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Stock-Based Compensation
9 Months Ended
Sep. 30, 2013
Stock-Based Compensation
3. Stock-Based Compensation

Following is the stock-based compensation expense related to common stock options, common stock, restricted common stock and common stock warrants:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2013      2012      2013      2012  
     (in thousands)  

Research and development

   $ 335       $ 248       $ 865       $ 756   

General and administrative

     1,473         571         2,411         1,414   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 1,808       $ 819       $ 3,276       $ 2,170   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2012 through September 30, 2013:

 

     Shares     Weighted Average
Exercise Price
 

Outstanding, December 31, 2012

     3,539,961      $ 5.66   

Granted

     425,426        3.89   

Exercised

     (156,349     1.69   

Options forfeited/cancelled

     (302,041     17.16   
  

 

 

   

Outstanding, September 30, 2013

     3,507,005      $ 4.59   
  

 

 

   

As of September 30, 2013, there was $5,086,000 of unrecognized compensation related to 1,515,137 unvested options, which is expected to be recognized over a weighted–average period of approximately 4.2 years. The weighted-average grant date fair value for options granted during the three and nine months ended September 30, 2013 was $3.55 and $3.17, respectively. The weighted-average grant date fair value for options granted during the three and nine months ended September 30, 2012 was $1.89 and $1.72, respectively.

The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:

 

    

 

 

Nine Months Ended
September 30,

    Cumulative
Period from
Inception
(July 10, 2000) to
September 30,
2013
 
     2013    

Risk-free interest rate

     1.17     1.75

Expected life of the options

     5.3 years        5.2 years   

Expected volatility of the underlying stock

     115     119

Expected dividend rate

     0     0

On September 26, 2013, the Company modified certain vested stock options held by a former member of the Company’s board of directors. The individual left the board on May 23, 2013. The modification extended the contractual period of exercise of 103,158 stock options until the end of their original terms instead of such options expiring 3 months after service on the board ended. As a result, the Company recorded a non-cash charge of $930,000 related to the modification in the quarter ended September 30, 2013.