Stockholders' Equity (Deficit) | Stockholders’ Equity (Deficit) Reverse Stock Split On July 14, 2014, we filed an amendment to our amended and restated certificate of incorporation, effecting a 1-for-8.175 reverse stock split. All issued and outstanding stock and per share amounts contained in our financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. Initial Public Offering In July 2014, we completed an initial public offering (the IPO) of 5,000,000 shares of common stock at a price of $12.00 per share. In August 2014, we sold an additional 410,564 shares of common stock directly to our underwriters when they exercised portions of their over-allotment on two separate occasions at $12.00 per share. We received net proceeds of $57.8 million (inclusive of the exercise of the over-allotment) after deducting underwriting discounts and commissions and offering expenses totaling $7.1 million . In connection with the closing of the IPO, all outstanding shares of convertible preferred stock automatically converted into 9,769,422 shares of common stock. In July 2014, prior to the completion of the IPO, warrants to purchase 996,940 shares of common stock were exercised for $8.1 million in cash. Immediately prior to the closing of the IPO, warrants to purchase 978,592 shares were automatically net exercised, resulting in an issuance of an additional 311,923 shares of common stock. The significant number of shares issued in the third quarter of 2014 is expected to impact the year-over-year comparability of our net loss per share calculations through the third quarter of 2015. Upon completion of the IPO, the total shares of common stock authorized was 100,000,000 and the total shares of preferred stock authorized was 10,000,000 . Follow-On Public Offerings In April 2015, we closed an underwritten public offering of 3,000,000 shares of our common stock at a price of $26.50 per share. In May 2015, we sold an additional 47,409 shares directly to our underwriters when they exercised a portion of their option to purchase additional shares at $26.50 per share. We received net proceeds of $75.4 million (inclusive of the exercise of a portion of the underwriters’ option to purchase additional shares), after underwriting discounts and commissions and offering expenses totaling $5.4 million . In September 2016, we completed an underwritten follow-on public offering of 5,226,369 shares of common stock at a price of $6.25 per share. We received net proceeds of $30.3 million (inclusive of the exercise of a portion of the underwriters’ option to purchase additional shares), after underwriting discounts and commissions, and offering expenses totaling $2.4 million . Common Stock We had 25,413,055 and 20,153,202 shares of common stock outstanding as of December 31, 2016 and 2015 , respectively. Shares of common stock reserved for future issuance were as follows: AS OF DECEMBER 31, 2016 2015 Shares to be issued under the employee stock purchase plan 503,620 316,322 Shares to be issued upon exercise of outstanding stock options 3,697,643 2,832,467 Shares available for future stock option grants 724,723 804,553 Shares of common stock reserved for future issuance 4,925,986 3,953,342 Equity Incentive Plans 2014 Employee Stock Purchase Plan In April 2014, our board of directors adopted, and in July 2014 our stockholders approved, the 2014 Employee Stock Purchase Plan (2014 ESPP). The total number of shares of common stock available for issuance under the 2014 ESPP may increase annually on January 1 by (i) the lesser of 1% of the total number of shares issued and outstanding as of December 31 of the immediately preceding year or (ii) 200,000 shares, or less as deemed appropriate by the Board of Directors. For 2017, the Board of Directors determined the current shares available to be issued under the 2014 ESPP is sufficient, and did not increase the amount of authorized shares. 2008 Equity Incentive Plan and 2014 Omnibus Incentive Plan In 2008, we adopted the 2008 Equity Incentive Plan (2008 Plan) for eligible employees, officers, directors, and consultants, which provided for the grant of incentive and non-statutory stock options, restricted stock awards, restructured stock unit awards grant, and stock appreciation rights. The terms of the stock awards, including vesting requirements, were determined by the board of directors, subject to the provisions of the 2008 Plan. In April 2014, our board of directors adopted, and in July 2014 our stockholders approved, the 2014 Omnibus Incentive Plan (2014 Plan) which provides for the granting of certain awards to eligible employees, officers, directors, and consultants. Upon approval of the 2014 Plan by the stockholders in July 2014, 1,400,000 shares of our common stock were reserved for issuance under the 2014 Plan and we ceased granting stock awards under the 2008 Plan. All shares of common stock subject to awards under the 2008 Plan that expire, terminate, or are otherwise surrendered, canceled, forfeited or repurchased without having been fully exercised or resulting in the issuance of common stock become available for issuance under the 2014 Plan. Stock options granted under the 2008 and 2014 Plans generally vest within four years, and vested options are exercisable until ten years after the date of grant. Vesting of certain employee options may be accelerated in the event of a change in control of our company. We grant stock options to employees with exercise prices equal to the fair value of our common stock on the date of grant. There were a total of 2,926,850 shares of common stock authorized under the 2014 Plan as of December 31, 2016 . The total number of shares of common stock available for issuance under the 2014 Plan will automatically increase annually on January 1 by 4% of the total number of shares issued and outstanding as of December 31 of the immediately preceding year. On January 1, 2017, in accordance with the 2014 Plan and annual increase provisions, the authorized shares increased by 1,016,522 shares. Restricted Stock Units In 2016, we began issuing restricted stock units (RSUs) to employees under the 2014 Plan. The fair value of the RSUs is determined on the date of grant based on the market price of our common stock. RSUs are recognized as an expense ratably over the vesting period and our RSUs generally vest over four years with 25% of the total award vesting on each anniversary of the vesting commencement date. The activity for our RSUs is summarized as follow: Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2015 — — Granted 118,000 $ 19.39 Vested — $ — Forfeited (10,750 ) $ 19.39 Outstanding at December 31, 2016 107,250 $ 19.39 Stock Option Activity Summary stock option information is as follows: OPTIONS OUTSTANDING WEIGHTED- AVERAGE EXERCISE PRICE WEIGHTED- AVERAGE REMAINING CONTRACT TERM (IN YEARS) AGGREGATE INTRINSIC VALUE (IN THOUSANDS) Outstanding at January 1, 2015 1,907,091 $4.16 Granted 1,241,394 $21.55 Exercised (219,290 ) $1.38 Forfeited (96,728 ) $18.61 Expired — $— Outstanding at December 31, 2015 2,832,467 $11.48 8.24 $ 30,447 Granted 991,110 $15.49 Exercised (20,782 ) $3.12 Forfeited (182,605 ) $19.01 Expired (29,797 ) $25.65 Outstanding at December 31, 2016 3,590,393 $12.13 7.33 $ 5,062 Vested and expected to vest after December 31, 2016 3,453,099 $12.00 7.27 $ 5,043 Exercisable at December 31, 2016 1,903,268 $8.86 6.12 $ 4,493 As of December 31, 2016 , there was $15.6 million of total unrecognized stock-based compensation expense related to nonvested stock options that is expected to be recognized over a weighted-average period of 2.4 years. The total intrinsic value of options exercised during the years ended December 31, 2016 , 2015 and 2014 was $0.1 million , $5.0 million and $0.2 million , respectively. Stock-Based Compensation Expense Employee stock-based compensation expense recognized was calculated based on awards ultimately expected to vest and has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. Total stock-based compensation expense recognized in our statements of operations is as follows (in thousands): YEARS ENDED DECEMBER 31, 2016 2015 2014 Employee: Research and development $ 3,923 $ 2,034 $ 421 General and administrative 5,029 3,810 703 Non-Employee: Research and development 268 205 216 General and administrative 63 248 4 Total stock-based compensation expense $ 9,283 $ 6,297 $ 1,344 We use the Black-Scholes option pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes option pricing model requires us to make certain estimates and assumptions, including assumptions related to the expected price volatility of our stock, the period during which the options will be outstanding, the rate of return on risk-free investments, and the expected dividend yield of our stock. To estimate the fair value of our common stock prior to our IPO, our board of directors periodically determined the per share fair value of our common stock at various dates using valuations performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . Upon the completion of our IPO, the fair value of our common stock has been determined by the trading value of our common stock on NASDAQ. The fair values of stock options granted to employees were calculated using the following assumptions: YEARS ENDED DECEMBER 31, 2016 2015 2014 Weighted-average estimated fair value $10.07 $15.65 $9.32 Risk-free interest rate (1) 1.10% - 2.39% 1.50% - 1.86% 1.54% - 2.16% Expected term of options (in years) (2) 5.50 - 9.46 5.50 - 6.08 5.50 - 6.75 Expected stock price volatility (3) 77% - 93% 77% - 91% 90% - 93% Expected dividend yield (4) —% —% —% (1) The risk-free interest rate assumption was based on zero-coupon U.S. Treasury instruments that had terms consistent with the expected term of our stock option grants. (2) We used the “simplified method” for options to determine the expected term of our stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option. (3) Volatility is a measure of the amount by which a financial variable, such as share price, has fluctuated or is expected to fluctuate during a period. We analyzed the stock price volatility of companies at a similar stage of development to estimate expected volatility of our stock price. (4) We have never declared or paid cash dividends and do not presently plan to pay cash dividends in the foreseeable future. |