Stockholder's Equity

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Stockholder's Equity

12. Stockholder’s Equity

Treasury Stock

On August 10, 2012, our Board of Directors authorized the repurchase of up to $100 million of our outstanding common stock through August 1, 2013. The previous authorization was for up to $25 million and covered the period through December 31, 2012. As of June 30, 2013 we have purchased an aggregate of $13.6 million, or 1,338,055 shares, all of which have been retired.

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 six months ended June 30, 2013:

	Common Stock Warrants		Weighted Average Exercise Price
Outstanding at December 31, 2012		395,000	$	5.45
Granted		50,000	$	7.51
Outstanding, at June 30, 2013		445,000	$	5.68
Exercisable, at June 30, 2013		395,000	$	5.45

Share-Based Compensation

We record share-based employee compensation expense for all equity-based programs, including stock options, restricted stock grants, 401(k) plan matching and our employee stock purchase plan. Total expense recorded for the three and six month periods ended June 30, 2013 and 2012 is as shown below:

	Three Months Ended June 30,				Six months Ended June 30,
	2013		2012		2013		2012
	($ in ‘000’s)
Research and development	$	485	$	397	$	1,159	$	788
Selling, general and administrative		2,439		2,685		4,512		5,309
Total share based compensation expense	$	2,924	$	3,082	$	5,671	$	6,097

Stock Options

During the three and six month period ended June 30, 2013, the Compensation Committee of our Board of Directors granted stock options at exercise prices equal to or greater than 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 six month period ended June 30, 2013 and 2012 were estimated at approximately $8.71 and $7.57, respectively using the Black-Scholes option pricing model with the following assumptions:

	Six-months ended June 30,
	2013			2012
Divided yield		0.00	%		0.00	%
Expected volatility		69.5	%		72.1	%
Risk free interest rate		0.35	%		0.40	%
Expected life (years)		4.95			4.50

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 six months ended June 30, 2013, our share-based charge in connection with the expensing of stock options was approximately $1.6 million and $3.0 million, respectively. During the three and six months ended June 30, 2012, our share-based compensation in connection with the expensing of stock options was approximately $1.3 million and $2.6 million, respectively.

As of June 30, 2013, there was approximately $12.2 million of unrecognized stock-based compensation cost related to stock options which we expect to recognize over a weighted average period of approximately 2.41 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 six month periods ended June 30, 2013, the share-based charge in connection with the expensing of restricted stock awards was approximately $1.1 million and $2.0 million, respectively. During the three and six month periods ended June 30, 2012, the share-based compensation in connection with the expensing of restricted stock awards was approximately $1.3 million and $2.5 million, respectively.

As of June 30, 2013, there was approximately $6.7 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 2.67 years.

401(k) Plan Matching Contribution

During the six month period ended June 30, 2013, we issued 50,970 shares of common stock as our matching contribution of approximately $446,000 for 401(k) contributions made by our employees. During the six month period ended June 30, 2012, we issued 26,154 shares of common stock as our matching contribution of approximately $333,500 for 401(k) contributions made by 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.

A total of 5,000,000 shares of common stock are authorized for issuance under the Purchase Plan, and as of June 30, 2013, 420,046 shares have been issued under the Purchase Plan.

Common Stock Reserved for Future Issuances

As of June 30, 2013, approximately 16.3 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	10,932,574
Exercise of warrants	445,000
Employee stock purchase plan shares reserved for issuance	4,579,954
Long-term retention and management incentive plan shares reserved for issuance	346,500
Total shares of common stock reserved for future issuances	16,344,028