Stock-Based Compensation

9 Months Ended

Sep. 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 September 30,				For the nine months ended September 30,
(in thousands)	2013		2012		2013		2012
Research and development	$	119	$	363	$	511	$	1,305
General and administrative		690		828		1,971		2,177
Stock-based employee compensation expense	$	809	$	1,191	$	2,482	$	3,482

The Company granted 125,000 and 1,551,400 stock options during the three and nine months ended September 30, 2013 that had a weighted-average grant date fair value of $2.47 and $1.94 per share, respectively. The Company granted 76,300 and 508,700 stock options during the three and nine months ended September 30, 2012 that had a weighted-average grant date fair value of $3.95 and $3.56 per share, respectively.

At September 30, 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 1.68 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 (see Note 3 Restructuring).

On June 14, 2013, the Company extended the contractual life of 71,167 fully vested stock options held by one employee from 3 to 12 months (see Note 3 Restructuring).

For the three months ended September 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 September 30,
	2013	2012
Risk-free interest rate	1.61 - 1.74%	0.79 - 1.04%
Expected life in years	6	6
Expected volatility	94.96 - 95.64%	83.37 - 83.51%
Expected dividend yield	0	0

Stock option activity under the Company’s stock option plan for the nine months ended September 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		1,551,400			2.55
Exercised		(570,168	)		1.68
Cancelled		(2,398,366	)		4.57
Outstanding, September 30, 2013		5,730,169		$	3.73		6.89	$	4,255
Vested and unvested expected to vest at September 30, 2013		5,675,997		$	3.95		4.75	$	4,215
Options exercisable, September 30, 2013		2,996,068		$	3.95		4.75	$	2,203
Options exercisable, December 31, 2012		3,683,786		$	3.56		5.28	$	3,972
Options available for future grant		1,565,070

A summary of the status of unvested restricted stock for the nine months ended September 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		(163,747	)		4.42
Non-vested, September 30, 2013		431,178		$	4.38

At September 30, 2013, total unrecognized compensation costs related to unvested restricted stock outstanding amounted to $1.5 million. The cost is expected to be recognized over a weighted-average period of 1.32 years.