Stockholders' Equity | Stockholders' Equity Convertible Preferred Stock The par value of convertible preferred stock is $0.001 per share. As of December 31, 2018 and 2017 , the Company had 5,000,000 shares authorized and no preferred stock issued and outstanding. Warrants During the year ended December 31, 2016, no warrants were exercised. As of December 31, 2016, the Company had warrants to purchase 61,595 shares of common stock outstanding with a weighted average exercise price of $16.78 and with exercise prices ranging from $14.40 to $31.50 . During the year ended in December 31, 2017, warrants to purchase 27,482 shares were net exercised for 9,878 shares of common stock with exercise price per share ranging from $14.95 to $31.50 in accordance with the terms of the warrant agreement. During the year ended December 31, 2018 , no warrants were exercised. As of both December 31, 2018 and December 31, 2017, the Company had outstanding warrants to purchase 34,113 shares of common stock at weighted average exercise price per share of $14.95 and expire in 2020. Stock Option Plan Equity Incentive Plans On January 23, 2014, the stockholders' approved the adoption of the 2014 Equity Incentive Plan (“2014 EIP”). The number of shares of common stock reserved for issuance under the Company’s 2014 EIP will automatically increase on January 1 of each year, beginning on January 1, 2015, and continuing through and including January 1, 2024, by 4% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year or a lesser number of shares determined by the Company’s Board of Directors. The maximum number of shares that may be issued upon the exercise of incentive stock options, or ISOs, under the Company’s 2014 EIP is 2,000,000 shares. The 2014 EIP provides for the grant of ISOs, non-statutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation, all of which may be granted to employees, including officers, non-employee directors and consultants of the Company and its affiliates. Additionally, the 2014 EIP provides for the grant of performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants. Under the 2014 EIP, options may be granted with different vesting terms from time to time, but not to exceed 10 years from the date of grant. Upon the effectiveness of the 2014 EIP, the Company ceased granting any equity awards under the 2012 Equity Incentive Plan and any cancelled or forfeited shares under the 2012 and 2002 Equity Incentive Plans will be retired. On January 1, 2018 , the number of shares of common stock reserved for issuance under the 2014 EIP, automatically increased by 4% of the total number of shares of the Company’s common stock outstanding on December 31, 2017 , or 1,460,643 shares. During the year ended December 31, 2018 , the Company granted stock options for 926,650 shares of common stock and 339,500 restricted stock awards under the 2014 EIP. These grants included non-employee directors' stock option grants for 36,000 shares and restricted stock award grants of 18,000 shares. As of December 31, 2018 , there were 1,681,760 shares available for issuance under the 2014 EIP. 2014 Inducement Plan On August 26, 2014, the Company’s Board of Directors authorized the adoption of the 2014 Inducement Plan (“2014 IN”), which became effective immediately. Stockholder approval of the 2014 IN was not required pursuant to Rule 5635 (c)(4) of the Nasdaq Listing Rules. The 2014 IN reserves 325,000 shares of common stock and provides for the grant of NSOs that will be used exclusively for grants to individuals that were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company. On December 14, 2015, the Company’s Board of Directors authorized an additional 500,000 shares of common stock to be reserved for issuance under the 2014 IN. Under the 2014 IN, options may be granted with different vesting terms from time to time, but not to exceed 10 years from the date of grant. During the year ended December 31, 2018 , the Company granted stock options for 210,000 shares of common stock and 34,000 restricted stock awards under the 2014 IN. As of December 31, 2018 , there were 157,861 shares available for issuance under the 2014 IN. Under the 2014 EIP and the 2014 IN plan, restricted stock awards typically vest annually over 1 , 3 , or 4 years , while options typically vest over four years , either with 25% of the total grant vesting on the first anniversary of the option grant date and 1/36th of the remaining grant vesting each month thereafter or 1/48th vesting monthly. The following summary of stock option and restricted stock award activity, excluding 2014 IN, for the periods presented is as follows: Number of Shares Available for Grant Number of Shares Underlying Outstanding Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (In thousands) Balance as of December 31, 2015 273,948 2,381,486 $ 18.36 Additional shares reserved 1,131,538 — — Options granted (839,800 ) 839,800 16.72 Restricted stock awards granted (299,900 ) 299,900 — Options exercised — (131,752 ) 10.67 Options cancelled/forfeited 320,084 (320,084 ) 21.77 Restricted stock awards forfeited 80,333 (80,333 ) — Restricted stock awards released — (124,344 ) — Shares cancelled/retired under 2002/2012 plans — (38,829 ) 8.92 Net settlement of restricted stock awards for employee taxes 23,289 — — Balance as of December 31, 2016 689,492 2,825,844 17.92 Additional shares reserved 1,145,958 — — Options granted (925,525 ) 925,525 21.65 Restricted stock awards granted (340,525 ) 340,525 — Options exercised — (309,341 ) 12.88 Options cancelled/forfeited 230,734 (230,734 ) 22.81 Restricted stock awards forfeited 81,905 (81,905 ) — Restricted stock awards released — (117,218 ) — Shares cancelled/retired under 2002/2012 plans — (696 ) 8.94 Net settlement of restricted stock awards for employee taxes 21,010 — — Balance as of December 31, 2017 903,049 3,352,000 19.29 Additional shares reserved 1,460,643 — — Options granted (926,650 ) 926,650 28.67 Restricted stock awards granted (339,500 ) 339,500 — Options exercised — (293,100 ) 15.45 Options cancelled/forfeited 423,096 (423,096 ) 25.66 Restricted stock awards forfeited 101,218 (101,218 ) — Restricted stock awards released — (198,213 ) — Net settlement of restricted stock awards for employee taxes 59,904 — — Balance as of December 31, 2018 1,681,760 3,602,523 $ 21.63 7.13 $ 8,071 Exercisable as of December 31, 2018 1,853,452 $ 19.47 6.11 $ 7,274 The intrinsic values of outstanding and exercisable options were determined by multiplying the number of shares by the difference in exercise price of the options and the fair value of the common stock as of December 31, 2018 . The total intrinsic values of options exercised as of December 31, 2018 , 2017 and 2016 of $1.5 million , $7.1 million , and $1.3 million , respectively, were determined by multiplying the number of shares by the difference between exercise price of the options and the fair value of the common stock as of December 31, 2018 , 2017 , and 2016 of $20.13 , $35.75 and $20.70 per share, respectively. The following table summarizes the stock option activity for the 2014 IN is as follows: Number of Shares Available for Grant Number of Shares Underlying Outstanding Options and Awards Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (In thousands) Balance as of December 31, 2015 449,889 354,219 $ 31.46 Options granted (110,000 ) 110,000 18.37 Restricted stock awards granted (15,000 ) 15,000 — Option forfeitures 88,594 (88,594 ) 22.97 Restricted stock awards released — (9,594 ) — Net settlement of restricted stock awards for employee taxes 3,604 — — Balance as of December 31, 2016 417,087 381,031 29.43 Options granted (35,000 ) 35,000 24.40 Restricted stock awards granted (95,000 ) 95,000 — Restricted stock awards released — (13,344 ) — Net settlement of restricted stock awards for employee taxes 5,009 — — Balance as of December 31, 2017 292,096 497,687 28.96 Options granted (210,000 ) 210,000 26.71 Restricted stock awards granted (34,000 ) 34,000 — Option forfeitures 25,521 (25,521 ) 24.40 Restricted stock award forfeitures 71,250 (71,250 ) — Restricted stock awards released — (37,094 ) — Net settlement of restricted stock awards for employee taxes 12,994 — — Balance as of December 31, 2018 157,861 607,822 $ 28.32 7.82 $ 194 Exercisable as of December 31, 2018 261,791 $ 29.34 6.67 $ 133 The following table summarizes information with respect to stock options outstanding and currently exercisable as of December 31, 2018 : Options Outstanding Options Exercisable Exercise Price Number of Options Weighted-Average Remaining Contractual Life (In Years) $0.45 - 9.15 430,333 4.41 430,333 $13.35 - 16.23 406,389 6.44 335,718 $16.3 - 18.37 423,042 7.16 298,893 $18.7 - 19.7 391,547 8.09 180,069 $19.91 - 24.96 442,443 8.48 167,039 $25.3 - 29.15 656,654 8.52 176,065 $29.4 - 32.22 587,175 6.88 360,415 $32.25 - 34.08 51,000 8.53 9,399 $35.95 - 35.95 10,500 8.94 2,625 $36.32 - 36.32 206,250 6.95 154,687 3,605,333 2,115,243 The following table summarizes information with respect to restricted stock awards outstanding as of December 31, 2018 : Number of Awards Available for Grant Weighted-Average Grant-Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding as of December 31, 2015 315,600 $ 25.67 — Granted 314,900 17.16 — Vested (133,938 ) 26.41 — Forfeited (80,333 ) 20.35 — Outstanding as of December 31, 2016 416,229 20.02 — Granted 435,525 22.08 — Vested (130,562 ) 23.25 — Forfeited (81,905 ) 19.32 — Outstanding as of December 31, 2017 639,287 20.86 — Granted 373,500 28.37 — Vested (235,307 ) 20.25 — Forfeited (172,468 ) 24.83 — Outstanding as of December 31, 2018 605,012 $ 24.61 $ 14,888 Stock Options Granted to Employees and Non-employee Directors During the years ended December 31, 2018 , 2017 , and 2016 , the Company granted stock options to employees and non-employee directors to purchase shares of common stock with a weighted-average grant date fair value of $16.35 , $13.43 and $16.91 per share, respectively. As of December 31, 2018 , 2017 , and 2016 , there was total unrecognized compensation cost for outstanding stock options and restricted stock awards of $30.8 million , $26.5 million , and $19.6 million to be recognized over a period of approximately 2.6 years , 2.7 years , and 2.7 years , respectively. The fair value of the employee and non-employee director stock options was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2018 2017 2016 Expected term (in years) 6.0 6.0 6.0 Expected volatility 60.2 % 67.7 % 61.9 % Risk-free interest rate 2.7 % 2.1 % 1.4 % Expected dividend rate — % — % — % Fair Value of Common Stock . The fair value of the shares of common stock is based on the Company's stock price as quoted by the Nasdaq. Expected Term . The expected term for employees and non-employee directors is based on the simplified method, as the Company’s stock options have the following characteristics: (i) granted at-the-money; (ii) exercisability is conditioned upon service through the vesting date; (iii) termination of service prior to vesting results in forfeiture; (iv) limited exercise period following termination of service; and (v) options are non-transferable and non-hedgeable, or “plain vanilla” options, and the Company has limited history of exercise data. The expected term for non-employees is based on the remaining contractual term. Expected Volatility . Since January 1, 2017, the expected volatility is based on the historical volatility of a group of similar entities combined with the historical volatility of the Company, whereas prior to 2017, the expected volatility was based solely on the historical volatility of a group of similar entities. In evaluating similarity, the Company considered factors such as industry, stage of life cycle, capital structure, and size. Risk-Free Interest Rate . The risk-free interest rate is based on U.S. Treasury constant maturity rates with remaining terms similar to the expected term of the options. Expected Dividend Rate . The Company has never paid any dividends and does not plan to pay dividends in the foreseeable future, and, therefore, used an expected dividend rate of zero in the valuation model. Forfeitures. Since January 1, 2017, the Company adopted the forfeiture rate methodology change in accordance with ASU 2016-09 to account for forfeitures as they occur. Prior to the adoption of ASU 2016-09, the Company was required to estimate forfeitures at the time of grant and revised those estimates in subsequent periods if actual forfeitures differed from those estimates. The Company used historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that were expected to vest. To the extent actual forfeitures differed from the estimates, the difference was recorded as a cumulative adjustment in the period that the estimates were revised. Equity Awards Granted to Non-employee Consultants During the year ended December 31, 2018 , the Company granted options to purchase 1,000 shares of common stock with an exercise price of $30.80 per share to a non-employee consultant. During the year ended December 31, 2017 , the Company granted options to purchase 5,000 shares of common stock with a weighted-average exercise price of $25.45 per share and restricted stock awards of 4,000 shares to a non-employee consultant. Also in 2017, two employees converted to non-employee consultants and the individuals' options and awards continued to vest in accordance with the 2014 EIP. The Company did not grant options to purchase shares of common stock to non-employee consultants during the year ended December 31, 2016, however, the non-employee consultant options outstanding for the year then ended related to employees who had converted to non-employee consultants. As of July 1, 2018, we began accounting for share-based payment transactions for acquiring goods and services from non-employees (excluding non-employee directors) in accordance with ASU 2018-07 (Note 2). Under ASU 2018-07, equity-classified non-employee share-based payment awards are measured at the grant date fair value on the grant date, and expense is recognized in the same period and in the same manner as if the Company had paid cash for the goods or services received. In connection with the adoption of ASU 2018-07, we recorded a cumulative charge of less than $0.1 million to the Accumulated Deficit balance as of January 1, 2018. Year Ended December 31, 2018 2017 2016 Expected term (in years) 5.5 8.9 7.3 Expected volatility 59.4 % 67.9 % 68.9 % Risk-free interest rate 2.8 % 2.3 % 1.7 % Expected dividend rate — % — % — % 2014 Employee Stock Purchase Plan On January 22, 2014, the Company’s Board of Directors authorized the adoption of the 2014 Employee Stock Purchase Plan (“2014 ESPP”), which became effective after adoption and approval by the Company’s stockholders on January 23, 2014. The maximum number of shares of common stock that may be issued under the Company’s 2014 ESPP was initially 200,000 shares. The number of shares of common stock reserved for issuance under the Company’s 2014 ESPP will automatically increase on January 1 of each year, beginning on January 1, 2015 and ending on and including January 1, 2024, by the lesser of (i) 1% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (ii) 300,000 shares of common stock or (iii) such lesser number of shares of common stock as determined by the Company’s Board of Directors. Shares subject to purchase rights granted under the Company’s 2014 ESPP that terminate without having been exercised in full will return to the 2014 ESPP reserve and will not reduce the number of shares available for issuance under the Company’s 2014 ESPP. The 2014 ESPP is intended to qualify as an “employee stock purchase plan,” or ESPP, under Section 423 of the Internal Revenue Code of 1986 with the purpose of providing employees with an opportunity to purchase the Company’s common stock through accumulated payroll deductions. On January 1, 2018 , the number of shares of common stock reserved for issuance under the Company’s 2014 ESPP, automatically increased by 1% of the total number of shares of the Company’s capital stock outstanding on December 31, 2017 , or 300,000 shares. As of December 31, 2018 , there were 1,178,940 shares available for issuance under the 2014 ESPP. For the year ended December 31, 2018 , the Company recorded stock-based compensation expense of $0.3 million and issued 37,894 shares of common stock to employees under the 2014 ESPP. For the year ended December 31, 2017, the Company recorded stock-based compensation expense of $0.2 million and issued 28,135 shares of common stock to employees under the 2014 ESPP. For the year ended December 31, 2016, the Company recorded stock-based compensation expense of $0.1 million and issued 21,064 shares of common stock to employees under the 2014 ESPP. The fair value of the option component of the shares purchased under the 2014 ESPP was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2018 2017 2016 Expected term (in years) 0.5 0.5 0.5 Expected volatility 50.9 % 59.2 % 72.0 % Risk-free interest rate 1.9 % 0.9 % 0.4 % Expected dividend rate — % — % — % Fair Value of Common Stock . The fair value of the shares of common stock is based on the Company’s stock price. Expected Term . The expected term is based on the term of the purchase period under the 2014 ESPP. Expected Volatility . Since of January 1, 2017 the expected volatility is based on the historical volatility of the Company's common stock. Prior to January 1, 2017, the expected volatility was based on volatility of a group of similar entities. In evaluating similarity, the Company considered factors such as industry, stage of life cycle, capital structure, and size. Risk-Free Interest Rate . The risk-free interest rate is based on U.S. Treasury constant maturity rates with remaining terms similar to the expected term. Expected Dividend Rate . The Company has never paid any dividends and does not plan to pay dividends in the foreseeable future, and, therefore, used an expected dividend rate of zero in the valuation model. Stock-Based Compensation Stock-based compensation expense related to options and awards for employees and non-employees and shares purchased under the 2014 ESPP by employees, was allocated as follows: (in thousands) Year Ended December 31, 2018 2017 2016 Research and development $ 7,480 $ 5,902 $ 5,557 General and administrative 8,793 7,328 6,396 Total stock-based compensation expense $ 16,273 $ 13,230 $ 11,953 There were no capitalized stock-based compensation costs or recognized stock-based compensation tax benefits during the years ended December 31, 2018 , 2017 , and 2016 . During 2017 and 2016, the Company modified certain equity awards, resulting in an acceleration of vesting for a portion of such awards as a result of termination of service. The acceleration in vesting of the unvested awards resulted in a Type III modification, which occurs when there is a change from an improbable to probable vesting condition. The Company recognized the incremental fair value, which was equal to the fair value of the awards on the modification date, and recognized the stock-based compensation over the remaining requisite service period. For the years ended December 31, 2017 and 2016, the Company recorded $0.1 million and $0.2 million , respectively, of stock-based compensation expense in connection with these modifications. There were no modifications for the year ended December 31, 2018. Common Stock As of December 31, 2018 and 2017 , the Company was authorized to issue up to 95,000,000 shares of par value $0.001 per share common stock. As of December 31, 2018 and 2017 , the Company had no shares of common stock subject to repurchase. Common stockholders are entitled to dividends when and if declared by the Board of Directors subject to the prior rights of the preferred stockholders. The holder of each share of common stock is entitled to one vote. The common stockholders voting as a class are entitled to elect one member to the Company’s Board of Directors. As of December 31, 2018 , no dividends have been declared. The Company had reserved shares of common stock, on an as if converted basis, for issuance as follows: December 31, 2018 Issuances under stock incentive plans 1,681,760 Issuances upon exercise of common stock warrants 34,113 Issuances under employee stock purchase plan 1,178,940 Issuances under inducement plan 157,861 Total 3,052,674 Follow-On Public Offerings In December 2017, the Company completed a follow-on public offering (the “2017 follow-on offering”), pursuant to which the Company issued 5,389,515 shares of common stock at $31.00 per share, including the exercise of the underwriters' over-allotment option to purchase 550,806 additional shares of common stock, for net proceeds of $156.9 million , after underwriting discounts, commissions and other offering expenses. In January 2019, the Company completed a follow-on public offering (the “2019 follow-on offering”), pursuant to which the Company issued 6,764,705 shares of common stock at $17.00 per share, including the exercise of the underwriters' over-allotment option to purchase 882,352 additional shares of common stock, for net proceeds of $107.6 million , after underwriting discounts, commissions and other offering expenses. At-The-Market Offerings In March 2016, the Company entered into the 2016 At-The-Market (“ATM”) agreement under which the Company may offer and sell common stock having aggregate proceeds of up to $75.0 million from time to time through Cowen, our sales agent. On March 25, 2016, the effective date of the registration statement on Form S-3 filed with the SEC on March 7, 2016, the 2015 ATM Agreement was effectively terminated and superseded by the 2016 ATM Agreement. Sales of common stock through Cowen under the 2016 ATM agreement will be made by means of ordinary brokers’ transactions on the Nasdaq Global Market or otherwise at market prices prevailing at the time of sale, in block transactions, or as otherwise agreed upon by the Company and Cowen. Cowen will sell the common stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions we may impose). The Company agreed to pay Cowen a commission of up to 3.0% of the gross sales proceeds of any common stock sold through Cowen under the ATM agreement. During the year ended December 31, 2017, the Company sold 1,802,651 shares of common stock under the 2016 ATM Agreement at a weighted average price of $22.17 per share resulting in net proceeds of $38.2 million , which was comprised of $38.8 million in proceeds after underwriting discounts and commissions and net of offering expenses of $0.6 million , of which $0.2 million was paid in 2016 and $0.4 million was paid in 2017. In March 2018, the Company terminated the 2016 ATM Agreement and entered into the 2018 ATM Agreement. Under the 2018 ATM Agreement, the Company may offer and sell common stock having aggregate proceeds of up to $125.0 million from time to time through Cantor Fitzgerald as our sales agent. Sales of common stock through Cantor Fitzgerald under the 2018 ATM Agreement will be made by means of ordinary brokers’ transactions on the NASDAQ Global Market or otherwise at market prices prevailing at the time of sale, in block transactions, or as otherwise agreed upon by the Company and Cantor Fitzgerald. Cantor Fitzgerald will sell the common stock from time to time, based upon instructions from the Company. The Company agreed to pay Cantor Fitzgerald a commission of up to 3.0% of the gross sales proceeds of any common stock sold through Cantor Fitzgerald under the 2018 ATM Agreement. No sales of common stock have taken place under the 2018 ATM Agreement as of December 31, 2018 |