Quarterly report pursuant to Section 13 or 15(d)

Stock-based Compensation

v2.4.0.8
Stock-based Compensation
 9 Months Ended
Sep. 30, 2013
Stock-based Compensation [Abstract]  
Stock-based Compensation
9.  Stock-based Compensation

In the first nine months of 2013, the Board of Directors of the Company approved grants under the Company’s Long Term Incentive Plan for an aggregate of 1,144,403 stock options and an aggregate of 958,385 RSUs to certain employees and the directors of the Company. The stock options vest monthly over four years for employees and one year for directors of the Company, and the RSUs vest annually over three years, in equal increments.

The Company recognizes compensation expense for all stock-based payment awards made to the Company’s employees, consultants and directors based on estimated fair values. The valuation of stock option awards is determined at the date of grant using the Black-Scholes Model. This model requires inputs such as the expected term of the option, expected volatility and risk-free interest rate. To establish an estimate of expected term, the Company considers the vesting period and contractual period of the award and its historical experience of stock option exercises, post-vesting cancellations and volatility. The estimate of expected volatility is based on the Company’s historical volatility. The risk-free rate is based on the yield available on U.S. Treasury zero-coupon issues. The forfeiture rate impacts the amount of aggregate compensation for both stock options and RSUs. To establish an estimate of forfeiture rate, the Company considers its historical experience of option forfeitures and terminations.
The fair value of the stock options granted was estimated based on the following weighted average assumptions for three and nine months ended September 30, 2013 and 2012:

 
  
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
Dividend yield
    
0
%
    
0
%
    
0
%
    
0
%
Expected volatility
    
92
%
    
92
%
    
92
%
    
92
%
Risk-free interest rate
    
1.43
%
    
0.72
%
    
0.87
%
    
1.05
%
Expected term
  
5.6 years
    
5.6 years
    
5.6 years
    
5.6 years
  

Stock option activity for the nine months ended September 30, 2013 was as follows:

 
  
Options
    
Weighted Average Exercise Price Per Share
    
Weighted Average Remaining Contractual Life (in years)
    
Aggregate Intrinsic Value (in thousands)
  
Options outstanding at December 31, 2012
    
6,788,383
    
$
8.99
      
7.36
    
$
1,531
  
Granted
    
1,144,403
    
$
3.10
                  
Exercised
    
(297,149
)
  
$
1.75
                  
Forfeited, expired or cancelled
    
(129,296
)
  
$
17.88
                  
Options outstanding at September 30, 2013
    
7,506,341
    
$
8.23
      
7.01
    
$
8,262
  
Options exercisable at September 30, 2013
    
4,817,306
    
$
11.13
      
6.03
    
$
4,050
  

 The valuation of RSUs is determined at the date of grant using the closing stock price. To establish an estimate of forfeiture rate, the Company considers its historical experience of forfeitures and terminations.

 Unvested RSU activity for the nine months ended September 30, 2013 is summarized below:

 
  
   
Weighted-
  
 
      
Average
 
 
  
Number of
Shares
    
Grant-Date
 Fair Value
  
Unvested balance at December 31, 2012
    
1,459,853
    
$
2.75
  
Granted
    
958,385
    
$
2.96
  
Vested
    
(419,760
)
  
$
2.99
  
Forfeited
    
(45,434
)
  
$
2.29
  
Unvested balance at September 30, 2013
    
1,953,044
    
$
2.63
  

 The following table shows total stock-based compensation expense included in the condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2013 and 2012 (in thousands):

 
  
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
Research and development
  
$
474
    
$
1,304
    
$
1,904
    
$
1,984
  
Selling, general and administrative
    
753
      
818
      
2,042
      
1,384
  
Total stock-based compensation expense
  
$
1,227
    
$
2,122
    
$
3,946
    
$
3,368