----

|   |
|--------|

| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|--------|------------------------------------------------------------------------------------------|
|   | For the quarterly period ended June 30, 2014                                             |
|   | 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 of incorporation or organization) | (I.R.S. Employer Identification Number) |

|   |
|--------|

| Large accelerated filer  ¨                                                          | Accelerated filer   x              |
|-----------------------------------------------------------------------------------------------|----------------------------------------------|
| Non-accelerated filer    ¨  (Do not check if a smaller reporting company) | Smaller reporting company   ¨ |

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|     |                                                                                                    | Page No. |
|----------|---------------------------------------------------------------------------------------------------------|----------|
| Part I   | FINANCIAL INFORMATION                                                                                   |     |
| Item 1.  | Financial Statements                                                                                    |     |
|     | Consolidated Balance Sheets at June 30, 2014 and December 31, 2013                                      | 3        |
|     | Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013         | 4        |
|     | Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2014 and 2013 | 5        |
|     | Consolidated Statements of Stockholders' Equity for the Six Months Ended June 30, 2014 and 2013         | 6        |
|     | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013                   | 7        |
|     | Notes to Consolidated Financial Statements                                                              | 8        |
| Item 2.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                   | 20       |
| Item 3.  | Quantitative and Qualitative Disclosures about Market Risk                                              | 32       |
| Item 4.  | Controls and Procedures                                                                                 | 32       |
|     |                                                                                                    |     |
| PART II  | OTHER INFORMATION                                                                                       |     |
| Item 1.  | Legal Proceedings                                                                                       | 33       |
| Item 1A. | Risk Factors                                                                                            | 33       |
| Item 6.  | Exhibits                                                                                                | 49       |
|     | Signatures                                                                                              | 50       |

----

|                                                                                                                    |   | June 30,2014 |     |   | December 31,2013 |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------------|----------|--------|------------------|--------|
|                                                                                                                    |   | (Unaudited)  |     |   |                  |   |
| ASSETS                                                                                                                  |   |              |     |   |                  |   |
| Current assets:                                                                                                         |   |              |     |   |                  |   |
| Cash and cash equivalents                                                                                               |   | $            | 85,347   |   |             | $      | 65,860 |   |
| Accounts receivable, net                                                                                                |   |         | 1,468    |   |             |   | 2,879 |   |
| Other current assets                                                                                                    |   |         | 1,943    |   |             |   | 1,943 |   |
| Total current assets                                                                                                    |   |         | 88,758   |   |             |   | 70,682 |   |
| Auction rate securities                                                                                                 |   |         | 2,208    |   |             |   | 2,208 |   |
| Fixed assets, at cost, net of accumulated depreciation and amortization                                                 |   |         | 2,203    |   |             |   | 2,413 |   |
| Intangible assets, net (Note 5)                                                                                         |   |         | 31,377   |   |             |   | 31,379 |   |
| Goodwill                                                                                                                |   |         | 7,702    |   |             |   | 7,702 |   |
| Other assets                                                                                                            |   |         | 157      |   |             |   | 157 |   |
|      Total assets                                                                              |   | $            | 132,405  |   |             | $      | 114,541 |   |
|                                                                                                                    |   |         |     |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                    |   |         |     |   |             |   |   |   |
| Current liabilities:                                                                                                    |   |         |     |   |             |   |   |   |
| Accounts payable and accrued expenses                                                                                   |   | $            | 4,237    |   |             | $      | 6,512 |   |
| Other current liabilities                                                                                               |   |         | 115      |   |             |   | 115 |   |
| Total current liabilities                                                                                               |   |         | 4,352    |   |             |   | 6,627 |   |
| Contingent consideration liability                                                                                      |   |         | 16,600   |   |             |   | 15,700 |   |
| Deferred tax liability – long term                                                                                |   |         | 12,320   |   |             |   | 12,321 |   |
| Other liabilities                                                                                                       |   |         | 912      |   |             |   | 914 |   |
| Total liabilities                                                                                                       |   |         | 34,184   |   |             |   | 35,562 |   |
| Commitments and contingencies (Note 10)                                                                                 |   |         |     |   |             |   |   |   |
| Stockholders' equity:                                                                                                   |   |         |     |   |             |   |   |   |
| Preferred stock, $.001 par value; 20,000,000 shares authorized; issued and outstanding – none                     |   |         | -        |   |             |   | - |   |
| Common stock, $.0013 par value; 160,000,000 shares authorized; issued – 69,755,634 in 2014 and 61,025,404 in 2013 |   |         | 91       |   |             |   | 79 |   |
| Additional paid-in capital                                                                                              |   |         | 588,126  |   |             |   | 548,510 |   |
| Accumulated deficit                                                                                                     |   |         | (487,063 | )      |             |   | (466,677 | ) |
| Accumulated other comprehensive loss                                                                                    |   |         | (192     | )      |             |   | (192 | ) |
| Treasury stock, at cost (200,000 shares in 2014 and 2013)                                                               |   |         | (2,741   | )      |             |   | (2,741 | ) |
| Total stockholders' equity                                                                                              |   |         | 98,221   |   |             |   | 78,979 |   |
| Total liabilities and stockholders' equity                                                                              |   | $            | 132,405  |   |             | $      | 114,541 |   |

----

|                                              |   | For the Three Months Ended |    |   | For the Six Months Ended |   |
|---------------------------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
|                                              |   | June 30,                   |    |   | June 30,                 |   |
|                                              |   | 2014                       |    |   | 2013                     |   |   | 2014 |   |   | 2013 |   |
| Revenues:                                         |   |                            |    |   |                          |   |   |  |   |   |  |   |
| Royalty income                                    |   | $                          | 1,367   |   |                     | $      | 1,176 |   |   | $ | 2,102 |   |   | $ | 2,333 |   |
| Collaboration revenue                             |   |                       | 72      |   |                     |   | 514 |   |   |   | 1,121 |   |   |   | 1,367 |   |
| Research grants                                   |   |                       | 0       |   |                     |   | 77 |   |   |   | 0 |   |   |   | 275 |   |
| Other revenues                                    |   |                       | 38      |   |                     |   | 34 |   |   |   | 69 |   |   |   | 52 |   |
| Total revenues                                    |   |                       | 1,477   |   |                     |   | 1,801 |   |   |   | 3,292 |   |   |   | 4,027 |   |
|                                              |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                         |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Research and development                          |   |                       | 7,848   |   |                     |   | 9,585 |   |   |   | 14,767 |   |   |   | 18,300 |   |
| License fees – research and development     |   |                       | 180     |   |                     |   | 153 |   |   |   | 270 |   |   |   | 223 |   |
| Royalty expense                                   |   |                       | 147     |   |                     |   | 119 |   |   |   | 229 |   |   |   | 235 |   |
| General and administrative                        |   |                       | 4,256   |   |                     |   | 3,899 |   |   |   | 8,161 |   |   |   | 8,219 |   |
| Depreciation and amortization                     |   |                       | 133     |   |                     |   | 318 |   |   |   | 277 |   |   |   | 595 |   |
| Total expenses                                    |   |                       | 12,564  |   |                     |   | 14,074 |   |   |   | 23,704 |   |   |   | 27,572 |   |
|                                              |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Operating loss                                    |   |                       | (11,087 | )      |                     |   | (12,273 | ) |   |   | (20,412 | ) |   |   | (23,545 | ) |
|                                              |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Other income:                                     |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                   |   |                       | 13      |   |                     |   | 10 |   |   |   | 25 |   |   |   | 24 |   |
| Total other income                                |   |                       | 13      |   |                     |   | 10 |   |   |   | 25 |   |   |   | 24 |   |
|                                              |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net loss before income tax benefit                |   |                       | (11,074 | )      |                     |   | (12,263 | ) |   |   | (20,387 | ) |   |   | (23,521 | ) |
|                                              |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit                                |   |                       | 1       |   |                     |   | - |   |   |   | 1 |   |   |   | - |   |
|                                              |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                          |   | $                          | (11,073 | )      |                     | $      | (12,263 | ) |   | $ | (20,386 | ) |   | $ | (23,521 | ) |
|                                              |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net loss per share – basic and diluted      |   | $                          | (0.17   | )      |                     | $      | (0.24 | ) |   | $ | (0.31 | ) |   | $ | (0.46 | ) |
| Weighted-average shares – basic and diluted |   |                       | 63,743  |   |                     |   | 51,481 |   |   |   | 66,775 |   |   |   | 50,802 |   |

----

|                                                     |   | For the Three Months Ended |    |   | For the Six Months Ended |   |
|----------------------------------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
|                                                     |   | June 30,                   |    |   | June 30,                 |   |
|                                                     |   | 2014                       |    |   | 2013                     |   |   | 2014 |   |   | 2013 |   |
|                                                     |   |                            |    |   |                          |   |   |  |   |   |  |   |
| Net loss                                                 |   | $                          | (11,073 | )      |                     | $      | (12,263 | ) |   | $ | (20,386 | ) |   | $ | (23,521 | ) |
| Other comprehensive income:                              |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net change in unrealized loss on auction rate securities |   |                       | -       |   |                     |   | 60 |   |   |   | - |   |   |   | 68 |   |
| Total other comprehensive income                         |   |                       | -       |   |                     |   | 60 |   |   |   | - |   |   |   | 68 |   |
| Comprehensive loss                                       |   | $                          | (11,073 | )      |                     | $      | (12,203 | ) |   | $ | (20,386 | ) |   | $ | (23,453 | ) |

----

|                                                                                                                         |   | Common Stock |   |   |        |   |   |                           |   |   | Accumulated Other  |   |   | Treasury Stock             |     |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|--------|--------|--------|--------|---------------------------|--------|--------|--------------------|--------|--------|----------------------------|----------|--------|--------|--------|
|                                                                                                                         |   | Shares       |   |   | Amount |   |   | AdditionalPaid-In Capital |   |   | AccumulatedDeficit |   |   | ComprehensiveIncome (Loss) |     |   | Shares |   |   | Amount |   |   | Total |   |
| Balance at December 31, 2013                                                                                                 |   |         | 61,025 |   |   | $      | 79     |                      |   | $      | 548,510            |   |   | $                          | (466,677 | )      |   | $      | (192 | ) |   |   | (200 | ) |   | $ | (2,741 | ) |   | $ | 78,979 |   |
| Net loss                                                                                                                     |   |         | -      |   |   |   | -      |                      |   |   | -                  |   |   |                       | (20,386  | )      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (20,386 | ) |
|    Compensation expenses for share-based payment arrangements                                                 |   |         | -      |   |   |   | -      |                      |   |   | 2,251              |   |   |                       | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,251 |   |
| Sale of common stock in public offering, net of underwriting discounts and commissions ($2,415) and offering expenses ($376) |   |         | 8,750  |   |   |   | 12     |                      |   |   | 37,447             |   |   |                       | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 37,459 |   |
|    Acquisition of subsidiary escrow shares returned                                                           |   |         | (19    | )      |   |   | -      |                      |   |   | (82                | )      |   |                       | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (82 | ) |
| Balance at June 30, 2014                                                                                                     |   |         | 69,756 |   |   | $      | 91     |                      |   | $      | 588,126            |   |   | $                          | (487,063 | )      |   | $      | (192 | ) |   |   | (200 | ) |   | $ | (2,741 | ) |   | $ | 98,221 |   |

|                                                                                                                         |   | Common Stock |   |   |        |   |   |                           |   |   | Accumulated Other   |   |   | Treasury Stock             |     |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|--------|--------|--------|--------|---------------------------|--------|--------|---------------------|--------|--------|----------------------------|----------|--------|--------|--------|
|                                                                                                                         |   | Shares       |   |   | Amount |   |   | AdditionalPaid-In Capital |   |   | Accumulated Deficit |   |   | ComprehensiveIncome (Loss) |     |   | Shares |   |   | Amount |   |   | Total |   |
| Balance at December 31, 2012                                                                                                 |   |         | 46,765 |   |   | $      | 61     |                      |   | $      | 493,613             |   |   | $                          | (424,105 | )      |   | $      | (260 | ) |   |   | (200 | ) |   | $ | (2,741 | ) |   | $ | 66,568 |   |
| Net loss                                                                                                                     |   |         | -      |   |   |   | -      |                      |   |   | -                   |   |   |                       | (23,521  | )      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (23,521 | ) |
| Other comprehensive income                                                                                                   |   |         | -      |   |   |   | -      |                      |   |   | -                   |   |   |                       | -        |   |   |   | 68 |   |   |   | - |   |   |   | - |   |   |   | 68 |   |
| Compensation expenses for share-based payment arrangements                                                                   |   |         | -      |   |   |   | -      |                      |   |   | 2,099               |   |   |                       | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,099 |   |
| Acquisition of subsidiary, net of issuance costs                                                                             |   |         | 4,472  |   |   |   | 6      |                      |   |   | 11,214              |   |   |                       | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 11,220 |   |
| Sale of common stock in public offering, net of underwriting discounts and commissions ($2,244) and offering expenses ($314) |   |         | 8,500  |   |   |   | 11     |                      |   |   | 34,832              |   |   |                       | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 34,843 |   |
| Exercise of stock options                                                                                                    |   |         | 1      |   |   |   | -      |                      |   |   | 3                   |   |   |                       | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3 |   |
| Balance at June 30, 2013                                                                                                     |   |         | 59,738 |   |   | $      | 78     |                      |   | $      | 541,761             |   |   | $                          | (447,626 | )      |   | $      | (192 | ) |   |   | (200 | ) |   | $ | (2,741 | ) |   | $ | 91,280 |   |

----

|                                                                                                               |   | For the Six Months Ended |    |
|--------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                                               |   | June 30,                 |    |
|                                                                                                               |   | 2014                     |    |   | 2013 |   |
| Cash flows from operating activities:                                                                              |   |                          |    |   |  |   |
| Net loss                                                                                                           |   | $                        | (20,386 | ) |   | $ | (23,521 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:                                        |   |                     |    |   |   |   |   |   |
| Depreciation and amortization                                                                                      |   |                     | 277     |   |   |   | 595 |   |
| (Gains) losses on sales of fixed assets                                                                            |   |                     | (73     | ) |   |   | 259 |   |
| Deferred income tax                                                                                                |   |                     | (1      | ) |   |   | - |   |
| Change in contingent consideration liability                                                                       |   |                     | 900     |   |   |   | - |   |
| Expenses for share-based compensation awards                                                                       |   |                     | 2,251   |   |   |   | 2,099 |   |
| Acquisition of subsidiary escrow shares returned                                                                   |   |                     | (82     | ) |   |   | - |   |
| Changes in assets and liabilities:                                                                                 |   |                     |    |   |   |   |   |   |
| Decrease in accounts receivable                                                                                    |   |                     | 1,411   |   |   |   | 5,744 |   |
| Decrease in other current assets                                                                                   |   |                     | -       |   |   |   | 812 |   |
| (Decrease) in accounts payable and accrued expenses                                                                |   |                     | (2,275  | ) |   |   | (2,508 | ) |
| (Decrease) in deferred revenue - current                                                                           |   |                     | -       |   |   |   | (780 | ) |
| (Decrease) in other liabilities                                                                                    |   |                     | (2      | ) |   |   | (163 | ) |
| Net cash used in operating activities                                                                              |   |                     | (17,980 | ) |   |   | (17,463 | ) |
| Cash flows from investing activities:                                                                              |   |                     |    |   |   |   |   |   |
| Cash acquired in acquisition of subsidiary                                                                         |   |                     | -       |   |   |   | 1,888 |   |
| Capital expenditures                                                                                               |   |                     | (68     | ) |   |   | (47 | ) |
| Proceeds from sales of fixed assets                                                                                |   |                     | 76      |   |   |   | 104 |   |
| Proceeds from redemption of auction rate securities                                                                |   |                     | -       |   |   |   | 1,100 |   |
| Net cash provided by investing activities                                                                          |   |                     | 8       |   |   |   | 3,045 |   |
| Cash flows from financing activities:                                                                              |   |                     |    |   |   |   |   |   |
| Equity issuance costs in connection with acquisition of subsidiary                                                 |   |                     | -       |   |   |   | (45 | ) |
| Proceeds from public offering of common stock, net of underwriting discounts and commissions and offering expenses |   |                     | 37,459  |   |   |   | 34,843 |   |
| Proceeds from the exercise of stock options                                                                        |   |                     | -       |   |   |   | 3 |   |
| Net cash provided by financing activities                                                                          |   |                     | 37,459  |   |   |   | 34,801 |   |
| Net increase in cash and cash equivalents                                                                          |   |                     | 19,487  |   |   |   | 20,383 |   |
| Cash and cash equivalents at beginning of period                                                                   |   |                     | 65,860  |   |   |   | 58,838 |   |
| Cash and cash equivalents at end of period                                                                         |   | $                        | 85,347  |   |   | $ | 79,221 |   |
|                                                                                                               |   |                     |    |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                                                  |   |                     |    |   |   |   |   |   |
| Contingent consideration liability                                                                                 |   |                     |    |   |   | $ | 15,900 |   |
| Stock acquisition consideration                                                                                    |   |                     |    |   |   | $ | 11,265 |   |

----

----

----

|                             |   | Net Loss (Numerator) |    |   | Weighted Average Common Shares (Denominator)(in thousands) |   |   | Per Share Amount |   |
|----------------------------------|--------|----------------------|---------|--------|------------------------------------------------------------|--------|--------|------------------|--------|
| Three months ended June 30, 2014 |   |                      |    |   |                                                            |   |   |                  |   |
| Basic and diluted                |   | $                    | (11,073 | )      |                                                       |   | 63,743 |             |   | $ | (0.17 | ) |
| Six months ended June 30, 2014   |   |                 |    |   |                                                       |   |   |             |   |   |   |   |
| Basic and diluted                |   | $                    | (20,386 | )      |                                                       |   | 66,775 |             |   | $ | (0.31 | ) |
| Three months ended June 30, 2013 |   |                 |    |   |                                                       |   |   |             |   |   |   |   |
| Basic and diluted                |   | $                    | (12,263 | )      |                                                       |   | 51,481 |             |   | $ | (0.24 | ) |
| Six months ended June 30, 2013   |   |                 |    |   |                                                       |   |   |             |   |   |   |   |
| Basic and diluted                |   | $                    | (23,521 | )      |                                                       |   | 50,802 |             |   | $ | (0.46 | ) |

|    |   | Three Months Ended June 30,          |
|---------|--------|--------------------------------------|
|    |   | 2014                                 |   |   | 2013 |
|    |   | WeightedAverage Number(in thousands) |   |   | WeightedAverage Exercise Price |   |   | WeightedAverage Number(in thousands) |   |   | WeightedAverage Exercise Price |
| Options |   |                                 | 6,261 |   |   | $ | 10.14 |   |   |   | 6,340 |   |   | $ | 11.62 |

|    |   | Six Months Ended June 30,            |
|---------|--------|--------------------------------------|
|    |   | 2014                                 |   |   | 2013 |
|    |   | WeightedAverage Number(in thousands) |   |   | WeightedAverage Exercise Price |   |   | WeightedAverage Number(in thousands) |   |   | WeightedAverage Exercise Price |
| Options |   |                                 | 6,066 |   |   | $ | 10.43 |   |   |   | 6,036 |   |   | $ | 11.97 |

----

| As of June 30, 2014            |   | GrossAmount |   |   | AccumulatedAmortization |   |   | Net CarryingValue |
|--------------------------------|--------|-------------|--------|--------|-------------------------|--------|--------|-------------------|
| Finite lived intangible assets |   | $           | 21     |   |                    | $      | 4      |              |   | $ | 17 |
| Total                          |   | $           | 21     |   |                    | $      | 4      |              |   | $ | 17 |

| As of December 31, 2013        |   | GrossAmount |   |   | AccumulatedAmortization |   |   | Net CarryingValue |
|--------------------------------|--------|-------------|--------|--------|-------------------------|--------|--------|-------------------|
| Finite lived intangible assets |   | $           | 21     |   |                    | $      | 2      |              |   | $ | 19 |
| Total                          |   | $           | 21     |   |                    | $      | 2      |              |   | $ | 19 |

|                       |   | Goodwill |   |   | IPR&D |
|----------------------------|--------|----------|--------|--------|-----------|
| Balance at January 1, 2014 |   | $        | 7,702  |   |      | $ | 31,360 |
| Impairment                 |   |     | -      |   |      |   | - |
| Balance at June 30, 2014   |   | $        | 7,702  |   |      | $ | 31,360 |

|                            |   | Goodwill |   |   | IPR&D |
|---------------------------------|--------|----------|--------|--------|-----------|
| Balance at January 1, 2013      |   | $        | -      |   |      | $ | - |
| Increase related to acquisition |   |     | 7,702  |   |      |   | 32,300 |
| Balance at June 30, 2013        |   | $        | 7,702  |   |      | $ | 32,300 |

----

|                     |   |                         |   |   | Fair Value Measurements at June 30, 2014                      |
|--------------------------|--------|-------------------------|--------|--------|---------------------------------------------------------------|
|                     |   | Balance atJune 30, 2014 |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |
| Assets:                  |   |                         |   |   |                                                               |   |   |  |   |   |  |
| Money market funds       |   | $                       | 80,385 |   |                                                          | $ | 80,385 |   |   | $ | - |   |   | $ | - |
| Auction rate securities  |   |                    | 2,208  |   |                                                          |   | - |   |   |   | - |   |   |   | 2,208 |
| Total Assets             |   | $                       | 82,593 |   |                                                          | $ | 80,385 |   |   | $ | - |   |   | $ | 2,208 |
|                     |   |                    |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Liability:               |   |                    |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Contingent consideration |   | $                       | 16,600 |   |                                                          | $ | - |   |   | $ | - |   |   | $ | 16,600 |
| Total Liability          |   | $                       | 16,600 |   |                                                          | $ | - |   |   | $ | - |   |   | $ | 16,600 |

|                     |   |                             |   |   | Fair Value Measurements at December 31, 2013                  |
|--------------------------|--------|-----------------------------|--------|--------|---------------------------------------------------------------|
|                     |   | Balance atDecember 31, 2013 |   |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |
| Assets:                  |   |                             |   |   |                                                               |   |   |  |   |   |  |
| Money market funds       |   | $                           | 60,364 |   |                                                          | $ | 60,364 |   |   | $ | - |   |   | $ | - |
| Auction rate securities  |   |                        | 2,208  |   |                                                          |   | - |   |   |   | - |   |   |   | 2,208 |
| Total Assets             |   | $                           | 62,572 |   |                                                          | $ | 60,364 |   |   | $ | - |   |   | $ | 2,208 |
|                     |   |                        |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Liability:               |   |                        |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Contingent consideration |   | $                           | 15,700 |   |                                                          | $ | - |   |   | $ | - |   |   | $ | 15,700 |
| Total Liability          |   | $                           | 15,700 |   |                                                          | $ | - |   |   | $ | - |   |   | $ | 15,700 |

----

----

|                               | Fair Value as of June 30, 2014 |   | Fair Value as of December 31, 2013 |   | Valuation Technique |        | Unobservable Input                              |   | Range(Weighted Average)                  |
|------------------------------------|--------------------------------|--------|------------------------------------|--------|---------------------|--------|-------------------------------------------------|--------|------------------------------------------|
|                               |                                |   |                                    |   |                |        |                                            |   |                                          |
| Asset:                             |                                |   |                                    |   |                |        |                                            |   |                                          |
| Auction rate securities            | $                              | 2,208  |                               | $      | 2,208               |   | Discounted cash flow model                      |        | Redemption period                        |   | 5 to 15 years(6 years) |
|                               |                           |   |                               |   |                |   |                             |        | Discount rate                            |   |   | 0.25% - 3.00% (1.55%) |
| Contingent considerationliability: |                           |   |                               |   |                |   |                                            |        |                                     |   |   |   |
| Azedra commercialization           | $                              | 2,400  |                               | $      | 2,300               |   | Probability adjusted discounted cash flow model |        | Probability of success                   |   |   | 40% |
|                               |                           |   |                               |   |                |   |                             |        | Period of milestone expected achievement |   |   | 2017 |
|                               |                           |   |                               |   |                |   |                             |        | Discount rate                            |   |   | 10% |
|                               |                           |   |                               |   |                |   |                                            |        |                                     |   |   |   |
| 1404 commercialization             | $                              | 2,100  |                               | $      | 2,000               |   | Probability adjusted discounted cash flow model |        | Probability of success                   |   |   | 31% |
|                               |                           |   |                               |   |                |   |                             |        | Period of milestone expected achievement |   |   | 2018 |
|                               |                           |   |                               |   |                |   |                             |        | Discount rate                            |   |   | 10% |
|                               |                           |   |                               |   |                |   |                                            |        |                                     |   |   |   |
| MIP-1095 commercialization         | $                              | 500    |                               | $      | 500                 |   | Probability adjusted discounted cash flow model |        | Probability of success                   |   |   | 19% |
|                               |                           |   |                               |   |                |   |                             |        | Period of milestone expected achievement |   |   | 2021 |
|                               |                           |   |                               |   |                |   |                             |        | Discount rate                            |   |   | 10% |
|                               |                           |   |                               |   |                |   |                                            |        |                                     |   |   |   |
| Net sales targets                  | $                              | 11,600 |                               | $      | 10,900              |   | Monte-Carlo simulation                          |        | Probability of success                   |   |   | 19% - 40%(32.8%) |
|                               |                           |   |                               |   |                |   |                             |        | Period of milestone expected achievement |   |   | 2018 - 2022 |
|                               |                           |   |                               |   |                |   |                             |        | Discount rate                            |   |   | 12.5% |

----

|                                                                                                                                                                                                         |   | Asset – Auction Rate SecuritiesFair Value Measurements Using SignificantUnobservable Inputs(Level 3)For the Three Months Ended June 30, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                         |   | 2014                                                                                                                                          |   |   | 2013 |   |
| Description                                                                                                                                                                                                  |   |                                                                                                                                               |   |   |  |   |
| Balance at beginning of period                                                                                                                                                                               |   | $                                                                                                                                             | 2,208  |   |   | $ | 3,148 |   |
| Transfers into Level 3                                                                                                                                                                                       |   |                                                                                                                                          | -      |   |   |   | - |   |
| Total realized/unrealized gains (losses)                                                                                                                                                                     |   |                                                                                                                                          |   |   |   |   |   |   |
| Included in net income (loss)                                                                                                                                                                                |   |                                                                                                                                          | -      |   |   |   | - |   |
| Included in other comprehensive income (loss)                                                                                                                                                                |   |                                                                                                                                          | -      |   |   |   | 60 |   |
| Settlements                                                                                                                                                                                                  |   |                                                                                                                                          | -      |   |   |   | (1,000 | ) |
| Balance at end of period                                                                                                                                                                                     |   | $                                                                                                                                             | 2,208  |   |   | $ | 2,208 |   |
|   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 |   | $                                                                                                                                             | -      |   |   | $ | - |   |

|                                                                                                                                                                                                         |   | Asset – Auction Rate SecuritiesFair Value Measurements Using SignificantUnobservable Inputs(Level 3)For the Six Months Ended June 30, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                         |   | 2014                                                                                                                                        |   |   | 2013 |   |
| Description                                                                                                                                                                                                  |   |                                                                                                                                             |   |   |  |   |
| Balance at beginning of period                                                                                                                                                                               |   | $                                                                                                                                           | 2,208  |   |   | $ | 3,240 |   |
| Transfers into Level 3                                                                                                                                                                                       |   |                                                                                                                                        | -      |   |   |   | - |   |
| Total realized/unrealized gains (losses)                                                                                                                                                                     |   |                                                                                                                                        |   |   |   |   |   |   |
| Included in net income (loss)                                                                                                                                                                                |   |                                                                                                                                        | -      |   |   |   | - |   |
| Included in other comprehensive income (loss)                                                                                                                                                                |   |                                                                                                                                        | -      |   |   |   | 68 |   |
| Settlements                                                                                                                                                                                                  |   |                                                                                                                                        | -      |   |   |   | (1,100 | ) |
| Balance at end of period                                                                                                                                                                                     |   | $                                                                                                                                           | 2,208  |   |   | $ | 2,208 |   |
|   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 |   | $                                                                                                                                           | -      |   |   | $ | - |   |

----

|                                                                                                                                                                     |   | Liability – Contingent ConsiderationFair Value Measurements Using SignificantUnobservable Inputs(Level 3)For the Three Months Ended June 30, |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                     |   | 2014                                                                                                                                               |   |   | 2013 |
| Description                                                                                                                                                              |   |                                                                                                                                                    |   |   |  |
| Balance at beginning of period                                                                                                                                           |   | $                                                                                                                                                  | 16,200 |   |   | $ | 15,900 |
| Fair value change to contingent consideration included in net loss                                                                                                       |   |                                                                                                                                               | 400 |   |   |   | - |
| Balance at end of period                                                                                                                                                 |   | $                                                                                                                                                  | 16,600 |   |   | $ | 15,900 |
|   Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period |   | $                                                                                                                                                  | 400 |   |   | $ | - |

|                                                                                                                                                                     |   | Liability – Contingent ConsiderationFair Value Measurements Using SignificantUnobservable Inputs(Level 3)For the Six Months Ended June 30, |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                     |   | 2014                                                                                                                                             |   |   | 2013 |
| Description                                                                                                                                                              |   |                                                                                                                                                  |   |   |  |
| Balance at beginning of period                                                                                                                                           |   | $                                                                                                                                                | 15,700 |   |   | $ | - |
| Fair value of contingent consideration – acquisition of Molecular Insight                                                                                          |   |                                                                                                                                             | - |   |   |   | 15,900 |
| Fair value change to contingent consideration included in net loss                                                                                                       |   |                                                                                                                                             | 900 |   |   |   | - |
| Balance at end of period                                                                                                                                                 |   | $                                                                                                                                                | 16,600 |   |   | $ | 15,900 |
|   Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period |   | $                                                                                                                                                | 900 |   |   | $ | - |

----

|                                  |   | June 30, 2014 |   |   | December 31, 2013 |   |
|---------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Royalties                             |   | $             | 1,397  |   |              | $      | 2,862 |   |
| Collaborators                         |   |          | 72     |   |              |   | 12 |   |
| Other                                 |   |          | 9      |   |              |   | 12 |   |
|                                  |   |          | 1,478  |   |              |   | 2,886 |   |
| Less, allowance for doubtful accounts |   |          | (10    | )      |              |   | (7 | ) |
| Total                                 |   | $             | 1,468  |   |              | $      | 2,879 |   |

|                                        |   | June 30, 2014 |   |   | December 31, 2013 |   |
|---------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Accrued consulting and clinical trial costs |   | $             | 1,939  |   |              | $      | 2,672 |   |
| Accrued payroll and related costs           |   |          | 1,329  |   |              |   | 2,123 |   |
| Restructuring accrual                       |   |          | 49     |   |              |   | - |   |
| Legal and professional fees                 |   |          | 545    |   |              |   | 608 |   |
| Accounts payable                            |   |          | 186    |   |              |   | 793 |   |
| Other                                       |   |          | 189    |   |              |   | 316 |   |
| Total                                       |   | $             | 4,237  |   |              | $      | 6,512 |   |

----

|                         |   | Severance and Related Benefits |   |   | Other Exit Costs |   |   | Contract Termination Costs |   |   | Total Restructuring Accrual |   |
|------------------------------|--------|--------------------------------|--------|--------|------------------|--------|--------|----------------------------|--------|--------|-----------------------------|--------|
| Balance at December 31, 2013 |   | $                              | -      |   |             | $      | -      |                       |   | $      | -                           |   |   | $ | - |   |
| Additions, net               |   |                           | 358    |   |             |   | -      |                       |   |   | -                           |   |   |   | 358 |   |
| Payments                     |   |                           | (146   | )      |             |   | -      |                       |   |   | -                           |   |   |   | (146 | ) |
| Balance at March 31, 2014    |   |                           | 212    |   |             |   | -      |                       |   |   | -                           |   |   |   | 212 |   |
| Additions, net               |   |                           | 1      |   |             |   | -      |                       |   |   | -                           |   |   |   | 1 |   |
| Payments                     |   |                           | (164   | )      |             |   | -      |                       |   |   | -                           |   |   |   | (164 | ) |
| Balance at June 30, 2014     |   | $                              | 49     |   |             | $      | -      |                       |   | $      | -                           |   |   | $ | 49 |   |

|                         |   | Severance and Related Benefits |   |   | Other Exit Costs |   |   | Contract Termination Costs |   |   | Total Restructuring Accrual |   |
|------------------------------|--------|--------------------------------|--------|--------|------------------|--------|--------|----------------------------|--------|--------|-----------------------------|--------|
| Balance at December 31, 2012 |   | $                              | 813    |   |             | $      | -      |                       |   | $      | -                           |   |   | $ | 813 |   |
| Additions, net               |   |                           | 1,477  |   |             |   | -      |                       |   |   | -                           |   |   |   | 1,477 |   |
| Payments                     |   |                           | (854   | )      |             |   | -      |                       |   |   | -                           |   |   |   | (854 | ) |
| Balance at March 31, 2013    |   |                           | 1,436  |   |             |   | -      |                       |   |   | -                           |   |   |   | 1,436 |   |
| Additions, net               |   |                           | 15     |   |             |   | 15     |                       |   |   | 1,359                       |   |   |   | 1,389 |   |
| Payments                     |   |                           | (914   | )      |             |   | (15    | )                          |   |   | (1,359                      | )      |   |   | (2,288 | ) |
| Balance at June 30, 2013     |   | $                              | 537    |   |             | $      | -      |                       |   | $      | -                           |   |   | $ | 537 |   |

----

----

----

----

|               |   | Three Months Ended June 30, |    |   |        |   |    | Six Months Ended June 30, |   |   |       |   |
|--------------------|--------|-----------------------------|---------|--------|--------|--------|---------|---------------------------|--------|--------|-------|--------|
|               |   | 2014                        |    |   | 2013   |   |    | PercentChange             |   |   | 2014  |   |   | 2013 |   |   | PercentChange |   |
|               |   |                             |    |   |        |   |    |                           |   |   |       |   |   |  |   |   |  |   |
| Revenues           |   | $                           | 1,477   |   |   | $      | 1,801   |                      |   |   | (18%) |   |   | $ | 3,292 |   |   | $ | 4,027 |   |   |   | (18%) |   |
| Expenses           |   |                        | (12,564 | )      |   |   | (14,074 | )                         |   |   | (11%) |   |   |   | (23,704 | ) |   |   | (27,572 | ) |   |   | (14%) |   |
| Operating loss     |   |                        | (11,087 | )      |   |   | (12,273 | )                         |   |   | (10%) |   |   |   | (20,412 | ) |   |   | (23,545 | ) |   |   | (13%) |   |
| Other income       |   |                        | 13      |   |   |   | 10      |                      |   |   | 30%   |   |   |   | 25 |   |   |   | 24 |   |   |   | 4% |   |
| Income tax benefit |   |                        | 1       |   |   |   | -       |                      |   |   | 100%  |   |   |   | 1 |   |   |   | - |   |   |   | 100% |   |
| Net loss           |   | $                           | (11,073 | )      |   | $      | (12,263 | )                         |   |   | (10%) |   |   | $ | (20,386 | ) |   | $ | (23,521 | ) |   |   | (13%) |   |

|                  | Three Months Ended June 30, |   |       |   | Six Months Ended June 30, |   |       |   |
|-----------------------|-----------------------------|--------|-------|--------|---------------------------|--------|-------|--------|
|                  | 2014                        |   | 2013  |   | PercentChange             |   | 2014  |   | 2013 |   | PercentChange |   |
|                  |                             |   |       |   |                           |   |       |   |  |   |  |   |
| Royalty income        |                        | $      | 1,367 |   |                      | $      | 1,176 |   |   |   | 16% |   |   | $ | 2,102 |   |   | $ | 2,333 |   |   |   | (10%) |   |
| Collaboration revenue |                        |   | 72    |   |                      |   | 514   |   |   |   | (86%) |   |   |   | 1,121 |   |   |   | 1,367 |   |   |   | (18%) |   |
| Research grants       |                        |   | -     |   |                      |   | 77    |   |   |   | (100%) |   |   |   | - |   |   |   | 275 |   |   |   | (100%) |   |
| Other revenues        |                        |   | 38    |   |                      |   | 34    |   |   |   | 12% |   |   |   | 69 |   |   |   | 52 |   |   |   | 33% |   |
| Total                 |                        | $      | 1,477 |   |                      | $      | 1,801 |   |   |   | (18%) |   |   | $ | 3,292 |   |   | $ | 4,027 |   |   |   | (18%) |   |

----

|                     | Relistor Net Sales          |
|--------------------------|-----------------------------|
|                     | Three Months Ended June 30, |   | Six Months Ended June 30, |
|                     | 2014                        |   | 2013 |   | 2014 |   | 2013 |
| U.S.                     |                        | $ | 8,200 |   |   | $ | 6,700 |   |   | $ | 11,800 |   |   | $ | 13,400 |
| Ex-U.S.                  |                        |   | 900 |   |   |   | 1,200 |   |   |   | 2,100 |   |   |   | 2,200 |
|    Global |                        | $ | 9,100 |   |   | $ | 7,900 |   |   | $ | 13,900 |   |   | $ | 15,600 |

|                  | Three Months Ended June 30, |   |       |   | Six Months Ended June 30, |   |       |   |
|-----------------------|-----------------------------|--------|-------|--------|---------------------------|--------|-------|--------|
|                  | 2014                        |   | 2013  |   | PercentChange             |   | 2014  |   | 2013 |   | PercentChange |   |
|                  |                             |   |       |   |                           |   |       |   |  |   |  |   |
| Salaries and benefits |                        | $      | 2,221 |   |                      | $      | 2,855 |   |   |   | (22%) |   |   | $ | 5,097 |   |   | $ | 7,496 |   |   |   | (32%) |   |

----

|                     | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|--------------------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|                     | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|                     |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Share-based compensation |                        | $      | 611  |   |                      | $      | 599  |   |   |   | 2% |   |   | $ | 1,088 |   |   | $ | 1,092 |   |   |   | 0% |   |

|                 | Three Months Ended June 30, |   |       |   | Six Months Ended June 30, |   |       |   |
|----------------------|-----------------------------|--------|-------|--------|---------------------------|--------|-------|--------|
|                 | 2014                        |   | 2013  |   | PercentChange             |   | 2014  |   | 2013 |   | PercentChange |   |
|                 |                             |   |       |   |                           |   |       |   |  |   |  |   |
| Clinical trial costs |                        | $      | 2,439 |   |                      | $      | 1,992 |   |   |   | 22% |   |   | $ | 4,081 |   |   | $ | 3,319 |   |   |   | 23% |   |

|                                                | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|-----------------------------------------------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|                                                | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|                                                |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Laboratory and manufacturing supplies and equipment |                        | $      | 34   |   |                      | $      | 421  |   |   |   | (92%) |   |   | $ | 68 |   |   | $ | 460 |   |   |   | (85%) |   |

|                                      | Three Months Ended June 30, |   |       |   | Six Months Ended June 30, |   |      |   |
|-------------------------------------------|-----------------------------|--------|-------|--------|---------------------------|--------|------|--------|
|                                      | 2014                        |   | 2013  |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|                                      |                             |   |       |   |                           |   |      |   |  |   |  |   |
| Contract manufacturing and subcontractors |                        | $      | 1,332 |   |                      | $      | 572  |   |   |   | 133% |   |   | $ | 1,994 |   |   | $ | 934 |   |   |   | 113% |   |

----

|        | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|-------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|        | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|        |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Consultants |                        | $      | 135  |   |                      | $      | 452  |   |   |   | (70%) |   |   | $ | 330 |   |   | $ | 765 |   |   |   | (57%) |   |

|         | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|--------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|         | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|         |                             |   |      |   |                           |   |      |   |  |   |  |   |
| License fees |                        | $      | 180  |   |                      | $      | 153  |   |   |   | 18% |   |   | $ | 270 |   |   | $ | 223 |   |   |   | 21% |   |

|            | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|-----------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|            | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|            |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Royalty expense |                        | $      | 147  |   |                      | $      | 119  |   |   |   | 24% |   |   | $ | 229 |   |   | $ | 235 |   |   |   | (3%) |   |

----

|                     | Three Months Ended June 30, |   |       |   | Six Months Ended June 30, |   |       |   |
|--------------------------|-----------------------------|--------|-------|--------|---------------------------|--------|-------|--------|
|                     | 2014                        |   | 2013  |   | PercentChange             |   | 2014  |   | 2013 |   | PercentChange |   |
|                     |                             |   |       |   |                           |   |       |   |  |   |  |   |
| Other operating expenses |                        | $      | 1,076 |   |                      | $      | 2,694 |   |   |   | (60%) |   |   | $ | 2,109 |   |   | $ | 4,234 |   |   |   | (50%) |   |

|                  | Three Months Ended June 30, |   |       |   | Six Months Ended June 30, |   |       |   |
|-----------------------|-----------------------------|--------|-------|--------|---------------------------|--------|-------|--------|
|                  | 2014                        |   | 2013  |   | PercentChange             |   | 2014  |   | 2013 |   | PercentChange |   |
|                  |                             |   |       |   |                           |   |       |   |  |   |  |   |
| Salaries and benefits |                        | $      | 1,156 |   |                      | $      | 1,175 |   |   |   | (2%) |   |   | $ | 2,475 |   |   | $ | 2,569 |   |   |   | (4%) |   |

|                     | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|--------------------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|                     | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|                     |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Share-based compensation |                        | $      | 867  |   |                      | $      | 752  |   |   |   | 15% |   |   | $ | 1,163 |   |   | $ | 1,008 |   |   |   | 15% |   |

|                             | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|----------------------------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|                             | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|                             |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Consulting and professional fees |                        | $      | 894  |   |                      | $      | 896  |   |   |   | 0% |   |   | $ | 1,746 |   |   | $ | 2,400 |   |   |   | (27%) |   |

|                     | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |       |   |
|--------------------------|-----------------------------|--------|------|--------|---------------------------|--------|-------|--------|
|                     | 2014                        |   | 2013 |   | PercentChange             |   | 2014  |   | 2013 |   | PercentChange |   |
|                     |                             |   |      |   |                           |   |       |   |  |   |  |   |
| Other operating expenses |                        | $      | 939  |   |                      | $      | 1,076 |   |   |   | (13%) |   |   | $ | 1,877 |   |   | $ | 2,242 |   |   |   | (16%) |   |

----

|                                                  | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|-------------------------------------------------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|                                                  | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|                                                  |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Contingent consideration liability expense (non-cash) |                        | $      | 400  |   |                      | $      | -    |   |   |   | 100% |   |   | $ | 900 |   |   | $ | - |   |   |   | 100% |   |

|                          | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|-------------------------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|                          | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|                          |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Depreciation and amortization |                        | $      | 133  |   |                      | $      | 318  |   |   |   | (58%) |   |   | $ | 277 |   |   | $ | 595 |   |   |   | (53%) |   |

|            | Three Months Ended June 30, |   |      |   | Six Months Ended June 30, |   |      |   |
|-----------------|-----------------------------|--------|------|--------|---------------------------|--------|------|--------|
|            | 2014                        |   | 2013 |   | PercentChange             |   | 2014 |   | 2013 |   | PercentChange |   |
|            |                             |   |      |   |                           |   |      |   |  |   |  |   |
| Interest income |                        | $      | 13   |   |                      | $      | 10   |   |   |   | 30% |   |   | $ | 25 |   |   | $ | 24 |   |   |   | 4% |   |

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|                        | Six Months Ended June 30, |
|-----------------------------|---------------------------|
|                        | 2014                      |   |   | 2013 |
|                        | (in millions)             |
| Oncology                    |                      | $ | 14.3 |   |   | $ | 18.2 |
| Relistor and other programs |                      |   | 1.0 |   |   |   | 0.6 |
| Total                       |                      | $ | 15.3 |   |   | $ | 18.8 |

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|                                  |               |   |   | Payments due by June 30, |
|---------------------------------------|---------------|--------|--------|--------------------------|
|                                  | Total         |   |   | 2015                     |   |   |   | 2016-2017 |   |   |   | 2018-2019 |   |   | Thereafter |
|                                  | (in millions) |
| Operating leases                      |          | $      | 13.0   |                     |   | $ | 1.9 |   |   | $ | 3.9 |   |   | $ | 4.0 |   |   | $ | 3.2 |
| License and collaboration agreements: |          |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed payments                        |          |   | 1.1    |                     |   |   | 0.3 |   |   |   | 0.4 |   |   |   | 0.4 |   |   |   | - |
| Contingent payments (1)               |          |   | 106.6  |                     |   |   | - |   |   |   | 4.8 |   |   |   | 16.1 |   |   |   | 85.7 |
| Total                                 |          | $      | 120.7  |                     |   | $ | 2.2 |   |   | $ | 9.1 |   |   | $ | 20.5 |   |   | $ | 88.9 |

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

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|   | · | It might not obtain labeling claims necessary to make the product commercially viable (in general, labeling claims define the medical conditions for which a drug product may be marketed, and are therefore very important to the commercial success of a product), or may be required to carry Boxed or other warnings that adversely affect its commercial success. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Approval may be limited to uses of the product for treatment or prevention of diseases or conditions that are relatively less financially advantageous to us than approval of greater or different scope or subject to an FDA-imposed REMS that imposes limits on the distribution or use of the product. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Side effects (including different or aggravated effects such as SAEs encountered in our PSMA ADC program) identified after the product is on the market might hurt sales or result in mandatory safety labeling changes, additional pre-clinical testing or clinical trials, imposition of a REMS, product recalls or withdrawals from the market. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Efficacy or safety concerns (including those arising from SAEs heretofore or hereafter encountered in our PSMA ADC program) regarding a marketed product, or manufacturing or other problems, may lead to a recall, withdrawal of marketing approval, reformulation of the product, additional pre-clinical testing or clinical trials, changes in labeling, imposition of a REMS, the need for additional marketing applications, declining sales or other adverse events. These potential consequences may occur whether or not the concerns originate from subsequent testing or other activities by us, governmental regulators, other entities or organizations or otherwise, and whether or not they are scientifically justified. If products lose previously received marketing and other approvals, our business, results of operations and financial condition would be materially adversely affected. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 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 Angelo W. Lovallo, Jr., Vice President, Finance and Treasurer (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 of the Chief Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                               |
|           |                                                                                                                                                                                                                                                |
| 101            | Interactive Data File                                                                                                                                                                                                                               |
|           |                                                                                                                                                                                                                                                |
| 101.INS        | XBRL Instance Document                                                                                                                                                                                                                              |
|           |                                                                                                                                                                                                                                                |
| 101.SCH        | XBRL Taxonomy Extension Schema                                                                                                                                                                                                                      |
|           |                                                                                                                                                                                                                                                |
| 101.CAL        | XBRL Taxonomy Extension Calculation Linkbase                                                                                                                                                                                                        |
|           |                                                                                                                                                                                                                                                |
| 101.LAB        | XBRL Taxonomy Extension Label Linkbase                                                                                                                                                                                                              |
|           |                                                                                                                                                                                                                                                |
| 101.PRE        | XBRL Taxonomy Extension Presentation Linkbase                                                                                                                                                                                                       |
|           |                                                                                                                                                                                                                                                |
| 101.DEF        | XBRL Taxonomy Extension Definition Document                                                                                                                                                                                                         |
|           |                                                                                                                                                                                                                                                |

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|                 | PROGENICS PHARMACEUTICALS, INC. |
|----------------------|---------------------------------|
| Date: August 8, 2014 | By:                             | /s/ Angelo W. Lovallo, Jr. |
|                 |                            | Angelo W. Lovallo, Jr.Vice President, Finance & Treasurer(Principal Financial and Accounting Officer) |