Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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Stockholders' Equity
3 Months Ended
Mar. 31, 2012
Stockholders' Equity [Abstract]  
Stockholders' Equity

8. Stockholders' Equity

Stock Option Activity

The following is a summary of the Company's stock option plan activity and related information:

 

     Shares     Weighted
Average
Exercise
Price
     Weighted
Average

Remaining
Contractual Term
in Years
     Aggregate
Intrinsic  Value
(In thousands)
 
          
          
          

Balance at December 31, 2011

     1,146,046      $ 25.77         7.96       $ 1,489   
  

 

 

         

Granted

     595,500        14.44         

Exercised

     (14,958     10.27         

Forfeited

     (55,344     10.05         

Cancelled

     (8,726     46.78         
  

 

 

         

Balance at March 31, 2012

     1,662,518        14.56         
  

 

 

         

Exercisable at March 31, 2012

     566,578        18.38         7.01         1,473   

Options vested and expected to vest as of March 31, 2012

     1,662,518        14.56         8.54         5,160   

The weighted-average grant date fair value of all stock options granted during the three months ended March 31, 2012 was $14.44 per share. The total intrinsic value of all options exercised during the three months ended March 31, 2012 and 2011 was approximately $0.1 million and $1,000, respectively. As of March 31, 2012, there was $6.6 million of total unrecognized compensation cost related to nonvested stock options. That cost is expected to be recognized over a weighted-average period of 3 years.

As of March 31, 2012, 0.1 million shares were available for future option grants or direct issuance under the Company's 2002 Stock Incentive Plan, as amended.

Restricted Stock Activity

Restricted stock activity for the three months ended March 31, 2012 is as follows:

 

     Shares     Weighted-
Average  Grant
Date Fair
Value
 
    
    

Nonvested at December 31, 2011

     115,506      $ 10.63   
  

 

 

   

Granted

     69,030        14.47   

Vested

     (30,807     11.74   

Forfeited

     (1,326     10.06   
  

 

 

   

Nonvested at March 31, 2012

     152,403        17.05   
  

 

 

   

 

The weighted-average grant-date fair value of restricted stock granted during the three months ended March 31, 2012 was $14.47 per share. As of March 31, 2012, there was $1.3 million of total unrecognized compensation cost related to nonvested restricted stock. That cost is expected to be recognized over a weighted-average period of 2 years.

Employee Stock Purchase Plan

The Company's Employee Stock Purchase Plan, as amended and restated (the "Amended ESPP") allows participants to purchase up to 1,250 shares of Ligand common stock during each offering period, but in no event may a participant purchase more than 1,250 shares of common stock during any calendar year. The length of each offering period is six months, and employees are eligible to participate in the first offering period beginning after their hire date.

The Amended ESPP allows employees to purchase Ligand common stock at the end of each six month period at a price equal to 85% of the lesser of fair market value on either the start date of the period or the last trading day of the period (the "Lookback Provision"). The 15% discount and the Lookback Provision make the Amended ESPP compensatory. There were no shares of common stock issued under the Amended ESPP during the three months ended March 31, 2012 and 2011. The Company recorded compensation expense related to the ESPP of $6,000 and $1,000 for the three months ended March 31, 2012 and 2011, respectively. As of March 31, 2012, 97,291 shares were available for future purchases under the Amended ESPP.

Warrants

As of March 31, 2012, warrants to purchase 144,606 shares of the Company's common stock were outstanding with an exercise price of $51.54 per share and an expiration date of April 2012. The warrants were assumed in the acquisition of Pharmacopeia, Inc.

As of March 31, 2012, 163,568 warrants with an exercise price of $179.40 per warrant and an expiration date of April 2013 were outstanding to purchase an aggregate of 129,360 shares of the Company's common stock. If exercised, these warrants are also entitled to receive $0.1 million in cash and 981,411 of each of the Company's four contingent value rights issued to Neurogen shareholders in December 2009. The series of warrants was assumed in the acquisition of Neurogen Corporation.

Share Repurchases

On June 15, 2010, the Company announced that its Board of Directors has authorized the Company to repurchase up to $10.0 million of its common stock from time to time in privately negotiated and open market transactions for a period of up to two years, subject to the Company's evaluation of market conditions, applicable legal requirements and other factors. The Company is not obligated to acquire common stock under this program and the program may be suspended at any time. Through March 31, 2012, the Company repurchased 16,905 shares of its common stock totaling $0.1 million.