Stock-Based Compensation

6 Months Ended

Jun. 30, 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 June 30,					For the six months ended June 30,
(in thousands)	2013			2012		2013		2012
Research and development	$	(145	)	$	426	$	392	$	942
General and administrative		277			652		1,281		1,348
Stock-based employee compensation expense	$	132		$	1,078	$	1,673	$	2,290

The Company granted 1,315,500 and 1,426,400 stock options during the three and six months ended June 30, 2013 that had a weighted-average grant date fair value of $1.77 and $1.89 per share, respectively. The Company granted 361,900 and 425,400 stock options during the three and six months ended June 30, 2012 that had a weighted-average grant date fair value of $3.51 and $3.48 per share, respectively.

At June 30, 2013, total unrecognized compensation costs related to unvested stock options outstanding amounted to $6.3 million. The cost is expected to be recognized over a weighted-average period of 1.74 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).

On May 31, 2013, the Company extended the contractual life of 66,667 fully vested stock options held by one employee from 3 to 12 months.

For the six months ended June 30, 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 June 30,
	2013			2012
Risk-free interest rate		1.65	%	0.93 - 1.10%
Expected life in years		6		6
Expected volatility		95.45	%	83.36 - 83.52%
Expected dividend yield		0		0

Stock option activity under the Company’s stock option plan for the six months ended June 30, 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		1,426,400			2.49
Exercised		(455,168	)		1.87
Cancelled		(1,580,116	)		4.73
Outstanding, June 30, 2013		6,538,419		$	3.76		7.11	$	956
Vested and unvested expected to vest at June 30, 2013		6,481,884		$	3.85		5.03	$	948
Options exercisable, June 30, 2013		3,406,985		$	3.85		5.03	$	956
Options exercisable, December 31, 2012		3,683,786		$	3.56		5.28	$	3,972
Options available for future grant		1,430,403

A summary of the status of unvested restricted stock for the six months ended June 30, 2013 is as follows:

	Number of Shares			Weighted-Average Grant Date Fair  Value
Non-vested, December 31, 2012		733,739		$	4.37
Granted		—			—
Vested		(138,814	)		4.26
Cancelled		(140,600	)		4.42
Non-vested, June 30, 2013		454,325		$	4.38

At June 30, 2013, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $1.4 million. The cost is expected to be recognized over a weighted-average period of 1.44 years.