Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation

Stock-Based Compensation

(10)  Stock-Based Compensation

At September 30, 2012, the 2008 Stock Option and Incentive Plan allowed for a maximum of 7,400,000 shares of common stock to be issued for grants of Stock Options and other Awards made prior to March 7, 2018 and grants of Incentive Stock Options made prior to October 20, 2017.

A summary of stock option activity for the nine months ended September 30, 2012 is as follows:

	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (In Years)
Options Outstanding at December 31, 2011	4,459,034		$	6.08	6.9
Granted	1,115,700		$	5.84
Exercised	(21,679	)	$	2.61
Canceled	(201,056	)	$	8.22
Options Outstanding at September 30, 2012	5,351,999		$	5.97	7.2
Options Vested and Expected to Vest at September 30, 2012	5,273,241		$	5.98	7.1
Options Exercisable at September 30, 2012	3,190,776		$	6.77	5.9
Shares Available for Grant under the 2008 Plan	3,380,865

The weighted average grant-date fair value of stock options granted during the nine months ended September 30, 2012 was $3.67. Stock-based compensation expense for the three and nine months ended September 30, 2012 and 2011 was recorded as follows:

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
	(In thousands)
Research and development	$	330	$	327	$	1,010	$	1,032
General and administrative	195		243		604		671
Total stock-based compensation expense	$	525	$	570	$	1,614	$	1,703

The fair values of employee stock options granted during the three and nine months ended September 30, 2012 and 2011 were valued using the Black-Scholes option-pricing model with the following assumptions:

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
Expected stock price volatility	71	%	70	%	70 - 71	%	68 - 70	%
Expected option term	6.0 years		6.0 years		6.0 years		6.0 years
Risk-free interest rate	1.2 - 1.3	%	1.9 - 2.5	%	0.9 - 1.4	%	1.9 - 2.9	%
Expected dividend yield	None		None		None		None