Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation

Stock-Based Compensation

(11)  Stock-Based Compensation

A summary of stock option activity for the nine months ended September 30, 2011 is as follows:

	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (In Years)
Options Outstanding at December 31, 2010	4,019,982		$	6.93	6.6
Granted	913,350		$	2.91
Exercised	—		$	—
Canceled	(398,195	)	$	7.77
Options Outstanding at September 30, 2011	4,535,137		$	6.05	7.1
Options Vested and Expected to Vest at September 30, 2011	4,472,565		$	6.08	7.0
Options Exercisable at September 30, 2011	2,809,966		$	7.09	6.0
Shares Available for Grant under the 2008 Plan	945,385

The weighted average grant-date fair value of stock options granted during the nine months ended September 30, 2011 was $1.83.

A summary of restricted stock activity for the nine months ended September 30, 2011 is as follows:

	Shares		Weighted Average Grant Date Fair Value (per share)
Outstanding and unvested at December 31, 2010	9,338		$	3.96
Granted	12,000		3.24
Vested	(12,338	)	(3.78		)
Canceled	—		—
Outstanding and unvested at September 30, 2011	9,000		$	3.24

Stock-based compensation expense for the three and nine months ended September 30, 2011 and 2010 was recorded as follows:

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
	(In thousands)
Research and development	$	327	$	359	$	1,032	$	1,267
General and administrative	243		224		671		930
Total stock-based compensation expense	$	570	$	583	$	1,703	$	2,197

The fair values of employee stock options granted during the three and nine months ended September 30, 2011 and 2010 were valued using the Black-Scholes option-pricing model with the following assumptions:

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Expected stock price volatility	70	%	67	%	68 - 70	%	65 - 67	%
Expected option term	6.0 years		6.2 years		6.0 years		6.2 years
Risk-free interest rate	1.9 – 2.5	%	2.2	%	1.9 – 2.9	%	2.2 – 3.2	%
Expected dividend yield	None		None		None		None