Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

Allocation of stock-based compensation expense included in the consolidated statements of operations

	Three Months Ended March 31,
(in thousands)	2012		2011
Research and development	$	3,529	$	3,132
General and administrative	2,706		2,409
Total stock-based compensation expense	$	6,235	$	5,541

Summary of equity award activity under the 2004 Plan

	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011
	Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value		Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value
2004 Plan
Stock options	118,000	$	19.05	94,000	$	22.12
RSUs time-based	468,541	18.12		394,580	24.59
RSAs time-based	402,500	18.11		1,148,000	24.70
RSAs performance-contingent(1)	44,500	18.11		1,290,000	24.73

(1)In 2011, the Compensation Committee of the Company’s Board of Directors approved the grant of 1,290,000 performance-contingent RSAs to senior management. These grants have dual triggers of vesting based upon the achievement of certain performance conditions over a six-year timeframe from 2011-2016 and continued employment, both of which must be satisfied in order for the RSAs to vest. Expense associated with these RSAs would be recognized, if at all, during these years depending on the probability of meeting the performance conditions. The maximum potential expense associated with the RSAs could be up to approximately $31.9 million (allocated as $6.3 million for research and development expense and $25.6 million for general and administrative expense) if all of the performance conditions are achieved on time. As of March 31, 2012, the Company had determined that the achievement of the requisite performance conditions was not probable and, as a result, no compensation expense has been recognized. As the RSAs are dependent upon the achievement of certain performance conditions, the expense associated with the RSAs may vary significantly from period to period. In 2012, the Compensation Committee of the Company’s Board of Directors approved the grant of 44,500 performance-contingent RSAs to senior management. These grants are subject to forfeiture unless one of three possible performance goals is achieved by December 31, 2013.

Schedule of weighted-average assumptions used to estimate the fair value of stock options granted

	Three Months Ended March 31,
	2012			2011
Employee stock options
Risk-free interest rate	1.00%-1.17		%	2.38%-2.46		%
Expected life (in years)	6			6
Volatility	0.55			0.49
Dividend yield	—		%	—		%
Weighted-average estimated fair value of stock options granted	$	9.88		$	10.86