(10)

Restructurings

In December 2012, the Company announced a plan to reduce its workforce by approximately 15-20 employees. In March 2013, in an effort to continue to cut ongoing operating expenses, the Company committed to a plan to reduce its workforce from 19 employees to 12 employees. The Company continued to reduce its workforce during the second quarter of 2013 from 12 to 5 employees.

During the first quarter of 2013, the Company incurred restructuring charges of $2.5 million, of which $1.6 million resulted in cash expenditures paid during the first quarter.

During the second quarter of 2013, the Company incurred restructuring charges of $596,000, of which $501,000 resulted in cash expenditures paid during the second quarter and $95,000 remained to be paid for one-time employee termination benefits and associated costs. The Company also reversed previously recognized expense of $132,000 due to changes in estimates of employee separation costs.

The Company has incurred costs from restructuring activities undertaken during 2011 as part of the transition from a fully integrated biopharmaceutical company with research, manufacturing, and marketing operations to a biotechnology company focused primarily on research and development. During the second half of 2011, the Company incurred additional restructuring costs as part of a plan to more closely align its resources and capital with on-going research and development activities. Restructuring costs are charged to earnings and accrued as a liability at the time they are considered probable and reasonably estimable. Restructuring costs include employee separation benefits and lease termination costs for facilities that have been vacated.

The following table summarizes the changes in the Company’s accrued restructuring liabilities during the first and second quarter of 2013 (in thousands) based on the quarter in which the related restructuring measures were initiated:

	2Q-13		1Q-13		4Q-11		3Q-11		2Q-11		Total
Balance at December 31, 2012		-		-		6		769		1		776
1Q2013 Payment made		-		(1,583)		(4)		(254)		(1)		(1,842)
1Q2013 Adjustments		-		-		-		(23)		-		(23)
1Q2013 Restructuring Accruals		-		2,505		-		29		-		2,534

Balance at March 31, 2013		-		922		2		521		-		1,445
2Q2013 Payment made		(501)		(757)		(2)		(460)		-		(1,720)
2Q2013 Adjustments		-		(103)		-		(29)		-		(132)
2Q2013 Restructuring Accruals		596		-		-		-		-		596
Balance at June 30, 2013		95		62		-		32		-		189