Stock-based Compensation Expense

6 Months Ended

Jun. 30, 2011

Stock-based Compensation Expense

Stock-based Compensation Expense

C. Stock-based Compensation Expense

        The Company issues stock options, restricted stock and restricted stock units with service conditions, which are generally the vesting periods of the awards. The Company also has issued, to certain members of senior management, restricted stock and restricted stock units that vest upon the earlier of the satisfaction of (i) a market or performance condition or (ii) a service condition, and stock options that vest upon the earlier of the satisfaction of (1) performance conditions or (2) a service condition. The Company also issues shares pursuant to an employee stock purchase plan ("ESPP").

        The effect of stock-based compensation expense during the three and six months ended June 30, 2011 and 2010 was as follows:

		Three Months Ended June 30,					Six Months Ended June 30,
		2011			2010		2011			2010
		(in thousands)
Stock-based compensation expense by type of award:
	Stock options	$	23,903		$	17,735	$	43,527		$	31,203
	Restricted stock and restricted stock units		6,835			5,743		13,665			10,490
	ESPP share issuances		1,523			971		3,102			2,089
	Less stock-based compensation expense capitalized to inventory		(382	)		—		(536	)		—
Total stock-based compensation expense included in net loss		$	31,879		$	24,449	$	59,758		$	43,782
Stock-based compensation expense by line item:
	Research and development expenses	$	20,453		$	17,735	$	39,002		$	32,055
	Sales, general and administrative expenses		11,426			6,714		20,756			11,727
Total stock-based compensation expense included in net loss		$	31,879		$	24,449	$	59,758		$	43,782

        The Company capitalized $0.4 million and $0.5 million, respectively, of stock-based compensation expense to inventory in the three and six months ended June 30, 2011, all of which is attributable to employees who support the Company's manufacturing operations related to INCIVEK.

        The following table sets forth the Company's unrecognized stock-based compensation expense, net of estimated forfeitures, as of June 30, 2011 by type of award, and the weighted-average period over which that expense is expected to be recognized:

		As of June 30, 2011
		Unrecognized Expense, Net of Estimated Forfeitures		Weighted-average Recognition Period
		(in thousands)		(in years)
Type of award:
	Stock options	$	131,167		2.65
	Restricted stock and restricted stock units		43,527		2.36
	ESPP share issuances		2,522		0.56

        The following table summarizes information about stock options outstanding and exercisable at June 30, 2011:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted-average Remaining Contractual Life		Weighted-average Exercise Price		Number Exercisable		Weighted-average Exercise Price
	(in thousands)		(in years)		(per share)		(in thousands)		(per share)
$  8.68-$20.00		3,050		3.61	$	15.54		2,839	$	15.30
$20.01-$30.00		1,862		5.11		27.81		1,734		27.85
$30.01-$40.00		15,063		7.74		35.69		7,110		35.04
$40.01-$50.00		277		8.56		45.28		54		43.31
$50.01-$57.27		337		9.88		54.52		164		53.81