Share-Based Compensation

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Shareholders’ Equity

Share-Based Compensation

Share-Based Compensation Expense

Share-based compensation expense recognized in the condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 is based on awards ultimately expected to vest.

Total share-based compensation expense related to all share-based awards for the three months ended March 31, 2016 and 2015 was comprised of the following (in thousands):

	Three Months Ended   March 31,
	2016		2015
Research and development:
Stock options	$	1,261	$	558
Restricted stock	30		478
Warrants	11		11
Research and development share-based compensation expense	1,302		1,047
General and administrative:
Stock options	1,710		589
Restricted stock	619		1,579
Warrants	74		187
General and administrative share-based compensation expense	2,403		2,355
Total share-based compensation expense included in expenses	$	3,705	$	3,402

As of March 31, 2016, approximately $35,436,000 of total unrecognized share-based compensation expense related to non-vested stock options remains and is expected to be recognized over a weighted-average period of approximately 3.3 years. As of March 31, 2016, approximately $1,952,000 of total unrecognized share-based compensation expense related to non-vested restricted stock awards remains and is expected to be recognized over a weighted-average period of approximately 1.0 year.

Stock Option Valuation

The fair value of each stock option award is estimated on the grant date using a Black-Scholes option pricing model (Black-Scholes model), which uses the assumptions noted in the following table. Expected volatility is based on historical volatility of the Company’s common stock. Expected life of employee stock options is determined using the “simplified” method. The expected life assumptions for non-employees were based upon the contractual term of the stock options. Risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the stock options in effect at the time of the grants. Dividend yield is based on the expectation of no future dividend payments by the Company.

The Company estimated the fair value of each stock option grant on the grant date using the Black-Scholes model with the following weighted-average assumptions:

	Three Months Ended   March 31,
	2016		2015
Expected volatility	148	%	174	%
Expected life (years)	5.41 years		6.82 years
Risk-free interest rate	1.4	%	1.8	%
Dividend yield	—		—

Stock Options

The Company’s 2013 Equity Plan stock option activity for the three months ended March 31, 2016 is comprised of the following:

	Outstanding Stock Options
	Shares Underlying Stock Options		Weighted-Average Exercise Price per Share
Outstanding at December 31, 2015	2,318,685		$	22.01
Granted	79,800		$	17.59
Exercised	(10,000	)	$	8.52
Forfeited	(27,666	)	$	25.71
Outstanding at March 31, 2016	2,360,819		$	21.87

As of March 31, 2016, there were 734,391 shares available for future grants under the 2013 Equity Plan.

Restricted Stock Awards

The Company’s restricted stock award activity for the three months ended March 31, 2016 is comprised of the following:

	Number of Shares		Weighted-Average Grant Date Fair Market Value
Unvested at December 31, 2015	1,072,899		$	13.00
Vested	(30,220	)	$	5.53
Unvested at March 31, 2016	1,042,679		$	13.22

Warrants

At March 31, 2016, the Company had 68,000 warrants outstanding. During the three months ended March 31, 2016, the Company awarded a warrant to purchase up to 17,000 shares of the Company's common stock to an outside third party at a price equal to the fair market value of the Company's common stock on the grant date.