Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

10. Stock-Based Compensation

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

	For the three months
	ended March 31,
(in thousands)	2012		2011
Research and development	$	516	$	110
General and administrative		696		592
Stock-based employee compensation expense	$	1,212	$	702

The Company granted 63,500 and 547,900 stock options during the three months ended March 31, 2012 and 2011 that had a weighted-average grant date fair value of $3.31 and $3.99 per share, respectively.

At March 31, 2012, total unrecognized compensation costs related to unvested stock options outstanding amounted to $6.5 million. The cost is expected to be recognized over a weighted-average period of 1.61 years.

For the three months ended March 31, 2012 and 2011, 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 three months ended March 31,
	2012		2011
Risk-free interest rate		1.11 - 1.13%		2.21 - 2.61%
Expected life in years		6		5.77
Expected volatility		83.48 - 83.53%		86.57 - 87.29%
Expected dividend yield		0		0

Stock option activity under the Company’s stock option plan for the three months ended March 31, 2012 is as follows:

(in thousands, except share and per share data)	Number of  Shares			Weighted- Average Exercise  Price		Weighted- Average  Contractual  Term (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2011		5,138,486		$	4.08
Granted		63,500			4.71
Exercised		-			-
Cancelled		(22,733	)		5.01
Outstanding, March 31, 2012		5,179,253		$	4.09		6.99	$	7,665
Vested and unvested expected to vest at March 31, 2012		5,139,034		$	4.09		6.99	$	7,605
Options exercisable, March 31, 2012		3,016,821		$	3.28		5.40	$	6,583
Options exercisable, December 31, 2011		2,911,186		$	3.21		5.52	$	4,232
Options available for future grant		15,756

A summary of the status of unvested restricted stock for the three months ended March 31, 2012 is as follows:

	Number of Shares			Weighted-Average  Grant Date Fair Value
Non-vested, December 31, 2011		950,906		$	4.34
Granted		145,302			4.51
Vested		(25,000	)		5.21
Cancelled		(9,380	)		4.41
Non-vested, March 31, 2012		1,061,828		$	4.13

At March 31, 2012, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $4.1 million. The cost is expected to be recognized over a weighted-average period of 1.85 years.