Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information
Entity Registrant Name	AASTROM BIOSCIENCES INC
Entity Central Index Key	0000887359
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		43,783,559
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 21,089	$ 5,530
Receivables	9	9
Other current assets	364	636
Total current assets	21,462	6,175
Property and equipment, net	1,246	1,564
Total assets	22,708	7,739
Current liabilities:
Accounts payable and accrued expenses	3,244	2,963
Accrued employee benefits	742	1,042
Current portion of long-term debt	40	40
Warrant liabilities	2,954	16,625
Total current liabilities	6,980	20,670
Long-term debt	9	40
Total liabilities	6,989	20,710
Total convertible preferred stock	40,358
Shareholders' deficit:
Common stock, no par value; shares authorized - 150,000; shares issued and outstanding - 38,635 and 43,784, respectively	242,771	228,877
Deficit accumulated during the development stage	(267,410)	(241,848)
Total shareholders' deficit	(24,639)	(12,971)
Total liabilities, convertible preferred stock and shareholders' deficit	22,708	7,739
Series B-1 non-voting convertible preferred stock
Current liabilities:
Total convertible preferred stock	2,668
Series B-2 voting convertible preferred stock
Current liabilities:
Total convertible preferred stock	$ 37,690

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical)	Sep. 30, 2012	Dec. 31, 2011
Common Stock, shares authorized	150,000,000	150,000,000
Common Stock, shares issued	43,784,000	38,635,000
Common Stock, shares outstanding	43,784,000	38,635,000
Series B-1 non-voting convertible preferred stock
Convertible preferred stock, shares authorized	39,000
Convertible preferred stock, shares reserved	39,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Series B-2 voting convertible preferred stock
Convertible preferred stock, shares authorized	39,000
Convertible preferred stock, shares reserved	39,000
Convertible preferred stock, shares issued	12,000
Convertible preferred stock, shares outstanding	12,000

Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation.

+ References+ Details

- Definition

The maximum number of securities classified as temporary equity that are permitted to be issued by an entity's charter and bylaws. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

+ References+ Details

- Definition

The number of securities classified as temporary equity that have been sold (or granted) to the entity's shareholders. Securities issued include securities outstanding and securities held in treasury. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

+ References+ Details

- Definition

The number of securities classified as temporary equity that have been issued and are held by the entity's shareholders. Securities outstanding equals securities issued minus securities held in treasury. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

+ References+ Details

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended		282 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Revenues:
Product sales and rentals		$ 9	$ 2	$ 18	$ 1,879
Research and development agreements					2,105
Grants					9,901
Total revenues		9	2	18	13,885
Costs and expenses:
Cost of product sales and rentals		2	2	4	3,043
Research and development	6,147	5,750	20,012	15,426	210,717
Selling, general and administrative	2,138	1,696	6,131	5,794	90,979
Total costs and expenses	8,285	7,448	26,145	21,224	304,739
Loss from operations	(8,285)	(7,439)	(26,143)	(21,206)	(290,854)
Other income (expense):
Decrease in fair value of warrants	2,241	5,496	3,289	4,286	15,578
Other income					1,249
Interest income	14	12	40	48	10,812
Interest expense	(4)	(3)	(10)	(7)	(489)
Total other income	2,251	5,505	3,319	4,327	27,150
Net loss	(6,034)	(1,934)	(22,824)	(16,879)	(263,704)
Accretion of convertible preferred stock	1,218		2,738		3,706
Net loss attributable to common shareholders	$ (7,252)	$ (1,934)	$ (25,562)	$ (16,879)	$ (267,410)
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share)	$ (0.17)	$ (0.05)	$ (0.63)	$ (0.44)
Weighted average number of common shares outstanding (Basic and Diluted) (in shares)	43,336	38,632	40,331	38,624

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended		282 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Operating activities:
Net loss	$ (22,824)	$ (16,879)	$ (263,704)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	487	464	7,985
Loss on property held for resale			110
Amortization of discounts and premiums on investments			(1,704)
Stock compensation expense	3,166	2,767	17,051
Decrease in fair value of warrants	(3,289)	(4,286)	(15,578)
Inventory write downs and reserves			2,240
Stock issued pursuant to license agreement			3,300
Provision for losses on accounts receivable			204
Changes in operating assets and liabilities:
Receivables		16	(258)
Inventories			(2,335)
Other current assets	272	(196)	(344)
Accounts payable and accrued expenses	281	(452)	3,012
Accrued employee benefits	(300)	218	742
Net cash used for operating activities	(22,207)	(18,348)	(249,279)
Investing activities:
Organizational costs			(73)
Purchase of short-term investments			(217,041)
Maturities of short-term investments			218,745
Property and equipment purchases	(169)	(803)	(7,386)
Proceeds from sale of property held for resale			400
Net cash used for investing activities	(169)	(803)	(5,355)
Financing activities:
Net proceeds from issuance of preferred stock	37,620		89,267
Net proceeds from issuance of common stock and warrants	346	32	185,054
Payments received for stock purchase rights and other, net			3,500
Proceeds from long-term debt			751
Principal payments under long-term debt obligations	(31)	(182)	(2,831)
Other, net			(18)
Net cash provided by (used for) financing activities	37,935	(150)	275,723
Net increase (decrease) in cash and cash equivalents	15,559	(19,301)	21,089
Cash and cash equivalents at beginning of period	5,530	31,248
Cash and cash equivalents at end of period	21,089	11,947	21,089
Supplemental cash flow information (non-cash):
Accretion of convertible preferred stock	2,738		3,706
Warrants exchanged for common stock	$ 10,382		$ 10,382

Organization and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Organization and Summary of Significant Accounting Policies

Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

Aastrom Biosciences, Inc. was incorporated in March 1989 (Inception), began employee-based operations in 1991, and is in the development stage. The Company operates its business in one reportable segment — research and product development involving the development of patient-specific cell based products for use in regenerative medicine.

Successful future operations are subject to several technical hurdles and risk factors, including satisfactory product development, timely initiation and completion of clinical trials, regulatory approval and market acceptance of the Company’s products and the Company’s continued ability to obtain future funding.

The Company is subject to certain risks related to the operation of its business and development of its products and product candidates. The Company believes that it will have adequate liquidity to finance its planned operations, including development of its products and product candidates, via cash on hand as of September 30, 2012 of $21,089,000 until at least December 31, 2012. While the Company’s budgeted cash usage and operating plan for 2012 does not currently contemplate taking additional actions to reduce the use of cash over the next three months, the Company could, if necessary, delay or forego certain budgeted discretionary expenditures such as anticipated hiring plans or certain non-critical research and development expenditures, as well as slow down or delay certain clinical trial activity (without jeopardizing our Phase 3 clinical trial for CLI). While the Company could sell shares through an At the Market Sales Agreement (ATM) to raise additional capital, there are certain factors, such as volume of trading in our stock, our stock price and the ability to terminate the agreement with notice, which could limit the amount the Company could raise in a short period of time. On a longer-term basis, the Company will need to raise additional funds in order to complete product development programs and complete clinical trials needed to market and commercialize these products. The Company cannot be certain that such funding will be available on favorable terms, if at all. Some of the factors that will impact the Company’s ability to raise additional capital and its overall success include: the rate and degree of progress for product development, the rate of regulatory approval to proceed with clinical trial programs, the level of success achieved in clinical trials, the requirements for marketing authorization from regulatory bodies in the United States and other countries, the liquidity and market volatility of the Company’s equity securities, regulatory and manufacturing requirements and uncertainties, technological developments by competitors, and other factors. If the Company cannot raise such funds, it may not be able to develop or enhance products, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements, which would likely have a material adverse impact on the Company’s business, financial condition and results of operations. As a result of the need to raise additional capital, there is uncertainty regarding our ability to maintain liquidity sufficient to operate the business effectively over at least the next twelve months, which raises substantial doubt as to our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Presentation

9 Months Ended

Sep. 30, 2012

Basis of Presentation

Basis of Presentation

2. Basis of Presentation

The condensed consolidated financial statements included herein have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) have been omitted pursuant to such rules and regulations. The financial statements reflect, in the opinion of management, all adjustments (consisting only of normal, recurring adjustments) necessary to state fairly the financial position and results of operations as of and for the periods indicated. The results of operations for the nine months ended September 30, 2012, are not necessarily indicative of the results to be expected for the full year or for any other period. The December 31, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the period ended December 31, 2011, as filed with the SEC.

The consolidated financial statements include the accounts of Aastrom and its wholly-owned subsidiaries, Aastrom Biosciences GmbH, located in Berlin, Germany and Aastrom Biosciences, SL, located in Barcelona, Spain (collectively, the Company). All inter-company transactions and accounts have been eliminated in consolidation. The subsidiaries are not a significant component of the consolidated financial statements as each has ceased operations and had limited operations historically.

Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation

Stock-Based Compensation

3. Stock-Based Compensation

The Company issues nonqualified and incentive stock options as well as other equity awards pursuant to its 2009 Omnibus Incentive Plan, as amended (Option Plan). Such awards pursuant to the Option Plan may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants.

During the nine months ended September 30, 2012, the Company granted 4,507,445 service-based options to purchase common stock. These options were granted with exercise prices equal to or greater than the fair market value of the Company’s stock at the grant date, vest over four years and expire after ten years. The weighted average grant-date fair value of service-based options granted under the Company’s Option Plan during the nine months ended September 30, 2011 and 2012 was $1.54 and $1.25, respectively.

The net compensation costs recorded for the service-based stock options related to employees and directors were $1,127,000 and $3,166,000 for the quarter and nine months ended September 30, 2012, respectively, compared to $919,000 and $2,767,000 for the corresponding periods ended September 30, 2011.

The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table.

	Nine Months Ended September 30,
Service-Based Stock Options	2011	2012

Expected dividend rate	0%	0%
Expected stock price volatility	72.9% - 78.9%	72.9% - 74.9%
Risk-free interest rate	1.7% - 2.7%	0.9% -1.5%
Expected life (years)	6.0 - 6.3	6.0 - 6.3

The following table summarizes the activity for service-based stock options for the indicated periods:

Service-Based Stock Options	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value

Outstanding at December 31, 2011	8,079,667		$	2.38	8.4	$	674,000
Granted	4,507,445		$	2.36
Exercised	(144,167	)	$	1.48		$	52,000
Cancelled	(1,057,700	)	$	2.03
Forfeited or expired	(828,432	)	$	2.20
Outstanding at September 30, 2012	10,556,813		$	2.43	8.4	$	206,000
Exercisable at September 30, 2012	3,727,232		$	2.75	7.3	$	119,000

As of September 30, 2012 there was $6,603,000 of total unrecognized compensation cost related to non-vested service-based stock options granted under the Option Plan. That cost is expected to be recognized over a weighted-average period of 3.0 years.

The total fair value of options vested during the nine months ended September 30, 2011 and 2012 was $1,582,000 and $2,136,000, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Stock Purchase Warrants

9 Months Ended

Sep. 30, 2012

Stock Purchase Warrants

Stock Purchase Warrants

4. Stock Purchase Warrants

The Company has historically issued warrants to purchase shares of the Company’s common stock in connection with certain of its common stock offerings. The following warrants were outstanding at September 30, 2012, and include provisions that could require cash settlement of the warrants or have anti-dilution price protection provisions requiring each to be recorded as liabilities of the Company at the estimated fair value at the date of issuance, with changes in estimated fair value recorded as non-cash income or expense in the Company’s statement of operations in each subsequent period:

(i) warrants to purchase an aggregate of 740,131 shares of the Company’s common stock, issued on October 17, 2007 in connection with the Company’s registered direct offering, exercisable from April 18, 2008 through April 17, 2013 at an exercise price of $12.72 per share, all of which remained outstanding as of September 30, 2012;

(ii) Class A warrants to purchase an aggregate of 4,882,228 shares of the Company’s common stock, issued on January 21, 2010 in connection with the Company’s registered public offering, exercisable for a five year period commencing on July 21, 2010 at an exercise price of $2.48 per share (as adjusted for the anti-dilution provision triggered by the close of the Company’s exchange program for the December 2010 warrants, as described below, and usage of the ATM during the third quarter), 4,525,978 of which remained outstanding as of September 30, 2012; and

(iii) warrants to purchase an aggregate of 10,000,000 shares of the Company’s common stock, issued on December 15, 2010 in connection with the Company’s registered public offering (December 2010 warrants), exercisable for a five year period commencing on December 15, 2010 at an exercise price of $1.75 per share (as adjusted from $3.22 per share for the anti-dilution provision triggered by usage of the Company’s ATM during the third quarter). On June 27, 2012, the Company announced the closing of a common stock exchange program for the remaining December 2010 warrants, which was completed on July 27, 2012, resulting in the issuance of 4,845,949 shares of common stock in exchange for 9,691,900 warrants. As of September 30, 2012, 308,100 December 2010 warrants remained outstanding.

The fair value of the Class A warrants and the December 2010 warrants are measured using the Monte Carlo valuation model, while the October 2007 warrants are measured using the Black-Scholes valuation model. Both of the methodologies are based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent the Company’s best estimates, however these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the warrant liabilities and the change in estimated fair value of the warrants could be materially different.

Inherent in both the Monte Carlo and Black-Scholes valuation models are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.

The Monte Carlo model is used for the Class A warrants and the December 2010 warrants to value the potential future exercise price adjustments triggered by the anti-dilution provisions as well as the value of the put feature of the December 2010 warrants. These both require Level 3 inputs which are based on the Company’s estimates of the probability and timing of potential future financings and fundamental transactions. The other assumptions used by the Company are summarized in the following tables:

October 2007 Warrants	December 31, 2011			September 30, 2012
Closing stock price	$	1.82		$	1.63
Expected dividend rate	0		%	0		%
Expected stock price volatility	93.6		%	56.2		%
Risk-free interest rate	0.1		%	0.2		%
Expected life (years)	1.25			0.50

January 2010 Class A Warrants	December 31, 2011			September 30, 2012
Closing stock price	$	1.82		$	1.63
Expected dividend rate	0		%	0		%
Expected stock price volatility	86.1		%	73.6		%
Risk-free interest rate	0.5		%	0.3		%
Expected life (years)	3.50			2.75

December 2010 Warrants	December 31, 2011			September 30, 2012
Closing stock price	$	1.82		$	1.63
Expected dividend rate	0		%	0		%
Expected stock price volatility	83.6		%	70.7		%
Risk-free interest rate	0.6		%	0.4		%
Expected life (years)	3.96			3.21

The following table summarizes the change in the estimated fair value of the Company’s warrant liabilities (in thousands):

Warrant Liabilities
Balance at December 31, 2011	$	16,625
Warrants exchanged for common stock	(10,382		)
Decrease in fair value	(3,289		)
Balance at September 30, 2012	$	2,954

Series B Convertible Preferred Stock

9 Months Ended

Sep. 30, 2012

Series B Convertible Preferred Stock

Series B Convertible Preferred Stock

5. Series B Convertible Preferred Stock

On March 9, 2012, the Company completed the sale of 12,308 shares of Series B-1 Non-Voting Convertible Preferred Stock (Series B-1 Preferred Stock) at an offering price of $3,250 per share. The Company received $37,620,000 in net proceeds from the sale of the shares of Series B-1 Preferred Stock, after offering expenses. In addition to the Series B-1 Preferred Stock, which was issued at the closing, the Company also authorized Series B-2 Voting Convertible Preferred Stock (Series B-2 Preferred Stock). The Series B-1 Preferred Stock and Series B-2 Preferred Stock collectively are referred to as the Series B Preferred Stock. The Series B-1 Preferred Stock is not entitled to vote on matters on which the common shareholders are generally entitled to vote. The Series B-2 Preferred Stock are entitled to vote with the holders of the common stock as a single class, with each share of Series B-2 Preferred Stock having the number of votes equal to the number of shares of common stock issuable upon conversion of such Series B-2 Preferred Stock. On May 3, 2012, shareholder approval was obtained in accordance with Nasdaq Marketplace Rule 5635(b), which allowed the holder of Series B-1 Preferred Stock to exchange all of the then outstanding shares for shares of Series B-2 Preferred Stock on a one-for-one basis. The Series B Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution, rank on parity with any other class or series of the Company capital stock that the Company may issue in the future which is designated as being on parity with the Series B Preferred Stock, and rank senior to our common stock and Series A preferred stock (45,000 shares authorized and zero issued and outstanding). The Series B Preferred Stock is convertible, at the option of the holder thereof at any time after the five year anniversary of the closing of the offering, into shares of common stock at a conversion price of $3.25 per share of common stock. At any time after the five year anniversary of issuance, the Company may elect to convert any or all outstanding shares of Series B Preferred Stock into shares of our common stock, subject to certain limitations. Dividends on the Series B Preferred Stock will be cumulative and compound daily, at a rate of 11.5% per annum, payable upon conversion, liquidation, redemption or other similar events, and payable in cash or Series B-1 Preferred Stock until the five year anniversary of issuance. Following the five year anniversary of issuance and until the earlier of the tenth anniversary of the issuance and the date no Series B Preferred Stock remain outstanding, dividends will accrue at a rate of 8% per annum and will be payable in cash or Series B-1 Preferred Stock, at our option. Unless prohibited by Michigan law governing distributions to shareholders, the Series B-1 Preferred Stock shall be redeemable at the option of holder of the Series B-1 Preferred Stock commencing at any time after the five year anniversary of issuance, liquidation, winding up, dissolution or other similar events, subject to certain terms and limitations.

The Series B Preferred Stock does not, in its entirety, require liability classification and has been evaluated for embedded features to determine if those features require bifurcation and separate classification as derivative liabilities. The Series B Preferred Stock host contract was evaluated for equity or mezzanine classification based upon the nature of the redemption and conversion features. Generally, any feature that could require cash redemption for matters not within the Company’s control, irrespective of probability of the event occurring, requires classification outside of stockholders’ equity. The Series B Preferred Stock has been recorded as mezzanine of the Condensed Consolidated Balance Sheets and will be accreted to its redemption value through charges to stockholders’ deficit using the effective interest method.

The carrying value of the Series B-1 Preferred Stock presented as mezzanine in the consolidated financial statements is $2,668,000, as of September 30, 2012. As of September 30, 2012, there are no outstanding shares of Series B-1 Preferred Stock; however, as the Series B-1 Preferred Stock dividends can be redeemed for cash, the Company is required to accrete to the carrying value of the Series B-1 Preferred Stock to its redemption value of $31,102,000 by charges to accumulated deficit using the effective interest method. Such accretion for the nine months ended September 30, 2012 amounted to $2,668,000. The redemption value is determined by the greater of the conversion price of the Series B-1 Preferred Stock or the common stock price, multiplied by the total accumulated dividends at the five year anniversary of issuance.

Net Loss Per Common Share

9 Months Ended

Sep. 30, 2012

Net Loss Per Common Share

Net Loss Per Common Share

6. Net Loss Per Common Share

Basic earnings (loss) per share is calculated using the two-class method, which is an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares and holders of the Series B Preferred Stock. The Series B Preferred Stock shares contain participation rights in undistributed earnings, but do not share in the losses of the Company. Therefore, in the event of a loss from continuing operations, the Series B Preferred Stock is not considered in the calculation of basic loss per share.

Net loss per common share is computed using the weighted-average number of common shares outstanding during the period. Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. The aggregate number of common equivalent shares (related to options, warrants and preferred stock) that have been excluded from the computations of diluted net loss per common share at September 30, 2011 and 2012 were 23,448,500 and 29,260,000, respectively.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation

Schedule of weighted average assumptions used to estimate fair value of each service-based stock option grant

	Nine Months Ended September 30,
Service-Based Stock Options	2011	2012

Expected dividend rate	0%	0%
Expected stock price volatility	72.9% - 78.9%	72.9% - 74.9%
Risk-free interest rate	1.7% - 2.7%	0.9% -1.5%
Expected life (years)	6.0 - 6.3	6.0 - 6.3

Summary of activity for service-based stock options

Service-Based Stock Options	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value

Outstanding at December 31, 2011	8,079,667		$	2.38	8.4	$	674,000
Granted	4,507,445		$	2.36
Exercised	(144,167	)	$	1.48		$	52,000
Cancelled	(1,057,700	)	$	2.03
Forfeited or expired	(828,432	)	$	2.20
Outstanding at September 30, 2012	10,556,813		$	2.43	8.4	$	206,000
Exercisable at September 30, 2012	3,727,232		$	2.75	7.3	$	119,000

Stock Purchase Warrants (Tables)

9 Months Ended

Sep. 30, 2012

Stock Purchase Warrants

Schedule of assumptions used in calculating estimated fair value of warrants

October 2007 Warrants	December 31, 2011			September 30, 2012
Closing stock price	$	1.82		$	1.63
Expected dividend rate	0		%	0		%
Expected stock price volatility	93.6		%	56.2		%
Risk-free interest rate	0.1		%	0.2		%
Expected life (years)	1.25			0.50

January 2010 Class A Warrants	December 31, 2011			September 30, 2012
Closing stock price	$	1.82		$	1.63
Expected dividend rate	0		%	0		%
Expected stock price volatility	86.1		%	73.6		%
Risk-free interest rate	0.5		%	0.3		%
Expected life (years)	3.50			2.75

December 2010 Warrants	December 31, 2011			September 30, 2012
Closing stock price	$	1.82		$	1.63
Expected dividend rate	0		%	0		%
Expected stock price volatility	83.6		%	70.7		%
Risk-free interest rate	0.6		%	0.4		%
Expected life (years)	3.96			3.21

Summary of change in estimated fair value of warrant liabilities

Warrant Liabilities
Balance at December 31, 2011	$	16,625
Warrants exchanged for common stock	(10,382		)
Decrease in fair value	(3,289		)
Balance at September 30, 2012	$	2,954

Organization and Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 item	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Organization and Summary of Significant Accounting Policies
Number of reportable segments	1
Cash on hand	$ 21,089	$ 5,530	$ 11,947	$ 31,248
Period over which no additional action is anticipated to be taken to reduce the use of cash under the budgeted cash usage and operating plan	3 months
Minimum period of uncertainty regarding the entity's ability to maintain liquidity sufficient to operate business effectively	12 months

- Definition

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Cash

-URI http://asc.fasb.org/extlink&oid=6506951

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Cash Equivalents

-URI http://asc.fasb.org/extlink&oid=6507016

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 95

-Paragraph 8, 9

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 210

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.5-02.1)

-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 95

-Paragraph 7

-Footnote 1

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 1

-Article 5

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 210

-SubTopic 10

-Section 45

-Paragraph 1

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6361293&loc=d3e6676-107765

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 230

-SubTopic 10

-Section 45

-Paragraph 4

-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3044-108585

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 95

-Paragraph 7, 26

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Stock-Based Compensation (Details) (Service-based stock option, USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Stock-Based Compensation
Vesting period			4 years
Expiration period			10 years
Weighted average grant-date fair value (in dollars per share)			$ 1.25	$ 1.54
Net compensation costs related to employees and directors	$ 1,127,000	$ 919,000	$ 3,166,000	$ 2,767,000
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected dividend rate (as a percent)			0.00%	0.00%
Expected stock price volatility, low end of range (as a percent)			72.90%	72.90%
Expected stock price volatility, high end of range (as a percent)			74.90%	78.90%
Risk-free interest rate, low end of range (as a percent)			0.90%	1.70%
Risk-free interest rate, high end of range (as a percent)			1.50%	2.70%
Options
Outstanding at the beginning of the period (in shares)			8,079,667
Granted (in shares)			4,507,445
Exercised (in shares)			(144,167)
Cancelled (in shares)			(1,057,700)
Forfeited or expired (in shares)			(828,432)
Outstanding at the end of the period (in shares)	10,556,813		10,556,813		8,079,667
Exercisable at the end of the period (in shares)	3,727,232		3,727,232
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)			$ 2.38
Granted (in dollars per share)			$ 2.36
Exercised (in dollars per share)			$ 1.48
Cancelled (in dollars per share)			$ 2.03
Forfeited or expired (in dollars per share)			$ 2.20
Outstanding at the end of the period (in dollars per share)	$ 2.43		$ 2.43		$ 2.38
Exercisable at the end of the period (in dollars per share)	$ 2.75		$ 2.75
Weighted Average Remaining Contractual Term
Outstanding at the beginning of the period			8 years 4 months 24 days		8 years 4 months 24 days
Outstanding at the end of the period			8 years 4 months 24 days		8 years 4 months 24 days
Exercisable at the end of the period			7 years 3 months 18 days
Aggregate Intrinsic Value
Outstanding at the beginning of the period			674,000
Exercised			52,000
Outstanding at the end of the period	206,000		206,000		674,000
Exercisable at the end of the period	119,000		119,000
Additional disclosures
Total unrecognized compensation cost	6,603,000		6,603,000
Weighted average period over which unrecognized compensation is expected to be recognized			3 years
Total fair value of options vested			$ 2,136,000	$ 1,582,000
Minimum
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected life			6 years	6 years
Maximum
Weighted average assumptions used to estimate fair value of each service-based stock option grant
Expected life			6 years 3 months 18 days	6 years 3 months 18 days

Stock Purchase Warrants (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended		282 Months Ended			9 Months Ended	12 Months Ended		1 Months Ended			9 Months Ended	12 Months Ended	1 Months Ended				9 Months Ended	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Warrant exchange offer	Sep. 30, 2012 October 2007 Warrants	Dec. 31, 2011 October 2007 Warrants	Oct. 17, 2007 October 2007 Warrants	Jan. 31, 2010 January 2010 Class A Warrants	Sep. 30, 2012 January 2010 Class A Warrants	Jan. 21, 2010 January 2010 Class A Warrants	Sep. 30, 2012 January 2010 Class A Warrants Level 3	Dec. 31, 2011 January 2010 Class A Warrants Level 3	Dec. 31, 2010 December 2010 Warrants	Sep. 30, 2012 December 2010 Warrants	Dec. 15, 2010 December 2010 Warrants	Jul. 27, 2012 December 2010 Warrants Warrant exchange offer	Sep. 30, 2012 December 2010 Warrants Level 3	Dec. 31, 2011 December 2010 Warrants Level 3
Stock Purchase Warrants
Number of warrants issued (in shares)										740,131			4,882,228					10,000,000
Exercise price per share (in dollars per share)								$ 12.72				$ 2.48					$ 1.75	$ 3.22
Exercisable period											5 years					5 years
Warrants outstanding							308,100					4,525,978
Assumptions used in calculating the estimated fair value of the warrants
Closing stock price (in dollars per share)								$ 1.63	$ 1.82					$ 1.63	$ 1.82					$ 1.63	$ 1.82
Expected dividend rate (as a percent)								0.00%	0.00%					0.00%	0.00%					0.00%	0.00%
Expected stock price volatility (as a percent)								56.20%	93.60%					73.60%	86.10%					70.70%	83.60%
Risk-free interest rate (as a percent)								0.20%	0.10%					0.30%	0.50%					0.40%	0.60%
Expected life								6 months	1 year 3 months					2 years 9 months	3 years 6 months					3 years 2 months 16 days	3 years 11 months 16 days
Change in the estimated fair value of warrant liabilities
Balance at the beginning of the period			$ 16,625
Warrants exchanged for common stock			(10,382)
Decrease in fair value of warrants	(2,241)	(5,496)	(3,289)	(4,286)	(15,578)
Balance at the end of the period	$ 2,954		$ 2,954		$ 2,954
Common stock issued in exchange of warrants (in shares)	43,784,000		43,784,000		43,784,000	38,635,000													4,845,949
Warrants exchanged for shares of common stock																			9,691,900

Series B Convertible Preferred Stock (Details) (USD $)	9 Months Ended	282 Months Ended	9 Months Ended			1 Months Ended	9 Months Ended
Series B Convertible Preferred Stock (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2012 Series B Preferred Stock	Sep. 30, 2012 Series B Preferred Stock Minimum	Sep. 30, 2012 Series B Preferred Stock Maximum	Mar. 31, 2012 Series B-1 Preferred Stock	Sep. 30, 2012 Series B-1 Preferred Stock	Sep. 30, 2012 Series A preferred stock
Series B Convertible Preferred Stock
Number of shares sold						12,308
Offering price per share (in dollars per share)						$ 3,250
Net proceeds from the sale of preferred stock	$ 37,620,000	$ 89,267,000				$ 37,620,000
Ratio for conversion into Series B-2 Preferred Stock							1
Convertible preferred stock, shares authorized								45,000
Convertible preferred stock, shares issued								0
Convertible preferred stock, shares outstanding								0
Period of closing of offering after which shares are convertible			5 years
Conversion price per share (in dollars per share)			$ 3.25
Percentage of cumulative dividend rate			11.50%
Period for accrual of dividend				5 years	10 years
Percentage of accrued dividend rate			8.00%
Carrying value of convertible preferred stock	40,358,000	40,358,000					2,668,000
Redemption value							31,102,000
Accretion of carrying value to redemption value							$ 2,668,000
Period to determine redemption value							5 years

Net Loss Per Common Share (Details)	9 Months Ended
Net Loss Per Common Share (Details)	Sep. 30, 2012	Sep. 30, 2011
Net Loss Per Common Share
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) that have been excluded from computations of diluted net loss per common share	29,260,000	23,448,500

- Definition

Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Antidilution

-URI http://asc.fasb.org/extlink&oid=6505113

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Diluted Earnings Per Share

-URI http://asc.fasb.org/extlink&oid=6510752

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Contingent Stock Agreement

-URI http://asc.fasb.org/extlink&oid=6508534

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 260

-SubTopic 10

-Section 50

-Paragraph 1

-Subparagraph (c)

-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 128

-Paragraph 40

-Subparagraph c

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 128

-Paragraph 13, 14

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Emerging Issues Task Force (EITF)

-Number 07-4

-Paragraph 4

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 128

-Paragraph 171

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details