Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.8.0.1
Stockholders' Equity
12 Months Ended
Dec. 31, 2017
Equity [Abstract]  
Stockholders' Equity
Stockholders’ Equity

Share-based Compensation Expense

The following table summarizes stock-based compensation expense (in thousands):
 
December 31,
 
2017
 
2016
 
2015
Stock-based compensation expense as a component of:
 
 
 
 
 
Research and development expenses
$
14,235

 
$
8,836

 
$
4,080

General and administrative expenses
10,680

 
10,057

 
8,378

 
$
24,915

 
$
18,893

 
$
12,458



Stock Plans

In May 2012 and May 2016, the Company’s stockholders approved an amendment and restatement of the Company’s 2002 Stock Incentive Plan to increase the number of shares available for issuance by 1.8 million and 0.9 million shares, respectively. As of December 31, 2017, there were 0.8 million shares available for future option grants or direct issuance under the Amended 2002 Plan.
Following is a summary of the Company’s stock option plan activity and related information:
 
 
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term in
Years
 
Aggregate
Intrinsic
Value
(In  thousands)
Balance at December 31, 2016
1,754,275

 
$
42.12

 
6.19
 
$
104,247

Granted
273,353

 
112.58

 
 
 
 
Exercised
(148,252
)
 
31.58

 
 
 
 
Forfeited
(3,044
)
 
79.74

 
 
 
 
Balance at December 31, 2017
1,876,332

 
53.17

 
5.77
 
157,340

Exercisable at December 31, 2017
1,431,245

 
40.08

 
4.95
 
138,616

Options vested and expected to vest as of December 31, 2017
1,876,332

 
$
53.17

 
5.77
 
$
157,340



The weighted-average grant-date fair value of all stock options granted during 2017, 2016 and 2015 was $53.17, $46.53 and $35.39 per share, respectively. The total intrinsic value of all options exercised during 2017, 2016 and 2015 was approximately $13.3 million, $12.0 million and $20.7 million, respectively.
Cash received from options exercised, net of fees paid, in 2017, 2016 and 2015 was $4.7 million, $6.2 million and $8.7 million, respectively.
Following is a further breakdown of the options outstanding as of December 31, 2017:
 
Range of exercise prices
Options
outstanding
 
Weighted
average
remaining  life
in years
 
Weighted average
exercise price
 
Options
exercisable
 
Weighted average
exercise price
$8.58 - $10.05
208,032

 
2.88
 
$
9.97

 
208,032

 
$
9.97

$10.12 - $12.81
71,850

 
3.95
 
11.44

 
71,850

 
11.44

$14.47 - $14.47
285,879

 
4.11
 
14.47

 
271,879

 
14.47

$16.14 - $17.88
72,777

 
1.16
 
16.32

 
72,777

 
16.32

$21.92 - $21.92
207,004

 
5.13
 
21.92

 
207,004

 
21.92

$32.00 - $56.26
226,287

 
6.72
 
50.50

 
160,301

 
48.49

$63.58 - $68.62
25,757

 
6.50
 
67.17

 
23,726

 
67.34

$74.42 - $74.42
216,118

 
6.11
 
74.42

 
206,828

 
74.42

$85.79 - $97.92
238,675

 
6.99
 
88.93

 
138,712

 
90.54

$100.38 - $141.61
323,953

 
9.12
 
112.75

 
70,136

 
106.78

$8.58 – $141.61
1,876,332

 
5.77
 
$
53.17


1,431,245

 
$
40.08



The assumptions used for the specified reporting periods and the resulting estimates of weighted-average grant date fair value per share of options granted:

 
Year Ended December 31,
 
2017
 
2016
 
2015
 
Risk-free interest rate
2.0%-2.2%
 
1.3%-1.9%
 
1.7%-2.0%
 
Expected volatility
43%-47%
 
48%-50%
 
50%-58%
 
Expected term
6.5 to 6.8 years
 
6.6 to 6.7 years
 
6.5 years
 

As of December 31, 2017, there was $19.4 million of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized over a weighted average period of 2.52 years.
Restricted Stock Activity
The following is a summary of the Company’s restricted stock activity and related information:
 
 
Shares
 
Weighted-Average
Grant Date Fair
Value
Outstanding at December 31, 2016
308,700

 
$
86.61

Granted
73,799

 
99.53

Vested
(187,864
)
 
84.50

Forfeited
(61,341
)
 
97.78

Outstanding at December 31, 2017
133,294

 
$
91.60


As of December 31, 2017, unrecognized compensation cost related to non-vested stock awards amounted to $6.5 million. That cost is expected to be recognized over a weighted average period of 1.34 years.

Employee Stock Purchase Plan

As of December 31, 2017, 67,394 shares of the Company's common stock are available for future issuance under it's Amended Employee Stock Purchase Plan, or ESPP. The ESPP permits eligible employees to purchase up to 1,250 shares of Ligand common stock per calendar year at a discount through payroll deductions. The price at which stock is purchased under the ESPP is equal to 85% of the fair market value of the common stock on the first of a six month offering period or purchase date, whichever is lower. There were 3,061, 1,961 and 3,374 shares issued under the ESPP in 2017, 2016 and 2015, respectively.

Share Repurchases
    
During the years ended December 31, 2017, 2016 and 2015 the Company repurchased 14,000 shares for $2.0 million, 40,500 shares for $3.9 million, 6,120 shares for $0.5 million, respectively.
    
In September 2015, the Company's Board of Directors authorized the Company to repurchase up to $200.0 million of its own stock in privately negotiated and open market transactions for a period of up to three years, subject to the Company's evaluation of market conditions. Authorization to repurchase up to an additional $193.6 million of its common stock remained as of December 31, 2017.