Share-Based Payment Arrangements (Tables)

12 Months Ended

Dec. 31, 2014

Share-Based Payment Arrangements [Abstract]

Assumptions used in computing the fair value of option grants

Under ASC 718 Compensation – Stock Compensation, the fair value of each non-qualified stock option award is estimated on the date of grant using the Black-Scholes option pricing model, which requires input assumptions noted in the following table. Ranges of assumptions for inputs are disclosed where the value of such assumptions varied during the related period. Historical volatilities are based upon daily quoted market prices of our common stock on The NASDAQ Stock Market LLC over a period equal to the expected term of the related equity instruments. We rely only on historical volatility since it provides the most reliable indication of future volatility. Future volatility is expected to be consistent with historical; historical volatility is calculated using a simple average calculation; historical data is available for the length of the option's expected term and a sufficient number of price observations are used consistently. Since our stock options are not traded on a public market, we do not use implied volatility. For 2014, 2013 and 2012 our expected term was calculated based upon historical data related to exercise and post-termination cancellation activity; accordingly, for grants issued to employees and directors and officers, we are using expected terms of 5.3 and 7.5 years, 5.3 and 7.4 years and 5.4 and 7.4 years, respectively. The expected term for options granted to non-employees was also calculated separately from stock options granted to employees and directors and officers and was ten years, which is the contractual term of those options. We have never paid dividends and do not expect to pay dividends in the future. Therefore, our dividend rate is zero. The risk-free rate for periods within the expected term of the options is based on the U.S. Treasury yield curve in effect at the time of grant. The following table presents assumptions used in computing the fair value of option grants during 2014, 2013 and 2012:

	2014		2013		2012
Expected volatility		74% – 84%		73% – 90%		70% – 85%
Expected dividends	Zero		Zero		Zero
Expected term (years)		5.3 – 7.5		5.3 – 10		5.3 – 10
Weighted average expected term (years)		5.93		5.96		6.11
Risk-free rate		1.64% – 2.42%		0.76% – 2.83%		0.57% – 1.71%

Summary of option activity under the Plans

PROGENICS PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

(amounts in thousands, except per share amounts or as otherwise noted)

A summary of option activity under the Plans as of December 31, 2014 and changes during the year then ended is presented below:

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Yr.)		Aggregate Intrinsic Value
Outstanding at January 1, 2014		5,249		$	10.94
Granted		993			4.66
Exercised		(77	)		5.54
Forfeited		(324	)		6.00
Expired		(423	)		13.52
Outstanding at December 31, 2014		5,418			9.96		5.79	$	6,856
Exercisable at December 31, 2014		4,115		$	11.40		4.89	$	3,798

Compensation expense of shares, granted to both employees and non-employees

The total compensation expense of shares, granted to both employees and non-employees, under all of our share-based payment arrangements that was recognized in operations during 2014, 2013 and 2012 was:

	2014		2013		2012
Recognized as:
Research and Development	$	1,843	$	2,012	$	4,060
General and Administrative		1,680		1,534		2,476
Total	$	3,523	$	3,546	$	6,536