| Summary of Significant Accounting Policies | The Company and a Summary of Its Significant Accounting Policies The Company Sequenom, Inc., and its wholly owned subsidiary Sequenom Center for Molecular Medicine LLC, doing business as Sequenom Laboratories (collectively the "Company"), is a life sciences company committed to enabling healthier lives through the development of innovative products and services. The Company serves patients and physicians by providing early patient management information. The Company develops and commercializes innovative molecular diagnostics testing services that serve the women's health market and is developing products and services for the oncology market. Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, which include all wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. Segment and Geographic Information The Company evaluates segment reporting in accordance with Accounting Standards Codification ("ASC") 280 during each reporting period, including evaluating the reporting package reviewed by the Company’s Chief Operating Decision Maker (the "CODM"). As of December 31, 2015, the Company concluded it operates in a single operating segment and a single reporting unit as a provider of innovative diagnostic testing services based on the financial information available and that is evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. The Company currently derives its diagnostic services revenue from domestic and international customers by providing testing services in its laboratories located in San Diego, California and Raleigh-Durham, North Carolina. During the year ended December 31, 2015, 5% of diagnostic services revenue was recognized from international customers. During the year ended December 31, 2014, 13% of diagnostic services revenue was recognized from international customers. The Company also generates license revenue through the Company's Pooled Patents Agreement (the "Pooled Patents Agreement") with Illumina, Inc. ("Illumina"). The Company has limited visibility into the revenue reported by Illumina to the Company. For the portion of the Company's license revenue recognized from the Pooled Patents Agreement that is derived from Illumina partners or licensees, the Company does not have the ability to determine whether the license revenue was derived from domestic or international sources. Use of Estimates The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. An example of the Company’s significant accounting estimates that may involve a higher degree of judgment and complexity than others include revenue recognition. Actual results could differ materially from those estimates and assumptions. Discontinued Operations On May 30, 2014, the Company sold its Bioscience business segment. As a result of the sale, the Company's Bioscience segment has been excluded from continuing operations for all periods herein and reported as discontinued operations. For additional information on the divestiture of the Company's Bioscience segment, see Note 3, Discontinued Operations. Revenue Recognition The Company generates revenue from diagnostic services from providing laboratory-developed tests, or LDTs, primarily for the detection of specific fetal abnormalities or other genetic conditions, as well as through the Pooled Patents Agreement and others who have licensed the Company's technology. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. The Company assesses whether the fee is fixed or determinable based on the nature of the fee charged for the services delivered, whether there are existing contractual arrangements, and historical payment patterns. In determining when to record revenue, the Company evaluates collectability and considers whether there is sufficient history to reliably estimate a payor's payment patterns. Revenue is deferred for fees received before earned. Diagnostic service revenues are derived from providing testing services in the Company's laboratory, which are reimbursed through arrangements with third-party payors and amounts patients self-pay or through contractual arrangements (client bill). Diagnostic services revenue for third-party payors is recognized upon cash collection until a reliable estimate of the amount that would be ultimately collected for the test and the above criteria have been met, at which time revenue is recognized on an accrual basis. Third-party payors include commercial payors, such as health insurance companies, health maintenance organizations and government payors, such as Medicare and Medicaid in the United States. Client bill revenue is primarily recognized on an accrual basis and includes laboratories and customers with whom the Company has a contractual agreement where they will pay for the test upon delivery of the test results to the ordering physicians. The Company generally bills third-party payors upon delivery of a test result to the ordering physician following completion of a test. Patients have responsibility for out-of-pocket costs for amounts not covered by their insurance carrier and the Company bills the patient directly for these amounts in the form of co-pays and deductibles in accordance with their insurance carrier and health plans. Revenue from patients, through co-payments or through cash based service offerings, are recognized on a cash basis. Some payors may not cover the test as ordered by the physician under their reimbursement policies. Consequently, the Company pursues reimbursement on a case-by-case basis. From time to time, the Company receives requests for refunds of payments, generally due to overpayments made by third-party payors. Upon becoming aware of a refund request, the Company establishes an accrued liability for tests covered by the refund request until such time as the Company determines whether or not a refund is due. License arrangements with third-party partners may involve multiple elements and the Company evaluates the agreements to determine whether each deliverable represents a separate unit of accounting. A deliverable constitutes a separate unit of accounting when it has stand-alone value to the customer. Items are considered to have stand-alone value when they are sold separately by any vendor or when the customer could resell the item on a stand-alone basis. Consideration is allocated at the inception of the contract to all deliverables based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence ("VSOE") of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence exists, the Company uses its best estimate of the selling price for the deliverable. Such amounts are recognized as revenue when each unit is delivered. If the delivered element does not have stand-alone value without one of the undelivered elements in the arrangement, the elements are combined and accounted for as a single unit of accounting. Such amounts are recognized as revenue when the last deliverable of the combined units is delivered. Recurring revenue generated under license or royalty arrangements, including the Pooled Patents Agreement with Illumina, is recognized in the period reported by the partner or licensee and when the revenue recognition criteria have been met. Cost of Revenues Cost of revenues include the cost of materials, direct labor (including laboratory and service personnel), equipment and infrastructure expenses associated with processing blood and other samples, quality control analyses, shipping charges to transport samples, and license and test fees, including those owed to Illumina as specified in the Pooled Patents Agreement. Infrastructure expenses include allocated facility occupancy and information technology costs. Costs associated with performing testing services are recorded as tests are processed. Costs recorded for sample processing and shipping charges represent the cost of all the tests processed during the period regardless of whether revenue is recognized with respect to that test. Royalties for licensed technology calculated on a per test basis or as a percentage of product revenue and fixed annual payments relating to the launch and commercialization of LDTs are recorded as license fees in cost of revenues at the time product revenue is recognized or in accordance with other contractual obligations. Research and Development Expenses Research and development expenses are comprised of costs incurred to develop technology and carry out clinical studies and include salaries and benefits, reagents and supplies used in research and development laboratory work, infrastructure expenses, including allocated facility occupancy and information technology costs, contract services, and other outside costs. Research and development costs are expensed as incurred. Costs for collaboration and clinical study agreements with collaborators are recorded as research and development expenses. Accruals are recorded for estimated study costs comprised of work performed by collaborators under contract terms. Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized and recognized as expense as the goods are delivered or the related services are performed. Collaboration, Development and Licensing Agreement Expenses The Company has collaborative agreements with life sciences partners that provide rights to develop, produce, and market products using certain know-how, technology and patent rights maintained by these partners. Terms of the various collaboration agreements may require milestone payments upon the achievement of certain product research and development objectives and payment of royalties on future sales, if any, of commercial products resulting from the collaboration. Pooled Patents Agreement On December 2, 2014, the Company entered into the Pooled Patents Agreement with Illumina, pursuant to which the parties pooled their intellectual property directed to noninvasive prenatal testing ("NIPT"). In accordance with the Pooled Patents Agreement, Sequenom, Inc. and the Chinese University of Hong Kong ("CUHK") entered into an agreement (the "CUHK Agreement"), pursuant to which certain license agreements by and between the Company and CUHK were amended and assigned to Illumina for inclusion in the patent pool, subject to the Pooled Patents Agreement. Illumina is responsible for paying all royalties to CUHK under the CUHK license agreements, and granted the Company a sublicense under each agreement to exploit laboratory-developed NIPT tests in accordance with the Pooled Patents Agreement. In connection with entering into the Pooled Patents Agreement, the Company also entered into an Amended and Restated Sale and Supply Agreement with Illumina (the "Supply Agreement"), pursuant to which the Company and its affiliates purchase various products from Illumina for use in NIPT as well as for other clinical and research uses. Concurrently, with the execution of the Pooled Patents Agreement, the Company, Illumina, Sequenom Center for Molecular Medicine, LLC ("SCMM" a subsidiary of Sequenom Inc.), and Verinata Health, Inc., (“Verinata ” a subsidiary of Illumina) entered into a Settlement Agreement (the "Settlement Agreement"), pursuant to which the parties settled certain claims and released the other parties from potential liability. The Company determined that the Pooled Patents Agreement, the Settlement Agreement, the Supply Agreement and the CUHK Agreement were all part of a single transaction with multiple elements as the various agreements were contemporaneously negotiated, contingent upon one another and negotiated with the same counterparties. As the agreements were considered to be part of one transaction with multiple elements, the Company followed the accounting guidance in ASC 605-25 to determine the separate units of account and the basis for allocating the consideration received. The Company evaluated all elements of the agreements and identified the following deliverables that had value; (1) the physical samples and applicable study protocols, (2) transfer of in vitro diagnostic, or IVD, technology (3) settlement of claims and disputes between the Company and Illumina and (4) the $6.15 million upfront payment made to CUHK. The Company allocated consideration to the physical samples and transfer of IVD technology based on its best estimate of selling price for each of the deliverables, which were derived from the Company's models as well as through the use of a third-party valuation expert. The physical samples and applicable study protocols were valued using the cost to recreate method, a form of the cost approach. The key inputs and assumptions used in this model included historical clinical study cost for gathering each sample plus a premium applied to the historical costs. The IVD technology was valued using the differential cash flow method, a form of the income approach. The key inputs and assumptions used in this model included forecasted IVD revenues and estimated royalties rates. The Company determined the value to be allocated to the settlement of claims and disputes based on the residual value method due to the complex nature of the litigation and the inability to make a reliable estimate of value for this component. Consideration allocated to each element was $21.0 million for each of (i) the physical samples and (ii) the transfer of IVD technology, and $1.85 million for the settlement of claims and disputes. The $6.15 million payment made by the Company to CUHK was reflected as a reduction of the proceeds received from Illumina as this was primarily for the amendment of certain license agreements by and between the Company and CUHK, and the assignment of those agreements to Illumina for inclusion in the patent pool, and resulted in net consideration to be allocated by the Company of $43.85 million . At December 31, 2014 , the Company had recorded a $21.0 million deferred gain on the Pooled Patents Agreement, which was recognized as a gain during the year ended December 31, 2015 following delivery and acceptance of the study related documents associated with the physical samples provided to Illumina. Concentration of Risks Financial instruments, which potentially are a concentration of credit risk, consist primarily of cash equivalents, marketable securities, and accounts receivable. The exposure to credit loss is limited by placing cash, cash equivalents and marketable securities with US financial institutions. Additionally, the Company has established guidelines regarding diversification of investments and their maturities, which are designed to maintain principal and maximize liquidity. Credit risk with respect to accounts receivable is limited due to the Company's large and diverse customer base. The Company considers ordering physicians and client laboratories to be its customers, and no single customer accounted for over 10% of total revenue. However, hundreds of third-party payors have reimbursed the Company for one or more of our tests. At a third-party payor level, no single payor represented more than 10% of total revenue during the year ended December 31, 2015. One third-party payor represented more than 10% of total revenue during the year ended December 31, 2014, accounting for $17.4 million , or 11% , of total revenue. In 2013, two third-party payors represented $25.0 million and $12.6 million or 21% and 11% of revenue, respectively. The Company requires raw materials and devices of appropriate quality and reliability and to meet applicable regulatory requirements that currently are available from a limited number of sources and in certain cases a single source of supply. Consequently, in the event that supplies are delayed or interrupted for any reason, it could impair the Company's ability to develop and produce services, which could have a material adverse effect on the Company's business, financial condition and results of operations. Fair Value Measurements Financial instruments consist principally of cash, cash equivalents, short-term marketable securities, accounts receivable, accounts payable, accrued expenses, long term debt and the Company's 5.00% Convertible Senior Notes due 2017 and 2018, or the Convertible Senior Notes. The carrying amounts of financial instruments such as cash equivalents, accounts receivable, accounts payable and accrued expenses approximate the related fair values due to the short-term maturities of these instruments. Marketable securities consist of available-for-sale securities that are reported at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1-Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2-Includes other inputs that are directly or indirectly observable in the marketplace. Level 3-Unobservable inputs that are supported by little or no market activities, therefore requiring an entity to develop its own assumptions. The Company determines the value of cash equivalents and marketable securities using quoted market prices or alternative pricing sources and models utilizing observable market inputs and, as such, classifies cash equivalents and marketable securities within Level 1 or Level 2. Cash, Cash Equivalents, and Marketable Securities Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less at the time of purchase. Investments with an original maturity of more than three months at the time of purchase are considered marketable securities. All marketable securities have been classified by management as available-for-sale. The available-for-sale securities are carried at fair value, with unrealized gains and losses, determined on a specific identification basis, reported as a component of other comprehensive income (loss) in stockholders' deficit until realized. A decline in the market value of any marketable security below cost that is determined to be other-than-temporary will result in a revaluation of its carrying amount to fair value. The impairment would be included in other income or expense in the consolidated statements of operations and a new cost basis for the security would be established. There were no such declines in market value of any marketable security in the periods presented. Accounts Receivable Diagnostic services revenue is recorded on an accrual basis for payors and tests that meet the revenue recognition criteria for accrual basis and for client bill arrangements, which are primarily labs and international customers, upon delivery of test results to ordering physicians where an agreement exists and for which collectability is reasonably assured. The Company considers receivables past due based on payment terms and reserves specific receivables if collectability is no longer reasonably assured. The Company evaluates such reserves on a regular basis and adjusts its reserves as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the reserve. Inventories Inventories are valued at the lower of cost (first-in, first-out) or market value (net realizable value). Provisions for slow moving, excess and obsolete inventories are estimated based on future demands and product life cycles, including expiration. Property, Equipment and Leasehold Improvements Property consists of a leased building that did not meet the sale-leaseback criteria upon completion of the construction of the building and is recorded at its fair value at the date of the lease, less depreciation. The building is being depreciated over a period of 15 years equal to the term of the related lease and extensions. Equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally 3 to 5 years). Leasehold improvements are stated at cost and amortized using the straight-line method over the estimated useful life of the improvement or the remaining term of the lease, whichever is shorter. The maximum estimated useful life of any leasehold improvement is generally 15 years from the completion of the improvement. Maintenance and repairs are charged to operations as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expense. Financing Lease For accounting purposes only, the Company is deemed to be the owner of the leased building in Raleigh-Durham, North Carolina, laboratory site as the terms of that facility lease agreement required extensive involvement in the construction of the building. Accordingly, assets were recorded representing the fair value of the building based on the assessed value and the total costs of the improvements, including the costs paid by the lessor (the legal owner of the building), with an associated long-term obligation. Upon completion of construction of the building, the sale-leaseback criteria was not met for de-recognition of the building assets and obligation. Therefore, the lease is accounted for as a long-term financing obligation. The Company reports rent expense only on the land portion of the property but not for the building which is owned by the Company for accounting purposes. Rather, building rental payments under the lease are recognized as a reduction of the financing obligation and interest expense. Operating Leases The Company leases office, laboratory and research and development facilities, and equipment under various non-cancellable operating lease agreements. Facility leases generally provide for periodic rent increases, and many contain escalation clauses and renewal options. Certain leases require the Company to pay property taxes and routine maintenance. Facility leases have terms that expire at various dates through September 2025. In cases where the lessor grants leasehold improvement allowances and the Company is deemed the accounting owner, rent expense is reduced by the allowances paid as those amounts are capitalized as improvements which are recognized as deferred rent that is amortized over the shorter of the lease term or the expected useful life of the improvements. During the years ended December 31, 2015, 2014 and 2013, no leasehold improvements were capitalized by the Company. Rent expense for operating leases is recognized on a straight-line basis. Rent expense of $3.5 million , $5.2 million , and $5.8 million was recognized for all operating leases during the years ended December 31, 2015, 2014 and 2013, respectively. Current and noncurrent deferred rent totaled $0.0 and $0.4 million , respectively, at December 31, 2015, and $1.2 million and $0.1 million , respectively, at December 31, 2014. Intangible Assets Intangible assets that have finite useful lives consist of purchased patent rights and licenses. These intangible assets are being amortized over the expected economic use of the assets. Net Income (Loss) Per Share Basic and diluted net (income) loss per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Common stock equivalents that could potentially reduce net earnings per common share in the future that were not included in the determination of diluted net income (loss) per common share as their effects were antidilutive are as follows (in thousands): Years Ended December 31, 2015 2014 2013 Shares underlying Convertible Senior Notes 28,088 28,088 28,088 Options to purchase common stock 14,435 13,266 13,961 Restricted stock units not yet vested and released 3,870 2,038 1,654 Restricted stock awards issued, but unvested — 34 17 Warrants to purchase common stock 200 250 250 Total 46,593 43,676 43,970 Goodwill The Company accounts for intangible assets in accordance with ASC No. 350, Intangibles-Goodwill and Other (“ASC 350”). The Company reviews goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. The Company operates as a single reporting unit and considers the Company as a whole when reviewing impairment factors. As the Company has a negative book value, the Company performs a qualitative and quantitative analysis to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. Some of the impairment indicators the Company considers include significant differences between the carrying amount and the estimated fair value of our assets and liabilities; macroeconomic conditions such as a deterioration in general economic condition or limitations on accessing capital; industry and market considerations such as a deterioration in the environment in which the Company operates and an increased competitive environment; cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows; overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; other relevant events such as litigation, changes in management, key personnel, strategy or customers; the testing for recoverability of our long-lived assets and a sustained decrease in share price. The Company evaluates the significance of identified events and circumstances on the basis of the weight of evidence along with how they could affect the relationship between the reporting unit's fair value and carrying amount, including positive mitigating events and circumstances. If the Company determines it is more likely than not that the fair value of goodwill is less than its carrying amount, then a second step is performed to quantify the amount of goodwill impairment, if any. If an impairment is indicated, a goodwill impairment charge is recorded to write the goodwill down to its implied fair value. During the third quarter of 2015, the Company determined certain indicators of potential impairment were present. Based on this assessment, the Company performed a qualitative and quantitative step one analysis for goodwill impairment. As a result of its analysis, the Company considered the indicators noted above and a comparison of carrying amounts to estimated fair values of the Company’s assets and liabilities. The Company determined it did not meet the more likely than not criteria that the fair value of goodwill was less than its carrying amount, primarily as the fair value of its reporting unit substantially exceeded its carrying value. Therefore, step two of the goodwill impairment test was not required. Valuation of Long-Lived and Intangible Assets The Company periodically re-evaluates the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of long-lived assets and finite-lived intangible assets. Long-lived assets and finite-lived intangibles are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an asset is considered to be impaired, the impairment recognized is equal to the amount by which the carrying value of the asset exceeds its fair value. Share-Based Compensation The Company measures and recognizes compensation expense for all share-based payments made to employees, directors, and consultants based on estimated fair value, net of estimated forfeitures. These share-based awards include stock options, restricted stock and restricted stock units, and stock purchase rights under the Company's employee stock purchase plan. The fair value of stock options granted and stock purchase rights is estimated using the Black-Scholes-Merton ("BSM") option-pricing model and for market-based grants the Monte Carlo simulation model is used. These models require the use of estimates such as stock price volatility and expected option lives, as well as expected option forfeiture rates, to value employee share-based compensation at the date of grant or modification. The fair value of restricted stock awards and restricted stock units is based on the market price of the Company's common stock on the date of grant. Share-based compensation cost is recognized on a straight-line basis over the requisite service period of the award or, in the case of market-based awards, on an accelerated basis, over the greater of the vesting period or derived service period. Share-based compensation expense is recognized only for those awards that are ultimately expected to vest for awards with only a service condition. For stock option modifications, the Company compares the fair value of the original award immediately before and after the modification. For Type I modifications, or probable-to-probable vesting conditions, the incremental fair value of fully vested awards is recognized as expense on the date of the modification, with the incremental fair value of unvested awards recognized ratably over the new service period. Forfeitures are estimated at the time of grant and revised if necessary, in subsequent periods, if actual forfeitures differ from those estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs. Due to a net loss carryforward position, no tax benefits for share-based compensation have been recognized in the consolidated statements of cash flows. The Company has not recognized, and does not expect to recognize in the near future, any tax benefit related to share-based compensation cost as a result of the full valuation allowance of the Company's net deferred tax assets and net operating loss carryforwards. The fair value of options granted to non-employees is estimated at the measurement date using the BSM pricing model and remeasured at each reporting date to fair value, with changes in fair value recognized as expense in the statement of operations and comprehensive income (loss). Restructuring Costs In May 2015, the Company decommissioned one of its research and development laboratories as part of the Company's plan to move certain general and administrative functions into the Company's corporate headquarters facility. As part of the decommissioning of the laboratory the Company recognized an impairment charge of $0.4 million on certain laboratory assets which it deemed would no longer be used. Additionally, in May 2015, the Company committed to a plan to consolidate its Grand Rapids facility. In connection with the plan the Company recognized $0.3 million in employee termination costs during the year ended December 31, 2015. The fair value measurement of restructuring related liabilities requires certain assumptions and estimates to be made by the Company, such as the retention period of certain employees, the timing and amount of sublease income on the property, and the operating costs to be paid until lease termination. The Company’s policy is to use its best estimates based on facts and circumstances available at the time of measurement, review the assumptions and estimates periodically, and adju |
