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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

10. Stock-Based Compensation

The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility and expected option life. The Company amortizes the fair value of the awards expected to vest on a straight-line basis. All option grants are amortized over the requisite service period of the awards. Expected volatility is based on historical volatility. The expected life of options granted is based on historical expected life. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant. The forfeiture rate is based on historical data, and the Company records stock-based compensation expense only for those awards that are expected to vest. The dividend yield is based on the fact that no dividends have been paid historically and none are currently expected to be paid.

The weighted average assumptions used to estimate the fair value of stock options granted to employees and directors for the three and nine month periods ended September 30, 2012 and 2011 are presented below:

 

                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2012     2011     2012     2011  

Risk-free interest rate

     0.33 %      0.57% - 1.32 %      0.36 %      0.57% - 1.89 % 

Expected volatility

     129 %      132 %      131 %      132% - 134 % 

Expected life in years

     4       4       4       4  

Dividend yield

     —         —         —         —    

Forfeiture rate

     8 %      11 %      8 %      11 % 

Total compensation cost for the Company’s stock plan that has been recognized in the condensed consolidated statement of operations for the three and nine months ended September 30, 2012 was $253,000 and $1.0 million, respectively, of which $117,000 and $477,000 were included in research and development expenses and $136,000 and $551,000 were included in general and administrative expenses, respectively.

Total compensation cost for the Company’s stock plan that has been recognized in the condensed consolidated statement of operations for the three and nine months ended September 30, 2011 was $261,000 and $1.4 million, respectively, of which $103,000 and $388,000 were included in research and development expenses and $158,000 and $1.0 million were included in general and administrative expenses, respectively.

As of September 30, 2012, there was $1.1 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements for Inovio stock options, which the Company expects to recognize over a weighted-average period of one year.

The weighted average grant date fair value per share was $0.44 and $0.47 for employee and director stock options granted during the three and nine months ended September 30, 2012, respectively, and $0.53 and $0.91 for employee and director stock options granted during the three and nine months ended September 30, 2011, respectively.

The fair value of options granted to non-employees at the measurement dates were estimated using the Black-Scholes pricing model. Total stock-based compensation for options granted to non-employees for the three and nine months ended September 30, 2012 was $46,000 and $149,000, respectively. Total stock-based compensation for options granted to non-employees for the three and nine months ended September 30, 2011 was $21,000 and $22,000, respectively.