| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|--------|------------------------------------------------------------------------------------------|
|   | For the quarterly period ended September 30, 2011                                        |
|   | Or                                                                                       |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|   | For the transition period from ___________ to ___________                                |

| Delaware                                                      | 13-3379479                              |
|---------------------------------------------------------------|-----------------------------------------|
| (State or other jurisdiction ofincorporation or organization) | (I.R.S. Employer Identification Number) |

----

INDEX

|     |                                                                                                                                             | Page No. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Part I   | FINANCIAL INFORMATION                                                                                                                            |     |
| Item 1.  | Financial Statements (Unaudited)                                                                                                                 |     |
|     | Consolidated Balance Sheets at September 30, 2011 and December 31, 2010                                                                          | 3        |
|     | Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2011 and 2010                                            | 4        |
|     | Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss) for the Nine Months Ended September 30, 2011 and 2010 | 5        |
|     | Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010                                                      | 6        |
|     | Notes to Consolidated Financial Statements                                                                                                       | 7        |
| Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                      | 15       |
| Item 3.  | Quantitative and Qualitative Disclosures about Market Risk                                                                                       | 26       |
| Item 4.  | Controls and Procedures                                                                                                                          | 27       |
|     |                                                                                                                                             |     |
| PART II  | OTHER INFORMATION                                                                                                                                |     |
| Item 1A. | Risk Factors                                                                                                                                     | 27       |
| Item 6.  | Exhibits                                                                                                                                         | 32       |
|     | Signatures                                                                                                                                       | 33       |

----

INDEX

INFORMATION

SHEETS

|                                                                                                                  |   | September 30,2011 |     |   | December 31,2010 |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|------------------|--------|
| Assets                                                                                                                |   |              |     |   |             |   |
| Current assets:                                                                                                       |   |              |     |   |             |   |
| Cash and cash equivalents                                                                                             |   | $                 | 77,998   |   |             | $      | 47,918 |   |
| Accounts receivable                                                                                                   |   |              | 2,512    |   |             |   | 2,283 |   |
| Other current assets                                                                                                  |   |              | 815      |   |             |   | 1,801 |   |
| Total current assets                                                                                                  |   |              | 81,325   |   |             |   | 52,002 |   |
| Auction rate securities                                                                                               |   |              | 3,424    |   |             |   | 3,608 |   |
| Fixed assets, at cost, net of accumulated depreciation and amortization                                               |   |              | 4,439    |   |             |   | 5,878 |   |
| Other assets                                                                                                          |   |              | 200      |   |             |   | 1,250 |   |
| Total assets                                                                                                          |   | $                 | 89,388   |   |             | $      | 62,738 |   |
|                                                                                                                  |   |              |     |   |             |   |   |   |
| Liabilities and Stockholders’ Equity                                                                            |   |              |     |   |             |   |   |   |
| Current liabilities:                                                                                                  |   |              |     |   |             |   |   |   |
| Accounts payable and accrued expenses                                                                                 |   | $                 | 6,881    |   |             | $      | 9,683 |   |
| Deferred revenue – current                                                                                      |   |              | 204      |   |             |   | - |   |
| Other current liabilities                                                                                             |   |              | 115      |   |             |   | 112 |   |
| Total current liabilities                                                                                             |   |              | 7,200    |   |             |   | 9,795 |   |
| Deferred revenue – long term                                                                                    |   |              | 213      |   |             |   | - |   |
| Other liabilities                                                                                                     |   |              | 1,595    |   |             |   | 1,635 |   |
| Total liabilities                                                                                                     |   |              | 9,008    |   |             |   | 11,430 |   |
| Commitments and contingencies (Note 8)                                                                           |   |              |     |   |             |   |   |   |
| Stockholders’ equity:                                                                                           |   |              |     |   |             |   |   |   |
| Preferred stock, $.001 par value; 20,000,000 shares authorized; issued and outstanding – none                   |   |              | -        |   |             |   | - |   |
| Common stock, $.0013 par value; 80,000,000 shares authorized; issued –33,957,003 in 2011 and 33,325,802 in 2010 |   |              | 44       |   |             |   | 43 |   |
| Additional paid-in capital                                                                                            |   |              | 461,281  |   |             |   | 453,353 |   |
| Accumulated deficit                                                                                                   |   |              | (377,928 | )      |             |   | (399,055 | ) |
| Accumulated other comprehensive loss                                                                                  |   |              | (276     | )      |             |   | (292 | ) |
| Treasury stock, at cost (200,000 shares in 2011 and 2010)                                                             |   |              | (2,741   | )      |             |   | (2,741 | ) |
| Total stockholders’ equity                                                                                      |   |              | 80,380   |   |             |   | 51,308 |   |
| Total liabilities and stockholders’ equity                                                                      |   | $                 | 89,388   |   |             | $      | 62,738 |   |

----

INDEX

OPERATIONS

|                                          |   | For the Three Months Ended |    |   | For the Nine Months Ended |   |
|-----------------------------------------------|--------|----------------------------|---------|--------|---------------------------|--------|
|                                          |   | September 30,              |    |   | September 30,             |   |
|                                          |   | 2011                       |    |   | 2010                      |   |   | 2011 |   |   | 2010 |   |
| Revenues:                                     |   |                       |    |   |                      |   |   |   |   |   |   |   |
| Collaboration revenue                         |   | $                          | 2,855   |   |                      | $      | 82 |   |   | $ | 76,398 |   |   | $ | 1,175 |   |
| Royalty income                                |   |                       | 1,240   |   |                      |   | 620 |   |   |   | 1,767 |   |   |   | 1,826 |   |
| Research grants                               |   |                       | 1,681   |   |                      |   | 1,234 |   |   |   | 4,346 |   |   |   | 2,667 |   |
| Other revenues                                |   |                       | 28      |   |                      |   | 31 |   |   |   | 88 |   |   |   | 127 |   |
| Total revenues                                |   |                       | 5,804   |   |                      |   | 1,967 |   |   |   | 82,599 |   |   |   | 5,795 |   |
|                                          |   |                       |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                     |   |                       |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Research and development                      |   |                       | 12,406  |   |                      |   | 12,967 |   |   |   | 44,887 |   |   |   | 35,518 |   |
| License fees – research and development |   |                       | 114     |   |                      |   | 110 |   |   |   | 566 |   |   |   | 1,217 |   |
| General and administrative                    |   |                       | 4,064   |   |                      |   | 5,414 |   |   |   | 14,213 |   |   |   | 17,568 |   |
| Royalty expense                               |   |                       | 147     |   |                      |   | 62 |   |   |   | 274 |   |   |   | 182 |   |
| Depreciation and amortization                 |   |                       | 520     |   |                      |   | 532 |   |   |   | 1,581 |   |   |   | 2,283 |   |
| Total expenses                                |   |                       | 17,251  |   |                      |   | 19,085 |   |   |   | 61,521 |   |   |   | 56,768 |   |
|                                          |   |                       |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)                       |   |                       | (11,447 | )      |                      |   | (17,118 | ) |   |   | 21,078 |   |   |   | (50,973 | ) |
|                                          |   |                       |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Other income:                                 |   |                       |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                               |   |                       | 15      |   |                      |   | 17 |   |   |   | 49 |   |   |   | 48 |   |
| Total other income                            |   |                       | 15      |   |                      |   | 17 |   |   |   | 49 |   |   |   | 48 |   |
|                                          |   |                       |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                             |   | $                          | (11,432 | )      |                      | $      | (17,101 | ) |   | $ | 21,127 |   |   | $ | (50,925 | ) |
|                                          |   |                       |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) per share - basic           |   | $                          | (0.34   | )      |                      | $      | (0.52 | ) |   | $ | 0.63 |   |   | $ | (1.57 | ) |
| Weighted-average shares - basic               |   |                       | 33,710  |   |                      |   | 32,814 |   |   |   | 33,501 |   |   |   | 32,444 |   |
|                                          |   |                       |    |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) per share - diluted         |   | $                          | (0.34   | )      |                      | $      | (0.52 | ) |   | $ | 0.63 |   |   | $ | (1.57 | ) |
| Weighted-average shares - diluted             |   |                       | 33,710  |   |                      |   | 32,814 |   |   |   | 33,664 |   |   |   | 32,444 |   |

----

INDEX

EQUITY

|                                                                                   |   | Common Stock |   |   | Additional |   |   |            |   |   | Accumulated Other   |   |   | Treasury Stock              |     |   |   |   |
|----------------------------------------------------------------------------------------|--------|--------------|--------|--------|------------|--------|--------|-----------------|--------|--------|---------------------|--------|--------|-----------------------------|----------|--------|--------|--------|
|                                                                                   |   | Shares       |   |   | Amount     |   |   | Paid-In Capital |   |   | Accumulated Deficit |   |   | Comprehensive Income (Loss) |     |   | Shares |   |   | Amount |   |   | Total |   |
| Balance at December 31,  2010                                                |   |         | 33,326 |   |       | $      | 43     |            |   | $      | 453,353             |   |   | $                           | (399,055 | )      |   | $      | (292 | ) |   |   | (200 | ) |   | $ | (2,741 | ) |   | $ | 51,308 |   |
|  Comprehensive income:                                                            |   |         |   |   |       |   |   |            |   |   |                |   |   |                        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                             |   |         | -      |   |       |   | -      |            |   |   | -                   |   |   |                        | 21,127   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,127 |   |
| Net change in unrealized loss on auction rate securities                               |   |         | -      |   |       |   | -      |            |   |   | -                   |   |   |                        | -        |   |   |   | 16 |   |   |   | - |   |   |   | - |   |   |   | 16 |   |
| Total comprehensive income                                                             |   |         |   |   |       |   |   |            |   |   |                |   |   |                        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 21,143 |   |
| Compensation expenses for share-based payment arrangements                             |   |         | -      |   |       |   | -      |            |   |   | 4,695               |   |   |                        | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,695 |   |
| Issuance of restricted stock, net of forfeitures                                       |   |         | (34    | )      |       |   | -      |            |   |   | -                   |   |   |                        | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Sale of common stock under employee stock purchase plans and exercise of stock options |   |         | 665    |   |       |   | 1      |            |   |   | 3,233               |   |   |                        | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,234 |   |
|  Balance at September 30, 2011                                                    |   |         | 33,957 |   |       | $      | 44     |            |   | $      | 461,281             |   |   | $                           | (377,928 | )      |   | $      | (276 | ) |   |   | (200 | ) |   | $ | (2,741 | ) |   | $ | 80,380 |   |

|                                                                                   |   | Common Stock |   |   | Additional |   |   |            |   |   | Accumulated Other   |   |   | Treasury Stock              |     |   |   |   |
|----------------------------------------------------------------------------------------|--------|--------------|--------|--------|------------|--------|--------|-----------------|--------|--------|---------------------|--------|--------|-----------------------------|----------|--------|--------|--------|
|                                                                                   |   | Shares       |   |   | Amount     |   |   | Paid-In Capital |   |   | Accumulated Deficit |   |   | Comprehensive (Loss) Income |     |   | Shares |   |   | Amount |   |   | Total |   |
| Balance at December 31,  2009                                                |   |         | 32,142 |   |       | $      | 42     |            |   | $      | 439,943             |   |   | $                           | (329,330 | )      |   | $      | (307 | ) |   |   | (200 | ) |   | $ | (2,741 | ) |   | $ | 107,607 |   |
|  Comprehensive loss:                                                              |   |         |   |   |       |   |   |            |   |   |                |   |   |                        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                               |   |         | -      |   |       |   | -      |            |   |   | -                   |   |   |                        | (50,925  | )      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (50,925 | ) |
| Net change in unrealized loss on marketable securities                                 |   |         | -      |   |       |   | -      |            |   |   | -                   |   |   |                        | -        |   |   |   | 15 |   |   |   | - |   |   |   | - |   |   |   | 15 |   |
| Total comprehensive loss                                                               |   |         |   |   |       |   |   |            |   |   |                |   |   |                        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (50,910 | ) |
| Compensation expenses for share-based payment arrangements                             |   |         | -      |   |       |   | -      |            |   |   | 7,726               |   |   |                        | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,726 |   |
| Issuance of restricted stock, net of forfeitures                                       |   |         | 187    |   |       |   | -      |            |   |   | -                   |   |   |                        | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Sale of common stock under employee stock purchase plans and exercise of stock options |   |         | 776    |   |       |   | 1      |            |   |   | 2,986               |   |   |                        | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,987 |   |
|  Balance at September 30, 2010                                                    |   |         | 33,105 |   |       | $      | 43     |            |   | $      | 450,655             |   |   | $                           | (380,255 | )      |   | $      | (292 | ) |   |   | (200 | ) |   | $ | (2,741 | ) |   | $ | 67,410 |   |

----

INDEX

FLOWS

|                                                                                                        |   | For the Nine Months EndedSeptember 30, |   |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                        |   | 2011                                   |   |   | 2010 |   |
| Cash flows from operating activities:                                                                       |   |                                   |   |   |   |   |
| Net income (loss)                                                                                           |   | $                                      | 21,127 |   |   | $ | (50,925 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:          |   |                                   |   |   |   |   |   |   |
| Depreciation and amortization                                                                               |   |                                   | 1,581  |   |   |   | 2,283 |   |
| Expenses for share-based compensation awards                                                                |   |                                   | 4,695  |   |   |   | 7,726 |   |
| Changes in assets and liabilities:                                                                          |   |                                   |   |   |   |   |   |   |
| (Increase) decrease in accounts receivable                                                                  |   |                                   | (229   | ) |   |   | 3,045 |   |
| Decrease (increase) in other current assets                                                                 |   |                                   | 986    |   |   |   | (458 | ) |
| Decrease in other assets                                                                                    |   |                                   | 1,050  |   |   |   | 730 |   |
| (Decrease) increase in accounts payable and accrued expenses                                                |   |                                   | (2,802 | ) |   |   | 812 |   |
| Increase in deferred revenue – current and long term                                                  |   |                                   | 417    |   |   |   | - |   |
| (Decrease) increase in other liabilities                                                                    |   |                                   | (37    | ) |   |   | 1,718 |   |
| Net cash provided by (used in) operating activities                                                         |   |                                   | 26,788 |   |   |   | (35,069 | ) |
| Cash flows from investing activities:                                                                       |   |                                   |   |   |   |   |   |   |
| Capital expenditures                                                                                        |   |                                   | (142   | ) |   |   | (2,127 | ) |
| Sales/maturities of marketable securities                                                                   |   |                                   | 200    |   |   |   | 1,700 |   |
| Net cash provided by (used in) investing activities                                                         |   |                                   | 58     |   |   |   | (427 | ) |
| Cash flows from financing activities:                                                                       |   |                                   |   |   |   |   |   |   |
| Proceeds from the exercise of stock options and sale of common stock under the Employee Stock Purchase Plan |   |                                   | 3,234  |   |   |   | 2,987 |   |
| Net cash provided by financing activities                                                                   |   |                                   | 3,234  |   |   |   | 2,987 |   |
| Net increase (decrease) in cash and cash equivalents                                                        |   |                                   | 30,080 |   |   |   | (32,509 | ) |
| Cash and cash equivalents at beginning of period                                                            |   |                                   | 47,918 |   |   |   | 90,903 |   |
| Cash and cash equivalents at end of period                                                                  |   | $                                      | 77,998 |   |   | $ | 58,394 |   |

----

INDEX

Statements

----

INDEX

----

INDEX

----

INDEX

|                                  |   | Net Income (Loss)(Numerator) |    |   | Weighted AverageCommon Shares(Denominator) |   |   | Per ShareAmount |   |
|---------------------------------------|--------|------------------------------|---------|--------|--------------------------------------------|--------|--------|-----------------|--------|
| Three months ended September 30, 2011 |   |                         |    |   |                                       |   |   |            |   |
| Basic and diluted                     |   | $                            | (11,432 | )      |                                       |   | 33,710 |            |   | $ | (0.34 | ) |
| Nine months ended September 30, 2011  |   |                         |    |   |                                       |   |   |            |   |   |   |   |
| Basic                                 |   | $                            | 21,127  |   |                                       |   | 33,501 |            |   | $ | 0.63 |   |
| Dilutive effect of stock options      |   |                         | -       |   |                                       |   | 142    |            |   |   |   |   |
| Dilutive effect of restricted stock   |   |                         | -       |   |                                       |   | 21     |            |   |   |   |   |
| Diluted                               |   | $                            | 21,127  |   |                                       |   | 33,664 |            |   | $ | 0.63 |   |
| Three months ended September 30, 2010 |   |                         |    |   |                                       |   |   |            |   |   |   |   |
| Basic and diluted                     |   | $                            | (17,101 | )      |                                       |   | 32,814 |            |   | $ | (0.52 | ) |
| Nine months ended September 30, 2010  |   |                         |    |   |                                       |   |   |            |   |   |   |   |
| Basic and diluted                     |   | $                            | (50,925 | )      |                                       |   | 32,444 |            |   | $ | (1.57 | ) |

|             |   | Three Months Ended September 30, |   |
|------------------|--------|----------------------------------|--------|
|             |   | 2011                             |   |   | 2010 |   |
|             |   | WeightedAverageNumber            |   |   | WeightedAverageExercise Price |   |   | WeightedAverageNumber |   |   | WeightedAverageExercise Price |   |
| Stock options    |   |                             | 6,186  |   |   | $ | 12.65 |   |   |   | 5,377 |   |   | $ | 14.34 |   |
| Restricted stock |   |                             | 9      |   |   |   |   |   |   |   | 11 |   |   |   |   |   |
| Total            |   |                             | 6,195  |   |   |   |   |   |   |   | 5,388 |   |   |   |   |   |

----

INDEX

|             |   | Nine Months Ended September 30, |   |
|------------------|--------|---------------------------------|--------|
|             |   | 2011                            |   |   | 2010 |   |
|             |   | WeightedAverageNumber           |   |   | WeightedAverageExercise Price |   |   | WeightedAverageNumber |   |   | WeightedAverageExercise Price |   |
| Stock options    |   |                            | 4,126  |   |   | $ | 15.78 |   |   |   | 4,949 |   |   | $ | 15.52 |   |
| Restricted stock |   |                            | -      |   |   |   |   |   |   |   | 34 |   |   |   |   |   |
| Total            |   |                            | 4,126  |   |   |   |   |   |   |   | 4,983 |   |   |   |   |   |

|                    |   |                         |   |   | Fair Value Measurements at September 30, 2011                       |   |
|-------------------------|--------|------------------------------|--------|--------|---------------------------------------------------------------------|--------|
|                    |   | Balance atSeptember 30, 2011 |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|                    |   |                         |   |   |                                                                |   |   |   |   |   |   |   |
| Money market funds      |   | $                            | 70,954 |   |                                                                | $      | 70,954 |   |   | $ | - |   |   | $ | - |   |
| Auction rate securities |   |                         | 3,424  |   |                                                                |   | - |   |   |   | - |   |   |   | 3,424 |   |
| Total                   |   | $                            | 74,378 |   |                                                                | $      | 70,954 |   |   | $ | - |   |   | $ | 3,424 |   |

|                    |   |                        |   |   | Fair Value Measurements at December 31, 2010                        |   |
|-------------------------|--------|-----------------------------|--------|--------|---------------------------------------------------------------------|--------|
|                    |   | Balance atDecember 31, 2010 |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|                    |   |                        |   |   |                                                                |   |   |   |   |   |   |   |
| Money market funds      |   | $                           | 43,958 |   |                                                                | $      | 43,958 |   |   | $ | - |   |   | $ | - |   |
| Auction rate securities |   |                        | 3,608  |   |                                                                |   | - |   |   |   | - |   |   |   | 3,608 |   |
| Total                   |   | $                           | 47,566 |   |                                                                | $      | 43,958 |   |   | $ | - |   |   | $ | 3,608 |   |

----

INDEX

|                                                                                                                                                                                                 |   |   | Fair Value Measurements Using SignificantUnobservable Inputs(Level 3)For the Three Months Ended September 30, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------|--------|
| Description                                                                                                                                                                                          |   |   | 2011                                                                                                          |   |   |   | 2010 |   |
|                                                                                                                                                                                                 |   |   |                                                                                                          |   |   |   |   |   |
| Balance at beginning of period                                                                                                                                                                       |   | $      |    3,516                                                                                       |   |   | $ |      3,608 |   |
| Transfers into Level 3                                                                                                                                                                               |   |   |               -                              |   |   |   |                  - |   |
| Total realized/unrealized gains (losses)                                                                                                                                                             |   |   |                                                                                                          |   |   |   |   |   |
| Included in net loss                                                                                                                                                                                 |   |   |               -                              |   |   |   |                  - |   |
| Included in comprehensive loss (1)                                                                                                                                                                   |   |   |               8                              |   |   |   |                 - |   |
| Settlements                                                                                                                                                                                          |   |   |    (100)                                                                                            | )      |   |   |     - |   |
| Balance at end of period                                                                                                                                                                             |   | $      |   3,424                                                                                                  |   |   | $ |      3,608 |   |
| (1) Total amount of unrealized gains (losses) for the period included in other comprehensive loss attributable to the change in fair market value of related assets still held at the reporting date |   | $      |                -                        |   |   | $ |                  - |   |

|                                                                                                                                                                                                 |   |   | Fair Value Measurements Using SignificantUnobservable Inputs(Level 3)For the Nine Months Ended September 30, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------|--------|
| Description                                                                                                                                                                                          |   |   | 2011                                                                                                         |   |   |   | 2010 |   |
|                                                                                                                                                                                                 |   |   |                                                                                                         |   |   |   |   |   |
| Balance at beginning of period                                                                                                                                                                       |   | $      |    3,608                                                                                      |   |   | $ |     3,792 |   |
| Transfers into Level 3                                                                                                                                                                               |   |   |               -                             |   |   |   |                   - |   |
| Total realized/unrealized gains (losses)                                                                                                                                                             |   |   |                                                                                                         |   |   |   |   |   |
| Included in net loss                                                                                                                                                                                 |   |   |               -                             |   |   |   |                   - |   |
| Included in comprehensive loss (1)                                                                                                                                                                   |   |   |             16                                        |   |   |   |         16 |   |
| Settlements                                                                                                                                                                                          |   |   |         (200)                                                        |   |   |   |     (200) |   |
| Balance at end of period                                                                                                                                                                             |   | $      |    3,424                                                                                      |   |   | $ |             3,608 |   |
| (1) Total amount of unrealized gains (losses) for the period included in other comprehensive loss attributable to the change in fair market value of related assets still held at the reporting date |   | $      |       -                                                                             |   |   | $ |                 - |   |

----

INDEX

|                          |   | September 30,2011 |   |   | December 31,2010 |   |
|-------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Collaborators                 |   | $                 | 709    |   |             | $      | 1,811 |   |
| Royalties                     |   |              | 1,240  |   |             |   | - |   |
| National Institutes of Health |   |              | 538    |   |             |   | 468 |   |
| Other                         |   |              | 25     |   |             |   | 4 |   |
| Total                         |   | $                 | 2,512  |   |             | $      | 2,283 |   |

|                                        |   | September 30,2011 |   |   | December 31,2010 |   |
|---------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Accrued consulting and clinical trial costs |   | $                 | 2,056  |   |             | $      | 6,125 |   |
| Accrued payroll and related costs           |   |              | 3,596  |   |             |   | 1,725 |   |
| Legal and professional fees                 |   |              | 530    |   |             |   | 1,116 |   |
| Accounts payable                            |   |              | 523    |   |             |   | 658 |   |
| Other                                       |   |              | 176    |   |             |   | 59 |   |
| Total                                       |   | $                 | 6,881  |   |             | $      | 9,683 |   |

|                           |   | For the Three and Nine Months Ended September 30, 2011 |   |
|--------------------------------|--------|--------------------------------------------------------|--------|
| Severance and related benefits |   | $                                                      | 1,064  |   |
| Total                          |   | $                                                      | 1,064  |   |

|                          |   | Severance and related benefits |   |
|-------------------------------|--------|-------------------------------------|--------|
| Initial expense accrual       |   | $                                   | 1,064  |   |
| Cash payments                 |   |                                | -      |   |
| Balance at September 30, 2011 |   | $                                   | 1,064  |   |

----

INDEX

----

INDEX

Note

----

INDEX

----

INDEX

|                  |   | Three Months Ended September 30, |   |   |   |   |   | Nine Months Ended September 30, |   |   |   |   |
|-----------------------|--------|---------------------------------------|--------|--------|--------|--------|--------|--------------------------------------|--------|--------|--------|--------|
| Sources of Revenue    |   | 2011                                  |   |   | 2010   |   |   | PercentChange                        |   |   | 2011   |   |   | 2010 |   |   | PercentChange |   |
|                  |   |                                  |   |   |   |   |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Collaboration revenue |   | $                                     | 2,855  |   |   | $      | 82     |                                 |   |   | 3,382  | %      |   | $ | 76,398 |   |   | $ | 1,175 |   |   |   | 6,402 | % |
| Royalty income        |   |                                  | 1,240  |   |   |   | 620    |                                 |   |   | 100    | %      |   |   | 1,767 |   |   |   | 1,826 |   |   |   | (3 | % ) |
| Research grants       |   |                                  | 1,681  |   |   |   | 1,234  |                                 |   |   | 36     | %      |   |   | 4,346 |   |   |   | 2,667 |   |   |   | 63 | % |
| Other revenues        |   |                                  | 28     |   |   |   | 31     |                                 |   |   | (10    | % )    |   |   | 88 |   |   |   | 127 |   |   |   | (31 | % ) |
| Total                 |   | $                                     | 5,804  |   |   | $      | 1,967  |                                 |   |   | 195    | %      |   | $ | 82,599 |   |   | $ | 5,795 |   |   |   | 1,325 | % |

----

INDEX

|                     |   |   | RELISTOR Net Sales by Collaborators (in millions)  |   |
|--------------------------|--------|--------|---------------------------------------------------------|--------|
|                     |   |   | Three Months EndedSeptember 30,                         |   |   |   | Nine Months EndedSeptember 30, |   |
|                     |   |   | 2011                                                    |   |   |   | 2010 |   |   |   | 2011 |   |   |   | 2010 |   |
| U.S.                     |   | $      | 8.2                                                     |   |   | $ | 2.4 |   |   | $ | 13.5 |   |   | $ | 7.2 |   |
| Ex-U.S.                  |   |   | 1.5                                                     |   |   |   | 1.7 |   |   |   | 4.7 |   |   |   | 5.0 |   |
|    Global |   | $      | 9.7                                                     |   |   | $ | 4.1 |   |   | $ | 18.2 |   |   | $ | 12.2 |   |

|                  |   | Three Months Ended September 30,                |   |   |              |   |   | Nine Months Ended September 30, |   |   |                                                                    |   |
|-----------------------|--------|-------------------------------------------------|--------|--------|-------------------|--------|--------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                  |   |         2011 |   |   |    2010 |   |   | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                  |   |                                            |   |   |              |   |   |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Salaries and benefits |   | $                                               | 5,216  |   |              | $      | 4,354  |                            |   |   | 20%                                                                     |   |   | $ | 14,868 |   |   | $ | 14,202 |   |   |   | 5% |   |

----

INDEX

|                     |   | Three Months Ended September 30,                     |        |   |                               |   |        | Nine Months Ended September 30, |   |   |                                                                    |   |
|--------------------------|--------|------------------------------------------------------|-------------|--------|------------------------------------|--------|-------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                     |   |         2011 |        |   |      2010 |   |        | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                     |   |                                                 |        |   |                               |   |        |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Share-based compensation |   | $                                                    |  1,243 |   |                               | $      |  1,436 |                            |   |   |  (13%)                                                             |   |   | $ |   3,423 |   |   | $ |   4,086 |   |   |   | (16%) |   |

|                 |   | Three Months Ended September 30,                |                   |   |                               |   |        | Nine Months Ended September 30, |   |   |                                                                    |   |
|----------------------|--------|-------------------------------------------------|------------------------|--------|------------------------------------|--------|-------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                 |   |         2011 |                   |   |      2010 |   |        | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                 |   |                                            |                   |   |                               |   |        |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Clinical trial costs |   | $                                               |     413 |   |                               | $      |  2,108 |                            |   |   | (80%)                                                                   |   |   | $ |   9,685 |   |   | $ |   3,003 |   |   |   | 223% |   |

|                                  |   | Three Months Ended September 30,                |   |   |                          |   |                   | Nine Months Ended September 30, |   |   |                                                                         |   |
|---------------------------------------|--------|-------------------------------------------------|--------|--------|-------------------------------|--------|------------------------|---------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|                                  |   |         2011 |   |   |      2010 |   |                   | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                                  |   |                                            |   |   |                          |   |                   |                            |   |   |                                                                         |   |   |   |   |   |   |   |
| Laboratory and manufacturing supplies |   | $                                               | 2,572  |   |                          | $      |     797 |                            |   |   | 223%                                                                         |   |   | $ |   3,948 |   |   | $ |   1,764 |   |   |   | 124% |   |

----

INDEX

|                                      |   | Three Months Ended September 30,                |        |   |                          |   |        | Nine Months Ended September 30, |   |   |                                                                    |   |
|-------------------------------------------|--------|-------------------------------------------------|-------------|--------|-------------------------------|--------|-------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                                      |   |         2011 |        |   |      2010 |   |        | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                                      |   |                                            |        |   |                          |   |        |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Contract manufacturing and subcontractors |   | $                                               |  1,009 |   |                          | $      |  1,419 |                            |   |   | (29%)                                                                   |   |   | $ |   5,872 |   |   | $ |   4,495 |   |   |   | 31% |   |

|        |   | Three Months Ended September 30,                |             |   |                          |   |             | Nine Months Ended September 30, |   |   |                                                                    |   |
|-------------|--------|-------------------------------------------------|------------------|--------|-------------------------------|--------|------------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|        |   |         2011 |             |   |      2010 |   |             | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|        |   |                                            |             |   |                          |   |             |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Consultants |   | $                                               |    164 |   |                          | $      |    992 |                            |   |   | (83%)                                                                   |   |   | $ |   1,143 |   |   | $ |   1,793 |   |   |   | (36%) |   |

|         |   | Three Months Ended September 30,                |                  |   |                          |   |             | Nine Months Ended September 30, |   |   |                                                                    |   |
|--------------|--------|-------------------------------------------------|-----------------------|--------|-------------------------------|--------|------------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|         |   |         2011 |                  |   |      2010 |   |             | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|         |   |                                            |                  |   |                          |   |             |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| License fees |   | $                                               |    114 |   |                          | $      |    110 |                            |   |   | 4%                                                                      |   |   | $ |      566 |   |   | $ |   1,217 |   |   |   | (53%) |   |

|            |   | Three Months Ended September 30,                |       |   |                          |   |                              | Nine Months Ended September 30, |   |   |                                                                    |   |
|-----------------|--------|-------------------------------------------------|------------|--------|-------------------------------|--------|-----------------------------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|            |   |         2011 |       |   |      2010 |   |                              | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|            |   |                                            |       |   |                          |   |                              |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Royalty expense |   | $                                               |   147 |   |                          | $      |       62 |                            |   |   | 137%                                                                    |   |   | $ |      274 |   |   | $ |      182 |   |   |   | 51% |   |

----

INDEX

|                     |   | Three Months Ended September 30,                |        |   |                          |   |        | Nine Months Ended September 30, |   |   |                                                                    |   |
|--------------------------|--------|-------------------------------------------------|-------------|--------|-------------------------------|--------|-------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                     |   |         2011 |        |   |      2010 |   |        | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                     |   |                                            |        |   |                          |   |        |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Other operating expenses |   | $                                               |  1,789 |   |                          | $      |  1,861 |                            |   |   | (4%)                                                                    |   |   | $ |   5,948 |   |   | $ |   6,175 |   |   |   | (4%) |   |

|                  |   | Three Months Ended September 30,                |        |   |                          |   |        | Nine Months Ended September 30, |   |   |                                                                    |   |
|-----------------------|--------|-------------------------------------------------|-------------|--------|-------------------------------|--------|-------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                  |   |         2011 |        |   |      2010 |   |        | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                  |   |                                            |        |   |                          |   |        |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Salaries and benefits |   | $                                               |  1,918 |   |                          | $      |  1,710 |                            |   |   | 12%                                                                     |   |   | $ |   5,748 |   |   | $ |   6,092 |   |   |   | (6%) |   |

|                     |   | Three Months Ended September 30,                |             |   |                          |   |        | Nine Months Ended September 30, |   |   |                                                                    |   |
|--------------------------|--------|-------------------------------------------------|------------------|--------|-------------------------------|--------|-------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                     |   |         2011 |             |   |      2010 |   |        | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                     |   |                                            |             |   |                          |   |        |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Share-based compensation |   | $                                               |    179 |   |                          | $      |  1,473 |                            |   |   | (88%)                                                                   |   |   | $ |   1,272 |   |   | $ |   3,640 |   |   |   | (65%) |   |

----

INDEX

|                             |   | Three Months Ended September 30,                |             |   |                          |   |        | Nine Months Ended September 30, |   |   |                                                                    |   |
|----------------------------------|--------|-------------------------------------------------|------------------|--------|-------------------------------|--------|-------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                             |   |         2011 |             |   |      2010 |   |        | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                             |   |                                            |             |   |                          |   |        |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Consulting and professional fees |   | $                                               |    816 |   |                          | $      |  1,252 |                            |   |   | (35%)                                                                   |   |   | $ |   3,636 |   |   | $ |   4,250 |   |   |   | (14%) |   |

|                     |   | Three Months Ended September 30,                |        |   |                          |   |                   | Nine Months Ended September 30, |   |   |                                                                    |   |
|--------------------------|--------|-------------------------------------------------|-------------|--------|-------------------------------|--------|------------------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                     |   |         2011 |        |   |      2010 |   |                   | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                     |   |                                            |        |   |                          |   |                   |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Other operating expenses |   | $                                               |  1,151 |   |                          | $      |     979 |                            |   |   | 18%                                                                     |   |   | $ |   3,557 |   |   | $ |   3,586 |   |   |   | (1%) |   |

|                          |   | Three Months Ended September 30,                |                   |   |                               |   |                   | Nine Months Ended September 30, |   |   |                                                                    |   |
|-------------------------------|--------|-------------------------------------------------|------------------------|--------|------------------------------------|--------|------------------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                          |   |         2011 |                   |   |      2010 |   |                   | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|                          |   |                                            |                   |   |                               |   |                   |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Depreciation and amortization |   | $                                               |     520 |   |                               | $      |     532 |                            |   |   | (2%)                                                                    |   |   | $ |    1,581 |   |   | $ |   2,283 |   |   |   | (31%) |   |

|            |   | Three Months Ended September 30,                |                              |   |                          |   |                              | Nine Months Ended September 30, |   |   |                                                                    |   |
|-----------------|--------|-------------------------------------------------|-----------------------------------|--------|-------------------------------|--------|-----------------------------------|---------------------------------|--------|--------|-------------------------------------------------------------------------|--------|
|            |   |         2011 |                              |   |      2010 |   |                              | PercentChange                   |   |   |             2011 |   |   |            2010 |   |   | PercentChange |   |
|            |   |                                            |                              |   |                          |   |                              |                            |   |   |                                                                    |   |   |   |   |   |   |   |
| Interest income |   | $                                               |       15 |   |                          | $      |       17 |                            |   |   | (12%)                                                                   |   |   | $ |         49 |   |   | $ |        48 |   |   |   | 2% |   |

----

INDEX

----

INDEX

----

INDEX

|     | Nine Months Ended September 30, |   |
|----------|---------------------------------|--------|
|     | 2011                            |   | 2010 |   |
|     | (in millions)                   |   |
| RELISTOR |                            | $      | 22.2 |   |   | $ | 13.7 |   |
| Cancer   |                            |   | 12.7 |   |   |   | 11.7 |   |
| HIV      |                            |   | 3.5 |   |   |   | 4.6 |   |
| Other    |                            |   | 7.3 |   |   |   | 6.9 |   |
| Total    |                            | $      | 45.7 |   |   | $ | 36.9 |   |

|                                              |   |          |   |   | Payments due by September 30, |   |
|---------------------------------------------------|--------|---------------|--------|--------|-------------------------------|--------|
|                                              |   | Total         |   |   | 2012                          |   |   |   | 2013-2014 |   |   |   | 2015-2016 |   |   | Thereafter |   |
|                                              |   | (in millions) |   |
| Operating leases                                  |   | $             | 38.4   |   |                          | $      | 3.3 |   |   | $ | 7.4 |   |   | $ | 8.4 |   |   | $ | 19.3 |   |
| License and collaboration agreements:             |   |          |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     - Fixed payments          |   |          | 2.4    |   |                          |   | 0.2 |   |   |   | 0.5 |   |   |   | 0.6 |   |   |   | 1.1 |   |
|     - Contingent payments (1) |   |          | 84.0   |   |                          |   | 1.0 |   |   |   | 3.3 |   |   |   | - |   |   |   | 79.7 |   |
| Total                                             |   | $             | 124.8  |   |                          | $      | 4.5 |   |   | $ | 11.2 |   |   | $ | 9.0 |   |   | $ | 100.1 |   |

| (1)   | Based on assumed achievement of milestones covered under each agreement, the timing and payment of which is highly uncertain. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------|

----

INDEX

Quantitative

----

INDEX

Controls

Factors

----

INDEX

----

INDEX

|   | ·  deaths or other adverse medical events involving subjects in our clinical trials; |
|--------|-----------------------------------------------------------------------------------------------------|

|   | ·  regulatory or patent issues; |
|--------|-------------------------------------------|

|   | ·  interim or final results of ongoing clinical trials; |
|--------|-------------------------------------------------------------------|

|   | ·  failure to enroll clinical sites as expected; |
|--------|------------------------------------------------------------|

|   | ·  competition for enrollment from clinical trials conducted by others in similar indications; |
|--------|----------------------------------------------------------------------------------------------------------|

|   | ·  scheduling conflicts with participating clinicians and clinical institutions; |
|--------|--------------------------------------------------------------------------------------------|

|   | ·  disagreements, disputes or other matters arising from collaborations; |
|--------|------------------------------------------------------------------------------------|

|   | ·  our inability to obtain additional funding when needed; and |
|--------|--------------------------------------------------------------------------|

|   | ·  manufacturing problems. |
|--------|--------------------------------------|

----

INDEX

----

INDEX

----

INDEX

Exhibits

| Exhibit Number | Description                                                                                                                                                                                                                                                                         |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |                                                                                                                                                                                                                                                                                |
| 12.1           | Statement re computation of ratio of earnings (loss) to combined fixed charges and preferred stock dividends.                                                                                                                                                                  |
|           |                                                                                                                                                                                                                                                                                |
| 31.1           | Certification of Mark R. Baker, Chief Executive Officer of the Registrant, pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.                                                                                                     |
|           |                                                                                                                                                                                                                                                                                |
| 31.2           | Certification of Robert A. McKinney, Chief Financial Officer and Senior Vice President, Finance and Operations (Principal Financial and Accounting Officer) of the Registrant, pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended. |
|           |                                                                                                                                                                                                                                                                                |
| 32             | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                             |

----

INDEX

SIGNATURES

|                   | PROGENICS PHARMACEUTICALS, INC. |
|------------------------|---------------------------------|
| Date: November 9, 2011 | By:                             | /s/ Robert A. McKinney |
|                   |                            | Robert A. McKinney, CPAChief Financial OfficerSenior Vice President, Finance & Operations(Duly authorized officer of the Registrant and Principal Financial and Accounting Officer) |