Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2014 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Incentive Plans | 8. Equity Incentive Plans |
2008 Plan |
The Company granted options under its 2008 Stock Incentive Plan (the “2008 Plan”) until June 2014 when it was terminated as to future awards, although it continues to govern the terms of options that remain outstanding under the 2008 Plan. The 2008 Plan provided for the granting of incentive and nonstatutory stock options, and stock purchase rights to employees, directors and consultants at the discretion of the Board of Directors. Stock options granted generally vest over a period of four years from the date of grant. In connection with the Board of Directors and stockholders approval of the 2014 Plan, all remaining shares available for future award under the 2008 Plan were transferred to 2014 Plan, and the 2008 Plan was terminated. |
2014 Plan |
The 2014 Equity Incentive Award Plan (“2014 Plan”) became effective on June 18, 2014, immediately prior to the time the Company’s Registration Statement on Form S-1 became effective. Under the 2014 Plan, 1,419,328 shares of common stock were initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, or SARs, restricted stock awards, restricted stock unit awards, deferred stock awards, deferred stock unit awards, dividend equivalent awards, stock payment awards and performance awards. In addition, 35,221 shares that had been available for future awards under the 2008 Plan as of June 18, 2014, were added to the initial reserve available under the 2014 Plan, bringing the total reserve upon the effective date of the 2014 Plan to 1,454,549. The number of shares initially reserved for issuance or transfer pursuant to awards under the 2014 Plan will be increased by (i) the number of shares represented by awards outstanding under 2008 Plan on June 18, 2014, that are either forfeited or lapse unexercised or that are repurchased for the original purchase price thereof, up to a maximum of 1,153,279 shares, and (ii) if approved by the Administrator of the 2014 Plan, an annual increase on the first day of each fiscal year ending in 2024, equal to the lesser of (A) four percent (4.0%) of the shares of stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of stock as determined by our board of directors; provided, however, that no more than 10,683,053 shares of stock may be issued upon the exercise of incentive stock options. Effective January 1, 2015, the 2014 Plan share reserve was increased by 743,569 shares. |
Stock Plan Activity |
The following table summarizes activity under the 2008 Plan and the 2014 Plan, including grants to nonemployees and restricted stock issued: |
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| | | | | Options Issued and | | | |
Outstanding |
| | Shares Available for Grant | | | Number of Shares | | | Weighted- Average | | | Aggregate | |
Exercise Price per | Intrinsic Value |
Share | |
| | | | | | | | | | | (in thousands) | |
Balances at December 31, 2011 | | | 19,798 | | | | 1,598,513 | | | $ | 0.57 | | | | | |
Options authorized | | | 114,428 | | | | — | | | | | | | | | |
Options granted | | | (81,233 | ) | | | 81,233 | | | | 3.46 | | | | | |
Options exercised | | | — | | | | (342,131 | ) | | | 0.52 | | | | | |
Options canceled | | | 43,848 | | | | (43,848 | ) | | | 0.52 | | | | | |
Balance at December 31, 2012 | | | 96,841 | | | | 1,293,767 | | | $ | 0.77 | | | | | |
Options granted | | | (99,552 | ) | | | 99,552 | | | | 3.42 | | | | | |
Options exercised | | | — | | | | (223,865 | ) | | | 0.56 | | | | | |
Options canceled | | | 6,625 | | | | (6,625 | ) | | | 2.23 | | | | | |
Balance at December 31, 2013 | | | 3,914 | | | | 1,162,829 | | | $ | 1.03 | | | | | |
Options authorized | | | 1,452,661 | | | | — | | | | | | | | | |
Options granted | | | (188,888 | ) | | | 188,888 | | | | 24.41 | | | | | |
Options exercised | | | — | | | | (336,398 | ) | | | 0.71 | | | | | |
Options canceled | | | 4,084 | | | | (4,084 | ) | | | 2.21 | | | | | |
Options repurchased | | | 3,511 | | | | (3,511 | ) | | | 0.55 | | | | | |
Issuance of common stock for services | | | (10,000 | ) | | | — | | | | — | | | | | |
Balance at December 31, 2014 | | | 1,265,282 | | | | 1,007,724 | | | $ | 5.51 | | | $ | 14,839 | |
Vested and expected to vest at December 31, 2014 | | | | | | | 990,889 | | | $ | 5.27 | | | $ | 14,746 | |
Vested at December 31, 2014 | | | | | | | 643,217 | | | $ | 1.21 | | | $ | 11,376 | |
The weighted-average grant-date estimated fair value of options granted during the years ended December 31, 2014, 2013 and 2012 was $18.53, $2.68 and $2.56 per share. The aggregate intrinsic value was calculated as the difference between the exercise price of the options and the estimated fair value of the Company’s common stock of $18.89 per share as of December 31, 2014. |
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2014 Employee Stock Purchase Plan |
The Company adopted the 2014 Employee Stock Purchase Plan (ESPP) and initially reserved 202,762 shares of common stock as of its effective date of June 18, 2014. If approved by the Administrator of the ESPP, on the first day of each calendar year, ending in 2024, the number of shares in the reserve will increase by an amount equal to the lesser of (i) one percent (1.0%) of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the board of directors; provided, however, no more than 2,230,374 shares of our common stock may be issued under the ESPP. Effective January 1, 2015, the ESPP share reserve was increased by 185,892. Under the ESPP, participants are offered the option to purchase shares of the Company’s common stock at a discount during a series of successive offering periods normally commencing on March 1 and September 1 of each year. The initial offering period commenced on September 1, 2014 and will end on February 27, 2015. |
As of December 31, 2014, no shares of common stock have been issued to employees participating in the ESPP and 202,762 shares were available for issuance under the ESPP. |
The following table illustrates the weighted-average assumptions for the Black-Scholes option-pricing model used in determining the fair value of ESPP purchase rights granted to employees: |
| | Year Ended December 31, 2014 | | | | | | | | | | | | | | | | | | |
Expected term (years) | | | 0.5 | | | | | | | | | | | | | | | | | | | |
Volatility | | | 73 | % | | | | | | | | | | | | | | | | | | |
Risk-free interest rate | | | 0.05 | % | | | | | | | | | | | | | | | | | | |
Dividend yield | | | — | % | | | | | | | | | | | | | | | | | | |
Liability for Early Exercise of Stock Options |
As of December 31, 2014 and 2013, there were zero and 286,217 shares of common stock outstanding, respectively, subject to the Company’s right of repurchase at prices ranging from $0.27 to $1.08 per share. As of December 31, 2014 and 2013, the Company recorded zero and $0.2 million, respectively, as liabilities associated with shares issued with repurchase rights. |
Modification of Stock Awards |
During September 2014, the Company entered into a Transition and Separation Agreement with its Chief Scientific Officer, Dominique Charmot, under which certain restricted shares that were subject to vesting and repurchase by the Company have become fully vested as of Dr. Charmot’s separation from the Company as an employee and director on December 23, 2014. This resulted in the acceleration of the vesting for 58,969 shares of restricted stock. As a result of the acceleration, the Company has recorded a stock-based compensation charge of $0.8 million during the year ended December 31, 2014 to reflect the revised service period for the restricted stock and related vesting of shares that would otherwise not have vested. |
Stock-based Compensation |
Total stock-based compensation recognized was as follows (in thousands): |
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| | Year Ended December 31, | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | 2012 | | | | | | | | | | | | |
| | | | | (in thousands) | | | | | | | | | | | | | | | |
Research and development | | $ | 1,376 | | | $ | 200 | | | $ | 221 | | | | | | | | | | | | |
General and administrative | | | 316 | | | | 152 | | | | 252 | | | | | | | | | | | | |
Total stock-based compensation | | $ | 1,692 | | | $ | 352 | | | $ | 473 | | | | | | | | | | | | |
As of December 31, 2014, there was $3.2 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to unvested share options with a weighted-average remaining recognition period of 2.3 years. |
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In determining the fair value of the stock-based awards, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine. |
Expected Term— The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding. The Company used the simplified method to determine the expected term, which is calculated as the average of the time-to-vesting and the contractual life of the options. |
Expected Volatility— The Company was privately held prior to its IPO in June 2014 and thus a sufficient trading history does not exist for the Company’s common stock. The expected volatility was estimated based on the average volatility for comparable publicly traded biopharmaceutical companies over a period equal to the expected term of the stock option grants. When selecting comparable publicly traded biopharmaceutical companies on which it has based its expected stock price volatility, the Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. |
Risk-Free Interest Rate— The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. |
Expected Dividend— The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero. |
The fair value of stock option awards to employees was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions: |
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| | Year Ended December 31 | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | 2012 | | | | | | | | | | | | |
Expected term (years) | | | 5.97 | | | | 6.07 | | | | 5.73 | | | | | | | | | | | | |
Volatility | | | 94 | % | | | 98 | % | | | 97 | % | | | | | | | | | | | |
Risk-free interest rate | | | 1.79 | % | | | 1.35 | % | | | 0.79 | % | | | | | | | | | | | |
Dividend yield | | | — | % | | | — | % | | | — | % | | | | | | | | | | | |
The weighted-average, estimated grant-date fair value of employee stock options granted during the years ended December 31, 2014, 2013 and 2012 was $18.57, $2.68 and $2.56 per share, respectively. |
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Options Granted to Nonemployees |
The Company has granted options to purchase shares of common stock to consultants in exchange for services performed. The Company granted options to purchase 10,000 and 3,333 shares with average exercise prices of $20.77 and $3.43 per share, respectively, during the years ended December 31, 2014 and 2013, respectively. These options vest upon grant or various terms up to three years. The Company recognized non-employees stock compensation expense of $0.1 million, $2,000 and zero during the years ended December 31, 2014, 2013 and 2012, respectively. The fair value of non-employees’ options was measured using the Black-Scholes option-pricing model reflecting the same assumptions as applied to employee options in each of the reported years, other than the expected life, which is assumed to be the remaining contractual life of the option. |
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Issuance of Common Stock for Services |
During the year ended December 31, 2014, the Company issued 10,000 shares of common stock to consultants in exchange for services performed. The shares issued were valued at $0.2 million based on the fair value of the common stock on the date of grant. |
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