Summary of Significant Accounting Policies (Tables)

112 Months Ended

Dec. 31, 2012

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 and 2011 are as follows:

($ in thousands)			Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2012		Quoted Prices in Active Markets  for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	72,002	$	72,002	$	—	$	—
Warrant liability	$	12,962	$	—	$	12,962	$	—

($ in thousands)			Fair Value Measurements at Reporting Date Using
Description	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	103,736	$	103,736	$	—	$	—
Warrant liability	$	19,425	$	—	$	19,425	$	—

Share-Based Compensation Expense Included in Statements of Operations

The following table presents share-based compensation expense included in the Company’s Statements of Operations:

	Year ended December 31,
(in thousands)	2012		2011		2010
Research and development	$	1,917	$	890	$	690
General and administrative		2,963		1,869		2,947
Share based employee compensation expense before tax		4,880		2,759		3,637
Income tax benefit		—		—		—
Net share based employee compensation expense	$	4,880	$	2,759	$	3,637

Effect on Net Loss and Earnings per Share if Applied Fair Value Recognition Provisions to Stock-Based Awards

The following table illustrates the effect on net loss and earnings per share if the Company had applied the fair value recognition provisions of current accounting standards to stock-based awards from September 9, 2003 (date of inception) to December 31, 2005:

(in thousands, except per share data)	September 9, 2003 (date of inception) to December 31,  2005
Net loss:
As reported	$	(15,364	)
Stock-based compensation expense included in reported net loss		802
Stock-based compensation expense under the fair-value based method		(1,756	)
Pro forma net loss	$	(16,318	)
Basic and diluted net loss per share:
As reported	$	(3.75	)
Pro forma	$	(3.98	)

Assumptions for Volatility, Expected life, Dividend Yield and Risk-free Interest Rate

The assumptions for volatility, expected life, dividend yield and risk-free interest rate are presented in the table below:

	2012	2011	2010
Weighted average risk-free interest rate	0.79 - 1.13%	1.09 - 2.69%	1.13 - 2.75%
Expected life in years	6	6	5
Expected volatility	83.36 - 83.53%	83.26 - 87.29%	89.2 - 90.6%
Expected dividend yield	0	0	0

Potential Dilutive Shares Excluded from Computation of Diluted Net Loss per Share

 The Company’s potential dilutive shares, which include outstanding common stock options, unvested restricted stock and warrants, have not been included in the computation of diluted net loss per share for any of the periods presented as the result would be antidilutive. Such potential common shares at December 31, 2012, 2011, and 2010 consist of the following:

	December 31,
	2012		2011		2010
Stock options		7,147,303		5,138,486		4,566,935
Unvested restricted stock		733,739		950,906		348,753
Warrants		11,197,454		13,117,264		15,912,142
		19,078,496		19,206,656		20,827,830