Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | DXCM | |
Entity Registrant Name | DEXCOM INC | |
Entity Central Index Key | 1,093,557 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 80,081,542 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 67.7 | $ 71.8 |
Short-term marketable securities, available-for-sale | 29.8 | 11.8 |
Accounts receivable, net | 45.5 | 42.4 |
Inventory | 22.4 | 16 |
Prepaid and other current assets | 5 | 3.9 |
Total current assets | 170.4 | 145.9 |
Restricted cash | 0.7 | 1 |
Property and equipment, net | 40.6 | 31.2 |
Intangible assets, net | 2.5 | 2.7 |
Goodwill | 3.7 | 3.2 |
Other assets | 0.5 | 0.6 |
Total assets | 218.4 | 184.6 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 24 | 20.4 |
Accrued payroll and related expenses | 17 | 17.2 |
Current portion of long-term debt | 2.4 | 2.3 |
Current portion of deferred revenue | 0.8 | 0.7 |
Total current liabilities | 44.2 | 40.6 |
Other liabilities | 2.4 | 1.5 |
Long-term debt, net of current portion | 1.1 | 2.3 |
Total liabilities | $ 47.7 | $ 44.4 |
Commitments and contingencies (Note 4) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 5.0 shares authorized; no shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | $ 0 | $ 0 |
Common stock, $0.001 par value, 100.0 authorized; 80.3 and 80.0 issued and outstanding, respectively, at June 30, 2015; and 77.6 and 77.3 shares issued and outstanding, respectively, at December 31, 2014 | 0.1 | 0.1 |
Additional paid-in capital | 685.3 | 638 |
Accumulated other comprehensive loss | (0.3) | (0.1) |
Accumulated deficit | (514.4) | (497.8) |
Total stockholders’ equity | 170.7 | 140.2 |
Total liabilities and stockholders’ equity | $ 218.4 | $ 184.6 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 80,300,000 | 77,600,000 |
Common stock, shares outstanding (in shares) | 80,000,000 | 77,300,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Product revenue | $ 92.9 | $ 58.2 | $ 165.7 | $ 104.9 |
Development grant and other revenue | 0.3 | 0.6 | 0.3 | 1 |
Total revenue | 93.2 | 58.8 | 166 | 105.9 |
Product cost of sales | 27.2 | 18.7 | 53.5 | 35.6 |
Development and other cost of sales | 0 | 0.2 | 0 | 0.6 |
Total cost of sales | 27.2 | 18.9 | 53.5 | 36.2 |
Gross profit | 66 | 39.9 | 112.5 | 69.7 |
Operating expenses | ||||
Research and development | 24.4 | 14.8 | 44.2 | 29.3 |
Selling, general and administrative | 45.2 | 30.9 | 84.6 | 58.5 |
Total operating expenses | 69.6 | 45.7 | 128.8 | 87.8 |
Operating loss | (3.6) | (5.8) | (16.3) | (18.1) |
Interest expense | (0.1) | (0.2) | (0.3) | (0.4) |
Net loss | $ (3.7) | $ (6) | $ (16.6) | $ (18.5) |
Basic net loss per share | $ (0.05) | $ (0.08) | $ (0.21) | $ (0.25) |
Shares used to compute basic net loss per share | 79.6 | 75 | 78.7 | 74.2 |
Diluted net loss per share | $ (0.05) | $ (0.09) | $ (0.21) | $ (0.25) |
Shares used to compute diluted net loss per share | 79.6 | 75.3 | 78.7 | 74.2 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net loss | $ (3,700) | $ (6,000) | $ (16,600) | $ (18,500) |
Unrealized gain (loss) on short-term available-for-sale marketable securities | 0 | 0 | 0 | 0 |
Foreign currency translation loss | 0 | 0 | (200) | 0 |
Comprehensive loss | $ (3,700) | $ (6,000) | $ (16,800) | $ (18,500) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities | ||
Net loss | $ (16.6) | $ (18.5) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 5 | 3.8 |
Share-based compensation | 36.6 | 21.9 |
Accretion and amortization related to marketable securities, net | 0.2 | 0.1 |
Amortization of debt issuance costs | 0.1 | 0.2 |
Change in fair value of contingent consideration | 0 | 0.2 |
Loss on disposal of equipment | 0.2 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (3.1) | (2.5) |
Inventory | (6.4) | (2.6) |
Prepaid and other assets | (1) | (0.6) |
Restricted cash | 0.3 | 0 |
Accounts payable and accrued liabilities | 3.7 | 4.4 |
Accrued payroll and related expenses | (0.2) | (2) |
Deferred revenue | 0.1 | (0.4) |
Deferred rent and other liabilities | 0.9 | (0.2) |
Net cash provided by operating activities | 19.8 | 3.8 |
Investing activities | ||
Purchase of available-for-sale marketable securities | (27.5) | (6.4) |
Proceeds from the maturity of available-for-sale marketable securities | 9.2 | 6 |
Purchase of property and equipment | (14.3) | (7.9) |
Acquisitions, net of cash acquired | (0.5) | 0 |
Net cash used in investing activities | (33.1) | (8.3) |
Financing activities | ||
Net proceeds from issuance of common stock | 10.4 | 11.9 |
Repayment of long-term debt | (1.2) | (1.1) |
Net cash provided by financing activities | 9.2 | 10.8 |
Increase (decrease) in cash and cash equivalents | (4.1) | 6.3 |
Cash and cash equivalents, beginning of period | 71.8 | 43.2 |
Cash and cash equivalents, end of period | $ 67.7 | $ 49.5 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization and Business DexCom, Inc. is a medical device company focused on the design, development and commercialization of continuous glucose monitoring (“CGM”) systems for ambulatory use by people with diabetes and by healthcare providers in the hospital for the treatment of people with and without diabetes. Unless the context requires otherwise, the terms “we,” “us,” “our,” the “company,” or “DexCom” refer to DexCom, Inc. and its subsidiaries. Basis of Presentation We have incurred operating losses since our inception and have an accumulated deficit of $514.4 million at June 30, 2015 . As of June 30, 2015 , we had available cash, cash equivalents and marketable securities totaling $97.5 million , excluding $0.7 million of restricted cash, and working capital of $126.2 million . Our ability to transition to, and maintain, profitable operations is dependent upon achieving a level of revenues adequate to support our cost structure. If events or circumstances occur such that we do not meet our operating plan as expected, we may be required to reduce planned increases in compensation expenses and other operating expenses needed to support the growth of our business which could have an adverse impact on our ability to achieve our intended business objectives. We believe our working capital resources will be sufficient to fund our operations through at least June 30, 2016 . We have prepared the accompanying unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation (except for the changes in estimates described below), have been included. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 . These unaudited consolidated financial statements should be read in conjunction with the audited financial statements and related notes thereto for the year ended December 31, 2014 included in the Annual Report on Form 10-K filed by us with the Securities and Exchange Commission on February 25, 2015. Principles of Consolidation The consolidated financial statements include the accounts of DexCom and our wholly owned subsidiaries, DexCom AB and SweetSpot Diabetes Care, Inc. (“SweetSpot”) . All significant intercompany balances and transactions have been eliminated in consolidation. Segment Reporting An operating segment is identified as a component of a business that has discrete financial information available, and one for which the chief operating decision maker must decide the level of resource allocation. In addition, the guidance for segment reporting indicates certain quantitative thresholds. The operations of SweetSpot , our subsidiary, does not meet the definition of an operating segment and are currently not material, but may become material in the future. We currently consider our operations to be, and manage our business globally within, one reportable segment, which is consistent with how our management reviews our business, makes investment and resource allocation decisions and assesses operating performance. We sell our products through a direct sales force in the United States and through distribution arrangements in the United States, Canada, Australia, New Zealand, and in portions of Europe, Asia, the Middle East, Latin America and Africa. DexCom, Inc. is domiciled in the United States. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Significant estimates include excess or obsolete inventories, valuation of inventory, warranty accruals, employee bonus, clinical trial expenses, allowance for bad debt, and share-based compensation expense. Share-Based Compensation Share-based compensation expense is measured at the grant date based on the estimated fair value of the award and is recognized, for awards that are ultimately expected to vest, primarily on a straight-line basis over the requisite service period of the individual grants, which typically equals the vesting period. Share-based payments that contain performance conditions are recognized when such conditions are probable of being achieved. The fair value of our Restricted Stock Units (“RSUs”) is based on the market price of our common stock on the date of grant. We estimate the fair value of stock options granted and stock purchase rights under our Employee Stock Purchase Plan (“ESPP”) using the Black-Scholes-Merton ("BSM") option-pricing model. Inherent in this model are assumptions related to our expected stock price volatility over the expected term of the awards, risk-free interest rate and any expected dividends. We determine our expected stock price volatility based on our historical stock price volatility over the most recent period equivalent to the expected life of the award. We determine the expected life of an award by considering various relevant factors, including the vesting period and contractual term of the award, our employees’ historical exercise patterns and length of service and employee characteristics. For stock purchase rights under our ESPP , the expected life is equal to the current offering period. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of our employee stock options and stock purchase plan. As we have not paid any cash dividends since our inception and do not anticipate paying dividends in the foreseeable future, we assume a dividend yield of zero. We are also required to estimate at grant the likelihood that the award will ultimately vest (the “pre-vesting forfeiture rate”), and to revise the estimate, if necessary, in future periods if the actual forfeiture rate differs. We determine the pre-vesting forfeiture rate of an award based on our historical pre-vesting award forfeiture experience, giving consideration to company-specific events impacting historical pre-vesting award forfeiture experience that are unlikely to occur in the future as well as anticipated future events that may impact forfeiture rates. We use our historical data to estimate pre-vesting forfeitures and record stock-based compensation expense only for those awards that are expected to vest. We recorded $20.7 million and $36.6 million in share-based compensation expense during the three and six months ended June 30, 2015 , respectively, compared to $13.2 million and $21.9 million during the three and six months ended June 30, 2014 respectively. At June 30, 2015 , unrecognized estimated compensation costs related to unvested stock options and restricted stock units totaled $177.5 million and is expected to be recognized through 2019. Revenue Recognition We sell our durable systems and disposable units through a direct sales force in the United States and through distribution arrangements in the United States, Canada, Australia, New Zealand, and in portions of Europe, Asia, the Middle East, Latin America and Africa. Components are individually priced and can be purchased separately or together. We receive payment directly from customers who use our products, as well as from distributors, organizations and third-party payors. Our durable system includes a reusable transmitter, a receiver, a power cord and a USB cable. Disposable sensors for use with the durable system are sold separately in packages of four. We provide free of charge software and mobile applications for use with our durable systems and disposable sensors. The initial durable system price is generally not dependent upon the purchase of any amount of disposable sensors. 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. Revenue on product sales is generally recognized upon shipment, which is when title and the risk of loss have been transferred to the customer and there are no other post shipment obligations. With respect to customers who directly pay for products, the products are generally paid for at the time of shipment using a customer’s credit card and do not include customer acceptance provisions. We recognize revenue from contracted insurance payors based on the contracted rate. For non-contracted insurance payors, we obtain prior authorization from the payor and recognize revenue based on the estimated collectible amount and historical experience. We also receive a prescription or statement of medical necessity and, for insurance reimbursement customers, an assignment of benefits prior to shipment. We provide a “ 30 -day money back guarantee” program whereby customers who purchase a durable system and a package of four disposable sensors may return the durable system for any reason within thirty days of purchase and receive a full refund of the purchase price of the durable system. We accrue for estimated returns, refunds and rebates, including pharmacy rebates, by reducing revenues and establishing a liability account at the time of shipment based on historical experience. Returns have historically been immaterial. We have entered into distribution agreements with Byram Healthcare and its subsidiaries ("Byram") , RGH Enterprises, Inc. (“Edgepark”) and other distributors that allow the distributors to sell our durable systems and disposable units. We have contracts with certain distributors who stock our products, and we refer to these distributors as Stocking Distributors , whereby the Stocking Distributors fulfill orders for our product from their inventory. We also have contracts with certain distributors that do not stock our products, but rather products are shipped directly to the customer by us on behalf of our distributor, and we refer to these distributors as Drop-Ship Distributors . Revenue is recognized based on contracted prices and invoices are either paid by check following the issuance of a purchase order or letter of credit, or they are paid by wire at the time of placing the order. Terms of distributor orders are generally Freight on Board (“FOB”) shipping point (or Free Carrier (“FCA”) shipping point for international orders). Distributors do not have rights of return per their distribution agreement outside of our standard warranty. The distributors typically have a limited time frame to notify us of any missing, damaged, defective or non-conforming products. For any such products, we shall either, at our option, replace the portion of defective or non-conforming product at no additional cost to the distributor or cancel the order and refund any portion of the price paid to us at that time for the sale in question. We have had collaborative license and development arrangements with strategic partners for the development and commercialization of products utilizing our technologies. The terms of these agreements typically include the license of certain intellectual property rights and the provision of multiple deliverables by us (for example, research and development services, product prototypes and products for use in clinical trials) in exchange for consideration to us of some combination of non-refundable license fees, funding of research and development activities, payments based upon achievement of development milestones and royalties in the form of a designated percentage of product sales or profits. With the exception of royalties, these types of consideration are classified as development grant and other revenue in our consolidated statements of operations and are generally recognized over the service period except for substantive milestone payments, which are generally recognized when the milestone is achieved. In determining whether each milestone is substantive, we considered whether the consideration earned by achieving the milestone should (i) be commensurate with either (a) our performance to achieve the milestone or (b) the enhancement of value of the item delivered as a result of a specific outcome resulting from our performance to achieve the milestone, (ii) relate solely to past performance and (iii) be reasonable relative to all deliverables and payment terms in the arrangement. We recognize royalties in the period in which we obtain the royalty report, which is necessary to determine the amount of royalties we are entitled to receive. Non-refundable license fees are recognized as revenue when we have a contractual right to receive such payment, the contract price is fixed or determinable, the collection of the resulting receivable is reasonably assured and we have no further performance obligations under the license agreement. Multiple element arrangements, such as license, development and other multiple element service arrangements are analyzed to determine how the arrangement consideration should be allocated among the separate units of accounting, or whether they must be accounted for as a single unit of accounting. For transactions containing multiple element arrangements, we consider deliverables as separate units of accounting and recognize deliverables as revenue upon delivery only if (i) the deliverable has standalone value and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is probable and substantially controlled by us. We allocate consideration to the separate units of accounting using the relative selling price method, in which allocation of consideration is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence (“TPE”), or if VSOE and TPE are not available, management’s best estimate of a standalone selling price for elements. We use judgment in estimating the value allocable to the deliverables in a transaction based on our estimate of the fair value or relative selling price attributable to the related deliverables and the consideration from such transactions is typically recognized as product revenue or development grant and other revenue. For arrangements that are accounted for as a single unit of accounting, total payments under the arrangement are recognized as revenue on a straight-line basis over the period we expect to complete our performance obligations. We review the estimated period of our performance obligations on a periodic basis and update the recognition period as appropriate. The cumulative amount of revenue earned is limited to the cumulative amount of payments we are entitled to as of the period ending date. If we cannot reasonably estimate when our performance obligation either ceases or becomes inconsequential, then revenue is deferred until we can reasonably estimate when the performance obligation ceases or becomes inconsequential. Revenue is then recognized over the remaining estimated period of performance. Deferred revenue amounts are classified as current liabilities to the extent that revenue is expected to be recognized within one year. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which we are expected to complete our performance obligations under an arrangement. Warranty Accrual Estimated warranty costs associated with a product are recorded at the time of shipment. We estimate future warranty costs by analyzing historical warranty experience for the timing and amount of returned product, and these estimates are evaluated on at least a quarterly basis to determine the continued appropriateness of such assumptions. Foreign Currency The financial statements of our non-U.S. subsidiary, whose functional currency is the Swedish Krona, are translated into U.S. dollars for financial reporting purposes. Assets and liabilities are translated at period-end exchange rates, and revenue and expense transactions are translated at average exchange rates for the period. Cumulative translation adjustments are recognized as part of comprehensive income and are included in accumulated other comprehensive loss in the consolidated balance sheet. Gains and losses on transactions denominated in other than the functional currency are reflected in operations. To date the results of operations of this subsidiary and related translation adjustments have not been material in our consolidated results. Comprehensive Loss We report all components of comprehensive loss, including net loss, in the consolidated financial statements in the period in which they are recognized. Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and comprehensive loss, including unrealized gains and losses on marketable securities and foreign currency translation adjustments, are reported, net of their related tax effect, to arrive at comprehensive loss. Inventory Inventory is valued at the lower of cost or market value on a part-by-part basis that approximates first in, first out. We make adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolete and potential scrapped inventories. Factors influencing these adjustments include inventories on hand and on order compared to estimated future usage and sales for existing and new products, as well as judgments regarding quality control testing data, and assumptions about the likelihood of scrap and obsolescence. Once written down the adjustments are considered permanent and are not reversed until the related inventory is sold or disposed. We recorded charges of approximately $2.0 million in cost of goods sold for the six months ended June 30, 2015 related to excess and obsolete inventory due to the approval and launch of our DexCom G4 PLATINUM with Share System. Our products require customized products and components that currently are available from a limited number of sources. We purchase certain components and materials from single sources due to quality considerations, costs or constraints resulting from regulatory requirements. Marketable Securities We have classified our marketable securities with remaining maturity at purchase of more than three months and remaining maturities of one year or less as short-term available-for-sale marketable securities. Marketable securities with remaining maturities of greater than one year are also classified as short-term available-for-sale marketable securities as such marketable securities represent the investment of cash that is available for current operations. We carry our marketable securities at fair value with unrealized gains and losses, if any, reported as a separate component of stockholders' equity and included in comprehensive loss. Realized gains and losses are calculated using the specific identification method and recorded as interest income. We invest in various types of securities, including debt securities in government-sponsored entities, corporate debt securities, U.S. Treasury securities and commercial paper. We do not generally intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. Fair Value Measurements The fair value hierarchy described by the authoritative guidance for fair value measurements is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value and include the following: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We carry our marketable securities at fair value. The carrying amounts of financial instruments, such as cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, are carried at cost, which approximate the related fair values due to the short-term maturities of these instruments. For additional detail see Note 6 “Fair Value Measurements.” Property and Equipment Property and equipment is stated at cost and depreciated over the estimated useful lives of the assets, generally three years for computer equipment, four years for machinery and equipment, and five years for furniture and fixtures, using the straight-line method. Leasehold improvements are stated at cost and amortized over the shorter of the estimated useful lives of the assets or the remaining lease term. Goodwill and Intangible Assets Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired. The change in the carrying value of goodwill during the three and six months ended June 30, 2015 resulted from an acquisition of a small privately held engineering consulting company with 10 full time employees to complement our research and development activities, which closed in April 2015. Our identifiable intangible assets are comprised of acquired core technologies, customer relationships, covenants not-to-compete, in-process research and development and trade names. The cost of identifiable intangible assets with finite lives is generally amortized on a straight-line basis over the assets’ respective estimated useful lives. We test goodwill and intangible assets with indefinite lives for impairment on an annual basis. Also, between annual tests we test for impairment if events and circumstances indicate it is more likely than not that the fair value is less than the carrying value. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, including a decline in market capitalization, a significant adverse change in legal factors, business climate or operational performance of the business and an adverse action or assessment by a regulator. Recent Accounting Guidance In May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance for Revenue from Contracts with Customers, to supersede nearly all existing revenue recognition guidance under U.S. GAAP . The core principle of the guidance is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The guidance defines a five step process to achieve this core principle and it is possible when the five step process is applied, more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The updated standard permits the use of either the retrospective or cumulative effect transition method and is effective for us in our first quarter of fiscal 2018. Early adoption is not permitted. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. |
Financial Statement Details
Financial Statement Details | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Financial Statement Details [Abstract] | |
Financial Statement Details | 3. Financial Statement Details (in millions) Short- Term Marketable Securities, Available-for-Sale Short-term Marketable securities, consisting solely of debt securities, were as follows: June 30, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value U.S. government agencies $ 22.8 $ — $ — $ 22.8 Corporate debt 4.6 — — 4.6 Commercial paper 2.4 — — 2.4 Total $ 29.8 $ — $ — $ 29.8 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value U.S. government agencies $ 9.1 $ — $ — $ 9.1 Corporate debt 2.3 — — 2.3 Commercial paper 0.4 — — 0.4 Total $ 11.8 $ — $ — $ 11.8 Inventory June 30, 2015 December 31, 2014 Raw materials $ 9.1 $ 7.6 Work-in-process 0.7 1.0 Finished goods 12.6 7.4 Total $ 22.4 $ 16.0 Accounts Payable and Accrued Liabilities June 30, 2015 December 31, 2014 Accounts payable trade $ 11.7 $ 9.9 Accrued tax, audit, and legal fees 1.8 1.6 Clinical trials 0.3 0.4 Accrued other including warranty 10.2 8.5 Total $ 24.0 $ 20.4 Accrued Warranty Warranty costs are reflected in the consolidated statements of operations as product cost of sales. A reconciliation of our accrued warranty costs for the three and six months ended June 30, 2015 and 2014 were as follows: Three Months Ended Six Months Ended 2015 2014 2015 2014 Beginning balance $ 1.1 $ 0.8 $ 1.3 $ 0.9 Charges to costs and expenses 1.8 1.2 3.0 2.2 Costs incurred (1.7 ) (1.1 ) (3.1 ) (2.2 ) Ending balance $ 1.2 $ 0.9 $ 1.2 $ 0.9 |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, outstanding options and unvested RSUs settleable in shares of common stock are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following table sets forth the computation of basic and diluted net loss per share (in millions, except per share data): Three Months Ended Six Months Ended 2015 2014 2015 2014 Numerator for basic and diluted net loss per share: Net loss for basic $ (3.7 ) $ (6.0 ) $ (16.6 ) $ (18.5 ) Impact of income related to mark-to-market on contingent consideration obligation settleable in shares — (1.0 ) — — Net loss for diluted $ (3.7 ) $ (7.0 ) $ (16.6 ) $ (18.5 ) Denominator for basic and diluted net loss per share: Weighted average common shares outstanding for basic 79.6 75.0 78.7 74.2 Dilutive potential common stock outstanding: Contingently issuable shares related to contingent consideration obligation settleable in shares — 0.3 — — Weighted average common shares outstanding for diluted 79.6 75.3 78.7 74.2 Basic net loss per share $ (0.05 ) $ (0.08 ) $ (0.21 ) $ (0.25 ) Diluted net loss per share $ (0.05 ) $ (0.09 ) $ (0.21 ) $ (0.25 ) Historical outstanding anti-dilutive securities not included in diluted net loss per share attributable to common stockholders calculation (in millions): Three Months Ended Six Months Ended 2015 2014 2015 2014 Options outstanding to purchase common stock 2.1 4.5 2.1 4.5 Unvested restricted stock units 4.4 4.6 4.4 4.6 Total 6.5 9.1 6.5 9.1 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Long-Term Debt In November 2012, we entered into a loan and security agreement (the “Loan Agreement”) that provides for (i) a $15.0 million revolving line of credit and (ii) a total term loan of up to $20.0 million (the "Term Loan"), in both cases, to be used for general corporate purposes. The borrowings under the Loan Agreement are collateralized by a first priority security interest in substantially all of our assets with a negative pledge on our intellectual property. The revolving line of credit is an interest-only financing that bears an interest rate equal to the prime rate plus 0.5% and requires repayment of principal at the maturity date of November 2015. Under the revolving line of credit, available funds, which were up to $15.0 million as of June 30, 2015 can be drawn at any time, and repaid funds can be redrawn. No amounts have been drawn against the revolving line of credit. Per the Loan Agreement , $7.0 million was advanced under the Term Loan at the funding date in November 2012 and up to $13.0 million in additional funds was available upon our request until September 30, 2013 (the "Draw Period"). In August 2013, the Loan Agreement was amended to change the Draw Period for the additional funds under the Term Loan to January 1, 2014 through March 31, 2014. We did not borrow any additional funds and the Draw Period expired unused. The Term Loan bears a fixed interest rate equal to the three-year treasury rate at the time of advance plus 6.94% and requires payment of interest only for the first year and amortized payments of interest and principal thereafter through the maturity date of November 2016 . The aggregate debt issuance costs and fees incurred with respect to the issuance of the Loan Agreement were $1.1 million . These costs have been capitalized as debt issuance costs on our consolidated balance sheet as other assets. Fees related to the revolving line of credit are being amortized through the maturity date of November 2015. Issuance costs and fees related to the term loan are being amortized through the maturity date of November 2016 using the effective interest method. As of June 30, 2015 , the remaining unamortized issuance costs and fees totaled $0.1 million . Principal repayment obligations under the Loan Agreement as of June 30, 2015 were as follows (in millions): Fiscal Year Ending Remainder of 2015 $ 1.2 2016 2.3 Total $ 3.5 Leases In April 2006, we entered into an office lease agreement for facilities located in San Diego, California. In August 2010, we entered into a First Amendment to Office Lease (the “First Lease Amendment”) with Kilroy Realty, L.P. (the “Landlord”) with respect to facilities in the buildings at 6340 Sequence Drive and 6310 Sequence Drive, each in San Diego, California, and on October 1, 2014, we entered into a Second Amendment to Office Lease (the “Second Lease Amendment”), which added the building at 6290 Sequence Drive in San Diego, California to our lease and extended the lease term related to the buildings at 6340 Sequence Drive, 6310 Sequence Drive, and 6290 Sequence Drive, each in San Diego, California. Under the Second Lease Amendment, we will continue to lease approximately 129,000 square feet in the current locations at 6340 Sequence Drive and 6310 Sequence Drive, and leased an additional 45,000 square feet at 6290 Sequence Drive, for a total of approximately 174,000 square feet of space. We also retain the right and obligation to lease an additional 45,000 square feet in the 6290 Sequence Drive location (the “Additional Space”), of which we leased approximately 15,000 square feet on April 1, 2015, and have agreed to lease the remaining 30,000 square feet beginning on October 1, 2015. The amended lease term extends through March 2022 and we have an option to renew the lease upon the expiration of the initial term for two additional five -year terms by giving notice to the Landlord prior to the end of the initial term of the lease and any extension period, if applicable. Provided we are not in default under the Second Lease Amendment and the Second Lease Amendment is still in effect, we generally have the right to terminate the lease starting at the 55 th month of the Second Lease Amendment. These facility leases have annual rental increases ranging from approximately 2.5% to 4% . The difference between the straight-line expense over the term of the lease and actual amounts paid are recorded as deferred rent. We have also entered into other operating lease agreements, primarily for office and warehouse space, that expire at various times through September 2017. Rental obligations, excluding real estate taxes, operating costs, and tenant improvement allowances, under all lease agreements as of June 30, 2015 were as follows (in millions): Fiscal Year Ending Remainder of 2015 $ 1.9 2016 4.5 2017 4.1 2018 5.0 2019 5.2 Thereafter 11.8 Total $ 32.5 Total rent expense for the three and six months ended June 30, 2015 was $1.4 million and $2.7 million , respectively, compared to $0.8 million and $1.5 million , respectively, for the same periods of 2014 . Litigation From time to time, we are subject to various claims and suits arising out of the ordinary course of business, including commercial and employment related matters. In addition, from time to time, we may bring claims or initiate lawsuits against various third parties with respect to matters arising out of the ordinary course of our business, including commercial and employment related matters. We do not expect that the resolution of these matters would, or will, have a material adverse effect or material impact on our consolidated financial position. Purchase Commitments We are party to various purchase arrangements related to our manufacturing and development activities including materials used in our CGM systems. As of June 30, 2015 , we had purchase commitments with vendors totaling $30.2 million due within one year. There are no material purchase commitments due beyond one year. |
Development and Other Agreement
Development and Other Agreements | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure Development Agreements Additional Information [Abstract] | |
Development and Other Agreements | Development and Other Agreements Edwards Lifesciences LLC On November 10, 2008, we entered into a Collaboration Agreement with Edwards Lifesciences LLC (“Edwards”) . The Collaboration Agreement was amended by the parties on May 5, 2009 (as amended, the “Collaboration Agreement”). Pursuant to the Collaboration Agreement, the parties agreed to develop jointly and to market an in-hospital automatic blood glucose monitoring system ("In-Hospital Product"). Under the terms of the Collaboration Agreement we will receive a royalty of up to 6% of commercial sales of the product. The Collaboration Agreement provides Edwards with an exclusive license to certain of our intellectual property rights used in the In-Hospital Product (“Edwards License”) . The Edwards License is limited to the critical care sector of the in-hospital market. Our development obligations under the Collaboration Agreement were completed in the fourth quarter of 2012. Each of the milestones related to the Collaboration Agreement is considered to be substantive under the terms of the Collaboration Agreement and, at the outset of the Collaboration Agreement, we were entitled to receive up to $12.0 million in milestones related to regulatory approvals and manufacturing readiness, subject to reductions based on the timing of the receipt of approvals. We currently do not expect to receive the full amount of such milestones due to regulatory and joint development delays. We also currently do not expect to receive any royalty payments from the commercial sales of the In-Hospital Product as Edwards has announced that they currently do not intend to commercialize the product. We did not recognize any consideration for milestones related to the Collaboration Agreement for the six months ended June 30, 2015 and 2014 . Tandem Diabetes Care, Inc. On February 1, 2012, we entered into a non-exclusive Development and Commercialization Agreement (the “Tandem Agreement”) with Tandem Diabetes Care, Inc. (“Tandem”) to integrate a future generation of our continuous glucose monitoring technology with Tandem ’s t:slim ™ insulin delivery system in the United States. On January 4, 2013, the Tandem Agreement was amended to allow for the integration of our G4 PLATINUM system with Tandem 's t:slim insulin delivery system in the United States. We received an initial payment of $1.0 million as a result of the execution of the Tandem Agreement , which was fully recognized in development grant and other revenue as of December 31, 2014. We recorded $0.1 million and $0.2 million during the three and six months ended June 30, 2014 , respectively, in development grant and other revenue related to this initial consideration received. In July 2014, we received an additional $1.0 million milestone payment related to the regulatory submission by Tandem of their CGM enabled insulin pump, which was recognized during 2014 in development grant and other revenue. Under the terms of the Tandem Agreement , we are entitled to receive up to $1.0 million to offset certain development, clinical and regulatory expenses. We are also entitled to receive up to an additional $1.0 million upon the achievement of a milestone related to regulatory approvals as set forth in the Tandem Agreement . Each of the milestones related to the Tandem Agreement is considered to be substantive. The Leona M. and Harry B Helmsley Charitable Trust In July 2013, we were awarded a $4.0 million grant (the "Helmsley Grant") from the Leona M. and Harry B. Helmsley Charitable Trust (the "Helmsley Trust") to accelerate the development of the sixth generation of our advanced glucose-sensing technologies (the " Gen 6 Sensor "). The funding is milestone-based and is contingent upon our meeting specific development milestones related to the development of the Gen 6 Sensor over a period of several years. Upon successful commercialization of our Gen 6 Sensor , we are obligated to either (1) make royalty payments based on a percentage of product sales of up to $2.0 million per year for four years, or (2) at our sole election, make a one-time $6.0 million royalty payment. The Helmsley Grant funds will offset research and development expense as incurred and earned. During 2013, $0.5 million of the Helmsley Grant was received and $0.5 million was earned. During 2014, $2.5 million of the Helmsley Grant was received and $2.5 million was earned. During the three months ended June 30, 2015 we did not receive or earn any funds from the Helmsley Trust. During the six months ended June 30, 2015 , $1.0 million of the Helmsley Grant was received and $1.0 million was earned. As of June 30, 2015 , we have received the full $4.0 million grant funds from the Helmsley Trust. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurements We base the fair value of our Level 1 financial instruments that are in active markets using quoted market prices for identical instruments. We obtain the fair value of our Level 2 financial instruments, which are not in active markets, from a primary professional pricing source using quoted market prices for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Fair value obtained from this professional pricing source can also be based on pricing models whereby all significant observable inputs, including maturity dates, issue dates, settlement date, benchmark yields, reported trades, broker-dealer quotes, issue spreads, benchmark securities, bids, offers or other market related data, are observable or can be derived from, or corroborated by, observable market data for substantially the full term of the asset. We validate the quoted market prices provided by our primary pricing service by comparing the fair values of our Level 2 marketable securities portfolio balance provided by our primary pricing service against the fair values of our Level 2 marketable securities portfolio balance provided by our investment managers. The following table represents our fair value hierarchy for our financial assets (cash equivalents, marketable securities and restricted cash) measured at fair value on a recurring basis as of June 30, 2015 (in millions): Fair Value Measurements Using Level 1 Level 2 Level 3 Total Cash equivalents $ — $ 31.3 $ — $ 31.3 Marketable securities, available for sale U.S. government agencies — 22.8 — 22.8 Corporate debt — 4.6 — 4.6 Commercial paper — 2.4 — 2.4 Total marketable securities, available for sale $ — $ 29.8 $ — $ 29.8 Restricted cash $ 0.7 $ — $ — $ 0.7 The following table represents our fair value hierarchy for our financial assets (cash equivalents, marketable securities and restricted cash) measured at fair value on a recurring basis as of December 31, 2014 (in millions): Fair Value Measurements Using Level 1 Level 2 Level 3 Total Cash equivalents $ — $ 54.3 $ — $ 54.3 Marketable securities, available for sale U.S. government agencies — 9.1 — 9.1 Corporate debt — 2.3 — 2.3 Commercial paper — 0.4 — 0.4 Total marketable securities, available for sale $ — $ 11.8 $ — $ 11.8 Restricted cash $ 1.0 $ — $ — $ 1.0 Our Restricted cash balance as of December 31, 2014, included certificates of deposit. There were no transfers between Level 1 and Level 2 securities during three and six months ended June 30, 2015 and 2014 . |
Organization and Summary of S13
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business DexCom, Inc. is a medical device company focused on the design, development and commercialization of continuous glucose monitoring (“CGM”) systems for ambulatory use by people with diabetes and by healthcare providers in the hospital for the treatment of people with and without diabetes. Unless the context requires otherwise, the terms “we,” “us,” “our,” the “company,” or “DexCom” refer to DexCom, Inc. and its subsidiaries. |
Basis of Presentation | Basis of Presentation We have incurred operating losses since our inception and have an accumulated deficit of $514.4 million at June 30, 2015 . As of June 30, 2015 , we had available cash, cash equivalents and marketable securities totaling $97.5 million , excluding $0.7 million of restricted cash, and working capital of $126.2 million . Our ability to transition to, and maintain, profitable operations is dependent upon achieving a level of revenues adequate to support our cost structure. If events or circumstances occur such that we do not meet our operating plan as expected, we may be required to reduce planned increases in compensation expenses and other operating expenses needed to support the growth of our business which could have an adverse impact on our ability to achieve our intended business objectives. We believe our working capital resources will be sufficient to fund our operations through at least June 30, 2016 . We have prepared the accompanying unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation (except for the changes in estimates described below), have been included. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015 . These unaudited consolidated financial statements should be read in conjunction with the audited financial statements and related notes thereto for the year ended December 31, 2014 included in the Annual Report on Form 10-K filed by us with the Securities and Exchange Commission on February 25, 2015. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of DexCom and our wholly owned subsidiaries, DexCom AB and SweetSpot Diabetes Care, Inc. (“SweetSpot”) . All significant intercompany balances and transactions have been eliminated in consolidation. |
Segment Reporting | Segment Reporting An operating segment is identified as a component of a business that has discrete financial information available, and one for which the chief operating decision maker must decide the level of resource allocation. In addition, the guidance for segment reporting indicates certain quantitative thresholds. The operations of SweetSpot , our subsidiary, does not meet the definition of an operating segment and are currently not material, but may become material in the future. We currently consider our operations to be, and manage our business globally within, one reportable segment, which is consistent with how our management reviews our business, makes investment and resource allocation decisions and assesses operating performance. We sell our products through a direct sales force in the United States and through distribution arrangements in the United States, Canada, Australia, New Zealand, and in portions of Europe, Asia, the Middle East, Latin America and Africa. DexCom, Inc. is domiciled in the United States. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Significant estimates include excess or obsolete inventories, valuation of inventory, warranty accruals, employee bonus, clinical trial expenses, allowance for bad debt, and share-based compensation expense. |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense is measured at the grant date based on the estimated fair value of the award and is recognized, for awards that are ultimately expected to vest, primarily on a straight-line basis over the requisite service period of the individual grants, which typically equals the vesting period. Share-based payments that contain performance conditions are recognized when such conditions are probable of being achieved. The fair value of our Restricted Stock Units (“RSUs”) is based on the market price of our common stock on the date of grant. We estimate the fair value of stock options granted and stock purchase rights under our Employee Stock Purchase Plan (“ESPP”) using the Black-Scholes-Merton ("BSM") option-pricing model. Inherent in this model are assumptions related to our expected stock price volatility over the expected term of the awards, risk-free interest rate and any expected dividends. We determine our expected stock price volatility based on our historical stock price volatility over the most recent period equivalent to the expected life of the award. We determine the expected life of an award by considering various relevant factors, including the vesting period and contractual term of the award, our employees’ historical exercise patterns and length of service and employee characteristics. For stock purchase rights under our ESPP , the expected life is equal to the current offering period. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected life of our employee stock options and stock purchase plan. As we have not paid any cash dividends since our inception and do not anticipate paying dividends in the foreseeable future, we assume a dividend yield of zero. We are also required to estimate at grant the likelihood that the award will ultimately vest (the “pre-vesting forfeiture rate”), and to revise the estimate, if necessary, in future periods if the actual forfeiture rate differs. We determine the pre-vesting forfeiture rate of an award based on our historical pre-vesting award forfeiture experience, giving consideration to company-specific events impacting historical pre-vesting award forfeiture experience that are unlikely to occur in the future as well as anticipated future events that may impact forfeiture rates. We use our historical data to estimate pre-vesting forfeitures and record stock-based compensation expense only for those awards that are expected to vest. We recorded $20.7 million and $36.6 million in share-based compensation expense during the three and six months ended June 30, 2015 , respectively, compared to $13.2 million and $21.9 million during the three and six months ended June 30, 2014 respectively. At June 30, 2015 , unrecognized estimated compensation costs related to unvested stock options and restricted stock units totaled $177.5 million and is expected to be recognized through 2019. |
Revenue Recognition | Revenue Recognition We sell our durable systems and disposable units through a direct sales force in the United States and through distribution arrangements in the United States, Canada, Australia, New Zealand, and in portions of Europe, Asia, the Middle East, Latin America and Africa. Components are individually priced and can be purchased separately or together. We receive payment directly from customers who use our products, as well as from distributors, organizations and third-party payors. Our durable system includes a reusable transmitter, a receiver, a power cord and a USB cable. Disposable sensors for use with the durable system are sold separately in packages of four. We provide free of charge software and mobile applications for use with our durable systems and disposable sensors. The initial durable system price is generally not dependent upon the purchase of any amount of disposable sensors. 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. Revenue on product sales is generally recognized upon shipment, which is when title and the risk of loss have been transferred to the customer and there are no other post shipment obligations. With respect to customers who directly pay for products, the products are generally paid for at the time of shipment using a customer’s credit card and do not include customer acceptance provisions. We recognize revenue from contracted insurance payors based on the contracted rate. For non-contracted insurance payors, we obtain prior authorization from the payor and recognize revenue based on the estimated collectible amount and historical experience. We also receive a prescription or statement of medical necessity and, for insurance reimbursement customers, an assignment of benefits prior to shipment. We provide a “ 30 -day money back guarantee” program whereby customers who purchase a durable system and a package of four disposable sensors may return the durable system for any reason within thirty days of purchase and receive a full refund of the purchase price of the durable system. We accrue for estimated returns, refunds and rebates, including pharmacy rebates, by reducing revenues and establishing a liability account at the time of shipment based on historical experience. Returns have historically been immaterial. We have entered into distribution agreements with Byram Healthcare and its subsidiaries ("Byram") , RGH Enterprises, Inc. (“Edgepark”) and other distributors that allow the distributors to sell our durable systems and disposable units. We have contracts with certain distributors who stock our products, and we refer to these distributors as Stocking Distributors , whereby the Stocking Distributors fulfill orders for our product from their inventory. We also have contracts with certain distributors that do not stock our products, but rather products are shipped directly to the customer by us on behalf of our distributor, and we refer to these distributors as Drop-Ship Distributors . Revenue is recognized based on contracted prices and invoices are either paid by check following the issuance of a purchase order or letter of credit, or they are paid by wire at the time of placing the order. Terms of distributor orders are generally Freight on Board (“FOB”) shipping point (or Free Carrier (“FCA”) shipping point for international orders). Distributors do not have rights of return per their distribution agreement outside of our standard warranty. The distributors typically have a limited time frame to notify us of any missing, damaged, defective or non-conforming products. For any such products, we shall either, at our option, replace the portion of defective or non-conforming product at no additional cost to the distributor or cancel the order and refund any portion of the price paid to us at that time for the sale in question. We have had collaborative license and development arrangements with strategic partners for the development and commercialization of products utilizing our technologies. The terms of these agreements typically include the license of certain intellectual property rights and the provision of multiple deliverables by us (for example, research and development services, product prototypes and products for use in clinical trials) in exchange for consideration to us of some combination of non-refundable license fees, funding of research and development activities, payments based upon achievement of development milestones and royalties in the form of a designated percentage of product sales or profits. With the exception of royalties, these types of consideration are classified as development grant and other revenue in our consolidated statements of operations and are generally recognized over the service period except for substantive milestone payments, which are generally recognized when the milestone is achieved. In determining whether each milestone is substantive, we considered whether the consideration earned by achieving the milestone should (i) be commensurate with either (a) our performance to achieve the milestone or (b) the enhancement of value of the item delivered as a result of a specific outcome resulting from our performance to achieve the milestone, (ii) relate solely to past performance and (iii) be reasonable relative to all deliverables and payment terms in the arrangement. We recognize royalties in the period in which we obtain the royalty report, which is necessary to determine the amount of royalties we are entitled to receive. Non-refundable license fees are recognized as revenue when we have a contractual right to receive such payment, the contract price is fixed or determinable, the collection of the resulting receivable is reasonably assured and we have no further performance obligations under the license agreement. Multiple element arrangements, such as license, development and other multiple element service arrangements are analyzed to determine how the arrangement consideration should be allocated among the separate units of accounting, or whether they must be accounted for as a single unit of accounting. For transactions containing multiple element arrangements, we consider deliverables as separate units of accounting and recognize deliverables as revenue upon delivery only if (i) the deliverable has standalone value and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is probable and substantially controlled by us. We allocate consideration to the separate units of accounting using the relative selling price method, in which allocation of consideration is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence (“TPE”), or if VSOE and TPE are not available, management’s best estimate of a standalone selling price for elements. We use judgment in estimating the value allocable to the deliverables in a transaction based on our estimate of the fair value or relative selling price attributable to the related deliverables and the consideration from such transactions is typically recognized as product revenue or development grant and other revenue. For arrangements that are accounted for as a single unit of accounting, total payments under the arrangement are recognized as revenue on a straight-line basis over the period we expect to complete our performance obligations. We review the estimated period of our performance obligations on a periodic basis and update the recognition period as appropriate. The cumulative amount of revenue earned is limited to the cumulative amount of payments we are entitled to as of the period ending date. If we cannot reasonably estimate when our performance obligation either ceases or becomes inconsequential, then revenue is deferred until we can reasonably estimate when the performance obligation ceases or becomes inconsequential. Revenue is then recognized over the remaining estimated period of performance. Deferred revenue amounts are classified as current liabilities to the extent that revenue is expected to be recognized within one year. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which we are expected to complete our performance obligations under an arrangement. |
Warranty Accrual | Warranty Accrual Estimated warranty costs associated with a product are recorded at the time of shipment. We estimate future warranty costs by analyzing historical warranty experience for the timing and amount of returned product, and these estimates are evaluated on at least a quarterly basis to determine the continued appropriateness of such assumptions. |
Foreign Currency | Foreign Currency The financial statements of our non-U.S. subsidiary, whose functional currency is the Swedish Krona, are translated into U.S. dollars for financial reporting purposes. Assets and liabilities are translated at period-end exchange rates, and revenue and expense transactions are translated at average exchange rates for the period. Cumulative translation adjustments are recognized as part of comprehensive income and are included in accumulated other comprehensive loss in the consolidated balance sheet. Gains and losses on transactions denominated in other than the functional currency are reflected in operations. To date the results of operations of this subsidiary and related translation adjustments have not been material in our consolidated results. |
Comprehensive Loss | Comprehensive Loss We report all components of comprehensive loss, including net loss, in the consolidated financial statements in the period in which they are recognized. Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and comprehensive loss, including unrealized gains and losses on marketable securities and foreign currency translation adjustments, are reported, net of their related tax effect, to arrive at comprehensive loss. |
Inventory | Inventory Inventory is valued at the lower of cost or market value on a part-by-part basis that approximates first in, first out. We make adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolete and potential scrapped inventories. Factors influencing these adjustments include inventories on hand and on order compared to estimated future usage and sales for existing and new products, as well as judgments regarding quality control testing data, and assumptions about the likelihood of scrap and obsolescence. Once written down the adjustments are considered permanent and are not reversed until the related inventory is sold or disposed. We recorded charges of approximately $2.0 million in cost of goods sold for the six months ended June 30, 2015 related to excess and obsolete inventory due to the approval and launch of our DexCom G4 PLATINUM with Share System. Our products require customized products and components that currently are available from a limited number of sources. We purchase certain components and materials from single sources due to quality considerations, costs or constraints resulting from regulatory requirements. |
Marketable Securities | Marketable Securities We have classified our marketable securities with remaining maturity at purchase of more than three months and remaining maturities of one year or less as short-term available-for-sale marketable securities. Marketable securities with remaining maturities of greater than one year are also classified as short-term available-for-sale marketable securities as such marketable securities represent the investment of cash that is available for current operations. We carry our marketable securities at fair value with unrealized gains and losses, if any, reported as a separate component of stockholders' equity and included in comprehensive loss. Realized gains and losses are calculated using the specific identification method and recorded as interest income. We invest in various types of securities, including debt securities in government-sponsored entities, corporate debt securities, U.S. Treasury securities and commercial paper. We do not generally intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. |
Fair Value Measurements | Fair Value Measurements The fair value hierarchy described by the authoritative guidance for fair value measurements is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value and include the following: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We carry our marketable securities at fair value. The carrying amounts of financial instruments, such as cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, are carried at cost, which approximate the related fair values due to the short-term maturities of these instruments. For additional detail see Note 6 “Fair Value Measurements.” |
Impairment of Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired. The change in the carrying value of goodwill during the three and six months ended June 30, 2015 resulted from an acquisition of a small privately held engineering consulting company with 10 full time employees to complement our research and development activities, which closed in April 2015. Our identifiable intangible assets are comprised of acquired core technologies, customer relationships, covenants not-to-compete, in-process research and development and trade names. The cost of identifiable intangible assets with finite lives is generally amortized on a straight-line basis over the assets’ respective estimated useful lives. We test goodwill and intangible assets with indefinite lives for impairment on an annual basis. Also, between annual tests we test for impairment if events and circumstances indicate it is more likely than not that the fair value is less than the carrying value. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, including a decline in market capitalization, a significant adverse change in legal factors, business climate or operational performance of the business and an adverse action or assessment by a regulator. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost and depreciated over the estimated useful lives of the assets, generally three years for computer equipment, four years for machinery and equipment, and five years for furniture and fixtures, using the straight-line method. Leasehold improvements are stated at cost and amortized over the shorter of the estimated useful lives of the assets or the remaining lease term. |
Recent Accounting Guidance | Recent Accounting Guidance In May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance for Revenue from Contracts with Customers, to supersede nearly all existing revenue recognition guidance under U.S. GAAP . The core principle of the guidance is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The guidance defines a five step process to achieve this core principle and it is possible when the five step process is applied, more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The updated standard permits the use of either the retrospective or cumulative effect transition method and is effective for us in our first quarter of fiscal 2018. Early adoption is not permitted. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. |
Financial Statement Details (Ta
Financial Statement Details (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Financial Statement Details [Abstract] | |
Financial Statement Details | 3. Financial Statement Details (in millions) Short- Term Marketable Securities, Available-for-Sale Short-term Marketable securities, consisting solely of debt securities, were as follows: June 30, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value U.S. government agencies $ 22.8 $ — $ — $ 22.8 Corporate debt 4.6 — — 4.6 Commercial paper 2.4 — — 2.4 Total $ 29.8 $ — $ — $ 29.8 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value U.S. government agencies $ 9.1 $ — $ — $ 9.1 Corporate debt 2.3 — — 2.3 Commercial paper 0.4 — — 0.4 Total $ 11.8 $ — $ — $ 11.8 Inventory June 30, 2015 December 31, 2014 Raw materials $ 9.1 $ 7.6 Work-in-process 0.7 1.0 Finished goods 12.6 7.4 Total $ 22.4 $ 16.0 Accounts Payable and Accrued Liabilities June 30, 2015 December 31, 2014 Accounts payable trade $ 11.7 $ 9.9 Accrued tax, audit, and legal fees 1.8 1.6 Clinical trials 0.3 0.4 Accrued other including warranty 10.2 8.5 Total $ 24.0 $ 20.4 Accrued Warranty Warranty costs are reflected in the consolidated statements of operations as product cost of sales. A reconciliation of our accrued warranty costs for the three and six months ended June 30, 2015 and 2014 were as follows: Three Months Ended Six Months Ended 2015 2014 2015 2014 Beginning balance $ 1.1 $ 0.8 $ 1.3 $ 0.9 Charges to costs and expenses 1.8 1.2 3.0 2.2 Costs incurred (1.7 ) (1.1 ) (3.1 ) (2.2 ) Ending balance $ 1.2 $ 0.9 $ 1.2 $ 0.9 |
Short Term Marketable Securities, Available for Sale | Short- Term Marketable Securities, Available-for-Sale Short-term Marketable securities, consisting solely of debt securities, were as follows: June 30, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value U.S. government agencies $ 22.8 $ — $ — $ 22.8 Corporate debt 4.6 — — 4.6 Commercial paper 2.4 — — 2.4 Total $ 29.8 $ — $ — $ 29.8 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Market Value U.S. government agencies $ 9.1 $ — $ — $ 9.1 Corporate debt 2.3 — — 2.3 Commercial paper 0.4 — — 0.4 Total $ 11.8 $ — $ — $ 11.8 |
Inventory | Inventory June 30, 2015 December 31, 2014 Raw materials $ 9.1 $ 7.6 Work-in-process 0.7 1.0 Finished goods 12.6 7.4 Total $ 22.4 $ 16.0 |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities June 30, 2015 December 31, 2014 Accounts payable trade $ 11.7 $ 9.9 Accrued tax, audit, and legal fees 1.8 1.6 Clinical trials 0.3 0.4 Accrued other including warranty 10.2 8.5 Total $ 24.0 $ 20.4 |
Accrued Warranty | Accrued Warranty Warranty costs are reflected in the consolidated statements of operations as product cost of sales. A reconciliation of our accrued warranty costs for the three and six months ended June 30, 2015 and 2014 were as follows: Three Months Ended Six Months Ended 2015 2014 2015 2014 Beginning balance $ 1.1 $ 0.8 $ 1.3 $ 0.9 Charges to costs and expenses 1.8 1.2 3.0 2.2 Costs incurred (1.7 ) (1.1 ) (3.1 ) (2.2 ) Ending balance $ 1.2 $ 0.9 $ 1.2 $ 0.9 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted net loss per share (in millions, except per share data): Three Months Ended Six Months Ended 2015 2014 2015 2014 Numerator for basic and diluted net loss per share: Net loss for basic $ (3.7 ) $ (6.0 ) $ (16.6 ) $ (18.5 ) Impact of income related to mark-to-market on contingent consideration obligation settleable in shares — (1.0 ) — — Net loss for diluted $ (3.7 ) $ (7.0 ) $ (16.6 ) $ (18.5 ) Denominator for basic and diluted net loss per share: Weighted average common shares outstanding for basic 79.6 75.0 78.7 74.2 Dilutive potential common stock outstanding: Contingently issuable shares related to contingent consideration obligation settleable in shares — 0.3 — — Weighted average common shares outstanding for diluted 79.6 75.3 78.7 74.2 Basic net loss per share $ (0.05 ) $ (0.08 ) $ (0.21 ) $ (0.25 ) Diluted net loss per share $ (0.05 ) $ (0.09 ) $ (0.21 ) $ (0.25 ) |
Historical Outstanding Anti-Dilutive Securities | Historical outstanding anti-dilutive securities not included in diluted net loss per share attributable to common stockholders calculation (in millions): Three Months Ended Six Months Ended 2015 2014 2015 2014 Options outstanding to purchase common stock 2.1 4.5 2.1 4.5 Unvested restricted stock units 4.4 4.6 4.4 4.6 Total 6.5 9.1 6.5 9.1 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Principal repayment obligations under the Loan Agreement as of June 30, 2015 were as follows (in millions): Fiscal Year Ending Remainder of 2015 $ 1.2 2016 2.3 Total $ 3.5 |
Rental Obligations | Rental obligations, excluding real estate taxes, operating costs, and tenant improvement allowances, under all lease agreements as of June 30, 2015 were as follows (in millions): Fiscal Year Ending Remainder of 2015 $ 1.9 2016 4.5 2017 4.1 2018 5.0 2019 5.2 Thereafter 11.8 Total $ 32.5 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy for Financial Assets | The following table represents our fair value hierarchy for our financial assets (cash equivalents, marketable securities and restricted cash) measured at fair value on a recurring basis as of June 30, 2015 (in millions): Fair Value Measurements Using Level 1 Level 2 Level 3 Total Cash equivalents $ — $ 31.3 $ — $ 31.3 Marketable securities, available for sale U.S. government agencies — 22.8 — 22.8 Corporate debt — 4.6 — 4.6 Commercial paper — 2.4 — 2.4 Total marketable securities, available for sale $ — $ 29.8 $ — $ 29.8 Restricted cash $ 0.7 $ — $ — $ 0.7 The following table represents our fair value hierarchy for our financial assets (cash equivalents, marketable securities and restricted cash) measured at fair value on a recurring basis as of December 31, 2014 (in millions): Fair Value Measurements Using Level 1 Level 2 Level 3 Total Cash equivalents $ — $ 54.3 $ — $ 54.3 Marketable securities, available for sale U.S. government agencies — 9.1 — 9.1 Corporate debt — 2.3 — 2.3 Commercial paper — 0.4 — 0.4 Total marketable securities, available for sale $ — $ 11.8 $ — $ 11.8 Restricted cash $ 1.0 $ — $ — $ 1.0 |
Organization and Summary of S18
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Share-based compensation | $ 20.7 | $ 13.2 | $ 36.6 | $ 21.9 | |
Accumulated deficit | 514.4 | 514.4 | $ 497.8 | ||
Cash, cash equivalents and short-term investments | 97.5 | 97.5 | |||
Restricted cash | 0.7 | 0.7 | $ 1 | ||
Working capital | 126.2 | 126.2 | |||
Unrecognized compensation cost | $ 177.5 | $ 177.5 | |||
Money back guarantee period (days) | 30 days | ||||
Computer Equipment [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Machinery and Equipment [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 4 years | ||||
Furniture and Fixtures [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 5 years | ||||
G4 PLATINUM with Share [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Inventory Write-down | $ 2 | ||||
Series of Individually Immaterial Business Acquisitions [Member] | |||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||
Entity Number of Employees | 10 | 10 |
Financial Statement Details - S
Financial Statement Details - Short Term Marketable Securities, Available for Sale (Detail) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Financial Statement Details [Line Items] | ||
Amortized Cost | $ 29.8 | $ 11.8 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Market Value | 29.8 | 11.8 |
U.S. government agencies [Member] | ||
Financial Statement Details [Line Items] | ||
Amortized Cost | 22.8 | 9.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Market Value | 22.8 | 9.1 |
Corporate debt [Member] | ||
Financial Statement Details [Line Items] | ||
Amortized Cost | 4.6 | 2.3 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Market Value | 4.6 | 2.3 |
Commercial paper [Member] | ||
Financial Statement Details [Line Items] | ||
Amortized Cost | 2.4 | 0.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Market Value | $ 2.4 | $ 0.4 |
Financial Statement Details - I
Financial Statement Details - Inventory (Detail) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 9.1 | $ 7.6 |
Work-in-process | 0.7 | 1 |
Finished goods | 12.6 | 7.4 |
Total | $ 22.4 | $ 16 |
Financial Statement Details - A
Financial Statement Details - Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Disclosure of Financial Statement Details [Abstract] | ||
Accounts payable trade | $ 11.7 | $ 9.9 |
Accrued tax, audit, and legal fees | 1.8 | 1.6 |
Clinical trials | 0.3 | 0.4 |
Accrued other including warranty | 10.2 | 8.5 |
Total | $ 24 | $ 20.4 |
Financial Statement Details -22
Financial Statement Details - Accrued Warranty (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning balance | $ 1.1 | $ 0.8 | $ 1.3 | $ 0.9 |
Charges to costs and expenses | 1.8 | 1.2 | 3 | 2.2 |
Costs incurred | (1.7) | (1.1) | (3.1) | (2.2) |
Ending balance | $ 1.2 | $ 0.9 | $ 1.2 | $ 0.9 |
Net Loss Per Common Share Net L
Net Loss Per Common Share Net Loss per Common Share - Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Numerator for basic and diluted net loss per share: | ||||
Net loss for basic | $ (3.7) | $ (6) | $ (16.6) | $ (18.5) |
Impact of income related to mark-to-market on contingent consideration obligation settleable in shares | 0 | (1) | 0 | 0 |
Net Income (Loss) Available to Common Stockholders, Diluted | $ (3.7) | $ (7) | $ (16.6) | $ (18.5) |
Denominator for basic and diluted net loss per share: | ||||
Weighted average common shares outstanding for basic | 79.6 | 75 | 78.7 | 74.2 |
Contingently issuable shares related to contingent consideration obligation settleable in shares | 0 | 0.3 | 0 | 0 |
Weighted average common shares outstanding for diluted | 79.6 | 75.3 | 78.7 | 74.2 |
Dilutive potential common stock outstanding: | ||||
Basic net loss per share | $ (0.05) | $ (0.08) | $ (0.21) | $ (0.25) |
Diluted net loss per share | $ (0.05) | $ (0.09) | $ (0.21) | $ (0.25) |
Net Loss Per Common Share - His
Net Loss Per Common Share - Historical Outstanding Anti-Dilutive Securities (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding anti-dilutive securities | 6.5 | 9.1 | 6.5 | 9.1 |
Options outstanding to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding anti-dilutive securities | 2.1 | 4.5 | 2.1 | 4.5 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding anti-dilutive securities | 4.4 | 4.6 | 4.4 | 4.6 |
Commitments and Contingencies -
Commitments and Contingencies - Long-Term Debt and PO Commitments (Detail) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended |
Nov. 30, 2012 | Jun. 30, 2015 | Dec. 31, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Long-term Line of Credit | $ 15 | ||
Term Loan Debt | $ 20 | ||
Prime Rate Plus | 0.50% | ||
Term Loan Advances Aggregate Amount | $ 7 | ||
Debt Instrument, Unused Borrowing Capacity, Amount | $ 13 | $ 15 | |
Debt Instrument Basis Spread On Treasury Variable Rate | 6.94% | ||
Debt Instrument, Maturity Date | Nov. 1, 2016 | ||
Debt Issuance Cost | $ 1.1 | ||
Unamortized Debt Issuance Expense | 0.1 | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||
2,015 | 1.2 | ||
2,016 | 2.3 | ||
Total | 3.5 | ||
Purchase commitments with vendors total | $ 30.2 | ||
Purchase commitments with vendors total maximum term, in years | 1 year |
Commitments and Contingencies26
Commitments and Contingencies - Rental Obligations (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015USD ($)ft² | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)ft² | Jun. 30, 2014USD ($) | Apr. 01, 2015ft² | Oct. 01, 2014ft² | |
Potential Rental Rate Adjustment Minimum | 2.50% | |||||
Potential Rental Rate Adjustment Maximum | 4.00% | |||||
Operating Leases, Rent Expense, Net | $ 1.4 | $ 0.8 | $ 2.7 | $ 1.5 | ||
Operating Leases, Future Minimum Payments Due, Remainder of 2015 | 1.9 | 1.9 | ||||
Operating Leases, Future Minimum Payments, 2016 | 4.5 | 4.5 | ||||
Operating Leases, Future Minimum Payments, 2017 | 4.1 | 4.1 | ||||
Operating Leases, Future Minimum Payments, 2018 | 5 | 5 | ||||
Operating Leases, Future Minimum Payments, 2019 | 5.2 | 5.2 | ||||
Operating Leases, Future Minimum Payments, Thereafter | 11.8 | 11.8 | ||||
Total | $ 32.5 | $ 32.5 | ||||
Leased Buildings -6340 Sequence Drive and 6310 Sequence Drive [Member] | ||||||
Leased Square Footage | ft² | 129,000 | |||||
Leased Building, 6290 Sequence Drive [Member] | ||||||
Leased Square Footage | ft² | 45,000 | |||||
Additional Available Space, 6290 Sequence Drive [Member] | ||||||
Leased Square Footage | ft² | 30,000 | 30,000 | 15,000 | 45,000 | ||
6310,6340 and 6290 Sequence Drive Lease [Member] | ||||||
Leased Square Footage | ft² | 174,000 | |||||
Lessee Leasing Arrangements, Operating Leases, Number of Renewal Term | 2 | |||||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 5 years |
Development and Other Agreeme27
Development and Other Agreements - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2014 | Jul. 31, 2013 | Feb. 29, 2012 | Nov. 30, 2008 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 01, 2012 | |
Development Agreements [Line Items] | |||||||||||
Development grant and other revenue | $ 0.3 | $ 0.6 | $ 0.3 | $ 1 | |||||||
Research and Development Arrangement, Value of Grant | $ 4 | ||||||||||
Research and Development Arrangement, Grants Received During Period | 1 | $ 2.5 | $ 0.5 | ||||||||
Helmsley Grant [Member] | Research and Development Grant [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Research and Development Arrangement, Contract to Perform for Others, Compensation Earned | 0 | $ 1 | $ 2.5 | $ 0.5 | |||||||
Option One [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Royalty Guarantees, Commitments, Commitment Period | 4 years | ||||||||||
Option Two [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Royalty Guarantees, Commitments, Amount | $ 6 | ||||||||||
Option One [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Royalty Guarantees, Commitments, Amounts, Per Year | $ 2 | ||||||||||
Edwards Lifesciences LLC [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Commercial sales royalty maximum | 6.00% | ||||||||||
Money eligible to be received related to regulatory approvals and manufacturing readiness | $ 12 | ||||||||||
Tandem Diabetes Care, Inc. [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Development grant and other revenue | $ 0.1 | $ 0.2 | |||||||||
Tandem Diabetes Care, Inc. [Member] | Maximum [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Third party contribution to off set expenses | $ 1 | ||||||||||
Tandem Diabetes Care, Inc. [Member] | Initial Payment [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
One-time milestone payment, received | $ 1 | ||||||||||
Regulatory Submission Milestone [Member] | Tandem Diabetes Care, Inc. [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Additional milestone payments | $ 1 | ||||||||||
Regulatory Approval Milestone [Member] [Member] | Tandem Diabetes Care, Inc. [Member] | |||||||||||
Development Agreements [Line Items] | |||||||||||
Additional milestone payments | $ 1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents, at Carrying Value | $ 31.3 | $ 54.3 |
Available-for-sale Securities, Debt Securities, Current | 29.8 | 11.8 |
Restricted cash | 0.7 | 1 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents, at Carrying Value | 0 | 0 |
Available-for-sale Securities, Debt Securities, Current | 0 | 0 |
Restricted cash | 0.7 | 1 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents, at Carrying Value | 31.3 | 54.3 |
Available-for-sale Securities, Debt Securities, Current | 29.8 | 11.8 |
Restricted cash | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents, at Carrying Value | 0 | 0 |
Available-for-sale Securities, Debt Securities, Current | 0 | 0 |
Restricted cash | 0 | 0 |
U.S. government agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 22.8 | 9.1 |
U.S. government agencies [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 0 | 0 |
U.S. government agencies [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 22.8 | 9.1 |
U.S. government agencies [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 0 | 0 |
Corporate debt [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 4.6 | 2.3 |
Corporate debt [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 0 | 0 |
Corporate debt [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 4.6 | 2.3 |
Corporate debt [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 0 | 0 |
Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 2.4 | 0.4 |
Commercial paper [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 0 | 0 |
Commercial paper [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | 2.4 | 0.4 |
Commercial paper [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Securities, Current | $ 0 | $ 0 |