Stockholders' Equity

9 Months Ended

Sep. 30, 2011

Stockholder's Equity [Abstract]

Stockholder's Equity

9. Stockholder’s Equity

Treasury Stock

On June 13, 2011, our Board of Directors authorized the purchase of up to $25 million of our outstanding common stock through the end of 2012. During the three months ended September 30, 2011, we purchased 353,055 shares of our common stock for an aggregate purchase price of $2.8 million.

Repurchased shares have been recorded as treasury shares and will be held until the Company’s Board of Directors designates that these shares be retired or used for other purposes.

Warrant Activity

We have issued warrants to purchase shares of our common stock to investors as part of financing transactions, or in connection with services rendered by consultants. Our outstanding warrants expire on varying dates through June 2015. Below is a summary of warrant activity during the nine months ended September 30, 2011:

				Weighted
	Common Stock			Average
	Warrants			Exercise Price
Outstanding at December 31, 2010		4,192,312		$	6.45
Issued		—			—
Exercised		(3,747,312	)		6.62
Forfeited		—			—
Expired		—			—
Outstanding, at September 30, 2011		445,000		$	5.04
Exercisable, at September 30, 2011		420,000		$	5.11

Share-Based Compensation

We record share-based employee compensation expense for all equity-based programs, including stock options, restricted stock grants, management incentive plan, 401(k) plan matching and our employee stock purchase plan. Total expense recorded for the three and nine months periods ended September 30, is as shown below:

	Three Months Ended				Nine months Ended
	September 30,				September 30,
	2011		2010		2011		2010
	($ in ‘000’s)
Research and development	$	280	$	253	$	1,179	$	2,111
Selling, general and administrative		4,056		1,803		14,037		4,156
Total share based compensation expense	$	4,336	$	2,056	$	15,216	$	6,267

Stock Options

During the three and nine month periods ended September 30, 2011, the Compensation Committee of our Board of Directors granted stock options at exercise prices equal to the closing price of our common stock on the trading day prior to the grant date. The weighted average grant date fair value of stock options granted during the nine months period ended September 30, 2011 and 2010 were estimated at approximately $4.58 and $2.53, respectively using the Black-Scholes option pricing model with the following assumptions:

	Nine-months ended September 30,
	2011			2010
Divided yield		0.00	%		0.00	%
Expected volatility		70.04	%		70.80	%
Risk free interest rate		0.96	%		2.06	%
Expected life (years)		4.93			5.00

Share based compensation expense is recognized only for those awards that are ultimately expected to vest, and we have applied a forfeiture rate to unvested awards for the purpose of calculating the compensation cost. These estimates will be reversed in future periods if actual forfeitures differ from our estimates.

During the three and nine months ended September 30, 2011, our share-based charge in connection with the expensing of stock options was approximately $1.5 million and $7.0 million, respectively. During the three and nine months ended September 30, 2010, our share-based charge in connection with the expensing of stock options was approximately $1.7 million and $4.7 million, respectively.

As of September 30, 2011, there was approximately $14.0 million of unrecognized stock-based compensation cost related to stock options which we expect to recognize over a weighted average period of approximately 2.36 years.

Restricted Stock

The fair value of restricted stock awards is the grant date closing market price of our common stock, and is charged to expense over the period of vesting. These awards are subject to forfeiture to the extent that the recipient’s service is terminated prior to the shares becoming vested.

During the three and nine month periods ended September 30, 2011, the share-based charge in connection with the expensing of restricted stock awards was approximately $260,000 and $1.4 million, respectively. During the three and nine month periods ended September 30, 2010, the share-based charge in connection with the expensing of restricted stock awards was approximately $121,000 and $879,000, respectively.

As of September 30, 2011, there was approximately $2.2 million of unrecognized share-based compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a weighted average period of approximately 2.27 years.

401(k) Plan Matching Contribution

During the three and nine month periods ended September 30, 2011, we issued 16,683 and 53,307 shares of common stock, respectively, as our match of approximately $145,000 and $432,000, respectively, on the 401(k) contributions of our employees. During the three and nine month periods ended September 30, 2010, we issued 33,584 and 108,263 shares of common stock as our match of approximately $134,000 and $463,000, respectively, on the 401(k) contributions of our employees.

Employee Stock Purchase Plan

Effective July 2009, we adopted the 2009 Employee Stock Purchase Plan (“Purchase Plan”). The Purchase Plan provides our eligible employees with an incentive by providing a method whereby they may voluntarily purchase shares of our common stock upon terms described in the Purchase Plan. The Purchase Plan is designed to be operated on the basis of six consecutive month offering periods commencing January 1 and July 1 of each year. The Purchase Plan provides that eligible employees may authorize payroll deductions to purchase shares of our common stock at 85% of the fair market value of common stock on the first or last day of the applicable purchase period. A participant may purchase a maximum of 50,000 shares of common stock during a 6-month offering period, not to exceed $25,000 worth of stock on the offering date during each plan year. The Purchase Plan terminates in 2019.

As of September 30, 2011, Purchase Plan participant contributions of $132,818 are included in other accrued obligations in the accompanying condensed consolidated balance sheet. A total of 5,000,000 shares of common stock are authorized for issuance under the Purchase Plan, and as of September 30, 2011, 302,232 shares have been issued under the Purchase Plan.

Common Stock Reserved for Future Issuances

As of September 30, 2011, approximately 11.3 million shares of our common stock, when fully vested, were issuable upon conversion or exercise of rights granted under prior financing arrangements, stock options and warrants, as follows:

Conversion of Series E preferred shares	40,000
Exercise of stock options	10,788,934
Exercise of warrants	445,000
Total shares of common stock reserved for future issuances	11,273,934