| Stock Incentive Plans | 6. Stock Incentive Plans Equity Incentive Award and Stock Incentive Plans As of June 30, 2016, a total of 4,192,996 shares of common stock have been authorized under the 2013 Equity Incentive Award Plan (the “2013 Plan”), including the additional 1,204,665 shares of common stock that became available for future issuance under the 2013 Plan as of January 1, 2016 as a result of an annual automatic increase provision in the 2013 Plan. As of June 30, 2016, a total of 2,718,342 shares are subject to options outstanding under the 2013 Plan. There are 1,822,492 shares subject to options outstanding under the 2004 Stock Incentive Plan (the “2004 Plan”) as of June 30, 2016, 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 the 2004 Plan and 2013 Plan during the six months ended June 30, 2016, including grants to nonemployees and restricted stock units (“RSUs”) granted:
Shares Available
for Grant
Options and
of Options and
Awards
(In thousands)
Awards
Outstanding
Balance at December 31, 2015
145
4,694
Additional shares authorized
1,205
—
Options granted
(203
)
203
Options exercised
—
(39
)
Awards vested
—
(71
)
Options forfeited
31
(31
)
RSUs forfeited
2
(2
)
Balance at June 30, 2016
1,180
4,754
The weighted-average grant date estimated fair value of options granted during the six months ended June 30, 2016 was $13.66 per share. Employee Stock Purchase Plan As of June 30, 2016, a total of 1,193,620 shares of common stock have been authorized and 978,208 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 301,166 shares of common stock that became available for future issuance under the ESPP as of January 1, 2016 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, 2016, the Company issued 78,227 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, 2016: expected term of 0.5 years, weighted-average volatility of 74.96%, risk-free interest rate of 0.38% 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 of 25% of the awarded RSUs was accelerated upon the achievement of a designated milestone payment related to safety data from Phase Ib and Phase II clinical trials of demcizumab (anti-DLL4, OMP-21M18). The stock-based compensation expense for the remaining RSUs is being amortized on the straight-line basis over the three-year vesting period. The Company has recognized the stock-based compensation expense of $ 0.5 million and $1.1 million related to these RSUs for the three and six months ended June 30, 2016, respectively. 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 are expected to differ from those estimates. Stock-based compensation expense recognized was as follows (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Research and development
$
1,598
$
1,326
$
3,241
$
2,650
General and administrative
1,354
1,091
2,706
2,154
Total
$
2,952
$
2,417
$
5,947
$
4,804
As of June 30, 2016, the Company had $20.3 million and $1.6 million of unrecognized stock-based compensation expense related to unvested stock options and RSUs, respectively, which are expected to be recognized over an estimated weighted-average period of 2.67 years and 0.75 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
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Weighted-average volatility
71.6%
63.75%
67.8%
63.88%
Weighted-average expected term (years)
6.2
6.2
6.2
6.2
Risk-free interest rate
1.51%
2.03%
1.56%
2.00%
Expected dividend yield
—
—
—
—
Common Stock Issuance under At-the-Market Agreement Pursuant to a sales agreement (the “ATM Agreement”) with Cantor Fitzgerald & Co. (“Cantor Fitzgerald”), we may issue and sell up to $50 million of our common stock in one or more at-the-market offerings, under our shelf registration statement on Form S-3 filed on June 12, 2015. Under the ATM Agreement, we agreed to pay Cantor Fitzgerald a commission of 3.0% of the aggregate gross proceeds from each sale of our shares thereunder. For the three and six months ended June 30, 2016, we sold approximately 78,060 shares under the ATM Agreement at a weighted average price of $12.34 per share, resulting in aggregate net proceeds of approximately $0.9 million. |
