Preferred Stock and Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity Note [Abstract]

Preferred Stock and Stockholders' Equity

Preferred Stock and Stockholders’ Equity

Preferred Stock

Under the Company’s amended and restated certificate of incorporation, as of December 31, 2012 and 2011, the Company is authorized to issue 10,000,000 shares of preferred stock with a $0.001 par value. As of December 31, 2012 and 2011, there were no shares of preferred stock issued or outstanding.

As of December 1, 2010, there were 77,891,000 shares of Series A convertible preferred stock for $76,955,000 and 64,507,000 shares of Series B convertible preferred stock for $72,357,000 outstanding. All of these 142,398,000 shares of preferred stock were converted to 14,240,000 shares of common stock on a 10 for 1 basis upon completion of the Company's IPO in 2010.

Common Stock

Under the Company’s amended and restated certificate of incorporation, as of December 31, 2012 and 2011, the Company was authorized to issue 200,000,000 and 100,000,000 shares of common stock, respectively, with a $0.001 par value. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available, when declared by the board of directors, subject to the prior rights of holders of convertible preferred stock.

Common stock reserved for future issuance is as follows (in thousands):

	December 31,
	2012	2011
Stock options	9,901	3,517
Warrants to purchase common stock	16,292	508
Shares authorized for future issuance under equity and purchase plans	1,166	1,681
	27,359	5,706

Common Stock Warrants

In connection with the July 2012 Offering (see Note 1), the Company sold warrants to purchase 15,784,200 shares of common stock (including over-allotment purchase). The warrants will be exercisable beginning on July 27, 2013 at an exercise price of $2.50 per share and will expire on July 27, 2017, which is five years from the date of issuance. As the warrants contain a cash settlement feature upon the occurrence of certain events that may be outside of the Company's control, the warrants are recorded as a current liability and are marked to market at each reporting date (see Note 2). The fair value of the warrants was approximately $9,308,000 as of December 31, 2012.

In July 2011, upon the closing of and in connection with the Financing Agreement (see Note 6), the Company issued to Healthcare Royalty a warrant exercisable into 225,000 shares of common stock. The warrant is exercisable at $9.00 per share of common stock and has a term of 10 years. As the warrant contains covenants where compliance with such covenants may be outside of the Company’s control, the warrant was recorded as a current liability and is marked to market at each reporting date (see Note 2). The fair value of the warrant was approximately $185,000 and $345,000 as of December 31, 2012 and 2011, respectively.

In June 2011, and in connection with entering into the Amended Oxford/SVB Agreement (see Note 6), the Company issued to Oxford and SVB warrants exercisable into an aggregate of 26,455 shares of common stock. The warrants are exercisable at $3.78 per share of common stock and have a term of 7 years. The value of the warrants of approximately $76,000 was recorded as debt discount and additional paid in capital in the consolidated balance sheet as of December 31, 2011.

Convertible Preferred Stock Warrants

In connection with the execution of the amended Oxford Agreement in July 2010, the Company issued warrants to Oxford and SVB to purchase 1,145,455 and 445,455 shares, respectively, of Series B convertible preferred stock at an exercise price of $1.10 per share. The warrants expire in November 2015. In connection with the Company’s initial public offering in November 2010, these warrants were converted to 159,090 warrants for common stock at an exercise price of $11.00 per share.

In accordance with accounting guidance for warrants for shares in redeemable securities, the Company classified warrants for convertible preferred stock as liabilities on the consolidated balance sheet based on fair value and increases or decreases in the fair value of such warrants were recorded as other income (expense) in the consolidated statement of operations and comprehensive loss. Upon the closing of the IPO on November 29, 2010, all preferred stock converted into common stock. The warrants were converted into warrants to purchase common stock and reclassed from a liability to equity.