Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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Stockholders' Equity
6 Months Ended
Jun. 30, 2012
Stockholders' Equity [Abstract]  
Stockholders' Equity

8. Stockholders’ Equity

On May 31, 2012, the Company’s stockholders approved the amendment and restatement of the Company’s 2002 Stock Incentive Plan to increase the number of shares available for issuance by 1.8 million shares.

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     $ 14.61       7.96     $ 1,489  
   

 

 

                         

Granted

    642,845       14.28                  

Exercised

    (17,003     10.25                  

Forfeited

    (65,927     10.01                  

Cancelled

    (12,823     40.50                  
   

 

 

                         

Balance at June 30, 2012

    1,693,138       14.51                  
   

 

 

                         

Exercisable at June 30, 2012

    689,860       16.87       7.15       2,634  

Options vested and expected to vest as of June 30, 2012

    1,693,138       14.51       8.35       6,702  

The weighted-average grant date fair value of all stock options granted during the six months ended June 30, 2012 was $8.90 per share. The total intrinsic value of all options exercised during the six months ended June 30, 2012 and 2011 was approximately $0.3 million and $2,500, respectively. As of June 30, 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 3.1 years.

As of June 30, 2012, 1.9 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 June 30, 2012 is as follows:

 

                 
    Shares     Weighted-
Average Grant
Date Fair Value
 

Nonvested at December 31, 2011

    115,506     $ 10.63  
   

 

 

         

Granted

    108,661       13.75  

Vested

    (71,406     11.48  

Forfeited

    (2,917     9.86  
   

 

 

         

Nonvested at June 30, 2012

    149,844       12.50  
   

 

 

         

The weighted-average grant-date fair value of restricted stock granted during the six months ended June 30, 2012 was $13.75 per share. As of June 30, 2012, there was $1.4 million of total unrecognized compensation cost related to nonvested restricted stock. That cost is expected to be recognized over a weighted-average period of 2.0 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 7,374 and 2,404 shares of common stock issued and $75,000 and $18,000 of proceeds received under the Amended ESPP during the six months ended June 30, 2012 and 2011, respectively. The Company recorded compensation expense related to the ESPP of $22,000 and $700 for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, 89,917 shares were available for future purchases under the Amended ESPP.

Warrants

As of June 30, 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 had 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 authority to repurchase shares of the Company’s common stock expired on June 8, 2012, at which time the Company had repurchased 16,905 shares of its common stock totaling $0.1 million.