Accounting for Shared-Based Payments (Tables)

9 Months Ended

Sep. 30, 2013

Accounting for Shared-Based Payments

Schedule of stock-based compensation expense

Stock-based compensation has been recognized in operating results as follow: (dollars in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30				November 15, 2005 (inception) to
	2013		2012		2013		2012		September 30, 2013
Employees—included in research and development	$	388	$	226	$	942	$	488	$	2,544
Employees—included in general and administrative	386		154		1,166		347		2,576
Subtotal employee stock based compensation	774		380		2,108		835		5,120
Non-employees—included in research and development	3		3		140		3		436
Non-employees—included in general and administrative	313		170		1,010		507		3,186
Subtotal non-employee stock based compensation	316		173		1,150		510		3,622
Total stock-based compensation expense	$	1,090	$	553	$	3,258	$	1,345	$	8,742

Schedule of weighted-average assumptions used to estimate fair value of stock option awards using the Black-Scholes option valuation model

	Nine Months Ended September 30, 2013	Nine Months Ended September 30, 2012
Risk-free interest rate	0.41%-2.64%	0.92%-1.50%
Dividend yield	—	—
Expected volatility	60%	60%
Expected term (in years)	6 years	6 years

Summary of stock option activity and of changes in stock options outstanding under the Plan

	Number of Options		Exercise Price Per Share		Weighted Average Exercise Price Per Share		Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Term
Balance outstanding, December 31, 2012	9,734,268		$	0.50 — 5.20	$	2.75	$	24,482	6.45 years
Granted	2,495,965	(a)	$	0.44 — 20.01	$	6.45
Exercised	(61,787	)	$	0.44 — 4.28	$	1.91
Forfeited	(887,202	)(a)	$	4.42 — 12.51	$	5.99
Balance outstanding, September 30, 2013	11,281,244	(a)	$	0.44-20.01	$	3.32	$	18,816	7.2 years
Exercisable at September 30, 2013	3,955,151	(a)	$	0.44-20.01	$	2.76	$	9,503	5.8 years

(a) Includes 1,221,316 stock options issued to former Callisto option holders under the terms of Callisto Synergy Merger Agreement dated January 17, 2013, of which 854,763 stock options are vested and 357,202 stock options that expired and were forfeited through September 30, 2013.