| Stock Incentive Plans | 6. Stock Incentive Plans
Equity Incentive Award and Stock Incentive Plans
As of June 30, 2015, a total of 2,981,839 shares of
common stock have been authorized under the 2013 Equity Incentive
Award Plan (the “2013 Plan”), including the additional
1,193,903 shares of common stock that became available for future
issuance under the 2013 Plan as of January 1, 2015 as a result
of an annual automatic increase provision in the 2013 Plan. As of
June 30, 2015, a total of 1,590,627 shares are subject to
options outstanding under the 2013 Plan. There are 1,899,557 shares
subject to options outstanding under the 2004 Stock Incentive Plan
(the “2004 Plan”) as of June 30, 2015, which will
become available for issuance under the 2013 Plan to the extent the
options are forfeited or lapse unexercised without issuance of such
shares under the 2004 Plan.
The following table summarizes activity under 2004 Plan and 2013
Plan during the six months ended June 30, 2015, including
grants to nonemployees and restricted stock units
(“RSUs”) granted:
(In thousands) Shares Available for Grant of Options and Options and
Balance at December 31, 2014 19 3,822
Additional shares authorized 1,194
—
Options granted (171 ) 171
Options exercised
— (163 )
Options forfeited 46 (46 )
RSUs forfeited 5 (5 )
Balance at June 30, 2015 1,093 3,779
The weighted-average grant date estimated fair value of options
granted during the six months ended June 30, 2015 was $15.15
per share.
Employee Stock Purchase Plan
As of June 30, 2015, a total of 892,454 shares of common stock
have been authorized and 783,121 shares of common stock are
available for future issuance under the Company’s Employee
Stock Purchase Plan (the “ESPP”). This authorized
number includes the additional 298,475 shares of common stock that
became available for future issuance under the ESPP as of
January 1, 2015 as a result of an annual automatic increase
provision in the ESPP. The ESPP allows eligible employees to
purchase shares of the Company’s common stock at a discount
through payroll deductions of up to 15% of their eligible
compensation, subject to any plan limitations. The ESPP provides
for six-month offering periods, and at the end of each offering
period, employees are able to purchase shares at 85% of the lower
of the fair market value of the Company’s common stock on the
first trading day of the offering period or on the last day of the
offering period.
During the six months ended June 30, 2015, the Company issued
43,424 shares under the ESPP. The Company used the following
assumptions to estimate the fair value of the ESPP offered during
the six months ended June 30, 2015: expected term of 0.5
years, weighted-average volatility from 51.1% to 72.5%, risk-free
interest rate from 0.05% to 0.08% and expected dividend yield of
zero.
Restricted Stock Units
In March 2014, the Company awarded 293,980 RSUs under the 2013
Plan. Each vested RSU represents the right to receive one share of
common stock. The fair value of the RSU awards was calculated based
on the NASDAQ quoted stock price on the date of the grant with the
expense being recognized over the vesting period. The RSUs are
generally scheduled to vest at the end of three years at
March 31, 2017. However, the vesting will be accelerated to
25% of the awarded RSUs upon the payment by Celgene of a designated
milestone payment related to Phase II clinical trials of demcizumab
(anti-DLL4, OMP-21M18). The stock-based compensation expense for
these RSUs is being amortized on the straight-line basis over the
three-year vesting period. The Company continues to assess at each
reporting date whether achievement of any performance condition is
probable and would begin recognizing compensation costs based on
the accelerated vesting if and when achievement of the performance
condition becomes probable. The Company has recognized the
stock-based compensation expense of $0.7 million and $1.4 million
related to these RSUs for the three and six months ended
June 30, 2015, respectively. There were no RSUs awarded during
the six months ended June 30, 2015.
Stock-Based Compensation
Employee stock-based compensation expense was calculated based on
awards expected to vest and has been reduced for estimated
forfeitures. Forfeitures are estimated at the time of grant and
revised, if necessary, in subsequent periods if actual forfeitures
differ from those estimates.
Stock-based compensation expense recognized was as follows (in
thousands):
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Research and development $ 1,326 $ 977 $ 2,650 $ 1,388
General and administrative 1,091 530 2,154 809
Total $ 2,417 $ 1,507 $ 4,804 $ 2,197
As of June 30, 2015, the Company had $15.5 million and $5.2
million of unrecognized compensation expense related to unvested
stock options and RSUs, respectively, which are expected to be
recognized over an estimated weighted-average period of 2.78 years
and 1.75 years, respectively.
The estimated grant date fair value of employee stock options was
calculated using the Black-Scholes option-pricing model, based on
the following assumptions:
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Weighted-average volatility 63.75 % 69.45 % 63.88 % 69.65 %
Weighted-average expected term (years) 6.20 6.20 6.20 6.20
Risk-free interest rate 2.03 % 2.22 % 2.00 % 2.23 %
Expected dividend yield
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