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Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2011

Significant Accounting Policies

Components of Comprehensive loss

Comprehensive loss

We report, in addition to net loss, comprehensive loss and its components as follows (in thousands):

		Three Months Ended June 30,						Six Months Ended June 30,
		2011			2010			2011			2010
Comprehensive loss:
Unrealized holding losses		$	(290	)	$	(437	)	$	(550	)	$	(286	)
Reclassification adjustment for realized loss included in net loss		—			—			—			(925		)
Net loss		(17,889		)	(25,154		)	(37,883		)	(34,811		)
Comprehensive loss		$	(18,179	)	$	(25,591	)	$	(38,433	)	$	(36,022	)

Convertible debt

We account for our 25/8 percent convertible notes by separating the liability and equity components of the instruments in a manner that reflects our nonconvertible debt borrowing rate when we recognize interest expense in subsequent periods. As a result, we assigned a value to the debt component of our 25/8 percent convertible notes equal to the estimated fair value of a similar debt instrument without the conversion feature, which resulted in us recording the debt at a discount. We are amortizing the resulting debt discount over the life of the debt as additional non-cash interest expense utilizing the effective interest method.

Schedule of weighted-average assumptions used for valuation of Employee Stock Options

		Six Months Ended June 30,
		2011		2010
Risk-free interest rate		2.3	%	2.8	%
Dividend yield		0.0	%	0.0	%
Volatility		51.4	%	55.7	%
Expected Life		5.3 years		5.1 years

Schedule of weighted-average assumptions used for valuation of ESPP

		Six Months Ended June 30,
		2011		2010
Risk-free interest rate		0.2	%	0.2	%
Dividend yield		0.0	%	0.0	%
Volatility		26.5	%	54.8	%
Expected Life		6 months		6 months

Schedule of stock-based compensation expense related to employee and non-employee stock options and the ESPP

		Three Months Ended June 30,						Six Months Ended June 30,
		2011			2010			2011			2010

Research and development		$	2,284		$	2,611		$	4,572		$	5,436
General and administrative		216			521			660			1,052
Total		$	2,500		$	3,132		$	5,232		$	6,488

Tabular disclosure of components of comprehensive income (loss) including, but not limited to: (a) foreign currency translation adjustments; (b) gains (losses) on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (c) gains (losses) on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (d) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (e) unrealized holding gains (losses) on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (f) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (g) the net gain (loss) and net prior service cost or credit for pension plans and other postretirement benefit plans.

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Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

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