Stock-Based Compensation

3 Months Ended

Mar. 31, 2013

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)	2013		2012
Research and development	$	537	$	516
General and administrative		1,004		696
Stock-based employee compensation expense	$	1,541	$	1,212

The Company granted 110,900 and 63,500 stock options during the three months ended March 31, 2013 and 2012 that had a weighted-average grant date fair value of $3.32 and $3.31 per share, respectively.

At March 31, 2013, total unrecognized compensation costs related to unvested stock options outstanding amounted to $8.8 million. The cost is expected to be recognized over a weighted-average period of 1.67 years.

On July 16, 2012, the Company extended the contractual life of 829,488 fully vested stock options held by 3 employees from 12 to 18 months, and extended the vesting period for 200,000 unvested stock options and 147,427 unvested shares of restricted stock held by 2 employees from 6 to 12 months (also see Note 3 Restructuring).

For the three months ended March 31, 2013 and 2012, 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,
	2013	2012
Risk-free interest rate	1.0 - 1.15%	1.11 - 1.13%
Expected life in years	6	6
Expected volatility	83.40 - 83.69%	83.48 - 83.53%
Expected dividend yield	0	0

Stock option activity under the Company’s stock option plan for the three months ended March 31, 2013 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, 2012		7,147,303		$	4.11
Granted		110,900			4.72
Exercised		(453,168	)		1.88
Cancelled		(61,200	)		4.88
Outstanding, March 31, 2013		6,743,835		$	4.26		7.23	$	801
Vested and unvested expected to vest at March 31, 2013		6,693,959		$	3.85		5.28	$	795
Options exercisable, March 31, 2013		3,408,985		$	3.85		5.28	$	801
Options exercisable, December 31, 2012		3,683,786		$	3.56		5.28	$	3,972
Options available for future grant		1,624,587

A summary of the status of unvested restricted stock for the three months ended March 31, 2013 is as follows:

	Number of Shares			Weighted-Average Grant Date Fair Value
Non-vested, December 31, 2012		733,739		$	4.37
Granted		—			—
Vested		(130,481	)		4.25
Cancelled		(1,190	)		4.41
Non-vested, March 31, 2013		602,068		$	4.39

At March 31, 2013, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $2.3 million. The cost is expected to be recognized over a weighted-average period of 1.48 years.