we completed the second reduction in force and the laboratory closings in december 2012. following completion of the second workforce reduction , we are no longer devoting resources to drug discovery or preclinical research activities . except for a small number of periods in which we generated net income due primarily to the recognition into revenue of amounts received under collaboration agreements , we have not been profitable . as of december 31 , 2012 , we had an accumulated deficit of $ 233.9 million . we expect that we may incur losses in future periods as our product candidates advance into later-stage development and as we progress our programs and invest in additional product opportunities . drug development , including clinical trials in particular , is time-consuming , expensive and may never yield a product that will generate revenue . as a clinical-stage company , our revenues , expenses and results of operations are likely to fluctuate significantly from quarter to quarter and year to year . we believe that period-to-period comparisons of our results of operations should not be relied upon as indicative of our future performance . revenue in january 2010 , we received the $ 200.0 million upfront payment under our mdd agreement with astrazeneca , which we recorded as deferred revenue and began recognizing into revenue on a straight-line basis over the estimated period of our substantive performance obligations under the agreement . in the first quarter of 2012 , we and astrazeneca announced that , based on the totality of the results of the phase 3 program , a regulatory filing for tc-5214 as an adjunct therapy for mdd would not be pursued and we reported the discontinuation of a switch monotherapy trial . these events resulted in a change in the estimated period of our substantive performance obligations under the agreement . accordingly , we revised the revenue recognition period for the upfront payment that we previously received and began recognizing the portion of the upfront payment not yet recognized into revenue on a straight-line basis over the remainder of the revised period . we had recognized the full amount of the upfront payment into revenue as of june 30 , 2012. pursuant to an april 2010 amendment to our ongoing collaboration agreement with astrazeneca related to an expansion of the development program for tc-5619 , we received an $ 11.0 million payment in may 2010 , which we recorded as deferred revenue and recognized into revenue on a straight-line basis over the estimated period of our research and development obligations for tc-5619 under the agreement . we completed our research and development obligations for tc-5619 in the second quarter of 2011. pursuant to a september 2010 amendment to our ongoing collaboration agreement with astrazeneca related to a clinical trial of tc-1734 in mild to moderate alzheimer 's disease , we received a $ 500,000 payment in the fourth quarter of 2010 and cumulative payments of $ 5.5 million in the second half of 2011. we recorded all of these payments as deferred revenue and began recognizing them into revenue on a straight-line basis over the estimated period of our obligations with respect to the study . as a result of astrazeneca 's exercise of its right to terminate tc-1734 from the agreement in march 2013 , we expect to recognize into revenue the remaining unrecognized deferred amount , totaling $ 3.5 million , during 2013. as of december 31 , 2012 , we had received $ 61.6 million in aggregate upfront fees and milestone payments under our ongoing collaboration agreement with astrazeneca and recognized an additional $ 26.5 million in 58 collaboration research and development revenue for research services that we provided in the preclinical research collaboration conducted under that agreement . we immediately recognized an aggregate of $ 32.6 million of the amounts received under the agreement for achievement of milestone events , because each event met the conditions required for immediate recognition under our revenue recognition policy . we deferred recognition of an aggregate of $ 29.0 million received under the agreement and are recognizing , or in some cases have fully recognized , these deferred amounts into revenue over the respective periods discussed in note 12 to our audited financial statements included in this annual report . as of december 31 , 2012 , we had $ 3.5 million of the amounts received under our ongoing collaboration agreement with astrazeneca that remained to be recognized into revenue for future periods . we received $ 45.0 million in aggregate payments under our now terminated product development and commercialization agreement and a related stock purchase agreement with glaxosmithkline . we immediately recognized an aggregate of $ 4.0 million of the amounts received under the product development and commercialization agreement for achievement of milestone events , because each event met the conditions required for immediate recognition under our revenue recognition policy . we deferred recognition of $ 29.5 million received under the two agreements and were recognizing it into revenue over the period discussed in note 12 to our audited financial statements included in this annual report . as a result of our receipt in february 2011 of notice of termination of the agreement , we recognized the remaining unrecognized deferred amount , $ 18.4 million , into revenue for the first quarter of 2011. we recorded $ 11.5 million of the amounts received under the stock purchase agreement , which reflected the fair value of shares of our common stock sold to glaxosmithkline in 2007 , as capital in excess of par value . from time to time we seek and are awarded grants or perform work under grants awarded to third-party collaborators from which we derive revenue . during the third quarter of 2011 , we were awarded a third grant from the michael j. fox foundation for parkinson 's research , or mjff . story_separator_special_tag this process involves reviewing open contracts and purchase orders , communicating with our applicable personnel to identify services that have been performed on our behalf , estimating level of services performed and the associated cost incurred for the services when we have not yet been invoiced or otherwise notified of actual cost and reviewing invoices received that have not yet become due and payable . we make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us . we periodically confirm the accuracy of our estimates with the service providers and 63 make adjustments if necessary . if we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services , our actual expenses could differ from our estimates . examples of estimated accrued expenses include : fees for services performed by contract research organizations in connection with clinical trials and non-clinical studies ; fees for services performed by clinical trial sites in connection with clinical trials ; fees for services performed by contract manufacturers in connection with the production of clinical trial materials ; and professional service fees . stock-based compensation we record the grant date fair value of stock options issued to employees and non-employee directors as stock-based compensation expense over the requisite service periods , which are typically the vesting periods . we currently use the black-scholes-merton formula to estimate grant date fair value and expect to continue to use this valuation model in the future . the black-scholes-merton formula requires us to make various assumptions , including among others the expected term of the award and expected volatility of our common stock . in the event a modification is made to a stock option after the grant date , we record additional stock-based compensation expense equal to the incremental fair value of the stock option immediately subsequent to the modification as compared to the fair value of the stock option immediately preceding the modification . during 2012 , we modified some outstanding stock options held by executive and non-executive employees who departed targacept to partially accelerate vesting and or extend the permitted period for exercise . these modifications resulted in incremental compensation cost for the year ended december 31 , 2012 of $ 1.4 million . we recorded stock-based compensation expense related to stock options granted to employees and directors of $ 7.8 million ( inclusive of expense resulting from stock option modifications ) for the year ended december 31 , 2012 , $ 8.5 million for the year ended december 31 , 2011 and $ 4.9 million for the year ended december 31 , 2010. as of december 31 , 2012 , we had $ 9.2 million in total unrecognized compensation cost related to non-vested stock-based compensation arrangements , which we expect to record over a weighted average period of 3.1 years . results of operations years ended december 31 , 2012 and december 31 , 2011 net operating revenues replace_table_token_5_th net operating revenues for the year ended december 31 , 2012 decreased by $ 39.8 million as compared to the year ended december 31 , 2011. the lower net operating revenues for 2012 were primarily attributable to a decrease of $ 39.6 million in license fees and milestones from collaborations . the lower license fees and milestones from collaborations principally resulted from decreases in recognition of deferred revenue of : $ 18.4 million related to our now concluded strategic alliance with glaxosmithkline , as all remaining deferred revenue was recognized in the 2011 period in connection with termination of the alliance ; $ 18.1 million associated with our now concluded mdd agreement with astrazeneca due to the completion of our performance obligations in mid-2012 ; and 64 $ 4.8 million related to the development of tc-5619 under our ongoing collaboration agreement with astrazeneca , as the tc-5619-related payments became fully recognized in the second quarter of 2011. these decreases were partially offset by an increase of $ 1.8 million in recognition of deferred revenue related to the development of tc-1734 under our ongoing collaboration agreement with astrazeneca . we expect our net operating revenues for 2013 to be substantially lower than 2012 , primarily due to the upfront payment received under our mdd agreement with astrazeneca becoming fully recognized in the second quarter of 2012. in future periods , we are eligible to receive additional milestone payments under our ongoing collaboration agreement with astrazeneca . the amount of milestone payments will depend on whether we achieve development , regulatory and commercial milestone events that are inherently uncertain and , if so , when . we expect that the amount of our milestone-based revenue , if any , will continue to vary from period to period . research and development expenses year ended december 31 , 2012 2011 change ( in thousands ) research and development expenses $ 49,087 $ 95,215 $ ( 46,128 ) research and development expenses for the year ended december 31 , 2012 decreased by $ 46.1 million as compared to the year ended december 31 , 2011. the lower research and development expenses for 2012 were principally attributable to decreases of : $ 29.9 million in costs incurred related to our mdd agreement with astrazeneca , to $ 2.2 million for 2012 , from $ 32.0 million for 2011 , as the development program conducted under the agreement wound down to completion ; $ 7.5 million in other research and development-related operating costs , including infrastructure costs and stock-based compensation and other compensation-related expenses for research and development personnel , to $ 25.6 million for 2012 , from $ 33.1 million for 2011 ; this decrease resulted primarily from the workforce reductions completed in the second and fourth quarters of 2012 discussed above ; $ 5.4 million in costs incurred for third-party research and development services in connection with preclinical programs

liquidity and capital resources sources of liquidity we have historically financed our operations and internal growth primarily through public and private offerings of our securities , payments received under collaboration and alliance agreements , including upfront fees , payments for research and development services and payments upon achievement of milestone events , grants and equipment financing . 68 our cash , cash equivalents and investments in marketable securities were $ 184.9 million as of december 31 , 2012 and $ 249.3 million as of december 31 , 2011. as of december 31 , 2012 , we had $ 77.8 million of cash in bank depository accounts and institutional money market funds at branch banking and trust company , pnc bank and wells fargo & company . substantially all of our remaining cash , cash equivalents and investments were invested as of december 31 , 2012 in u.s. treasury notes and bonds , u.s. and state government agency-backed securities , corporate debt securities that are rated at least a quality or equivalent and certificates of deposit . stock offerings in may 2011 , we completed an underwritten public offering of 3,658,537 shares of our common stock . in june 2011 , we sold an additional 548,780 shares of our common stock upon the exercise of the overallotment option granted to the underwriters . our net proceeds from the offering , after deducting underwriters ' discounts and commissions and offering expenses paid by us , were $ 80.8 million . beginning with our initial public offering in april 2006 , we have derived aggregate net proceeds of $ 195.1 million from public offerings of our common stock . we have also derived aggregate net proceeds of $ 121.8 million from private placements of convertible preferred stock , all of which occurred prior to our initial public offering .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources sources of liquidity we have historically financed our operations and internal growth primarily through public and private offerings of our securities , payments received under collaboration and alliance agreements , including upfront fees , payments for research and development services and payments upon achievement of milestone events , grants and equipment financing . 68 our cash , cash equivalents and investments in marketable securities were $ 184.9 million as of december 31 , 2012 and $ 249.3 million as of december 31 , 2011. as of december 31 , 2012 , we had $ 77.8 million of cash in bank depository accounts and institutional money market funds at branch banking and trust company , pnc bank and wells fargo & company . substantially all of our remaining cash , cash equivalents and investments were invested as of december 31 , 2012 in u.s. treasury notes and bonds , u.s. and state government agency-backed securities , corporate debt securities that are rated at least a quality or equivalent and certificates of deposit . stock offerings in may 2011 , we completed an underwritten public offering of 3,658,537 shares of our common stock . in june 2011 , we sold an additional 548,780 shares of our common stock upon the exercise of the overallotment option granted to the underwriters . our net proceeds from the offering , after deducting underwriters ' discounts and commissions and offering expenses paid by us , were $ 80.8 million . beginning with our initial public offering in april 2006 , we have derived aggregate net proceeds of $ 195.1 million from public offerings of our common stock . we have also derived aggregate net proceeds of $ 121.8 million from private placements of convertible preferred stock , all of which occurred prior to our initial public offering .
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 Suspicious Activity Report : we completed the second reduction in force and the laboratory closings in december 2012. following completion of the second workforce reduction , we are no longer devoting resources to drug discovery or preclinical research activities . except for a small number of periods in which we generated net income due primarily to the recognition into revenue of amounts received under collaboration agreements , we have not been profitable . as of december 31 , 2012 , we had an accumulated deficit of $ 233.9 million . we expect that we may incur losses in future periods as our product candidates advance into later-stage development and as we progress our programs and invest in additional product opportunities . drug development , including clinical trials in particular , is time-consuming , expensive and may never yield a product that will generate revenue . as a clinical-stage company , our revenues , expenses and results of operations are likely to fluctuate significantly from quarter to quarter and year to year . we believe that period-to-period comparisons of our results of operations should not be relied upon as indicative of our future performance . revenue in january 2010 , we received the $ 200.0 million upfront payment under our mdd agreement with astrazeneca , which we recorded as deferred revenue and began recognizing into revenue on a straight-line basis over the estimated period of our substantive performance obligations under the agreement . in the first quarter of 2012 , we and astrazeneca announced that , based on the totality of the results of the phase 3 program , a regulatory filing for tc-5214 as an adjunct therapy for mdd would not be pursued and we reported the discontinuation of a switch monotherapy trial . these events resulted in a change in the estimated period of our substantive performance obligations under the agreement . accordingly , we revised the revenue recognition period for the upfront payment that we previously received and began recognizing the portion of the upfront payment not yet recognized into revenue on a straight-line basis over the remainder of the revised period . we had recognized the full amount of the upfront payment into revenue as of june 30 , 2012. pursuant to an april 2010 amendment to our ongoing collaboration agreement with astrazeneca related to an expansion of the development program for tc-5619 , we received an $ 11.0 million payment in may 2010 , which we recorded as deferred revenue and recognized into revenue on a straight-line basis over the estimated period of our research and development obligations for tc-5619 under the agreement . we completed our research and development obligations for tc-5619 in the second quarter of 2011. pursuant to a september 2010 amendment to our ongoing collaboration agreement with astrazeneca related to a clinical trial of tc-1734 in mild to moderate alzheimer 's disease , we received a $ 500,000 payment in the fourth quarter of 2010 and cumulative payments of $ 5.5 million in the second half of 2011. we recorded all of these payments as deferred revenue and began recognizing them into revenue on a straight-line basis over the estimated period of our obligations with respect to the study . as a result of astrazeneca 's exercise of its right to terminate tc-1734 from the agreement in march 2013 , we expect to recognize into revenue the remaining unrecognized deferred amount , totaling $ 3.5 million , during 2013. as of december 31 , 2012 , we had received $ 61.6 million in aggregate upfront fees and milestone payments under our ongoing collaboration agreement with astrazeneca and recognized an additional $ 26.5 million in 58 collaboration research and development revenue for research services that we provided in the preclinical research collaboration conducted under that agreement . we immediately recognized an aggregate of $ 32.6 million of the amounts received under the agreement for achievement of milestone events , because each event met the conditions required for immediate recognition under our revenue recognition policy . we deferred recognition of an aggregate of $ 29.0 million received under the agreement and are recognizing , or in some cases have fully recognized , these deferred amounts into revenue over the respective periods discussed in note 12 to our audited financial statements included in this annual report . as of december 31 , 2012 , we had $ 3.5 million of the amounts received under our ongoing collaboration agreement with astrazeneca that remained to be recognized into revenue for future periods . we received $ 45.0 million in aggregate payments under our now terminated product development and commercialization agreement and a related stock purchase agreement with glaxosmithkline . we immediately recognized an aggregate of $ 4.0 million of the amounts received under the product development and commercialization agreement for achievement of milestone events , because each event met the conditions required for immediate recognition under our revenue recognition policy . we deferred recognition of $ 29.5 million received under the two agreements and were recognizing it into revenue over the period discussed in note 12 to our audited financial statements included in this annual report . as a result of our receipt in february 2011 of notice of termination of the agreement , we recognized the remaining unrecognized deferred amount , $ 18.4 million , into revenue for the first quarter of 2011. we recorded $ 11.5 million of the amounts received under the stock purchase agreement , which reflected the fair value of shares of our common stock sold to glaxosmithkline in 2007 , as capital in excess of par value . from time to time we seek and are awarded grants or perform work under grants awarded to third-party collaborators from which we derive revenue . during the third quarter of 2011 , we were awarded a third grant from the michael j. fox foundation for parkinson 's research , or mjff . story_separator_special_tag this process involves reviewing open contracts and purchase orders , communicating with our applicable personnel to identify services that have been performed on our behalf , estimating level of services performed and the associated cost incurred for the services when we have not yet been invoiced or otherwise notified of actual cost and reviewing invoices received that have not yet become due and payable . we make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us . we periodically confirm the accuracy of our estimates with the service providers and 63 make adjustments if necessary . if we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services , our actual expenses could differ from our estimates . examples of estimated accrued expenses include : fees for services performed by contract research organizations in connection with clinical trials and non-clinical studies ; fees for services performed by clinical trial sites in connection with clinical trials ; fees for services performed by contract manufacturers in connection with the production of clinical trial materials ; and professional service fees . stock-based compensation we record the grant date fair value of stock options issued to employees and non-employee directors as stock-based compensation expense over the requisite service periods , which are typically the vesting periods . we currently use the black-scholes-merton formula to estimate grant date fair value and expect to continue to use this valuation model in the future . the black-scholes-merton formula requires us to make various assumptions , including among others the expected term of the award and expected volatility of our common stock . in the event a modification is made to a stock option after the grant date , we record additional stock-based compensation expense equal to the incremental fair value of the stock option immediately subsequent to the modification as compared to the fair value of the stock option immediately preceding the modification . during 2012 , we modified some outstanding stock options held by executive and non-executive employees who departed targacept to partially accelerate vesting and or extend the permitted period for exercise . these modifications resulted in incremental compensation cost for the year ended december 31 , 2012 of $ 1.4 million . we recorded stock-based compensation expense related to stock options granted to employees and directors of $ 7.8 million ( inclusive of expense resulting from stock option modifications ) for the year ended december 31 , 2012 , $ 8.5 million for the year ended december 31 , 2011 and $ 4.9 million for the year ended december 31 , 2010. as of december 31 , 2012 , we had $ 9.2 million in total unrecognized compensation cost related to non-vested stock-based compensation arrangements , which we expect to record over a weighted average period of 3.1 years . results of operations years ended december 31 , 2012 and december 31 , 2011 net operating revenues replace_table_token_5_th net operating revenues for the year ended december 31 , 2012 decreased by $ 39.8 million as compared to the year ended december 31 , 2011. the lower net operating revenues for 2012 were primarily attributable to a decrease of $ 39.6 million in license fees and milestones from collaborations . the lower license fees and milestones from collaborations principally resulted from decreases in recognition of deferred revenue of : $ 18.4 million related to our now concluded strategic alliance with glaxosmithkline , as all remaining deferred revenue was recognized in the 2011 period in connection with termination of the alliance ; $ 18.1 million associated with our now concluded mdd agreement with astrazeneca due to the completion of our performance obligations in mid-2012 ; and 64 $ 4.8 million related to the development of tc-5619 under our ongoing collaboration agreement with astrazeneca , as the tc-5619-related payments became fully recognized in the second quarter of 2011. these decreases were partially offset by an increase of $ 1.8 million in recognition of deferred revenue related to the development of tc-1734 under our ongoing collaboration agreement with astrazeneca . we expect our net operating revenues for 2013 to be substantially lower than 2012 , primarily due to the upfront payment received under our mdd agreement with astrazeneca becoming fully recognized in the second quarter of 2012. in future periods , we are eligible to receive additional milestone payments under our ongoing collaboration agreement with astrazeneca . the amount of milestone payments will depend on whether we achieve development , regulatory and commercial milestone events that are inherently uncertain and , if so , when . we expect that the amount of our milestone-based revenue , if any , will continue to vary from period to period . research and development expenses year ended december 31 , 2012 2011 change ( in thousands ) research and development expenses $ 49,087 $ 95,215 $ ( 46,128 ) research and development expenses for the year ended december 31 , 2012 decreased by $ 46.1 million as compared to the year ended december 31 , 2011. the lower research and development expenses for 2012 were principally attributable to decreases of : $ 29.9 million in costs incurred related to our mdd agreement with astrazeneca , to $ 2.2 million for 2012 , from $ 32.0 million for 2011 , as the development program conducted under the agreement wound down to completion ; $ 7.5 million in other research and development-related operating costs , including infrastructure costs and stock-based compensation and other compensation-related expenses for research and development personnel , to $ 25.6 million for 2012 , from $ 33.1 million for 2011 ; this decrease resulted primarily from the workforce reductions completed in the second and fourth quarters of 2012 discussed above ; $ 5.4 million in costs incurred for third-party research and development services in connection with preclinical programs

