Commitments And Contingencies

3 Months Ended

Mar. 31, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

NOTE 10 — COMMITMENTS AND CONTINGENCIES

(a) Operating Leases

The majority of the Company's historical operating lease payments relate to its corporate headquarters and laboratory space. The Company's corporate headquarters are currently located at 201 Spear Street, San Francisco, California, where it leases approximately 34,000 square feet of office space pursuant to lease agreements that expire in July 2012 and May 2013. The Company also leases approximately 9,000 square feet of laboratory space in India pursuant to a lease agreement that expires in December 2015.

In December 2011, the Company entered into a non-cancelable lease agreement for approximately 57,000 square feet of office space located at 525 Market Street, San Francisco, California, which is intended to serve as its future corporate headquarters. The term of the lease is seven years. The Company has an option to extend the term of the lease for an additional five years. As part of the lease agreement, the Company received a tenant improvement allowance of $2.4 million. The Company recorded the allowance as deferred rent and associated capital expenditures as leasehold improvements that will be amortized over the shorter of their useful life or the term of the lease. In connection with the execution of the lease, the Company delivered to the lessor a letter of credit collateralized by restricted cash totaling $5.1 million.

In February 2012, the Company entered into a non-cancelable lease agreement for approximately 15,000 square feet of office space located in Oakbrook Terrace, Illinois, which is intended to serve as its future commercial headquarters. The Company selected this location for its commercial headquarters based on its proximity to the Company's collaboration partner, Astellas. The term of the lease is seven years and seven months. As part of the lease agreement, the Company received a tenant improvement allowance of $0.8 million. The Company recorded the allowance as deferred rent and associated capital expenditures as leasehold improvements that will be amortized over the shorter of their useful life or the term of the lease. In connection with the execution of the lease, the Company delivered to the lessor a letter of credit collateralized by restricted cash totaling $0.8 million.

The future minimum rentals under the Company's non-cancelable operating leases at March 31, 2012 were as follows:

Years ending December 31,	Annual Payments
2012 (remainder of year)	$	2,970
2013		5,080
2014		4,836
2015		4,901
2016		3,586
2017 and after		8,769
Total	$	30,142

In addition to the future minimum rental payments included in the table above, certain lease agreements also require the Company to make additional payments during the lease term for taxes, insurance, and other operating expenses.

(b) Litigation

In March 2010, the first of several putative securities class action lawsuits was commenced in the U.S. District Court for the Northern District of California, naming as defendants the Company and certain of its officers. The lawsuits are largely identical and allege violations of the Securities Exchange Act of 1934, as amended. The plaintiffs allege, among other things, that the defendants disseminated false and misleading statements about the effectiveness of dimebon for the treatment of Alzheimer's disease. The plaintiffs purport to seek damages, an award of their costs and injunctive relief on behalf of a class of stockholders who purchased or otherwise acquired the Company's common stock between September 21, 2006 and March 2, 2010. The actions were consolidated in September 2010 and, in April 2011 the court entered an order appointing Catoosa Fund, L.P. and its attorneys as lead plaintiff and lead counsel. Thereafter, the lead plaintiff filed a consolidated amended complaint, which was dismissed without prejudice as to all defendants in August 2011. The lead plaintiff filed a second amended complaint in November 2011. On March 22, 2012, the court dismissed the second amended complaint with prejudice and entered judgment in favor of defendants. Lead plaintiff filed a notice of appeal to the United States Circuit Court of Appeals for the Ninth Circuit on April 20, 2012. Lead plaintiff's opening brief is currently due on July 30, 2012.

The lawsuit is subject to inherent uncertainties, and the actual cost will depend upon many unknown factors. The outcome of the litigation is inherently uncertain, and the Company could be forced to expend significant resources in the defense of the suit and it may not prevail. The Company has not established any reserve for any potential liability relating to this lawsuit. The Company's management believes that the Company has meritorious defenses and intends to defend the lawsuit vigorously. The Company believes it is entitled to coverage under its relevant insurance policies, subject to a $350,000 retention, but coverage could be denied or prove to be insufficient.