Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation

9. Stock-Based Compensation

The Company recognized stock-based compensation expense on all employee and non-employee awards as follows:

	For the three months				For the nine months
	ended September 30,				ended September 30,
(in thousands)	2011		2010		2011		2010
Research and development, including costs of research contracts	$	264	$	199	$	540	$	613
General and administrative		322		824		1,360		2,585
Stock-based employee compensation expense	$	586	$	1,023	$	1,900	$	3,198

The Company granted 509 thousand and 1.6 million stock options during the three and nine months ended September 30, 2011 that had a weighted-average grant date fair value of $3.88 and $4.18 per share, respectively.  During the three and nine months ended September 30, 2010, the Company granted 42 thousand and 197 thousand stock options that had a weighted-average grant date fair value of $2.66  and $3.42 per share, respectively.

At September 30, 2011, total unrecognized compensation costs related to unvested stock options outstanding amounted to $7.1 million. The cost is expected to be recognized over a weighted-average period of 1.77 years.

For the nine months ended September 30, 2011 and 2010, the fair value of stock options was estimated on the date of grant using a Black-Scholes option valuation model with the following assumptions:

	For the nine months ended September 30,
	2011			2010
Risk-free interest rate		1.12 -2.61	%		1.28 - 2.75	%
Expected life in years		5.77 - 6			5
Expected volatility		83.26 - 87.4	%		89.2 - 90.6	%
Expected dividend yield		0			0

Stock option activity under the Company’s stock option plan for the nine months ended September 30, 2011 is as follows:

					Weighted-
			Weighted-		Average
(in thousands, except share and per	Number of		Average Exercise		Contractual		Aggregate
share data)	Shares		Price		Term (Years)		Intrinsic Value
Outstanding, December 31, 2010		4,566,935	$	3.39
Granted		1,573,100		5.83
Exercised		460,887		1.96
Cancelled		697,750		4.91
Outstanding, September 30, 2011		4,981,398	$	4.08		7.22	$	4,485
Options exercisable, September 30, 2011		2,619,880	$	3.17		5.31	$	4,002
Options available for future grant		1,141,718

A summary of the status of unvested restricted stock for the nine months ended September 30, 2011 is as follows:

			Weighted-Average
	Number of Shares		Grant Date Fair Value
Non-vested, December 31, 2010		348,753	$	3.32
Granted		75,000		5.66
Vested		108,334		4.36
Cancelled		16,667		2.85
Non-vested, September 30, 2011		298,752	$	2.57

At September 30, 2011, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $688 thousand. The cost is expected to be recognized over a weighted-average period of 1.47 years.