Common Stock Equity Incentive Plan

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Common Stock Equity Incentive Plan

Common Stock Equity Incentive Plan

In April 2000, the stockholders approved the Company's 2000 Equity Incentive Plan (the “2000 Plan”), and in July 2009, the stockholders approved the Company's 2009 Equity Incentive Plan (the “2009 Plan”). Following the approval of the 2009 Plan, all options outstanding under the 2000 Plan are effectively included under the 2009 Plan. Under the provisions of the 2009 Plan, the Company may grant the following types of common stock awards:

• Incentive Stock Options

• Nonstatutory Stock Options

• Restricted Stock Awards

• Stock Appreciation Rights

Awards under the 2009 Plan, as amended, may be made to officers, employees, Board of Directors, advisors, and consultants to the Company. As of March 31, 2013 there were 5,733,514 shares of common stock authorized for the 2009 plan and 755,790 shares remained available for issuance.

On January 1, 2013 an additional 838,375 shares of commons stock were added to the shares reserved for future issuance under the Company’s 2009 Equity Incentive Plan. The shares added to the reserve on January 1, 2013 were increased pursuant to an “evergreen provision” on January 1 of each year, from 2012 to (and including) 2019, in an amount equal to 4% of the total number of shares of Common Stock outstanding on December 31 of the preceding calendar year.

Under the terms of the Company’s 2010 Non-Employee Directors’ Stock Option Plan, or Directors’ Plan, which became effective on November 10, 2011, 238,095 shares of common stock were reserved for future issuance. As of March 31, 2013, 164,297 shares remained available for issuance under the plan.

Under the terms of the Company’s 2010 Employee Stock Purchase Plan, or 2010 Purchase Plan, which became effective on November 10, 2011, 214,285 shares of common stock were reserved for future issuance. As of March 31, 2013, 174,762 shares remained available for issuance under the plan.

Stock Options

Share-based employee compensation expense for the three months endedMarch 31, 2013, and 2012, and from inception through March 31, 2013 was $966,000, $736,000, and $9.5 million, respectively, and is allocated between research and development and general and administrative expenses within the consolidated statements of operations, giving rise to a related tax benefit of $0 for all periods. As of March 31, 2013, the total compensation cost related to nonvested option awards not yet recognized was $8.6 million and the weighted average period over which it is expected to be recognized was 3.1 years.

The following table summarizes the stock option activity for the three months endedMarch 31, 2013:

	Number of options		Weighted average exercise price		Weighted average remaining contractual term (years)
Outstanding at beginning of period	3,752,413		$	4.34
Options granted	701,750		11.81
Options exercised	(19,647	)	6.07
Options forfeited	(4,500	)	11.68
Options expired	—		—
Outstanding at end of period	4,430,016		$	5.51	7.5
Options exercisable at end of period	2,792,067		$	3.53	6.6

Based on the March 31, 2013 price of $12.27 per share, the intrinsic value of stock options outstanding as of March 31, 2013, was $30.1 million, of which $24.4 million and $5.7 million related to stock options that were vested and unvested, respectively, at that date.

The following table summarizes options that were granted during the three months endedMarch 31, 2013, and the range of assumptions used to estimate the fair value of those stock options using a Black-Scholes valuation model:

Risk-free interest rate	1.18%-1.36%
Expected dividend yield	—
Expected volatility	66.1%-67.3%
Expected term (in years)	6.8-7.0
Weighted average grant-date fair value per share	$7.52

The intrinsic value of options exercised during the three months endedMarch 31, 2013 was $114,000. The fair value of awards vested during the three months endedMarch 31, 2013 was $955,000.