Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense in the statements of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Research and development	$	236	$	150	$	419	$	273
General and administrative		353		553		757		862
Total stock-based compensation expense	$	589	$	703	$	1,176	$	1,135

Summary of Option Activity

The following is a summary of option activity under the 2005 Plan and the 1995 Plan for the six months ended June 30, 2012:

	2005 Stock Incentive Plan					1995 Stock Option Plan
	Stock Options			Weighted-Average Exercise Price		Stock Options			Weighted-Average Exercise Price
Outstanding at January 1, 2012		7,412,746		$	2.22		474,650		$	4.38
Granted		3,428,000		$	1.28		—		$	—
Exercised		(47,034	)	$	0.56		—		$	—
Canceled		(1,370,312	)	$	2.28		(184,000	)	$	4.00
Outstanding at June 30, 2012		9,423,400		$	1.88		290,650		$	4.59
Shares exercisable at June 30, 2012		3,148,169		$	2.39		290,650		$	4.59
Shares available for grant a June 30, 2012		5,437,536

Assumptions Used to Estimate Grant Date Fair Value of Stock Options Granted Using Black-Scholes Option-Pricing Model

The fair value of stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Weighted-average fair value of stock options granted	$	0.71		$	1.09		$	0.71		$	1.23
Risk-free interest rate		0.59	%		0.83%-1.91	%		0.59%-1.54	%		0.83%-1.91	%
Dividend yield		0	%		0	%		0	%		0	%
Volatility		75.47%-75.52	%		73.28%-80.02	%		75.47%-80.48	%		73.28%-80.48	%
Expected term (in years)		4.24			3.34-4.47			3.34-7.09			3.26-4.47
Expected forfeiture rate		0%-23.15	%		0%-23.15	%		0%-23.15	%		0%-23.15	%

Summary of Restricted Stock Awards Activity

The following is a summary of restricted stock awards activity for the six months ended June 30, 2012:

	Number of Shares		Per Share Weighted-Average Grant-Date Fair Value
Outstanding at January 1, 2012		53,333	$	1.63
Restricted stock granted		—	$	—
Restricted stock vested		—	$	—
Restricted stock forfeited		—	$	—
Outstanding at June 30, 2012		53,333	$	1.63