The Company, Basis of Presentation and Summary of Significant Accounting Policies

Face amount or stated value per share of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer); generally not indicative of the fair market value per share.

+ References+ Details

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)	12 Months Ended		147 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Revenues	$ 802,580		$ 2,360,807
Operating expenses:
Cost of revenues			1,258,421
Research and development	5,013,092	7,784,719	167,054,655
General and administrative	6,734,844	8,323,715	112,257,368
Total operating expenses	11,747,936	16,108,434	280,570,444
Operating loss	(10,945,356)	(16,108,434)	(278,209,637)
Impairment charge on investment securities			(1,735,212)
Other expense	(29,605)	(81,292)	(389,230)
Interest expense		(1,595,093)	(3,605,818)
Other income	24,791	62,316	19,145,183
Loss before income taxes	(10,950,170)	(17,722,503)	(264,794,714)
Income taxes	(11,144)	(11,573)	(75,961)
Net loss	(10,961,314)	(17,734,076)	(264,870,675)
Accretion to redemption value of redeemable convertible preferred stock			(98,445)
Deemed dividend resulting from beneficial conversion feature on Series C redeemable convertible preferred stock			(31,264,677)
Net loss applicable to common stockholders	(10,961,314)	(17,734,076)	(296,233,797)
Basic and diluted net loss per common share	$ (0.66)	$ (1.20)
Shares used to compute basic and diluted net loss per common share	16,522,929	14,813,156
Net loss applicable to common stockholders	(10,961,314)	(17,734,076)	(296,233,797)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(11,112)	(1,143)	(67,957)
Comprehensive loss	$ (10,972,426)	$ (17,735,219)	$ (296,301,754)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)	3 Months Ended		12 Months Ended													147 Months Ended
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2006	Dec. 31, 2005	Dec. 31, 2004	Dec. 31, 2003	Dec. 31, 2002	Dec. 31, 2001	Dec. 31, 2000	Dec. 31, 2012
Cashless warrant exercises, (in shares)								650,047	260,000
Employee stock-based compensation			$ 709,650	$ 1,372,748	$ 2,000,935	$ 2,371,636	$ 3,172,712	$ 3,939,416
Stock-based compensation related to founders' warrants											34,069,916
Warrant exercises, shares									275,000
Warrant exercises of 275,000 shares at $1.00 per share in March and August									275,000
Issuance of common stock upon option exercises (in shares)			60,000						1,400
Issuance of common stock upon option exercises			137,730	76,263	166,599	406,357			14,000	5,557,773
Issuance costs for registration statement filed on behalf of restricted stockholders										(165,476)
Fair value of redemption feature of Avigen purchase						9,513,042
Issuance of shares for Convertible Notes				76,473	1,804,780
Conversion of redeemable convertible preferred stock into common stock in February										43,502,765
Issuance of shares under an employee stock purchase plan			58,619	8,230	37,460	81,967	86,726	33,782
Issuance of stock			1,348,873	1,951,951				10,639,600							50,000
Stock-based compensation related to acceleration of option vesting upon employee termination and subsequent reissuance of a fully vested option										127,875
Amortization of deferred employee stock-based compensation									2,090,182	311,282	224,579
Fair value of warrant issued			100,000		859,208
Accretion to redemption value of redeemable convertible preferred stock										(19,689)	(78,756)					(98,445)
Comprehensive income (loss):
Net loss	(2,434,000)	(3,503,000)	(10,961,314)	(17,734,076)	(20,187,308)	(20,368,890)	(21,924,829)	(48,903,244)	(35,689,611)	(25,692,135)						(264,870,675)
Other comprehensive income			(11,112)	(1,143)	9,212	(35,170)	101,722	(82,261)	(34,017)	(15,188)
Purchase of treasury stock									(1,382,425)	(55,445)
Ending Balance	14,879,922		14,879,922													14,879,922
Net loss and comprehensive loss											(48,272,603)	(6,209,130)	(6,931,476)	(1,794,734)	(201,325)
Net loss	(2,434,000)	(3,503,000)	(10,961,314)	(17,734,076)	(20,187,308)	(20,368,890)	(21,924,829)	(48,903,244)	(35,689,611)	(25,692,135)						(264,870,675)
Other comprehensive loss			(11,112)	(1,143)	9,212	(35,170)	101,722	(82,261)	(34,017)	(15,188)
Ending Balance	14,879,992	23,497,546	14,879,992	23,497,546	24,704,360	40,013,474	48,044,532	66,608,201	100,980,908	135,707,779	7,669,122	4,569,882	1,122,465	8,053,941	4,848,675	14,879,992
IPO
Issuance of stock										104,486,895
Common Stock and Warrants
Issuance of stock				7,686,886
Series A Preferred Stock
Issuance of stock														5,000,000	5,000,000
Series B Preferred Stock
Issuance of stock				5,355,854							17,156,104	9,656,547
Convertible preferred Shares
Conversion of convertible preferred stock into common stock in February (in shares)										(1,291,150)
Conversion of convertible preferred stock into common stock in February										(12,912)
Comprehensive income (loss):
Ending Balance (in shares)	220,000		220,000													220,000
Ending Balance	2,200		2,200													2,200
Ending Balance (in shares)		220,000		220,000							1,291,150	1,107,500	1,000,000	1,000,000	500,000
Ending Balance		2,200		2,200							12,912	11,075	10,000	10,000	5,000
Convertible preferred Shares \| Series A Preferred Stock
Issuance of common stock in public offering (in shares)														500,000	500,000
Issuance of stock														5,000	5,000
Convertible preferred Shares \| Series B Preferred Stock
Issuance of common stock in public offering (in shares)				220,000							183,650	107,500
Issuance of stock				2,200							1,837	1,075
Common Shares
Cashless warrant exercises, (in shares)								650,047	260,000
Cashless warrant exercises								650	260
Warrant exercises, shares									275,000
Issuance of common stock in public offering (in shares)								1,000,000
Warrant exercises of 275,000 shares at $1.00 per share in March and August									275
Issuance of common stock upon option exercises (in shares)			60,000	32,836	44,948	100,483			1,400	157,300
Issuance of common stock upon option exercises			60	31	49	98			2	157
Issuance of shares for Convertible Notes (in shares)				11,246	265,409
Conversion of convertible preferred stock into common stock in February (in shares)										2,766,785
Issuance of shares for Convertible Notes				12	265
Conversion of redeemable convertible preferred stock into common stock in February										2,767
Conversion of convertible preferred stock into common stock in February (in shares)										3,911,500
Conversion of convertible preferred stock into common stock in February										3,911
Issuance of common stock in public offering (in shares)			1,219,696	800,000											50,000
Issuance of stock			1,219	800				1,000							50
Comprehensive income (loss):
Ending Balance (in shares)	17,407,311		17,407,311													17,407,311
Ending Balance	17,407		17,407													17,407
Ending Balance (in shares)		16,127,615		16,127,615	12,482,867	12,172,510	12,072,027	12,072,027	10,421,985	9,885,585	50,000	50,000	50,000	50,000	50,000
Ending Balance		16,128		16,128	12,484	12,170	12,072	12,072	10,422	9,885	50	50	50	50	50
Common Shares \| IPO
Issuance of common stock in initial public offering at in February (in shares)										3,000,000
Issuance of stock										3,000
Common Shares \| Common Stock and Warrants
Issuance of common stock in public offering (in shares)				2,800,666
Issuance of stock				2,801
Additional paid-in capital
Employee stock-based compensation			709,650	1,372,748	2,000,935	2,371,636	3,172,712	3,939,416
Stock-based compensation related to founders' warrants											34,069,916
Cashless warrant exercises								(650)	(260)
Warrant exercises of 275,000 shares at $1.00 per share in March and August									274,725
Deferred employee stock-based compensation									(799,439)		1,419,300
Issuance of common stock upon option exercises			137,670	76,232	166,550	406,259			13,998	5,557,616
Issuance costs for registration statement filed on behalf of restricted stockholders										(165,476)
Fair value of redemption feature of Avigen purchase						9,513,042
Issuance of shares for Convertible Notes				76,461	1,804,515
Conversion of redeemable convertible preferred stock into common stock in February										43,499,998
Conversion of convertible preferred stock into common stock in February										9,001
Issuance of stock			1,347,654	1,951,151				10,638,600							49,950
Stock-based compensation related to acceleration of option vesting upon employee termination and subsequent reissuance of a fully vested option										127,875
Amortization of deferred employee stock-based compensation									2,090,182
Cancelation of stock options issued to employees and related deferred compensation										(84,000)
Fair value of warrant issued			100,000		859,208
Comprehensive income (loss):
Ending Balance	312,293,225		312,293,225													312,293,225
Ending Balance		309,998,251		309,998,251	293,483,920	288,652,712	276,361,775	273,189,063	258,611,697	257,032,491	103,603,582	19,695,422	10,039,950	10,039,950	5,044,950
Additional paid-in capital \| IPO
Issuance of stock										104,483,895
Additional paid-in capital \| Common Stock and Warrants
Issuance of stock				7,684,085
Additional paid-in capital \| Series A Preferred Stock
Issuance of stock														4,995,000	4,995,000
Additional paid-in capital \| Series B Preferred Stock
Issuance of stock				5,353,654							17,154,267	9,655,472
Additional paid-in capital \| Series C Preferred Stock
Deemed dividend resulting from beneficial conversion feature on Series C redeemable convertible preferred stock											31,264,677
Deferred compensation
Deferred employee stock-based compensation									799,439		(1,419,300)
Amortization of deferred employee stock-based compensation										311,282	224,579
Cancelation of stock options issued to employees and related deferred compensation										84,000
Comprehensive income (loss):
Ending Balance										(799,439)	(1,194,721)
Accumulated other comprehensive loss
Comprehensive income (loss):
Other comprehensive income			(11,112)	(1,143)	9,212	(35,170)	101,722	(82,261)	(34,017)	(15,188)
Ending Balance	(67,957)		(67,957)													(67,957)
Other comprehensive loss			(11,112)	(1,143)	9,212	(35,170)	101,722	(82,261)	(34,017)	(15,188)
Ending Balance		(56,845)		(56,845)	(55,702)	(64,914)	(29,744)	(131,466)	(49,205)	(15,188)
Treasury stock
Issuance of shares under an employee stock purchase plan			58,619	8,230	37,460	81,967	86,726	33,782
Comprehensive income (loss):
Purchase of treasury stock									(1,382,425)	(55,445)
Ending Balance	(1,131,086)		(1,131,086)													(1,131,086)
Ending Balance		(1,189,705)		(1,189,705)	(1,197,935)	(1,235,395)	(1,317,362)	(1,404,088)	(1,437,870)	(55,445)
Deficit accumulated during the development stage
Accretion to redemption value of redeemable convertible preferred stock										(19,689)	(78,756)
Comprehensive income (loss):
Net loss			(10,961,314)	(17,734,076)	(20,187,308)	(20,368,890)	(21,924,829)	(48,903,244)	(35,689,611)	(25,692,135)
Ending Balance	(296,233,797)		(296,233,797)													(296,233,797)
Net loss and comprehensive loss											(48,272,603)	(6,209,130)	(6,931,476)	(1,794,734)	(201,325)
Net loss			(10,961,314)	(17,734,076)	(20,187,308)	(20,368,890)	(21,924,829)	(48,903,244)	(35,689,611)	(25,692,135)
Ending Balance		(285,272,483)		(285,272,483)	(267,538,407)	(247,351,099)	(226,982,209)	(205,057,380)	(156,154,136)	(120,464,525)	(94,752,701)	(15,136,665)	(8,927,535)	(1,996,059)	(201,325)
Deficit accumulated during the development stage \| Series C Preferred Stock
Deemed dividend resulting from beneficial conversion feature on Series C redeemable convertible preferred stock											$ (31,264,677)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2006	Dec. 31, 2005	Dec. 31, 2001 Series A Preferred Stock	Dec. 31, 2000 Series A Preferred Stock	Dec. 31, 2011 Series B Preferred Stock	Dec. 31, 2004 Series B Preferred Stock	Dec. 31, 2003 Series B Preferred Stock	Dec. 31, 2011 Common Stock and Warrants	Dec. 31, 2006 Minimum	Dec. 31, 2006 Maximum
Issuance of common stock upon partial exercise of over allotment option, par value							$ 38.80
Treasury stock, par value							$ 11.10							$ 10.30	$ 13.10
Cashless warrant exercises, (in shares)					650,047	260,000
Warrant exercises, shares						275,000
Issuance of common stock for cash to founders, par value	$ 2.50				$ 12.00
Shares of warrants exercised, par value						$ 1.00
Average value of shares issued under an employee stock purchase plan		$ 6.56	$ 2.21	$ 2.33	$ 6.72
Issuance of common stock, net of issuance costs	$ 48,049
Option exercises, shares						1,400
Issuance of common stock in initial public offering, par value													$ 3.00
Shares of option exercises, par value						$ 10.00
Issuance of units in a public offering net of issuance costs													715,112
Issuance of convertible preferred stock, par value								$ 10	$ 10	$ 25	$ 100	$ 100
Issuance of convertible preferred stock, issuance costs										$ 144,146	$ 1,208,896	$ 1,093,453

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended		147 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Operating activities:
Net loss	$ (10,961,314)	$ (17,734,076)	$ (264,870,675)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation	709,650	1,372,748	50,390,931
Amortization of Kissei upfront payment	(802,580)		1,697,420
Depreciation and amortization	69,528	41,869	2,014,052
Amortization of premium/discount on investment securities, convertible debt, debt discount and issuance costs		752,124	(1,099,365)
Impairment charge, net on investment securities and ARS Put			1,735,212
(Gain)/loss on disposal of assets	823		11,460
Impairment of sublease			35,259
Changes in operating assets and liabilities:
Prepaid expenses and other assets	266,927	164,563	(310,664)
Accounts payable, income tax payable, accrued expenses and deferred rent	(776,508)	(656,196)	545,034
Accrued compensation and related expenses	(370,964)	250,333	131,983
Restricted assets		(17)	5,982
Deferred revenue		2,500,000	2,500,000
Net cash used in operating activities	(11,864,438)	(13,308,652)	(209,712,471)
Investing activities:
Cash paid for acquired business, net of acquired cash			(2,829,785)
Purchases of investment securities			(377,205,766)
Maturities or sales of investment securities			377,918,240
Acquisition of property and equipment	(83,378)	(6,085)	(2,360,968)
Investment in joint venture	(680,000)		(680,000)
Proceeds from sales of property and equipment			256,845
Net cash used in investing activities	(763,378)	(6,085)	(4,901,434)
Financing activities:
Proceeds from issuance of common stock and units, net of issuance costs	1,486,603	9,715,100	132,665,225
Proceeds from issuance of convertible preferred stock, net of issuance costs		5,355,854	85,572,825
Proceeds from ARS loan			17,605,485
Net proceeds from debt			14,670,000
Proceeds from conversion of convertible notes		76,473	1,881,253
Purchase of treasury stock, net of employee stock purchases	58,619	8,230	(1,164,868)
Repayment of debt		(15,000,000)	(15,000,000)
Repayment of ARS loan			(17,605,485)
Net cash provided by (used in) financing activities	1,545,222	155,657	218,624,435
Net increase / (decrease) in cash and cash equivalents	(11,082,594)	(13,159,080)	4,010,530
Cash and cash equivalents, beginning of period	15,093,124	28,252,204
Cash and cash equivalents, end of period	4,010,530	15,093,124	4,010,530
Supplemental disclosure of investing activities and financing activities:
Proceeds from issuance of warrants		2,882,258	2,882,258
Conversion of convertible preferred stock into common stock upon initial public offering			43,515,677
Restricted assets, cash unrestricted upon conversion of convertible notes		76,473	1,881,815
Supplemental disclosures of cash flow information:
Income taxes paid	10,951	12,010	69,601
Interest paid		$ 1,088,926	$ 2,487,343

The Company, Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

1. The Company, Basis of Presentation and Summary of Significant Accounting Policies

The Company

We were incorporated in the state of Delaware in September 2000. We are a development stage biopharmaceutical company focused on acquiring and developing novel, small molecule therapeutics for the treatment of serious diseases with unmet medical needs with a commercial focus on the U.S. market. We are currently focusing our development activities on MN-166, an ibudilast-based drug candidate for the treatment of neurological disorders, and obtaining additional funding to advance clinical trial development of MN-221, a novel, highly selective ß₂ -adrenergic receptor agonist being developed for the treatment of acute exacerbations of asthma and chronic obstructive pulmonary disease, or COPD.

As a development stage company, we have consumed substantial amounts of capital since our inception. We do not have material commitments for capital expenditures. We do conduct clinical trials which are administered by third-party CROs and there is a significant degree of estimation involved in quantifying the expense associated with clinical trial activity. We accrue costs for work performed by CROs based on the achievement of contracted milestone activities and on internal estimates of activities using patient enrollment and contractual or estimated rates during the period. Our R&D expense and cash payments in future periods could potentially be impacted if we were not to receive complete and accurate information from the CRO or other third parties on a timely basis or correctly estimate the outcome of contract negotiations, activity levels and enrollment rates.

We have had, and will continue to have an ongoing need to raise additional cash from outside sources to fund our operations. Our business will continue to require us to incur substantial research and development expenses and management plans to continue financing operations with equity issuances, debt arrangements or a combination thereof.

We incurred losses of $11.0 million and $17.7 million for the years ended December 31, 2012 and 2011 respectively. We have a history of recurring losses from operations and have an accumulated deficit of $296.2 million as of December 31, 2012. Additionally, we have used net cash of $11.9 million and $13.3 million to fund our operating activities for the years ended December 31, 2012 and 2011, respectively. To date, these operating losses have been funded primarily through the private placement of our equity securities, the public sale of our common stock, long-term debt and the exercise of founders’ warrants.

As of December 31, 2012, we had available cash and cash equivalents of $4.0 million and working capital of $3.4 million. We presently estimate that we have sufficient working capital to fund operations through June 30, 2013. The Company will require additional cash funding to continue to execute its strategic plan and fund operations through December 31, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Between August 21, 2012 and the date of this report, the Company has generated proceeds of $3.0 million under the Common Stock Purchase Agreement with Aspire Capital Fund LLC (“Aspire”) including proceeds of $1.5 million on the sale 800,000 shares of its common stock subsequent to December 31, 2012 (see Note 7). We have the right, subject to the terms of the Common Stock Purchase Agreement, to cause Aspire to acquire up to 3,231,096 shares for total gross proceeds not to exceed $20 million (including the 2,019,696 shares issued or sold to Aspire to date for $3.0 million), subject to daily dollar limitations and subject to the maximum dollar amount we can sell from time to time under our registration statement on Form S-3. We expect to sell additional shares under this agreement during 2013. We are also pursuing other opportunities to raise capital through the sale of our common stock or through other strategic initiatives. There can be no assurances that there will be adequate financing available to us on acceptable terms, or at all. If the Company is unable to obtain additional financing, we may have to seek buyers for one or more of our programs or cease operations.

Basis of Presentation

Our primary activities since incorporation have been recruiting personnel, conducting research and development, performing business and financial planning and raising capital. Accordingly, in connection with preparation of the consolidated financial statements we operate under one reporting segment and are considered to be in the development stage, in accordance with the authoritative guidance for development stage entities.

During the first quarter of 2005, we completed our initial public offering, or IPO, of 3,000,000 shares of common stock in Japan for proceeds of $104.5 million, net of underwriting discounts and commissions and offering costs. In December 2006, we were listed on the Nasdaq Global Market. Accordingly, we are a public company in both the U.S. and Japan, as our stock is traded on both the Nasdaq Global Market and the Jasdaq Market (formerly the Hercules Market of the Osaka Securities Exchange until its closure in 2010).

Avigen Transaction. On December 18, 2009, we acquired 100% of the outstanding shares of Avigen, a biopharmaceutical company whose potential product candidate, MN-166, is a therapeutic for Central Nervous System, or CNS, disorders. Under the terms of the transaction, Avigen shareholders, at their election, received an amount per share either in cash, Convertible Notes or a combination thereof, upon closing. Avigen shareholders holding approximately 17% of the Avigen common stock outstanding at the closing date elected to receive cash in the amount of approximately $1.19 per share. The remaining Avigen shareholders received the corresponding value of Convertible Notes. Holders of the Convertible Notes could convert their notes into our common stock at an initial conversion price of $6.80 per share through May 31, 2011. At the maturity of the Convertible Notes, the remaining holders would be paid the same per share amount as the Avigen shareholders that elected to receive cash at the closing, plus accrued interest. All Avigen shareholders were also entitled to receive approximately $0.04 per share, which was paid in two increments in 2010, and rights under contingent payment rights issued. In March 2011 we paid $0.02 per share to former Avigen shareholders related to the management transition plan Contingent Payment Rights (CPR).

Avigen Management Transition Plan (MTP). On March 11, 2011, a designated representative from Avigen notified us of the termination of the Avigen MTP, with the final distribution to occur on or about March 31, 2011. In connection with the termination of the Avigen MTP and pursuant to the related contingent payment rights agreement, the remaining funds were distributed to American Stock Transfer & Trust Company, LLC, or AST, and AST was instructed to distribute the funds to the Avigen shareholders on a pro rata basis (approximately $0.02 per share) based on the shares of Avigen common stock held immediately prior to the effective time of the Merger.

Joint Venture. We entered into an agreement to form a joint venture company with Zhejiang Medicine Co., Ltd. and Beijing Make-Friend Medicine Technology Co., Ltd. effective September 27, 2011. The joint venture agreement provides for the joint venture company, Zhejiang Sunmy Bio-Medical Co., Ltd. (“Zhejiang Sunmy”),to develop and commercialize MN-221 in China. A sublicense agreement will be required under which Zhejiang Sunmy will license MN-221 from us. In accordance with the joint venture agreement, in March 2012 we paid $680,000 for a 30% interest in Zhejiang Sunmy. The other parties to the joint venture agreement provided funding for their combined 70% interest. We have not entered into the sublicense of MN-221 with Zhejiang Sunmy as of the date of this filing. Zhejiang Sunmy is a variable interest entity for which we are not the primary beneficiary as we do not have a majority of the board seats and we will not have power to direct or significantly influence the actions of the entity. We therefore account for the activities of Zhejiang Sunmy under the equity method whereby we absorb any loss or income generated by Zhejiang Sunmy according to our percentage ownership. At December 31, 2012 we reflect a long-term asset on our consolidated balance sheet which represents our investment in Zhejiang Sunmy, net of our portion of any generated loss or income.

Principles of Consolidation

The consolidated financial statements include the accounts of MediciNova, Inc. and its wholly-owned subsidiaries. MediciNova, Inc. and its subsidiaries are collectively referred to herein as “we,” “our” or “us.”

On December 13, 2006, MediciNova (Europe) Limited, a wholly-owned subsidiary of MediciNova, Inc., was incorporated under the laws of England and Wales and established for the purpose of facilitating the clinical development of the Company’s product candidates for the European marketplace. MediciNova (Europe) Limited’s functional currency is the U.S. dollar, the reporting currency of its parent.

On January 4, 2007, MediciNova Japan, Inc., a wholly-owned subsidiary of MediciNova, Inc., was incorporated under the laws of Japan and established to strengthen business development and investor and public relations activities in Japan and other Asian countries. MediciNova Japan, Inc.’s functional currency is the Japanese yen.

On August 17, 2009, Absolute Merger, Inc., a wholly-owned subsidiary of MediciNova, Inc. was incorporated under the General Corporation Law of the State of Delaware for the purpose of facilitating the merger with Avigen.

All intercompany transactions and investments in our subsidiaries have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and other highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents at December 31, 2012 consisted of money market funds.

Deferred Revenue and Revenue Recognition

In October 2011, we entered into an agreement with Kissei Pharmaceutical Co., Ltd., or Kissei, to perform research and development services relating to MN-221 in exchange for a non-refundable upfront payment of $2.5 million. Under the terms of the agreement we are responsible for all costs to be incurred in the performance of these services. Certain of these research and development services were completed in 2012 and the remaining services are expected to be delivered and completed after 2013. We assessed the deliverables in accordance with the authoritative guidance and concluded the existence of one deliverable, research and development services. As such, we are recognizing as revenue the $2.5 million payment as the research and development services are performed. The amount received from Kissei, net of the amount recorded as revenue, is included on the balance sheet as deferred revenue and will be recognized as revenue as we perform the remaining services. Revenue recorded in 2012 was $0.8 million. No revenue was recorded in 2011.

At-The-Market Issuance Sales Agreement

On May 5, 2011, we entered into an at-the-market, or ATM, issuance sales agreement, or sales agreement, with McNicoll, Lewis & Vlak LLC, or MLV, pursuant to which we could issue and sell shares of our common stock having an aggregate offering price of up to $15.0 million from time to time through MLV as our sales agent. The issuance and sale of these shares by us under the sales agreement, if any, would be subject to the effectiveness of our shelf registration statement on Form S-3 (File No. 333-163116), initially filed with the Securities and Exchange Commission on November 13, 2009.

Effective October 23, 2011, we terminated the ATM between us and MLV. No shares of common stock were issued under the ATM.

Concentrations and Credit Risk

We maintain cash balances at various financial institutions and such balances commonly exceed the $250,000 amount insured by the Federal Deposit Insurance Corporation. We also maintain money market funds at various financial institutions which are not federally insured although are invested primarily in U.S. government securities. We have not experienced any losses in such accounts and management believes that we do not have significant credit risk with respect to such cash and cash equivalents.

Goodwill and Purchased Intangibles

Goodwill is recorded when the consideration paid for an acquisition exceeds the fair value of the identified net tangible and intangible assets of acquired businesses. The allocation of purchase price for acquisitions require extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. Additionally, we must determine whether an acquired entity is considered to be a business or a set of net assets as a portion of the purchase price can only be allocated to goodwill in a business combination. Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. The amounts and useful lives assigned to intangible assets that have finite useful lives require the use of estimates and the exercise of judgment. These judgments can significantly affect our net operating results. We recorded goodwill and IPR&Dof $9.6 million and $4.8 million, respectively, as of December 31, 2012 and 2011.

Our annual test date for goodwill and purchased indefinite life intangibles impairment is December 31 or more frequently if we believe indicators of impairment are present. We periodically re-evaluate the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of our long-lived assets. The criteria used for these evaluations include management’s estimate of the asset’s continuing ability to generate income from operations and positive cash flows in future periods as well as the strategic significance of any intangible assets in our business objectives. If assets are considered to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets.

Fair Value

Financial instruments, including cash equivalents, accounts payable and accrued liabilities, are carried at cost, which we believe approximates fair value given their short-term nature. We are required to measure certain assets and liabilities at fair value, either upon initial measurement or for subsequent accounting or reporting. We use fair value in the initial measurement of net assets acquired in a business combination and when accounting for and reporting on investment securities and certain financial instruments or assets. We estimate fair value using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market of market participants, considering the highest and best use of assets and, for liabilities, assuming the risk of non-performance will be the same before and after the transfer. Many, but not all, of our financial instruments are carried at fair value.

The judgments made in determining an estimate of fair value can materially impact our results of operations.

Equipment

Property and equipment, net, which consists of leasehold improvements, furniture and equipment and software, is stated at cost. Leasehold improvements, furniture and equipment, and software are depreciated using the straight-line method over the estimated useful lives of the related assets. The useful life for furniture, equipment (other than computers) and software is five years, computers is three years and leasehold improvements are amortized over the lesser of the useful life or the term of the lease.

Research and Development

Research and development expenses consist of costs incurred to further our research and development activities and include salaries and related employee benefits, costs associated with clinical trials, costs associated with non-clinical activities such as regulatory activities, research-related overhead expenses, and fees paid to external service providers who conduct certain research and development activities on our behalf. We use external service providers and vendors to conduct clinical trials, to manufacture product candidates to be used in clinical trials and to provide various other products and services related to our product development programs. Research and development expenses also include fees for licensed technology for which technological feasibility has not been established and there are no alternative uses. Research and development costs are expensed as incurred or accrued based on certain contractual provisions such as those for estimates of work performed, milestones achieved and patient enrollment. As actual costs become known, accruals are adjusted if necessary. To date, our accrual estimates have not differed significantly from the actual costs incurred.

Income Taxes

In accordance with the authoritative guidance for income taxes under ASC 740, a deferred tax asset or liability is determined based on the difference between the financial statement and the tax basis of assets and liabilities as measured by the enacted tax rates, which will be in effect when these differences reverse. We provide a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized.

The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

We are subject to taxation in the U.S., California and foreign jurisdictions, of which currently no years are under examination. Our tax years for 2000 and forward are subject to examination by the U.S. and state tax authorities due to the carry-forward of unutilized net operating losses and research and development credits. During each of the two years in the period ended December 31, 2012, income tax expense relates to intercompany service income earned by our Japanese subsidiary, MediciNova Japan, Inc.

Stock-Based Compensation

We award options to purchase our common stock to our employees and directors and under our Amended and Restated 2004 Stock Incentive Plan (the “2004 Plan”), the successor to our 2000 General Stock Incentive Plan (the “2000 Plan”). The cost of these employee awards is measured according to the grant date fair value of the stock award and is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for the award, which is usually the vesting period. We occasionally issue employee performance based stock options, the vesting of which is subsequently based on a determination made by the Company’s board of directors as to the achievement of certain corporate objectives. The grant date of such awards is the date on which our board of directors makes its determination. For periods preceding the grant date, the cost of these awards is measured according to their fair value at each reporting date. Stock options awarded to non-employees were recorded at their fair value as determined in accordance with the authoritative guidance for equity under ASC 505.

Under the MediciNova, Inc. 2007 Employee Stock Purchase Plan, or ESPP, 300,000 shares of our common stock have been reserved for issuance. In addition, the shares reserved will automatically increase by a number equal to the lesser of: (i) 15,000 shares, (ii) 1% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year or (iii) such lesser amount as determined by the Board. The ESPP permits full-time employees to purchase our common stock through payroll deductions (which cannot exceed 15% of each employee’s compensation) at the lower of 85% of fair market value at the beginning of the offering period or the end of each six-month offering period.

The exercise price of stock options granted during the years ended December 31, 2012 and 2011 were equal to market value on the date of grant. During the years ended December 31, 2012 and 2011, options to purchase 750,000 and 1,431,000 shares of common stock, respectively, were granted. For the year ended December 31, 2012, 35,414 shares were issued under the ESPP, leaving 249,578 shares available for future issuance. Stock-based compensation expense for such stock options and employee stock purchase place are reflected in total operating expense for each respective year. The estimated fair value of each stock option award was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for stock option grants:


	Year Ended December 31,
	2012			2011
Stock Options
Risk-free interest rate		0.67	%		0.70	%
Expected volatility of common stock		83.26	%		78.79	%
Dividend yield		0.00	%		0.00	%
Expected option term (in years)		5.31			5.36
Employee Stock Purchase Plan
Risk-free interest rate		0.30	%		0.27	%
Expected volatility of common stock		79.5	%		77.97	%
Dividend yield		0.00	%		0.00	%
Expected option term (in years)		0.5			0.5

The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected term of our employee stock options. The expected volatility is based on the historical volatility of our stock since listing on the Nasdaq Global Market in December 2006. We have not paid nor do we anticipate paying dividends on our common stock in the foreseeable future. The expected term of employee stock options is based on the simplified method as provided by the authoritative guidance on stock compensation, as we concluded that our historical stock option exercise experience does not provide a reasonable basis for us to estimate the expected term.

The weighted-average fair value of each stock option granted during the years ended December 31, 2012 and 2011, estimated as of the grant date using the Black-Scholes option valuation model, was $1.33 per option and $1.25 per option, respectively.

For the years ended December 31, 2012 and 2011, stock-based compensation expense related to stock options and the employee stock purchase plan was $0.7 million and $1.4 million, respectively, and was recorded as a component of general and administrative expense ($0.4 million and $1.1 million, respectively) and research and development expense ($0.3 million and $0.3 million, respectively). During the years ended December 31, 2012 and 2011, there were 60,000 and 32,836 stock options exercised, respectively, from which proceeds of $0.1 million and $0.08 million, respectively, were received.

As of December 31, 2012, there was $1.0 million of unamortized compensation cost related to unvested stock option awards which is expected to be recognized over a remaining weighted-average vesting period of 1.2 years, on a straight-line basis.

Net Loss Per Share

Net loss per common share is presented as basic and diluted net loss per common share. Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period using the treasury-stock method. For purposes of this calculation, convertible preferred stock, stock options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted net loss per common share when their effect is dilutive.

Potentially dilutive outstanding securities excluded from diluted net loss per common share because of their anti-dilutive effect:


	December 31,
	2012		2011
Convertible preferred stock, as converted		2,200,000		2,200,000
Stock options		3,328,981		3,092,671
Warrants		3,128,686		2,998,686

Total		8,657,667		8,291,357

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board, or FASB, issued updated accounting guidance that clarifies existing fair value measurements and disclosures, and eliminates differences between GAAP and International Financial Reporting Standards to make convergence guidance more understandable. This guidance is effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In September 2011, the FASB, issued guidance to simplify how entities test for goodwill impairment. The updated guidance permits an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit in which goodwill resides is less than its carrying value. For reporting units in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, the updated guidance eliminates the requirement to perform further goodwill impairment testing. This new guidance is effective for fiscal years beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

Effective January 1, 2012, the Company adopted guidance issued by the FASB, concerning presentation and disclosure only for the presentation of comprehensive (loss) income. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations, other than its impact on the presentation of comprehensive (loss) income.

In August 2012, the FASB issued updated guidance to 2011 guidance that permits an assessment of the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit in which goodwill resides is less than its carrying value. This updated guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Measurements

2. Fair Value Measurements

As defined in the authoritative guidance for fair value measurements and disclosures under ASC 820, fair value is based on the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability and consistency of fair value measurements, ASC 820 prescribes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels which are described below:


Level 1:		Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.

Level 2:		Inputs are quoted prices for similar items in active markets or inputs are quoted prices for identical or similar items in markets that are not active.

Level 3:		Inputs are unobservable due to little or no market data availability and inputs are usually developed by management or a third-party which reflect those inputs that a market participant would use. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The following table presents our financial instruments measured at fair value on a recurring basis classified by the fair value measurements and disclosures valuation hierarchy (in thousands):


	As of December 31, 2012
			Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
Cash equivalents	$	1,720	$	1,720	$	—	$	—


	As of December 31, 2011
			Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
Cash equivalents	$	1,690	$	1,690	$	—	$	—

At December 31, 2012, cash equivalents (instruments with maturities of three months or less at the date of purchase) were primarily invested in money market accounts, the fair value of which is based on Level 1 criteria in which their carrying amount is a reasonable estimate of their fair value based on daily quoted market prices. At December 31, 2012 and 2011 we did not hold financial instruments measured at fair value on a non-recurring basis.

The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis.

Related Party Transactions

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+ Details

Long-term Debt

12 Months Ended

Dec. 31, 2012

Long-term Debt

3. Long-term Debt

In May 2010, we entered into a loan and security agreement, or the Loan Agreement, with Oxford Finance Corporation, or Oxford, under which we borrowed $15.0 million at a stated interest rate of 12.87 percent. Our obligations under the Loan Agreement were secured by a first priority security interest in substantially all of our assets, other than our intellectual property, and we also agreed not to pledge or otherwise encumber our intellectual property assets. Our obligations under the Loan Agreement were guaranteed on a senior secured basis by Avigen. The Loan Agreement also contained certain restrictive covenants.

Pursuant to the Loan Agreement, we issued to Oxford a warrant to purchase up to 198,020 shares of our common stock, par value $0.001 per share. The warrant is exercisable, immediately, in whole or in part, has a per share exercise price of $6.06 and may be exercised on a cashless basis. The warrant will terminate on the earlier of May 10, 2017 or the closing date of a merger or consolidation transaction in which we are not the surviving entity. In addition, the warrant and debt instrument were immediately separable and issued separately. We accounted for the warrant as a component of stockholders’ equity as the agreement required settlement in shares and under no provision of the agreement are we required to settle the warrant in cash.

We accounted for the interest on the debt using the effective interest method wherein we treated the debt issuance costs paid directly to Oxford and the relative fair value of the warrants issued to Oxford as a discount on the debt, and we treated the debt issuance costs paid to third parties (primarily legal fees) as an other asset in our consolidated balance sheet. The amortization of the debt discount was recorded as interest expense and the amortization of the debt issuance costs paid to third parties was recorded as other expense in our consolidated statement of operations and comprehensive loss.

On March 31, 2011, we entered into an agreement with Oxford under which we made an early repayment of the loan in-full and wherein Oxford waived the prepayment penalty of approximately $437,000.

The table below summarizes the long-term debt activity:


	Year Ended December 31, 2011
	Carrying Value 12/31/2010			Amortization (Interest Expense)			Amortization (Other Expense)			Payments		Write-Off Debt Related Costs			Carrying Value 12/31/2011
Other Assets:
Debt issuance costs paid to third parties	$	124,722		$			$	(21,426	)	$	—	$	(103,296	)	$	—


Liability:
Loan	$	(15,000,000	)	$			$	—		$	15,000,000	$	—		$	—
Deferred interest charge	$	(134,491	)	$	(504,207	)		—		$	450,000	$	188,698		$	—

	$	(15,134,491	)	$	(504,207	)	$	—		$	15,450,000	$	188,698		$	—


Contra Liability:
Relative fair value of warrants issued to lender(1)	$	595,342		$	(102,274	)	$	—		$	—	$	(493,068	)	$	—
Debt issuance costs paid to lender	$	103,934		$	(17,855	)		—		$	—	$	(86,079	)	$	—

	$	699,276		$	(120,129	)	$	—		$	—	$	(579,147	)	$	—

(1)

The relative fair value of the warrants issued to the lender was calculated using a Black-Scholes valuation model. The risk-free interest rate assumption was 2.86 percent based upon observed risk-free interest rates appropriate for the expected term of the warrants. The expected volatility assumption was 76 percent consistent with the volatility of our common stock based on the historical volatility of our stock since listing on the Nasdaq Global Market in December 2006. We have not paid and do not anticipate paying dividends on our common stock since our inception, and therefore, the dividend yield assumption was zero. The expected term assumption was seven years, which is the contractual life of the warrants. The fair value of the warrants using the Black-Scholes valuation model was calculated to be $4.34 per share.

Balance Sheet Details

12 Months Ended

Dec. 31, 2012

Balance Sheet Details

4. Balance Sheet Details

Property and Equipment

Property and equipment, net, consist of the following:


	December 31,
	2012			2011
Leasehold improvements	$	170,386		$	172,648
Furniture and equipment		351,992			561,332
Software		228,397			221,380

		750,775			955,360
Less accumulated depreciation and amortization		(672,301	)		(925,935	)

	$	78,474		$	29,425

Depreciation expense	$	33,507		$	41,869

Accrued Expenses

Accrued expenses consist of the following:


	December 31,
	2012		2011
Research and development costs	$	152,046	$	615,792
Professional services fees		68,102		100,823
Joint venture capital contribution payable		—		650,000
Other		94,504		149,200

	$	314,652	$	1,515,815

Related Party Transactions

12 Months Ended

Dec. 31, 2012

5. Related Party Transactions

We entered into a stock purchase agreement dated September 26, 2011 with Kissei, under which on October 13, 2011 Kissei purchased for $7.5 million an aggregate of 800,000 shares of our common stock and 220,000 shares of our Series B Convertible Preferred Stock. On the same day, we entered into a letter agreement with Kissei pursuant to which we agreed to renegotiate in good faith the existing levels of the milestone payment amounts and royalty rates under our license agreement for MN-221 and agreed upon a new price for clinical supplies of API. On October 13, 2011 we entered into a services agreement with Kissei to perform two separate studies relating to MN-221 in exchange for $2.5 million paid to us in October, 2011. We are responsible for all costs to be incurred in the performance of these studies. The amount received from Kissei, net of the amount recorded as revenue through December 31, 2012, is included on the balance sheet at December 31, 2012 as deferred revenue and will be recognized as revenue in future periods as we perform the remaining services.

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

Commitments and Contingencies

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-Number 210

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-Article 3A

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

6. Commitments and Contingencies

Facility Lease

On July 6, 2011, we entered into a fifth amendment (the “Fifth Lease Amendment”) of our lease agreement (the “Lease”), with 4350 La Jolla Village LLC (the “Landlord”). The Fifth Lease Amendment amended and extended the Lease term from August 31, 2011 to May 31, 2012. The Fifth Lease Amendment provided that we pay the Landlord a monthly base rent of $12,468 for the premises during the nine-month extension period. On March 19, 2012, we entered into a sixth amendment of the Lease (the “Sixth Lease Amendment”), which extended the lease term through February 28, 2013, and provided that we pay the Landlord a monthly base rent of $12,672 for the premises during the term of the Sixth Lease Amendment. See Notes to Consolidated Financial Statements-Note 11. Subsequent Events, for information regarding a change in our headquarters and a new sublease agreement. In June 2005, we leased office space in Tokyo, Japan under a non-cancelable operating lease that expires in May 2013 and provides for six month extensions thereafter. Rent expense for the years ended December 31, 2012 and 2011 was $286,762 and $529,114, respectively, and rent expense, net of sub-lease income for the period from September 26, 2000 (inception) to December 31, 2012 was $5.0 million.

Future minimum payments as of December 31, 2012 are as follows:


Years ending December 31:
2013	$	77,039

Total minimum payments	$	77,039

License Agreements

Since our inception, we have entered into eight license agreements with pharmaceutical companies which cover our current product candidates. In general, we seek to obtain exclusive licenses to the patent rights and know-how for all indications under the agreements within our licensed territories and to procure patent protection for our anticipated products, or obtain such protection from the relevant patents owned by our licensors. Under our license agreements we generally are required to make an upfront payment and additional payments upon the achievement of specific development and/or regulatory approval milestones. We are also generally obligated to pay royalties under the agreements until the later of the expiration of the applicable patent or the applicable last date of market exclusivity after the first commercial sale, on a country-by-country basis.

The amounts expended under these agreements and charged to research and development expense from September 26, 2000 (inception) to December 31, 2012 was $9,850,000. No such amounts have been expended during the years ended December 31, 2012 or 2011. As of December 31, 2012, future potential milestone payments totaled $94.1 million, and there are no minimum royalties required under any of the license agreements. We are unable at this time to estimate with certainty the timing on when these milestone payments will occur as these payments are dependent upon the progress of our product development programs.

Legal Proceedings

On March 3, 2011, we received a letter, in which certain allegations were made, from a former employee who had been terminated in January 2011 pursuant to our planned reduction-in-force. On July 8, 2011, the former employee filed a lawsuit in the Superior Court of the State of California, County of San Diego, asserting certain claims related to the Company’s work environment and the employee’s termination, and on December 12, 2011 the court granted our motion to compel arbitration. On August 1, 2012 the arbitrator stayed all proceedings to allow the plaintiff time to obtain new counsel. The plaintiff has since obtained new counsel and the arbitrator has continued the stay to allow our legal counsel and the plaintiff’s new counsel to work out some final details regarding documents and property previously held by the plaintiff’s former counsel. Based on our current assessment, we do not expect its outcome to have a material adverse effect on our business, financial condition and results of operations.

The entire disclosure for commitments and contingencies.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity

7. Stockholders’ Equity

Initial Public Offering in Japan

On February 8, 2005, we completed an IPO of 3,000,000 shares of common stock in Japan and received aggregate proceeds of $104,486,895, net of underwriting discounts and commissions and offering expenses. In addition, on March 8, 2005, we closed the sale of an additional 157,300 shares of our common stock pursuant to the partial exercise by our underwriters of an over-allotment option which resulted in aggregate proceeds to us of $5,557,773, net of underwriting discounts and commissions. In connection with our IPO, redeemable convertible and convertible preferred stock outstanding as of February 8, 2005 was automatically converted into 6,678,285 shares of common stock.

Public Offering in the U.S.

On February 1, 2007, we completed a public offering of 1,000,000 shares of common stock in the U.S. at a purchase price of $12.00 per share and received aggregate net proceeds of approximately $10,639,600, net of underwriting discounts and commissions and offering expenses.

Redeemable Convertible Preferred Stock

On September 2, 2004, we sold 27,667,856 shares of Series C redeemable convertible preferred stock at a purchase price of $1.62 per share for total net proceeds of $43,404,320, net of issuance costs. The Series C preferred stock was sold at a price per share below our IPO price. Accordingly, pursuant to the authoritative guidance for debt under ASC 470, we recorded a deemed dividend on the Series C preferred stock of $31,264,677, which is equal to the number of shares of Series C preferred stock sold multiplied by the difference between the estimated fair value of the underlying common stock and the Series C preferred stock conversion price per share. The deemed dividend increased the net loss applicable to common stockholders in the calculation of basic and diluted net loss per common share and was reported as a charge to accumulated deficit and a credit to additional paid-in capital, with no net impact on total stockholders’ equity.

Convertible Notes

At the closing of the Avigen transaction, we and American Stock Transfer & Trust Company, LLC, as trustee, entered into the indenture. Under the terms of a separate trust agreement (the “Trust Agreement”), $29.4 million, which represented the initial principal amount of the Convertible Notes, was deposited with a trust agent for the benefit of the holders and us.

Prior to their maturity on June 18, 2011, holders of the Convertible Notes could submit irrevocable conversion notices instructing the trustee to convert such Convertible Notes into shares of our common stock at an initial conversion price of $6.80 per share. Following each conversion date we would issue the number of whole shares of common stock issuable upon conversion and the trustee would in turn release to us the respective amount of restricted cash to cover the stock issuance. Prior to the maturity of the Convertible Notes, approximately $1.9 million of the convertible notes were converted to 276,655 shares of our common stock. All remaining Convertible Notes matured on June 18, 2011 and the principal was repaid in full.

Firm Underwritten Public Offering

On March 23, 2011, we consummated a firm-commitment underwritten public offering of 2,750,000 units at a price to the public of $3.00 per unit for gross proceeds of $8.25 million. Each unit consists of one share of common stock, and a warrant to purchase one share of common stock. The shares of common stock and warrants are immediately separable and were issued separately. On March 24, 2011, the underwriter exercised 50,666 units of its 412,500 unit overallotment. The warrants are exercisable immediately upon issuance, have a five-year term and an exercise price of $3.56 per share. The warrants are indexed to our stock and do not permit net-cash settlement. On March 29, 2011, we received net proceeds of $7.7 million, after underwriter discount and underwriter expenses and no warrants exercised. In accordance with the authoritative guidance, the warrants were classified as equity instruments as they contain no provisions which may require cash settlement.

Oxford Warrant

In May 2010, pursuant to the Loan Agreement with Oxford, we issued to Oxford a warrant to purchase up to 198,020 shares of our common stock at an exercise price of $6.06 per share. The warrant will terminate on the earlier of May 10, 2017 or the closing date of a merger or consolidation transaction in which we are not the surviving entity. In addition, the warrant and debt instrument are immediately separable and were issued separately. We therefore accounted for the warrant as a component of stockholders’ equity as the agreement requires settlement in shares and under no provision of the agreement are we required to settle the warrant in cash.

Kissei Stock Purchase

In October 2011, pursuant to a stock purchase agreement by and between us and Kissei, Kissei purchased for $7.5 million (i) an aggregate of 800,000 shares of our common stock, par value $0.001 per share, at a price of $2.50 per share, which approximated the fair value of our common stock at the time of the transaction, and (ii) 220,000 shares of our Series B Convertible Preferred Stock, or Series B Preferred, par value $0.01 per share, at a price of $25.00 per share, which approximated the fair value of our preferred stock on an as converted basis at the time of the transaction. The purchase agreement contains customary representations, warranties and covenants and a standstill agreement from Kissei that terminates if Kissei beneficially owns less than three percent of our outstanding voting stock. Each share of the Series B Preferred is convertible into 10 shares of common stock. The Series B Preferred ranks pari passu (on an as-if-converted-to-common-stock basis) with the common stock in liquidation and dividend rights. The holders of the Series B Preferred do not have voting rights, and the consent of a majority of the outstanding Series B Preferred is required for certain actions of the Company.

Common Stock Purchase Agreement

On August 20, 2012, we entered into a common stock purchase agreement with Aspire pursuant to which the Company may sell to Aspire, and Aspire would be obligated to purchase, up to an aggregate of $20 million of our common stock over the two year term of the agreement including $1 million in common stock purchased by Aspire in connection with execution of the agreement. Daily sales of our common stock to Aspire are subject to certain limitations and the per share sales price is based on closing stock prices at or near each transaction date. No more than 3,231,096 shares of our common stock can be issued under this agreement, including the 363,636 shares issued to Aspire in consideration of entering into the agreement. Our net proceeds will depend on the frequency and number of shares of our common stock sold to Aspire and the per share purchase price of each transaction. We may, on any business day over term of the agreement, direct Aspire to purchase up to 50,000 shares, to a maximum of $500,000 per business day. The purchase price shall be the lower of the lowest sale price of the Company’s common stock on the date of the sale, or the average of the three lowest closing stock prices during the 12 consecutive business days ending on the business day immediately preceding the purchase date. In addition, MediciNova may on any business day over the term of the Agreement, direct Aspire to make a volume-weighted average purchase (“VWAP”) of stock not to exceed 15% (which limitation may be increased up to 30% by the mutual agreement of the parties) of the aggregate shares of our stock traded on the next business day, the purchase price of which shall be the lower of the closing price on the date of the sale, or 95% of the next business day’s Nasdaq volume weighted average price, subject to a minimum market price threshold established by us and certain other exceptions. We initially issued 363,636 shares of our common stock to Aspire as consideration for entering into the agreement. As of December 31, 2012, the Company had completed sales to Aspire totaling 856,060 shares of common stock at prices ranging from $1.65 to $1.93 per share, generating gross proceeds of $1.5 million. Between August 21, 2012 and the date of this report, we have generated proceeds of $3.0 million under the Common Stock Purchase Agreement with Aspire including proceeds of $1.5 million on the sale 800,000 shares of our common stock subsequent to December 31, 2012. The agreement with Aspire provides Aspire certain termination rights, including rights under an event of default as defined therein, under which the Company may not require and Aspire would not be obligated to purchase any shares of our common stock. The Company and Aspire may also not effect any sales under the agreement on any purchase date where the closing price of our common stock is less than $1.00 per share.

Warrant For Services

On August 22, 2012, we issued a warrant in exchange for investor relations services to purchase up to 130,000 of our common shares at a price of $1.88 per share, the closing price of our common stock on that date. The warrant contains provisions whereby the warrant becomes exercisable for specified shares of our common stock as a result of our stock achieving certain share price targets within a 15 month period beginning on August 22, 2012. The warrant expires in five years. The warrant is valued at its fair value of approximately $100,000 on August 22, 2012, is classified as equity and as a prepaid expense, and is being amortized over the one year period beginning August 22, 2012.

Stock Options

We grant options to our employees, directors and consultants under our 2004 Plan, the successor to the 2000 Plan.

2000 General Stock Incentive Plan

In September 2000, we adopted the 2000 Plan under which incentive stock options could be granted to our employees and nonstatutory stock options and other stock-based awards could be granted to employees, directors and consultants. Stock options have been granted with an exercise price of $10.00 per share and vest 25% after the first year of service from the grant date, with the remaining shares vesting in equal monthly installments over the subsequent 36 months of service. An employee may exercise stock options prior to vesting in which case we have the right to repurchase the unvested shares at the original exercise price if the employee is terminated before vesting in all shares occurs.

Following the vesting period, options are exercisable until the earlier of 90 days after the employee’s termination with us or the ten-year anniversary of the initial grant, subject to adjustment under certain conditions. We have the right to purchase all of those shares that the employees have or will acquire under these stock options. The purchase price for any vested shares repurchased will be the greater of the fair market value of such shares on the date of purchase or the aggregate exercise price for such shares.

At December 31, 2012, stock options to purchase a total of 4,000 shares of common stock were outstanding under the 2000 Plan at a weighted average exercise price of $10.00 per share. No additional stock options have been or will be issued under the 2000 Plan. However, stock options previously granted under the 2000 Plan will remain outstanding until the earlier of expiration or exercise.

2004 Stock Incentive Plan

In connection with our IPO, we adopted the 2004 Plan, which serves as the successor program to the 2000 Plan. The 2004 Plan became effective upon the completion of our IPO in February 2005 and was amended and restated in February 2007.

The 2004 Plan is administered by the compensation committee of our board of directors and provides for the grant of (i) options to purchase shares of common stock; (ii) restricted stock; (iii) stock appreciation rights; and (iv) stock units. Incentive stock options may only be granted to employees. Nonstatutory stock options and other stock-based awards may be granted to employees, non-employee directors and consultants.

The number of shares reserved for issuance under the 2004 Plan will be increased on the first day of each of our fiscal years from 2006 through 2014, with the first such increase occurring on January 1, 2006, by the lesser of: (i) 100,000 shares; (ii) 3% of our outstanding common stock on the last day of the immediately preceding fiscal year; or (iii) the number of shares determined by our board of directors. In addition, in February 2007 and June 2008, the total number of shares available for grant under the 2004 Plan was increased by 300,000 and 1,000,000, respectively.

Options granted to optionees other than non-employee directors will generally vest monthly over a four-year period, beginning on the vesting commencement date. The exercise price of an incentive stock option shall not be less than 100% of the fair market value at the time of grant and the exercise price of a nonstatutory stock option shall not be less than 85% of the fair market value at the time of grant.

The 2004 Plan terminates ten years after its initial adoption by the board of directors, unless terminated earlier by the board of directors. The board of directors may amend or terminate the plan at any time, subject to stockholder approval where required by applicable law.

A summary of our stock option activity and related information as of December 31, 2012 is as follows:


	Number of Option Shares			Weighted Average Exercise Price
Outstanding at January 1, 2012		3,092,671		$	5.52
Granted		750,000		$	2.01
Exercised		(60,000	)	$	2.30
Cancelled		(453,690	)	$	4.57

Outstanding at December 31, 2012		3,328,981		$	4.92

Exercisable at December 31, 2012		2,089,963		$	6.32

The weighted average contractual life of options outstanding at December 31, 2012 was 7.2 years and the weighted average contractual life of exercisable options at December 31, 2012 was 6.1 years. There was no aggregate intrinsic value of stock options outstanding and options exercisable, during the year ended December 31, 2012.

Common Stock Reserved for Future Issuance

The following table summarizes common stock reserved for future issuance at December 31, 2012:


Common Stock under the employee stock purchase program			249,578
Common stock reserved for issuance upon exercise of warrant			3,128,686
Common stock options outstanding (under the 2000 Plan and 2004 Plan)			3,328,981
Common stock options authorized for future grant (under the 2004 Plan)			466,752

			7,173,997

Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes

8. Income Taxes

The significant components of our deferred income taxes at December 31, 2012 and 2011 are as follows:


	12/31/12			12/31/11
Deferred Tax Assets:
Net operating loss carryforwards		83,783,000			79,215,000
Capitalized licenses		1,822,000			2,067,000
Research tax credits		7,145,000			7,124,000
Stock Options		570,000			395,000
Other, net		862,000			988,000

Total Deferred Tax Assets		94,182,000			89,789,000

Deferred Tax Liabilities
In process R&D		(1,956,000	)		(1,956,000	)

Total Deferred Tax Liabilities		(1,956,000	)		(1,956,000	)

Net deferred tax assets		92,226,000			87,833,000
Valuation Allowance		(94,182,000	)		(89,789,000	)

Net Deferred Tax Liability		(1,956,000	)		(1,956,000	)

We have established a valuation allowance against our deferred tax assets due to the uncertainty that such assets will be realized. We periodically evaluate the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred tax assets will be realizable, the valuation allowance will be reduced.

At December 31, 2012, we had federal and California net operating loss, or NOL, carryforwards of approximately $205.7 million and $205.1 million, respectively. The federal net operating loss carryforwards begin to expire in 2020, and the California net operating loss carryforwards begin to expire in 2013. At December 31, 2012, we also had federal and California research tax credit carryforwards of approximately $6.2 million and $1.4 million, respectively. The federal research tax credit carryforwards begin to expire in 2024, and the California research tax credit carryforward does not expire and can be carried forward indefinitely until utilized.

The above NOL carryforward and the research tax credit carryforwards are subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions due to ownership change limitations that have occurred which will limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. Multiple ownership changes have occurred in previous years which created annual limitations on our ability to utilize NOL and tax credit carryovers. Such limitations will result in approximately $7.3 million and $1 million of tax benefits related to federal and state NOL and tax credit carryforwards, respectively, that will expire unused. Accordingly, the related NOL and research credit carryforwards are not reflected in the deferred tax assets or the corresponding valuation allowance above. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, related to our operations in the U.S. will not impact our effective tax rate.

A reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows:


	Year Ended December 31,
	2012			2011
Federal statutory income tax rate		35.0	%		35.0	%
State income taxes, net of federal benefit		5.8			5.5
Tax credits		—			1.6
Change in valuation allowance		(40.1	)		(37.1	)
Permanent differences		(0.7	)		(5.0	)
Other		—			—

Provision for income taxes		0.0	%		0.0	%

We file income tax returns in the United States, California and foreign jurisdictions. Due to our losses incurred, we are essentially subject to income tax examination by tax authorities from our inception to date. Our policy is to recognize interest expense and penalties related to income tax matters as tax expense. At December 31, 2012, there are no unrecognized tax benefits, and we do not have any significant accruals for interest related to unrecognized tax benefits or tax penalties.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Employee Savings Plan

12 Months Ended

Dec. 31, 2012

Employee Savings Plan

9. Employee Savings Plan

We have an employee savings plan available to substantially all employees. Under the plan, an employee may elect salary reductions which are contributed to the plan. The plan provides for discretionary contributions by us, which totaled $96,415, $97,929, and $1,196,091 for the years ended December 31, 2012, 2011 and the period from September 26, 2000 (inception) to December 31, 2012, respectively.

The entire disclosure for pension and other postretirement benefits.

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Quarterly Financial Data

12 Months Ended

Dec. 31, 2012

Quarterly Financial Data

10. Quarterly Financial Data (Unaudited)

The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Summarized quarterly data for fiscal 2012 and 2011 are as follows (in thousands, except per share data):


	Year Ended December 31, 2012
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
Selected quarterly financial data:
Revenues		191			494			84			34
Total operating expenses		4,064			2,781			2,446			2,455
Net loss		(3,867	)		(2,281	)		(2,379	)		(2,434	)
Net loss applicable to common stockholders		(3,867	)		(2,281	)		(2,379	)		(2,434	)
Basic and diluted net loss per common share(1)		(0.24	)		(0.14	)		(0.14	)		(0.14	)


	Year Ended December 31, 2011
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
Selected quarterly financial data:
Total operating expenses		4,976			3,722			3,907			3,503
Net loss		(5,656	)		(4,681	)		(3,894	)		(3,503	)
Net loss applicable to common stockholders		(5,656	)		(4,681	)		(3,894	)		(3,503	)
Basic and diluted net loss per common share(1)		(0.45	)		(0.31	)		(0.25	)		(0.22	)

(1)	Loss per share is computed independently for each of the quarters presented. The sum of the quarterly net loss per share will not necessarily equal the total for the year.

Principles of Consolidation

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

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The Company, Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Basis of Presentation

Basis of Presentation

Principles of Consolidation

All intercompany transactions and investments in our subsidiaries have been eliminated in consolidation.

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

Deferred Revenue and Revenue Recognition

Deferred Revenue and Revenue Recognition

At-The-Market Issuance Sales Agreement

At-The-Market Issuance Sales Agreement

Effective October 23, 2011, we terminated the ATM between us and MLV. No shares of common stock were issued under the ATM.

Concentrations and Credit Risk

Concentrations and Credit Risk

Goodwill and Purchased Intangibles

Goodwill and Purchased Intangibles

Fair Value

Fair Value

The judgments made in determining an estimate of fair value can materially impact our results of operations.

Equipment

Equipment

Research and Development

Research and Development

Income Taxes

Income Taxes

Stock-Based Compensation

Stock-Based Compensation


	Year Ended December 31,
	2012			2011
Stock Options
Risk-free interest rate		0.67	%		0.70	%
Expected volatility of common stock		83.26	%		78.79	%
Dividend yield		0.00	%		0.00	%
Expected option term (in years)		5.31			5.36
Employee Stock Purchase Plan
Risk-free interest rate		0.30	%		0.27	%
Expected volatility of common stock		79.5	%		77.97	%
Dividend yield		0.00	%		0.00	%
Expected option term (in years)		0.5			0.5

Net Loss Per Share

Net Loss Per Share

Potentially dilutive outstanding securities excluded from diluted net loss per common share because of their anti-dilutive effect:


	December 31,
	2012		2011
Convertible preferred stock, as converted		2,200,000		2,200,000
Stock options		3,328,981		3,092,671
Warrants		3,128,686		2,998,686

Total		8,657,667		8,291,357

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Company, Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Weighted-average assumptions for stock option

The estimated fair value of each stock option award was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for stock option grants:


	Year Ended December 31,
	2012			2011
Stock Options
Risk-free interest rate		0.67	%		0.70	%
Expected volatility of common stock		83.26	%		78.79	%
Dividend yield		0.00	%		0.00	%
Expected option term (in years)		5.31			5.36
Employee Stock Purchase Plan
Risk-free interest rate		0.30	%		0.27	%
Expected volatility of common stock		79.5	%		77.97	%
Dividend yield		0.00	%		0.00	%
Expected option term (in years)		0.5			0.5

Securities excluded from diluted net loss per common share

Potentially dilutive outstanding securities excluded from diluted net loss per common share because of their anti-dilutive effect:


	December 31,
	2012		2011
Convertible preferred stock, as converted		2,200,000		2,200,000
Stock options		3,328,981		3,092,671
Warrants		3,128,686		2,998,686

Total		8,657,667		8,291,357

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value Measurements on recurring basis

The following table presents our financial instruments measured at fair value on a recurring basis classified by the fair value measurements and disclosures valuation hierarchy (in thousands):


	As of December 31, 2012
			Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
Cash equivalents	$	1,720	$	1,720	$	—	$	—


	As of December 31, 2011
			Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
Cash equivalents	$	1,690	$	1,690	$	—	$	—

Tabular disclosure related to assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a recurring and/or nonrecurring basis in periods after initial recognition. Disclosures include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3) as well as transfers between levels 1 and 2.

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

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-Name Statement of Financial Accounting Standard (FAS)

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+ Details

Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2012

Long-term Debt Activity

The table below summarizes the long-term debt activity:


	Year Ended December 31, 2011
	Carrying Value 12/31/2010			Amortization (Interest Expense)			Amortization (Other Expense)			Payments		Write-Off Debt Related Costs			Carrying Value 12/31/2011
Other Assets:
Debt issuance costs paid to third parties	$	124,722		$			$	(21,426	)	$	—	$	(103,296	)	$	—


Liability:
Loan	$	(15,000,000	)	$			$	—		$	15,000,000	$	—		$	—
Deferred interest charge	$	(134,491	)	$	(504,207	)		—		$	450,000	$	188,698		$	—

	$	(15,134,491	)	$	(504,207	)	$	—		$	15,450,000	$	188,698		$	—


Contra Liability:
Relative fair value of warrants issued to lender(1)	$	595,342		$	(102,274	)	$	—		$	—	$	(493,068	)	$	—
Debt issuance costs paid to lender	$	103,934		$	(17,855	)		—		$	—	$	(86,079	)	$	—

	$	699,276		$	(120,129	)	$	—		$	—	$	(579,147	)	$	—

(1)

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Property and Equipment Net

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-Name Accounting Standards Codification

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-Subparagraph (SX 210.5-02.22)

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-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 22

-Article 5

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+ Details

Balance Sheet Details (Tables)

12 Months Ended

Dec. 31, 2012

Property and equipment, net, consist of the following:


	December 31,
	2012			2011
Leasehold improvements	$	170,386		$	172,648
Furniture and equipment		351,992			561,332
Software		228,397			221,380

		750,775			955,360
Less accumulated depreciation and amortization		(672,301	)		(925,935	)

	$	78,474		$	29,425

Depreciation expense	$	33,507		$	41,869

Accrued expenses

Accrued expenses consist of the following:


	December 31,
	2012		2011
Research and development costs	$	152,046	$	615,792
Professional services fees		68,102		100,823
Joint venture capital contribution payable		—		650,000
Other		94,504		149,200

	$	314,652	$	1,515,815

Tabular disclosure of the useful life and salvage value of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software.

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2012

Future minimum payments

Future minimum payments as of December 31, 2012 are as follows:


Years ending December 31:
2013	$	77,039

Total minimum payments	$	77,039

Summary of stock option activity and related information

Tabular disclosure of a lessee's leasing arrangements including: (1) the basis on which contingent rental payments are determined, (2) the existence and terms of renewal or purchase options and escalation clauses, (3) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

+ References+ Details

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2012

A summary of our stock option activity and related information as of December 31, 2012 is as follows:


	Number of Option Shares			Weighted Average Exercise Price
Outstanding at January 1, 2012		3,092,671		$	5.52
Granted		750,000		$	2.01
Exercised		(60,000	)	$	2.30
Cancelled		(453,690	)	$	4.57

Outstanding at December 31, 2012		3,328,981		$	4.92

Exercisable at December 31, 2012		2,089,963		$	6.32

Common Stock Reserved for Future Issuance

The following table summarizes common stock reserved for future issuance at December 31, 2012:


Common Stock under the employee stock purchase program			249,578
Common stock reserved for issuance upon exercise of warrant			3,128,686
Common stock options outstanding (under the 2000 Plan and 2004 Plan)			3,328,981
Common stock options authorized for future grant (under the 2004 Plan)			466,752

			7,173,997

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of Deferred Income Taxes

The significant components of our deferred income taxes at December 31, 2012 and 2011 are as follows:


	12/31/12			12/31/11
Deferred Tax Assets:
Net operating loss carryforwards		83,783,000			79,215,000
Capitalized licenses		1,822,000			2,067,000
Research tax credits		7,145,000			7,124,000
Stock Options		570,000			395,000
Other, net		862,000			988,000

Total Deferred Tax Assets		94,182,000			89,789,000

Deferred Tax Liabilities
In process R&D		(1,956,000	)		(1,956,000	)

Total Deferred Tax Liabilities		(1,956,000	)		(1,956,000	)

Net deferred tax assets		92,226,000			87,833,000
Valuation Allowance		(94,182,000	)		(89,789,000	)

Net Deferred Tax Liability		(1,956,000	)		(1,956,000	)

Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax Rate

A reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows:


	Year Ended December 31,
	2012			2011
Federal statutory income tax rate		35.0	%		35.0	%
State income taxes, net of federal benefit		5.8			5.5
Tax credits		—			1.6
Change in valuation allowance		(40.1	)		(37.1	)
Permanent differences		(0.7	)		(5.0	)
Other		—			—

Provision for income taxes		0.0	%		0.0	%

Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2012

Summarized Quarterly Data

Summarized quarterly data for fiscal 2012 and 2011 are as follows (in thousands, except per share data):


	Year Ended December 31, 2012
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
Selected quarterly financial data:
Revenues		191			494			84			34
Total operating expenses		4,064			2,781			2,446			2,455
Net loss		(3,867	)		(2,281	)		(2,379	)		(2,434	)
Net loss applicable to common stockholders		(3,867	)		(2,281	)		(2,379	)		(2,434	)
Basic and diluted net loss per common share(1)		(0.24	)		(0.14	)		(0.14	)		(0.14	)


	Year Ended December 31, 2011
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
Selected quarterly financial data:
Total operating expenses		4,976			3,722			3,907			3,503
Net loss		(5,656	)		(4,681	)		(3,894	)		(3,503	)
Net loss applicable to common stockholders		(5,656	)		(4,681	)		(3,894	)		(3,503	)
Basic and diluted net loss per common share(1)		(0.45	)		(0.31	)		(0.25	)		(0.22	)

(1)	Loss per share is computed independently for each of the quarters presented. The sum of the quarterly net loss per share will not necessarily equal the total for the year.

Company Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	1 Months Ended		3 Months Ended								12 Months Ended								147 Months Ended	12 Months Ended											12 Months Ended			12 Months Ended	1 Months Ended	12 Months Ended		1 Months Ended		12 Months Ended		1 Months Ended	3 Months Ended	1 Months Ended
	Mar. 31, 2012	Oct. 31, 2011	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012 Segment	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007 M	Dec. 31, 2006	Dec. 31, 2005	Dec. 31, 2012	Dec. 31, 2012 Furniture and Fixtures	Dec. 31, 2012 Equipment	Dec. 31, 2012 Software	Dec. 31, 2012 Computer	Dec. 31, 2012 General and Administrative Expenses	Dec. 31, 2011 General and Administrative Expenses	Dec. 31, 2012 Research and development costs	Dec. 31, 2011 Research and development costs	Dec. 31, 2007 Employee Stock	Dec. 31, 2012 Employee Stock	May 05, 2011 At Market Issuance Sales Agreement	Dec. 31, 2012 Common Stock	Dec. 31, 2011 Common Stock	Oct. 31, 2011 Kissei Stock Purchase Agreement	Dec. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement	Aug. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock	Dec. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock	Aug. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Maximum	Mar. 31, 2011 Avigen	Dec. 31, 2009 Avigen	Dec. 31, 2012 Avigen Increments	Mar. 31, 2011 Avigen Pro Rata Basis	Feb. 28, 2005 JAPAN IPO	Mar. 31, 2005 JAPAN IPO	Mar. 31, 2013 Issuance of Equity Aspire Capital Fund Llc Kissei Stock Purchase Agreement	Mar. 31, 2013 Issuance of Equity Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Incurred losses			$ (2,434,000)	$ (2,379,000)	$ (2,281,000)	$ (3,867,000)	$ (3,503,000)	$ (3,894,000)	$ (4,681,000)	$ (5,656,000)	$ (10,961,314)	$ (17,734,076)	$ (20,187,308)	$ (20,368,890)	$ (21,924,829)	$ (48,903,244)	$ (35,689,611)	$ (25,692,135)	$ (264,870,675)
Accumulated deficit			(296,233,797)				(285,272,483)				(296,233,797)	(285,272,483)							(296,233,797)
Net cash used in operating activities											(11,864,438)	(13,308,652)							(209,712,471)
Cash and cash equivalents			4,010,530				15,093,124				4,010,530	15,093,124	28,252,204						4,010,530
Working capital			3,400,000								3,400,000								3,400,000
Aggregate proceeds from stock issued											1,486,603	9,715,100							132,665,225															3,000,000								104,486,895	104,486,895	1,500,000
Stock Purchase Agreement, shares sold																																				2,019,696									800,000
Stock purchase agreement, number of common stock agreed to be purchased																																			3,231,096
Stock purchase agreement, aggregate amount of common stock agreed to be purchased																																					20,000,000
Number of reporting segments											1
Stock issued																																										3,000,000	3,000,000
Percentage of outstanding shares acquired																																							100.00%
Percentage of Avigen shareholders that received cash																																							17.00%
Share received by former Avigen shareholders																																						$ 0.02	$ 1.19	$ 0.04	$ 0.02
Common stock, initial conversion price																																						$ 6.80
Number of paid increments																																								2
Investment in China joint venture	680,000
Investment in China joint venture, percentage	30.00%					30.00%																											3.00%
Other parties investment in China joint venture, percentage	70.00%					70.00%
Research and development Cost		2,500,000
Revenue relating to research and development services		2,500,000									800,000
Sales agreement, aggregate offering price			17,407				16,128				17,407	16,128							17,407											15,000,000
Cash insured amount			250,000								250,000								250,000
Goodwill			9,600,241				9,600,241				9,600,241	9,600,241							9,600,241
IPR&D recorded			4,800,000				4,800,000				4,800,000	4,800,000							4,800,000
Useful life																				5 years	5 years
Useful life																						5 years	3 years
Common stock reserved for issuance			7,173,997								7,173,997								7,173,997									300,000	249,578
Shares reserved, description																												Shares reserved will automatically increase by a number equal to the lesser of (i) 15,000 shares, (ii) 1% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year or
Percentage of employee compensation for purchase of common stock under ESPP																Cannot exceed 15%
Common stock fair market value, percentage																85.00%
Employee stock purchase plan offering period																6
Common stock options, granted											750,000	1,431,000
Shares issued under ESPP											35,414
Shares available for future issuance											249,578
Weighted-average fair value, per option											$ 1.33	$ 1.25
Stock-based compensation expense											709,650	1,372,748							50,390,931					400,000	1,100,000	300,000	300,000
Stock options exercised											60,000						1,400														60,000	32,836
Proceed from stock options exercised											100,000	80,000
Unamortized compensation cost			$ 1,000,000								$ 1,000,000								$ 1,000,000
Unamortized compensation cost, vesting period											1 year 2 months 12 days

Weighted-average Assumptions for Stock Option (Detail)	12 Months Ended
Weighted-average Assumptions for Stock Option (Detail)	Dec. 31, 2012	Dec. 31, 2011
ESPP assumptions
Employee Stock Purchase Plan
Risk-free interest rate	0.30%	0.27%
Expected volatility of common stock	79.50%	77.97%
Dividend yield	0.00%	0.00%
Expected option term (in years)	6 months	6 months
Stock Options assumptions
Employee Stock Purchase Plan
Risk-free interest rate	0.67%	0.70%
Expected volatility of common stock	83.26%	78.79%
Dividend yield	0.00%	0.00%
Expected option term (in years)	5 years 3 months 22 days	5 years 4 months 10 days

The estimated measure of the percentage by which a share price is expected to fluctuate during a period. Volatility also may be defined as a probability-weighted measure of the dispersion of returns about the mean. The volatility of a share price is the standard deviation of the continuously compounded rates of return on the share over a specified period. That is the same as the standard deviation of the differences in the natural logarithms of the stock prices plus dividends, if any, over the period.

+ References+ Details

Securities Excluded from Diluted Net Loss Per Common Share (Detail)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	8,657,667	8,291,357
Convertible Preferred Stock, as Converted
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	2,200,000	2,200,000
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	3,328,981	3,092,671
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	3,128,686	2,998,686

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.

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

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Antidilution

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-Publisher FASB

-Name Accounting Standards Codification

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-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

Fair Value Measurements on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $)	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 1,720	$ 1,690
Fair Value Measurements using Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 1,720	$ 1,690

This element represents the portion of the balance sheet assertion valued at fair value by the entity whether such amount is presented as a separate caption or as a parenthetical disclosure. Additionally, this element may be used in connection with the fair value disclosures required in the footnote disclosures to the financial statements. The element may be used in both the balance sheet and disclosure in the same submission. This item includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Company may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months.

+ References+ Details

Long-term Debt - Additional Information (Detail) (USD $)	1 Months Ended
	May 31, 2010	Dec. 31, 2012	Aug. 22, 2012	Dec. 31, 2011	Mar. 31, 2011	Mar. 23, 2011
Debt Instrument [Line Items]
Loan and security agreement date	May 2010
Amount borrowed	$ 15,000,000
The stated interest rate	12.87%
Common stock in warrant to purchase	198,020		130,000
Common stock, par value	$ 0.001	$ 0.001		$ 0.001
Per share exercise price	6.06					3.56
The warrant termination date	10-May-17
Payment penalty					$ 437,000

Long-term Debt Activity (Detail) (USD $)

12 Months Ended

147 Months Ended

Dec. 31, 2011

Dec. 31, 2012

Payment of interest

$ 1,088,926

$ 2,487,343

Other Asset

124,722

(21,426)

(103,296)

Liability

188,698

Amortization (Interest Expense)

(15,134,491)

(504,207)

Payments

15,450,000

Payment of interest

450,000

Liability | Loans

(15,000,000)

Payments

15,000,000

Liability | Deferred Charges

188,698

Amortization (Interest Expense)

(134,491)

(504,207)

Payment of interest

450,000

Contra Liability

699,276

(120,129)

(579,147)

Contra Liability | Warrant

595,342

^[1]

(102,274)

^[1]

(493,068)

^[1]

Contra Liability | Debt Issuance Costs

103,934

(17,855)

$ (86,079)

[1]

Including current and noncurrent portions, aggregate carrying amount of long-term borrowings as of the balance sheet date before deducting unamortized discount or premiums (if any). May include notes payable, bonds payable, commercial loans, mortgage loans, convertible debt, subordinated debt and other types of debt, which had initial maturities beyond one year or beyond the normal operating cycle, if longer.

+ References+ Details

The cash outflow for debt initially having maturity due after one year or beyond the normal operating cycle, if longer.

+ References+ Details

Long-term Debt Activity (Parenthetical) (Detail) (USD $)		12 Months Ended
	Aug. 22, 2012	Dec. 31, 2012 Warrant
Risk-free interest rate assumption		2.86%
Expected volatility assumption		76.00%
Dividend yield assumption		0.00%
Expected term assumption		7 years
Fair value of the warrants using the Black-Scholes valuation model	$ 100,000	$ 4.34

Property and Equipment Net (Detail) (USD $)	12 Months Ended
Property and Equipment Net (Detail) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Leasehold improvements	$ 170,386	$ 172,648
Furniture and equipment	351,992	561,332
Software	228,397	221,380
Property, Plant and Equipment, Gross, Total	750,775	955,360
Less accumulated depreciation and amortization	(672,301)	(925,935)
Property and equipment, net	78,474	29,425
Depreciation expense	$ 33,507	$ 41,869

The cumulative amount of depreciation, depletion and amortization (related to property, plant and equipment, but not including land) that has been recognized in the income statement.

+ References+ Details

The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation.

+ References+ Details

Gross amount of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment.

+ References+ Details

Amount, net of accumulated depreciation, depletion and amortization, of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment.

+ References+ Details

Accrued Expenses (Detail) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Incremental Effect on Balance Sheet, Application of FAS 158 Recognition Provisions [Line Items]
Accrued expenses	$ 314,652	$ 1,515,815
Accrued Expense	314,652	1,515,815
Research and development costs
Incremental Effect on Balance Sheet, Application of FAS 158 Recognition Provisions [Line Items]
Accrued expenses	152,046	615,792
Professional services fees
Incremental Effect on Balance Sheet, Application of FAS 158 Recognition Provisions [Line Items]
Accrued expenses	68,102	100,823
Joint venture capital contribution payable
Incremental Effect on Balance Sheet, Application of FAS 158 Recognition Provisions [Line Items]
Accrued expenses		650,000
Other
Incremental Effect on Balance Sheet, Application of FAS 158 Recognition Provisions [Line Items]
Accrued expenses	$ 94,504	$ 149,200

Related Party Transactions - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	12 Months Ended
	Oct. 31, 2011	Dec. 31, 2012
Related Party Transaction [Line Items]
Revenue relating to research and development services	$ 2.5	$ 0.8
Common Stock
Related Party Transaction [Line Items]
Common stock purchased, shares	800,000
Kissei Stock Purchase Agreement
Related Party Transaction [Line Items]
Stock purchased, amount	$ 7.5
Kissei Stock Purchase Agreement \| Series B Preferred Stock
Related Party Transaction [Line Items]
Common stock purchased, shares	220,000
Kissei Stock Purchase Agreement \| Common Stock
Related Party Transaction [Line Items]
Common stock purchased, shares	800,000

The amount of compensation earned (contract income) under a research and development arrangement accounted for as a contract to perform research and development for others.

+ References+ Details

Commitments and Contingencies - Additional Information (Detail) (USD $)	12 Months Ended		147 Months Ended	1 Months Ended			147 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Agreement	Mar. 31, 2012 San Diego	Jul. 31, 2011 San Diego	Jun. 30, 2005 JAPAN	Dec. 31, 2012 Licensing Agreements
Loss Contingencies [Line Items]
Monthly base rent				$ 12,672	$ 12,468
Rent extension period					9 months
Operating lease expiration date				Feb. 28, 2013
Operating lease expiration period						2013-05
Rent expense	286,762	529,114
Rent expense, net of sub-lease income			5,000,000
Number of license agreements			8
Research and development expense	5,013,092	7,784,719	167,054,655				9,850,000
Future potential milestone payments							$ 94,100,000

Future Minimum Payments (Detail) (USD $)	Dec. 31, 2012
Operating Leased Assets [Line Items]
2013	$ 77,039
Total minimum payments	$ 77,039

Amount of required minimum rental payments for leases having an initial or remaining non-cancelable letter-terms in excess of one year.

+ References+ Details

Amount of required minimum rental payments maturing in the second fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year.

+ References+ Details

Stockholders Equity - Additional Information (Detail) (USD $)	1 Months Ended						12 Months Ended				147 Months Ended							1 Months Ended			12 Months Ended				1 Months Ended			12 Months Ended	1 Months Ended		1 Months Ended				1 Months Ended	12 Months Ended		1 Months Ended					1 Months Ended		1 Months Ended				3 Months Ended	1 Months Ended
	Aug. 31, 2012	Mar. 31, 2011	Jun. 30, 2008	Feb. 28, 2007	Feb. 28, 2005	Sep. 30, 2000	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2007	Dec. 31, 2000	Dec. 31, 2012	Aug. 22, 2012	Mar. 31, 2012	Jun. 18, 2011	Mar. 24, 2011	Mar. 23, 2011	May 31, 2010	Feb. 28, 2005 Incentive Stock Option	Feb. 28, 2005 Nonstatutory Stock Options	Oct. 31, 2011 Common Stock	Dec. 31, 2012 Common Stock	Dec. 31, 2011 Common Stock	Dec. 31, 2010 Common Stock	Dec. 31, 2000 Common Stock	Oct. 31, 2011 Kissei Stock Purchase Agreement	Oct. 31, 2011 Kissei Stock Purchase Agreement Common Stock	Aug. 31, 2012 Aspire Capital Fund Llc Common Stock Maximum	Dec. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement	Dec. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Maximum	Aug. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Maximum	Dec. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock	Aug. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock	Dec. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock Maximum	Aug. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock Maximum	Dec. 31, 2012 Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock Minimum	Dec. 31, 2005 IPO	Dec. 31, 2012 2000 Plan	Mar. 31, 2013 Issuance of Equity Aspire Capital Fund Llc Kissei Stock Purchase Agreement	Mar. 31, 2013 Issuance of Equity Aspire Capital Fund Llc Kissei Stock Purchase Agreement Common Stock	May 31, 2010 Warrants Not Settleable in Cash Oxford Loan Agreement	May 31, 2010 Warrants Not Settleable in Cash Redington	Dec. 31, 2012 Convertible Notes Payable	Sep. 30, 2004 Redeemable Preferred Stock	Sep. 02, 2004 Redeemable Preferred Stock	Oct. 31, 2011 Series B Preferred Stock	Oct. 31, 2011 Series B Preferred Stock Kissei Stock Purchase Agreement	Feb. 28, 2005 JAPAN	Feb. 28, 2005 JAPAN IPO	Mar. 31, 2005 JAPAN IPO	Mar. 31, 2005 JAPAN Underwriters Overallotment Option	Feb. 28, 2007 UNITED STATES IPO	Feb. 01, 2007 UNITED STATES IPO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued																					1,219,696	800,000		50,000																			27,667,856					3,000,000	3,000,000	157,300	1,000,000
Aggregate proceeds from stock issued							$ 1,486,603	$ 9,715,100			$ 132,665,225																	$ 3,000,000			$ 1,500,000	$ 1,000,000						$ 1,500,000										$ 104,486,895	$ 104,486,895	$ 5,557,773	$ 10,639,600
Series B Preferred convertible into common stock																						11,246	265,409																								6,678,285
Stock issued, price per share																																												$ 1.62								$ 12.00
Proceeds from preferred stock								5,355,854			85,572,825																																43,404,320
Deemed dividend on the Series C preferred stock																																											31,264,677
Principal amount of secured convertible notes																	15,000,000																									29,400,000
Initial conversion price														$ 6.80
Number of convertible notes converted							1,900,000
Number of shares issuable based upon conversion							276,655
Number of units in firm-commitment underwritten public offering																2,750,000
Firm-commitment underwritten public offering price																$ 3.00
Firm-commitment underwritten public offering gross amount																8,250,000
Consists of each firm commitment underwritten public offering unit																One share of common stock, and a warrant to purchase one share of common stock.
Exercise period of warrants		5 years
Warrants exercise price																3.56	6.06
Number of units underwriter exercised															50,666
Number of units over allotted															412,500
Net proceeds received from public offering		7,700,000
Warrant issued to purchase of Common shares												130,000					198,020																							198,020
Common share price												$ 1.88																													$ 6.06
Stock purchased, amount																									7,500,000
Common stock purchased, shares																				800,000						800,000					856,060	363,636							800,000							220,000
Common stock, par value							$ 0.001	$ 0.001			$ 0.001						$ 0.001								$ 0.001
Shares purchase & equity issuance, per share amount								$ 2.50	$ 12.00	$ 1.00										$ 2.50													$ 1.93		$ 1.65	$ 38.80									$ 25.00
Series B Convertible Preferred Stock par value							$ 0.01	$ 0.01			$ 0.01														$ 0.01
Percentage of outstanding voting stock													30.00%												3.00%
Series B Preferred stock conversion term																									Each share of the Series B Preferred is convertible into 10 shares of common stock.
Series B Preferred Stock, Shares Issued upon Conversion																									10
Stock purchase agreement, aggregate amount of common stock agreed to be purchased																														20,000,000		20,000,000
Stock purchase agreement, number of common stock agreed to be purchased																																3,231,096
Stock purchase agreement, term of agreement																																2 years
Stock purchase agreement, maximum number of shares can be directed to be purchased per day																											50,000
Stock purchase agreement, maximum value of shares can be directed to be purchased per day																											500,000
Stock purchase agreement, number of lowest closing stock prices to determine purchase price																																3
Stock purchase agreement, number of consecutive business days required to determine purchase price																																12 days
Stock purchase agreement, volume-weighted average purchase as percentage of aggregate shares of stock traded on next business day																																15.00%		30.00%
Daily volume weighted average price of Company's common stock																																95.00%
Stock purchase agreement, closing price of common stock per share that results in not effect any sales																													$ 1.00
Warrant, exercisable period	15 months
Warrant, expiration period	5 years
Warrant, fair value												$ 100,000
Warrant, amortization period	1 year
Stock option, exercise price						$ 10.00	$ 4.92	$ 5.52			$ 4.92																										$ 10.00
Stock option, vesting percentage after first year						25.00%
Stock option, vesting period						36 months
Number of days after employee termination that options are exercisable						90 days
Anniversary of initial grant that options are exercisable						10 years
Common stock outstanding							3,328,981	3,092,671			3,328,981																										4,000
Shares reserved for issuance, number of shares increased					100,000
Shares reserved for issuance, increase as percentage of common stock outstanding					3.00%
Number of shares available for grant			1,000,000	300,000
Options granted to optionees other than non-employee directors, vesting period					4 years
Exercise price of stock option as a percentage of fair market value																		100.00%	85.00%
2004 Plan termination period					10 years
Weighted average contractual life, options exercisable							7 years 2 months 12 days
Weighted average contractual life, options outstanding							6 years 1 month 6 days

Changes in Stock Options Outstanding (Detail) (USD $)	12 Months Ended
Changes in Stock Options Outstanding (Detail) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2006	Sep. 30, 2000
Changes in stock options outstanding
Stock Options, Beginning Balance	3,092,671
Weighted Average Exercise Price, Beginning Balance	$ 5.52			$ 10.00
Stock Options, Granted	750,000	1,431,000
Weighted Average Exercise Price, Granted	$ 2.01
Stock options, Exercised	(60,000)		(1,400)
Weighted Average Exercise Price, Exercised	$ 2.30
Stock options, Cancelled	(453,690)
Weighted Average Exercise Price, Cancelled	$ 4.57
Stock Options, Ending Balance	3,328,981	3,092,671
Weighted Average Exercise Price, Ending Balance	$ 4.92	$ 5.52		$ 10.00
Stock Options, Exercisable at December 31, 2012	2,089,963
Weighted Average Exercise Price, Exercisable at December 31, 2012	$ 6.32

Common Stock Reserved for Future Issuance (Detail)	Dec. 31, 2012	Dec. 31, 2007
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Common Stock reserved for future issuance	7,173,997
2000 Plan and 2004 Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Common Stock reserved for future issuance	3,328,981
Stock Plan 2004
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Common Stock reserved for future issuance	466,752
Warrant
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Common Stock reserved for future issuance	3,128,686
Employee Stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Common Stock reserved for future issuance	249,578	300,000

Deferred Income Taxes (Detail) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Deferred Tax Assets:
Net operating loss carryforwards	$ 83,783,000	$ 79,215,000
Capitalized licenses	1,822,000	2,067,000
Research tax credits	7,145,000	7,124,000
Stock Options	570,000	395,000
Other, net	862,000	988,000
Total Deferred Tax Assets	94,182,000	89,789,000
Deferred Tax Liabilities
In process R&D	(1,956,000)	(1,956,000)
Total Deferred Tax Liabilities	(1,956,000)	(1,956,000)
Net deferred tax assets	92,226,000	87,833,000
Valuation Allowance	(94,182,000)	(89,789,000)
Net Deferred Tax Liability	$ (1,956,000)	$ (1,956,000)

Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Increase of ownership of certain stockholders or public groups in the stock, percentage	50.00%
Increase of ownership of certain stockholders or public groups in the stock, period	3 years
Limitations on tax benefits related to federal and state NOL	$ 7.3
Limitations on tax benefits related to tax credit	1
Federal
Net operating loss carry-forwards	205.7
Research tax credit carry-forwards	6.2
Net operating loss carry forward, expiration year	2020
Research and Development Credits, expiration period	2024
California
Net operating loss carry-forwards	205.1
Research tax credit carry-forwards	$ 1.4
Net operating loss carry forward, expiration year	2013

The amount of the tax credit carryforward, before tax effects, available to reduce future taxable income under enacted tax laws.

+ References+ Details

Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax (Detail)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Schedule Of Effective Tax Rates Line Items
Federal statutory income tax rate	35.00%	35.00%
State income taxes, net of federal benefit	5.80%	5.50%
Tax credits		1.60%
Change in valuation allowance	(40.10%)	(37.10%)
Permanent differences	(0.70%)	(5.00%)
Other
Provision for income taxes	0.00%	0.00%

A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations.

+ References+ Details

Net loss applicable to common stockholders

The domestic federal statutory tax rate applicable under enacted tax laws to the Company's pretax income from continuing operations for the period. The "statutory" tax rate is the regular tax rate if there are alternative tax systems.

+ References+ Details

Selected Quarterly Financial Information (Detail) (USD $)

3 Months Ended

12 Months Ended

147 Months Ended

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2011

Sep. 30, 2011

Jun. 30, 2011

Mar. 31, 2011

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Dec. 31, 2007

Dec. 31, 2006

Dec. 31, 2005

Dec. 31, 2012

Revenues

$ 34,000

$ 84,000

$ 494,000

$ 191,000

$ 802,580

$ 2,360,807

Total operating expenses

2,455,000

2,446,000

2,781,000

4,064,000

3,503,000

3,907,000

3,722,000

4,976,000

11,747,936

16,108,434

280,570,444

Net loss

(2,434,000)

(2,379,000)

(2,281,000)

(3,867,000)

(3,503,000)

(3,894,000)

(4,681,000)

(5,656,000)

(10,961,314)

(17,734,076)

(20,187,308)

(20,368,890)

(21,924,829)

(48,903,244)

(35,689,611)

(25,692,135)

(264,870,675)

$ (2,434,000)

$ (2,379,000)

$ (2,281,000)

$ (3,867,000)

$ (3,503,000)

$ (3,894,000)

$ (4,681,000)

$ (5,656,000)

$ (10,961,314)

$ (17,734,076)

$ (296,233,797)

Basic and diluted net loss per common share

$ (0.14)

^[1]

$ (0.14)

^[1]

$ (0.14)

^[1]

$ (0.24)

^[1]

$ (0.22)

^[1]

$ (0.25)

^[1]

$ (0.31)

^[1]

$ (0.45)

^[1]

$ (0.66)

$ (1.20)

[1]	Loss per share is computed independently for each of the quarters presented. The sum of the quarterly net loss per share will not necessarily equal the total for the year.

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 130

-Paragraph 10, 15

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

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 03

-Paragraph 19

-Article 5

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

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 04

-Paragraph 20

-Article 9

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 95

-Paragraph 28, 29, 30

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 944

-SubTopic 225

-Section S99

-Paragraph 1

-Subparagraph (SX 210.7-04.22)

-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 220

-SubTopic 10

-Section 45

-Paragraph 6

-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e565-108580

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 230

-SubTopic 10

-Section 45

-Paragraph 28

-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3602-108585

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

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Other Comprehensive Income

-URI http://asc.fasb.org/extlink&oid=6519514

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

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Net Income

-URI http://asc.fasb.org/extlink&oid=6518256

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Research Bulletin (ARB)

-Number 51

-Paragraph 38

-Subparagraph a

-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 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Research Bulletin (ARB)

-Number 51

-Paragraph A7

-Appendix A

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Research Bulletin (ARB)

-Number 51

-Paragraph 38

-Subparagraph d

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