Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 26, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | EXACT SCIENCES CORP | ||
Entity Central Index Key | 1124140 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1,398,396,140 | ||
Entity Common Stock, Shares Outstanding | 88,671,335 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $58,131 | $12,851 |
Marketable securities | 224,625 | 120,408 |
Accounts receivable | 1,376 | |
Inventory, net | 4,017 | |
Prepaid expenses and other current assets | 3,528 | 2,199 |
Total current assets | 291,677 | 135,458 |
Property and Equipment, at cost: | ||
Laboratory equipment | 10,381 | 5,087 |
Assets under construction | 1,552 | 2,592 |
Computer equipment and computer software | 7,577 | 1,217 |
Leasehold improvements | 5,937 | 5,043 |
Furniture and fixtures | 939 | 268 |
Property and Equipment, gross | 26,386 | 14,207 |
Less-Accumulated depreciation | -6,439 | -3,038 |
Net property and equipment | 19,947 | 11,169 |
Total assets | 311,624 | 146,627 |
Current Liabilities: | ||
Accounts payable | 2,647 | 873 |
Accrued expenses | 13,960 | 5,694 |
Capital lease obligation, current portion | 360 | 351 |
Lease incentive obligation, current portion | 554 | 540 |
Deferred license fees, current portion | 294 | |
Total current liabilities | 17,521 | 7,752 |
Long-term debt | 1,000 | 1,000 |
Long-term accrued interest | 106 | 84 |
Other long-term liabilities | 2,399 | |
Capital lease obligation, less current portion | 360 | |
Lease incentive obligation, less current portion | 1,614 | 2,115 |
Total liabilities | 22,640 | 11,311 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock, $0.01 par value Authorized—5,000,000 shares Issued and outstanding—no shares at December 31, 2014 and December 31, 2013 | ||
Common stock, $0.01 par value Authorized—200,000,000 shares Issued and outstanding—88,626,042 and 71,071,838 shares at December 31, 2014 and December 31, 2013 | 887 | 711 |
Additional paid-in capital | 709,019 | 455,239 |
Accumulated other comprehensive income | -115 | 125 |
Accumulated deficit | -420,807 | -320,759 |
Total stockholders' equity | 288,984 | 135,316 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $311,624 | $146,627 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, Authorized shares | 5,000,000 | 5,000,000 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, Authorized shares | 200,000,000 | 200,000,000 |
Common stock, Issued shares | 88,626,042 | 71,071,838 |
Common stock, outstanding shares | 88,626,042 | 71,071,838 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales | |||
Laboratory service revenue | $1,504 | ||
License fees | 294 | 4,144 | 4,144 |
Total revenue | 1,798 | 4,144 | 4,144 |
Cost of sales | 4,325 | ||
Gross margin | -2,527 | 4,144 | 4,144 |
Operating expenses: | |||
Research and development | 28,669 | 27,678 | 42,131 |
General and administrative | 30,435 | 13,649 | 9,900 |
Sales and marketing | 38,908 | 9,578 | 4,755 |
Total operating expenses | 98,012 | 50,905 | 56,786 |
Loss from operations | -100,539 | -46,761 | -52,642 |
Other income (expense) | |||
Investment income | 542 | 316 | 262 |
Interest expense | -51 | -69 | -41 |
Total other income (expense) | 491 | 247 | 221 |
Net loss | ($100,048) | ($46,514) | ($52,421) |
Net loss per share-basic and diluted (in dollars per share) | ($1.25) | ($0.69) | ($0.88) |
Weighted average common shares outstanding-basic and diluted (in shares) | 80,232 | 67,493 | 59,481 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Comprehensive Loss | |||
Net loss | ($100,048) | ($46,514) | ($52,421) |
Other comprehensive loss, net of tax: | |||
Unrealized gain (loss) on available-for-sale investments | -240 | 47 | 92 |
Comprehensive loss | ($100,288) | ($46,467) | ($52,329) |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2011 | $566 | $304,767 | ($14) | ($221,824) | $83,495 |
Balance (in shares) at Dec. 31, 2011 | 56,624,763 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock related to the Mayo Transaction (Note 4) | 1 | 999 | 1,000 | ||
Issuance of common stock related to the Mayo Transaction (Note 4) (in shares) | 97,466 | ||||
Issuance of common stock, net of issuance costs of $11.0, $4.8 and $3.9 million for 2014, 2013 and 2012, respectively | 63 | 57,692 | 57,755 | ||
Issuance of common stock, net of issuance costs (in shares) | 6,325,000 | ||||
Exercise of common stock options and warrants | 7 | 2,381 | 2,388 | ||
Exercise of common stock options and warrants (in shares) | 691,471 | ||||
Issuance of common stock to fund the Company's 2014, 2013 and 2012 401(k) match | 274 | 274 | |||
Issuance of common stock to fund the Company's 2013, 2012 and 2011 401(k) match (in shares) | 32,872 | ||||
Compensation expense related to issuance of stock options and restricted stock awards | 1 | 5,492 | 5,493 | ||
Compensation expense related to issuance of stock options and restricted stock awards (in shares) | 74,617 | ||||
Purchase of employee stock purchase plan shares | 1 | 366 | 367 | ||
Purchase of employee stock purchase plan shares (in shares) | 63,611 | ||||
Expense related to warrants (Note 4) | 152 | 152 | |||
Net loss | -52,421 | -52,421 | |||
Accumulated other comprehensive (loss) income | 92 | 92 | |||
Balance at Dec. 31, 2012 | 639 | 372,123 | 78 | -274,245 | 98,595 |
Balance (in shares) at Dec. 31, 2012 | 63,909,800 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock, net of issuance costs of $11.0, $4.8 and $3.9 million for 2014, 2013 and 2012, respectively | 63 | 73,232 | 73,296 | ||
Issuance of common stock, net of issuance costs (in shares) | 6,325,000 | ||||
Exercise of common stock options and warrants | 4 | 1,337 | 1,341 | ||
Exercise of common stock options and warrants (in shares) | 418,146 | ||||
Issuance of common stock to fund the Company's 2014, 2013 and 2012 401(k) match | 1 | 354 | 354 | ||
Issuance of common stock to fund the Company's 2013, 2012 and 2011 401(k) match (in shares) | 30,538 | ||||
Compensation expense related to issuance of stock options and restricted stock awards | 3 | 7,741 | 7,744 | ||
Compensation expense related to issuance of stock options and restricted stock awards (in shares) | 328,422 | ||||
Purchase of employee stock purchase plan shares | 1 | 452 | 453 | ||
Purchase of employee stock purchase plan shares (in shares) | 59,932 | ||||
Net loss | -46,514 | -46,514 | |||
Accumulated other comprehensive (loss) income | 47 | 47 | |||
Balance at Dec. 31, 2013 | 711 | 455,239 | 125 | -320,759 | 135,316 |
Balance (in shares) at Dec. 31, 2013 | 71,071,838 | 71,071,838 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock, net of issuance costs of $11.0, $4.8 and $3.9 million for 2014, 2013 and 2012, respectively | 155 | 238,425 | 238,580 | ||
Issuance of common stock, net of issuance costs (in shares) | 15,500,000 | ||||
Exercise of common stock options and warrants | 15 | 2,625 | 2,640 | ||
Exercise of common stock options and warrants (in shares) | 1,522,753 | ||||
Issuance of common stock to fund the Company's 2014, 2013 and 2012 401(k) match | 1 | 455 | 456 | ||
Issuance of common stock to fund the Company's 2013, 2012 and 2011 401(k) match (in shares) | 32,666 | ||||
Compensation expense related to issuance of stock options and restricted stock awards | 4 | 11,516 | 11,520 | ||
Compensation expense related to issuance of stock options and restricted stock awards (in shares) | 410,619 | ||||
Purchase of employee stock purchase plan shares | 1 | 759 | 760 | ||
Purchase of employee stock purchase plan shares (in shares) | 88,166 | ||||
Net loss | -100,048 | -100,048 | |||
Accumulated other comprehensive (loss) income | -240 | -240 | |||
Balance at Dec. 31, 2014 | $887 | $709,019 | ($115) | ($420,807) | $288,984 |
Balance (in shares) at Dec. 31, 2014 | 88,626,042 | 88,626,042 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net loss | ($100,048) | ($46,514) | ($52,421) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization of fixed assets | 3,710 | 1,418 | 985 |
Loss on disposal of property and equipment | 49 | 100 | |
Stock-based compensation | 11,520 | 7,744 | 5,493 |
Amortization of deferred license fees | -294 | -4,144 | -4,144 |
Warrant licensing expense | 152 | ||
Restricted stock licensing expense | 1,000 | ||
Amortization of premium on short-term investments | 842 | 636 | 532 |
Changes in assets and liabilities: | |||
Prepaid expenses and other current assets | -1,329 | -1,606 | 441 |
Accounts receivable | -1,376 | ||
Inventory, net | -4,017 | ||
Accounts payable | 1,886 | -2,891 | 2,887 |
Accrued expenses | 8,610 | 2,833 | 532 |
Lease incentive obligation | -487 | 2,655 | |
Accrued interest | 22 | 21 | 21 |
Net cash used in operating activities | -80,912 | -39,748 | -44,522 |
Cash flows from investing activities: | |||
Purchases of marketable securities | -209,471 | -98,510 | -96,047 |
Maturities of marketable securities | 104,172 | 72,289 | 58,411 |
Purchases of property and equipment | -12,537 | -9,282 | -681 |
Net cash used in investing activities | -117,836 | -35,503 | -38,317 |
Cash flows from financing activities: | |||
Proceeds from sale of common stock, net of issuance costs | 238,580 | 73,296 | 57,755 |
Proceeds from exercise of common stock options | 2,640 | 1,341 | 2,388 |
Proceeds in connection with the Company's employee stock purchase plan | 760 | 453 | 367 |
Proceeds from New Market Tax Credit financing agreements | 2,399 | ||
Payments on capital lease obligations | -351 | -333 | -107 |
Net cash provided by financing activities | 244,028 | 74,757 | 60,403 |
Net increase (decrease) in cash and cash equivalents | 45,280 | -494 | -22,436 |
Cash and cash equivalents, beginning of period | 12,851 | 13,345 | 35,781 |
Cash and cash equivalents, end of period | 58,131 | 12,851 | 13,345 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Unrealized gain (loss) on available-for-sale investments | -240 | 47 | 92 |
Issuance of 32,666, 30,538, and 32,872 shares of common stock to fund the Company’s 401(k) matching contribution for 2013, 2012, and 2011, respectively | 456 | 354 | 274 |
Laboratory equipment acquired with a capital lease | $1,151 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Consolidated Statements of Cash Flows | |||
Issuance of shares of common stock to fund the Company's 401(k) matching contribution | 32,666 | 30,538 | 32,872 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2014 | |
ORGANIZATION | |
ORGANIZATION | (1) ORGANIZATION |
Exact Sciences Corporation (“Exact” or the “Company”) was incorporated in February 1995. Exact is a molecular diagnostics company currently focused on the early detection and prevention of colorectal cancer. The Company’s non‑invasive stool‑based DNA (sDNA) screening technology includes proprietary and patented methods that isolate and analyze human DNA present in stool to screen for the presence of colorectal pre‑cancer and cancer. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||
Principles of Consolidation | |||||||||||||||||||
The accompanying consolidated financial statements include the accounts of the Company’s wholly‑owned subsidiaries, Exact Sciences Laboratories, LLC, Exact Sciences Finance Corporation, Exact Sciences Europe LTD, and variable interest entities. See Note 12 for the discussion of financing arrangements involving certain entities that are variable interest entities that are included in our consolidated financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. | |||||||||||||||||||
References to “Exact”, “we”, “us”, “our”, or the “Company” refer to Exact Sciences Corporation and its wholly owned subsidiaries. | |||||||||||||||||||
Use of Estimates | |||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||
The Company considers cash on hand, demand deposits in bank, money market funds, and all highly liquid investments with an original maturity of 90 days or less to be cash and cash equivalents. The Company had no restricted cash at December 31, 2014 and 2013. | |||||||||||||||||||
Marketable Securities | |||||||||||||||||||
Management determines the appropriate classification of debt securities at the time of purchase and re‑evaluates such designation as of each balance sheet date. Debt securities carried at amortized cost are classified as held‑to‑maturity when the Company has the positive intent and ability to hold the securities to maturity. Marketable equity securities and debt securities not classified as held‑to‑maturity are classified as available‑for‑sale. Available‑for‑sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive income. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight‑line method. Such amortization is included in investment income. Realized gains and losses and declines in value judged to be other‑than‑temporary on available‑for‑sale securities are included in investment income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available‑for‑sale are included in investment income. | |||||||||||||||||||
At December 31, 2014 and December 31, 2013 the Company’s investments were comprised of fixed income investments and all were deemed available‑for‑sale. The objectives of the Company’s investment strategy are to provide liquidity and safety of principal while striving to achieve the highest rate of return consistent with these two objectives. The Company’s investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations (including those with a contractual term greater than one year from the date of purchase) are classified as current. All of the Company’s investments are considered current. Realized gains were $11,000, $9,639, and $6,231, net of insignificant realized losses, for the years ended December 31, 2014, 2013, and 2012, respectively. Unrealized losses on investments recorded in other comprehensive income were $159,908 and $7,190 for the years ended December 31, 2014 and 2013, respectively. Unrealized gains on investments recorded in other comprehensive income were $45,808 and $132,663 for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||
Available‑for‑sale securities at December 31, 2014 consist of the following: | |||||||||||||||||||
December 31, 2014 | |||||||||||||||||||
Gains in Accumulated | Losses in Accumulated | ||||||||||||||||||
Other Comprehensive | Other Comprehensive | Estimated Fair | |||||||||||||||||
(In thousands) | Amortized Cost | Income | Income | Value | |||||||||||||||
Corporate bonds | $ | 141,239 | $ | 21 | $ | -136 | $ | 141,124 | |||||||||||
U.S. government agency securities | 18,687 | 8 | -7 | 18,688 | |||||||||||||||
Asset backed securities | 60,821 | 17 | -18 | 60,820 | |||||||||||||||
Commercial paper | 3,993 | — | — | 3,993 | |||||||||||||||
Total available-for-sale securities | $ | 224,740 | $ | 46 | $ | -161 | $ | 224,625 | |||||||||||
Available‑for‑sale securities at December 31, 2013 consist of the following: | |||||||||||||||||||
December 31, 2013 | |||||||||||||||||||
Gains in Accumulated | Losses in Accumulated | ||||||||||||||||||
Other Comprehensive | Other Comprehensive | Estimated Fair | |||||||||||||||||
(In thousands) | Amortized Cost | Income | Income | Value | |||||||||||||||
Corporate bonds | $ | 77,935 | $ | 82 | $ | -7 | $ | 78,010 | |||||||||||
U.S. government agency securities | 34,291 | 46 | — | 34,337 | |||||||||||||||
Certificates of deposit | 6,558 | 4 | — | 6,562 | |||||||||||||||
Commercial paper | 1,499 | — | — | 1,499 | |||||||||||||||
Total available-for-sale securities | $ | 120,283 | $ | 132 | $ | -7 | $ | 120,408 | |||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||
The amount recognized in accumulated other comprehensive income (loss) (AOCI) for the years ended December 31, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Beginning balance | $ | 125 | $ | 78 | $ | -14 | |||||||||||||
Other comprehensive (loss) income before reclassifications | -200 | 90 | 84 | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | -40 | -43 | 8 | ||||||||||||||||
Net current period change in accumulated other comprehensive income (loss) | -240 | 47 | 92 | ||||||||||||||||
Ending balance | $ | -115 | $ | 125 | $ | 78 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) for the years ended December 31, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||
Affected Line Item in the | Year Ended December 31, | ||||||||||||||||||
Details about AOCI Components | Statement of Operations | 2014 | 2013 | 2012 | |||||||||||||||
Change in value of available-for-sale investments | |||||||||||||||||||
Sales and maturities of available-for-sale investments | Investment income | $ | -40 | $ | -43 | $ | 8 | ||||||||||||
Total reclassifications | $ | -40 | $ | -43 | $ | 8 | |||||||||||||
Property and Equipment | |||||||||||||||||||
Property and equipment are stated at cost and depreciated using the straight‑line method over the assets’ estimated useful lives. Maintenance and repairs are expensed when incurred; additions and improvements are capitalized. The estimated useful lives of fixed assets are as follows: | |||||||||||||||||||
Estimated | |||||||||||||||||||
Asset Classification | Useful Life | ||||||||||||||||||
Laboratory equipment | 3 - 5 years | ||||||||||||||||||
Office, computer equipment and computer software | 3 years | ||||||||||||||||||
Leasehold improvements | Lesser of the remaining lease term or useful life | ||||||||||||||||||
Furniture and fixtures | 3 years | ||||||||||||||||||
Depreciation expense for the years ended December 31, 2014, 2013, and 2012 was $3.7 million, $1.4 million, and $1.0 million, respectively. | |||||||||||||||||||
At December 31, 2014, the Company had $1.6 million of assets under construction which consisted of $1.2 million of capitalized costs related to software and computer hardware projects and $0.4 million of costs related to leasehold improvement projects. Depreciation will begin on these assets once they are placed into service. We expect that it will cost $0.2 million to complete the leasehold improvement projects and $0.1 million to complete the software projects, and these projects are expected to be completed in 2015. | |||||||||||||||||||
Software Capitalization Policy | |||||||||||||||||||
Software development costs related to internal use software are incurred in three stages of development: the preliminary project stage, the application development stage, and the post‑implementation stage. Costs incurred during the preliminary project and post‑implementation stages are expensed as incurred. Costs in the application development stage that meet the criteria for capitalization are capitalized and amortized using the straight‑line basis over the estimated economic useful life of the software. | |||||||||||||||||||
Patent Costs | |||||||||||||||||||
Patent costs, which have historically consisted of related legal fees, are capitalized as incurred, only if the Company determines that there is some probable future economic benefit derived from the transaction. The capitalized patents are amortized beginning when patents are approved over an estimated useful life of five years. Capitalized patent costs are expensed upon disapproval, upon a decision by the Company to no longer pursue the patent or when the related intellectual property is either sold or deemed to be no longer of value to the Company. The Company determined that all patent costs incurred during the year ended December 31, 2014, 2013 and 2012 should be expensed and not capitalized as the future economic benefit derived from the transactions cannot be determined. | |||||||||||||||||||
Net Loss Per Share | |||||||||||||||||||
Basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share is the same because all outstanding common stock equivalents have been excluded, as they are anti‑dilutive as a result of the Company’s losses. | |||||||||||||||||||
The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti‑dilutive effect due to net losses for each period (amounts are in thousands): | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Shares issuable upon exercise of stock options | 4,934 | 6,063 | 6,182 | ||||||||||||||||
Shares issuable upon exercise of outstanding warrants(1) | — | 155 | 325 | ||||||||||||||||
Shares issuable upon the release of restricted stock awards | 1,541 | 1,151 | 814 | ||||||||||||||||
Shares issuable upon the vesting of restricted stock awards related to licensing agreement | 24 | 49 | 73 | ||||||||||||||||
6,499 | 7,418 | 7,394 | |||||||||||||||||
-1 | At December 31, 2013, represents warrants to purchase 80,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. At December 31, 2012, represents warrants to purchase 250,000 shares of common stock issued under a licensing agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. | ||||||||||||||||||
Accounting for Stock‑Based Compensation | |||||||||||||||||||
The Company requires all share‑based payments to employees, including grants of employee stock options, restricted stock, restricted stock units and shares purchased under an ESPP (if certain parameters are not met), to be recognized in the financial statements based on their fair values. | |||||||||||||||||||
Revenue Recognition | |||||||||||||||||||
Laboratory service revenue. The Company’s revenues are primarily generated by the Cologuard test. Revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. The Company assesses whether the fee is fixed or determinable and if the collectability is reasonable based on the nature of the fee charged for the laboratory services delivered and whether there are existing contractual arrangements with customers, third-party commercial payors (insurance carriers and health plans) or coverage of the test by Centers for Medicare & Medicaid Services (CMS). In addition, when evaluating collectability, the Company considers factors such as collection experience for the healthcare industry, the financial standing of customers or third-party commercial payors, and whether it has sufficient collection history to reliably estimate a payor’s individual payment patterns. | |||||||||||||||||||
A significant portion of laboratory service revenues earned by the Company will be initially recognized on a cash basis because the above criteria will not have been met at the time the test results are delivered. The Company generally bills third-party payors upon generation and delivery of a test result to the ordering physician following completion of a test. As such, the Company takes assignment of benefits and risk of collection with the third-party payor. Patients may have out-of-pocket costs for amounts not covered by their insurance reimbursement policies. Consequently, the Company pursues reimbursement on a case-by-case basis directly from the patient. | |||||||||||||||||||
For laboratory services performed, where the collectability is not reasonably assured, the Company will continue to recognize revenues upon cash collection until it can reliably estimate the amount that would be ultimately collected for the Cologuard test. In order to begin to record revenue on an accrual basis in these scenarios, the Company expects to use at least several months of payment history, review the number of test paid against the number of tests billed, and consider the payor’s outstanding balance for unpaid test to determine whether payments are being made for a consistently high percentage of tests billed and at appropriate amounts given the contracted or historical payment amount. Cologuard became available upon FDA approval on August 11, 2014. The national coverage decision for Cologuard was released by CMS on October 9, 2014. | |||||||||||||||||||
The Company recognized approximately $1.5 million in laboratory service revenue for the year ended December 31, 2014. | |||||||||||||||||||
License fees. License fees for the licensing of product rights are recorded as deferred revenue upon receipt of cash and recognized as revenue on a straight‑line basis over the license period. | |||||||||||||||||||
As more fully described in Note 3 below, in connection with the Company’s transaction with Genzyme Corporation, Genzyme agreed to pay the Company a total of $18.5 million, of which $16.65 million was paid on January 27, 2009 and $1.85 million was subject to a holdback by Genzyme to satisfy certain potential indemnification obligations in exchange for the assignment and licensing of certain intellectual property to Genzyme. The Company’s on‑going performance obligations to Genzyme under the Collaboration, License and Purchase Agreement (the “CLP Agreement”), as described below, including its obligation to deliver through licenses certain intellectual property improvements to Genzyme, if improvements are made during the initial five‑year collaboration period, were deemed to be undelivered elements of the CLP Agreement on the date of closing. Accordingly, the Company deferred the initial $16.65 million in cash received at closing and is amortizing that up‑front payment on a straight line basis into revenue over the initial five‑year collaboration period ending in January 2014. The Company received the first holdback amount of $962,000, which included accrued interest, due from Genzyme during the first quarter of 2010. The Company received the second holdback amount of $934,250 which included accrued interest due, from Genzyme during the third quarter of 2010. The amounts were deferred and were amortized on a straight‑line basis into revenue over the remaining term of the collaboration at the time of receipt. | |||||||||||||||||||
In addition, Genzyme purchased 3,000,000 shares of common stock purchased from the Company on January 27, 2009 for $2.00 per share, representing a premium of $0.51 per share above the closing price of the Company’s common stock on that date of $1.49 per share. The aggregate premium paid by Genzyme over the closing price of the Company’s common stock on the date of the transaction of $1.53 million is deemed to be a part of the total consideration for the CLP Agreement. Accordingly, the Company deferred the aggregate $1.53 million premium and amortized that amount on a straight line basis into revenue over the initial five‑year collaboration period ending in January 2014. | |||||||||||||||||||
The Company recognized approximately $0.3 million in license fee revenue for the year ended December 31, 2014 and $4.1 million in license fee revenue in connection with the amortization of the up‑front payments from Genzyme during the years ended December 31, 2013, and 2012, respectively. | |||||||||||||||||||
Inventory | |||||||||||||||||||
Inventory is stated at the lower of cost or market value (net realizable value). The Company determines the cost of inventory using the first-in, first out method (FIFO). The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and records a charge to cost of sales for such inventory as appropriate. In addition, the Company’s products are subject to strict quality control and monitoring which the Company performs throughout the production process. If certain batches or units of product no longer meet quality specifications or become obsolete due to expiration, the Company records a charge to cost of sales to write down such unmarketable inventory to its estimated realizable value. | |||||||||||||||||||
Direct and indirect manufacturing costs incurred during process validation and for other research and development activities, which are not permitted to be sold, have been expensed to research and development. Raw material inventory that was purchased in prior periods, and expensed to research and development, may still be on hand and used toward the production of commercial Cologuard, provided it has an appropriate remaining shelf life. This inventory is expected to provide a gross margin benefit to the Company in future periods of $0.7 million if the entirety of those balances were allocated to inventory produced for resale and not allocated to research and development activities. | |||||||||||||||||||
The Company has invested in its manufacturing operations to support future demand for Cologuard. Because of this investment in the future, the Company is not currently operating at normal capacity. Charges related to excess capacity are included as current period charges to cost of sales, and are not capitalized into inventory. Total excess capacity charged to cost of sales during the year ended December 31, 2014 was $1.6 million. | |||||||||||||||||||
Inventory consists of the following (amount in thousands): | |||||||||||||||||||
December 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Raw Materials | $ | 1,019 | $ | — | |||||||||||||||
Semi-finished and finished goods | 2,998 | — | |||||||||||||||||
Total inventory | $ | 4,017 | $ | — | |||||||||||||||
Advertising Costs | |||||||||||||||||||
The Company expenses the costs of media advertising at the time the advertising takes place. The Company expensed approximately $5.3 million, $0.1 million and $0.1 million of media advertising during the years ended December 31, 2014, 2013, and 2012, respectively. | |||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
The FASB has issued authoritative guidance which requires that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy. The fair value hierarchy establishes and prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. | |||||||||||||||||||
The three levels of the fair value hierarchy established are as follows: | |||||||||||||||||||
Level 1 | Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | ||||||||||||||||||
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. | ||||||||||||||||||
Level 3 | Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available. | ||||||||||||||||||
Fixed‑income securities and mutual funds are valued using a third party pricing agency. The valuation is based on observable inputs including pricing for similar assets and other observable market factors. There has been no material change from period to period. | |||||||||||||||||||
The following table presents the Company’s fair value measurements as of December 31, 2014 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands. | |||||||||||||||||||
Fair Value Measurement at December 31, 2014 Using: | |||||||||||||||||||
Quoted Prices | Significant | ||||||||||||||||||
in Active | Other | Significant | |||||||||||||||||
Markets for | Observable | Unobservable | |||||||||||||||||
Fair Value at | Identical Assets | Inputs | Inputs | ||||||||||||||||
Description | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash and money market | $ | 53,569 | $ | 53,569 | $ | — | $ | — | |||||||||||
Corporate bonds | 4,562 | — | 4,562 | — | |||||||||||||||
Available-for-Sale | |||||||||||||||||||
Marketable securities | |||||||||||||||||||
Corporate bonds | 141,124 | — | 141,124 | — | |||||||||||||||
U.S. government agency securities | 18,688 | — | 18,688 | — | |||||||||||||||
Asset backed securities | 60,820 | — | 60,820 | — | |||||||||||||||
Commercial paper | 3,993 | — | 3,993 | — | |||||||||||||||
Total | $ | 282,756 | $ | 53,569 | $ | 229,187 | $ | — | |||||||||||
The following table presents the Company’s fair value measurements as of December 31, 2013 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands. | |||||||||||||||||||
Fair Value Measurement at December 31, 2013 Using: | |||||||||||||||||||
Quoted Prices | Significant | ||||||||||||||||||
in Active | Other | Significant | |||||||||||||||||
Markets for | Observable | Unobservable | |||||||||||||||||
Fair Value at | Identical Assets | Inputs | Inputs | ||||||||||||||||
Description | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash and money market | $ | 12,851 | $ | 12,851 | $ | — | $ | — | |||||||||||
Available-for-Sale | |||||||||||||||||||
Marketable securities | |||||||||||||||||||
Corporate bonds | 78,010 | — | 78,010 | — | |||||||||||||||
U.S. government agency securities | 34,338 | — | 34,338 | — | |||||||||||||||
Certificates of deposit | 6,561 | — | 6,561 | — | |||||||||||||||
Commercial paper | 1,499 | — | 1,499 | — | |||||||||||||||
Total | $ | 133,259 | $ | 12,851 | $ | 120,408 | $ | — | |||||||||||
The Company monitors investments for other-than-temporary impairment. It was determined that unrealized gains and losses at December 31, 2014 and 2013, are temporary in nature, because the change in market value for those securities has resulted from fluctuating interest rates, rather than a deterioration of the credit worthiness of the issuers. So long as the Company holds these securities to maturity, it is unlikely to experience gains or losses. In the event that the Company disposes of these securities before maturity, it is expected that realized gains or losses, if any, will be immaterial. | |||||||||||||||||||
The following table summarizes the gross unrealized losses and fair values of investments in an unrealized loss position as of December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: | |||||||||||||||||||
31-Dec-14 | |||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | |||||||||||||
Marketable Securities | |||||||||||||||||||
Corporate bonds | $ | 113,960 | $ | -136 | $ | — | $ | — | $ | 113,960 | $ | -136 | |||||||
Asset backed securities | 33,073 | -18 | — | — | 33,073 | -18 | |||||||||||||
U.S. government agency securities | 5,641 | -7 | — | — | 5,641 | -7 | |||||||||||||
Total | $ | 152,674 | $ | -161 | $ | — | $ | — | $ | 152,674 | $ | -161 | |||||||
The following table summarizes the gross unrealized losses and fair value of investments in an unrealized loss position as of December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | |||||||||||||
Marketable Securities | |||||||||||||||||||
Corporate bonds | $ | 7,379 | $ | -6 | $ | — | $ | — | $ | 7,379 | $ | -6 | |||||||
Asset backed securities | 5,062 | -1 | — | — | 5,062 | -1 | |||||||||||||
Commercial paper | 1,499 | — | — | — | 1,499 | — | |||||||||||||
Total | $ | 13,940 | $ | -7 | $ | — | $ | — | $ | 13,940 | $ | -7 | |||||||
The following table summarizes contractual underlying maturities of the Company’s available‑for‑sale investments at December 31, 2014 (in thousands): | |||||||||||||||||||
Due one year or less | Due after one year through two years | ||||||||||||||||||
Description | Cost | Fair Value | Cost | Fair Value | |||||||||||||||
Marketable Securities | |||||||||||||||||||
U.S. government agency securities | $ | 14,788 | $ | 14,796 | $ | 3,899 | $ | 3,892 | |||||||||||
Corporate bonds | 81,461 | 81,423 | 59,777 | 59,701 | |||||||||||||||
Commercial paper | 3,993 | 3,993 | — | — | |||||||||||||||
Asset backed securities | — | — | 60,821 | 60,820 | |||||||||||||||
Total | $ | 100,242 | $ | 100,212 | $ | 124,497 | $ | 124,413 | |||||||||||
Concentration of Credit Risk | |||||||||||||||||||
In accordance with GAAP, the Company is required to disclose any significant off‑balance‑sheet risk and credit risk concentration. The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts or other hedging arrangements. Financial instruments that subject the Company to credit risk consist of cash, cash equivalents and marketable securities. As of December 31, 2014, the Company had cash and cash equivalents deposited in financial institutions in which the balances exceed the federal government agency insured limit of $250,000 by approximately $57.1 million. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk. | |||||||||||||||||||
Subsequent Events | |||||||||||||||||||
The Company evaluates events that occur through the filing date and discloses those events or transactions that provide additional evidence with respect to conditions that existed at the date of the balance sheet. In addition, the financial statements are adjusted for any changes in estimates resulting from the use of such evidence. | |||||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The update also creates a new Subtopic 340-40, Other Assets and Deferred Costs – Contracts with Customers, which provides guidance for the incremental costs of obtaining a contract with a customer and those costs incurred in fulfilling a contract with a customer that are not in the scope of another topic. The new revenue standard requires that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entities expect to be entitled in exchange for those goods or services. To achieve that core principle, the standard requires a five step process of identifying the contracts with customers, identifying the performance obligations in the contracts, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, the performance obligations are satisfied. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements. | |||||||||||||||||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The amendment is effective for the annual period beginning after December 15, 2016, and for annual and interim periods thereafter, with early adoption permitted. The amendment requires an entity’s management to evaluate for each annual and interim reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued. If substantial doubt is raised, further analysis and disclosures are required, including management’s plans to mitigate the adverse conditions or events. | |||||||||||||||||||
In July 2013, the FASB issued ASU 2013-11 regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This standard requires entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss ("NOL") or tax credit carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. This ASU requires entities to assess whether to net the unrecognized tax benefit with a deferred tax asset as of the reporting date. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company adopted this guidance during the first quarter of 2014, and it did not have a material impact on the consolidated financial statements as we have a full valuation allowance against the deferred tax asset. Refer to footnote 13 for further description. | |||||||||||||||||||
Reclassifications | |||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation in the consolidated financial statements and accompanying notes to the consolidated financial statements. | |||||||||||||||||||
GENZYME_STRATEGIC_TRANSACTION
GENZYME STRATEGIC TRANSACTION | 12 Months Ended |
Dec. 31, 2014 | |
GENZYME STRATEGIC TRANSACTION | |
GENZYME STRATEGIC TRANSACTION | (3) GENZYME STRATEGIC TRANSACTION |
Transaction summary | |
On January 27, 2009, the Company entered into a Collaboration, License and Purchase Agreement (the “CLP Agreement”) with Genzyme Corporation (“Genzyme”). Pursuant to the CLP Agreement, the Company (i) assigned to Genzyme all of its intellectual property applicable to the fields of prenatal and reproductive health (the “Transferred Intellectual Property”), (ii) granted Genzyme an irrevocable, perpetual, exclusive, worldwide, fully‑paid, royalty‑free license to use and sublicense all of the Company’s remaining intellectual property (the “Retained Intellectual Property”) in the fields of prenatal and reproductive health (the “Genzyme Core Field”), and (iii) granted Genzyme an irrevocable, perpetual, non‑exclusive, worldwide, fully‑paid, royalty‑free license to use and sublicense the Retained Intellectual Property in all fields other than the Genzyme Core Field and other than colorectal cancer detection and stool‑based disease detection (the “Company Field”). Following the transaction, the Company retained rights in its intellectual property to pursue only the fields of colorectal cancer detection and stool‑based detection of any disease or condition | |
Pursuant to the Genzyme Strategic Transaction, Genzyme agreed to pay an aggregate of $18.5 million to the Company, of which $16.65 million was paid at closing and $1.85 million (the “Holdback Amount”) was subject to a holdback by Genzyme to satisfy certain potential indemnification obligations of the Company. Genzyme also agreed to pay a double‑digit royalty to the Company on income received by Genzyme as a result of any licenses or sublicenses to third parties of the Transferred Intellectual Property or the Retained Intellectual Property in any field other than the Genzyme Core Field or the Company Field. | |
The Company’s on‑going performance obligations to Genzyme under the CLP, including the obligation to deliver certain intellectual property improvements to Genzyme, if improvements are made during the initial five year collaboration period, were deemed to be undelivered elements of the CLP Agreement on the date of closing. Accordingly, the Company deferred the initial $16.65 million in cash received at closing and is amortizing that up‑front payment on a straight line basis into the License Fee Revenue line item in its statements of operations over the initial five year collaboration period. The Company received the first holdback amount of $962,000, which included accrued interest, due from Genzyme during the first quarter of 2010. The Company received the second holdback amount of $934,250 which included accrued interest due, from Genzyme during the third quarter of 2010. The amounts were deferred and were amortized on a straight‑line basis into revenue over the remaining term of the collaboration through January 2014. | |
In addition, the Company entered into a Common Stock Subscription Agreement with Genzyme on January 27, 2009, which provided for the private issuance and sale to Genzyme of 3,000,000 shares (the “Shares”) of the Company’s common stock, $0.01 par value per share, at a per share price of $2.00, for an aggregate purchase price of $6.0 million. The price paid by Genzyme for the Shares represented a premium of $0.51 per share above the closing price of the Company’s common stock on that date of $1.49 per share. The aggregate premium paid by Genzyme over the closing price of the Company’s common stock on the date of the transaction of $1.53 million is included as a part of the total consideration for the CLP. Accordingly, the Company deferred the aggregate $1.53 million premium and amortized that amount on a straight line basis into the License fees line item in the Company’s statements of operations over the initial five‑year collaboration period. | |
The Company recognized approximately $0.3 million in license fee revenue in connection with the amortization of the up-front payments and holdback amounts from Genzyme during the year ended December 31, 2014. The Company recognized approximately $4.1 million in license fee revenue in connection with the amortization of the up‑front payments and holdback amounts from Genzyme during each of the years ended December 31, 2013 and 2012. | |
MAYO_LICENSE_AGREEMENT
MAYO LICENSE AGREEMENT | 12 Months Ended |
Dec. 31, 2014 | |
MAYO LICENSE AGREEMENT | |
MAYO LICENSE AGREEMENT | (4) MAYO LICENSE AGREEMENT |
Overview | |
On June 11, 2009, the Company entered into a license agreement (the “License Agreement”) with MAYO Foundation for Medical Education and Research (“MAYO”). Under the License Agreement, MAYO granted the Company an exclusive, worldwide license within the field (the “Field”) of stool or blood based cancer diagnostics and screening (excluding a specified proteomic target) with regard to certain MAYO patents, and a non‑exclusive worldwide license within the Field with regard to certain MAYO know‑how. The licensed patents cover advances in sample processing, analytical testing and data analysis associated with non‑ invasive, stool‑based DNA screening for colorectal cancer. Under the License Agreement, the Company assumes the obligation and expense of prosecuting and maintaining the licensed patents and is obligated to make commercially reasonable efforts to bring products covered by the license to market. Pursuant to the License Agreement, the Company granted MAYO two common stock purchase warrants with an exercise price of $1.90 per share covering 1,000,000 and 250,000 shares of common stock, respectively. The Company is also required to make payments to MAYO for up‑front fees, fees once certain milestones are reached by the Company, and other payments as outlined in the License Agreement. In addition to the license to intellectual property owned by MAYO, the Company receives product development and research and development efforts from MAYO personnel. The Company is also obligated to make royalty payments to MAYO on potential future net sales of any products developed from the licensed technology. The Company sought rights to the MAYO intellectual property for the specific purpose of developing a non‑invasive, stool‑based DNA screening test for colorectal cancer. At the time the license agreement was executed, the sole focus of the Company was the development of such a test. Accordingly, the Company recognized the initial payments and expense related to the warrants at the time of the transaction and the amounts were expensed to research and development as there were no anticipated alternative future uses associated with the intellectual property. | |
Warrants | |
The warrants granted to MAYO were valued using a Black‑Scholes pricing model at the date of the grant. The warrants were granted with an exercise price of $1.90 per share of common stock. The grant to purchase 1,000,000 shares was immediately exercisable and the grant to purchase 250,000 shares vests and became exercisable over a four year period. | |
The warrant covering 1,000,000 shares was fully exercised as of September 2011. | |
In January of 2013, MAYO partially exercised its warrant covering 250,000 shares by utilizing the cashless exercise provision contained in the warrant. As a result of this exercise for a gross amount of 85,000 shares, in lieu of paying a cash exercise price, MAYO forfeited its right with respect to 14,008 shares leaving it with a net amount of 70,992 shares. | |
In June of 2013, MAYO partially exercised this warrant by utilizing the cashless exercise provision contained in the warrant. As a result of this exercise for a gross amount of 85,000 shares, in lieu of paying a cash exercise price, MAYO forfeited its right with respect to 12,765 shares leaving it with a net amount of 72,235 shares. | |
In June of 2014, MAYO exercised the remaining shares of this warrant by utilizing the cashless exercise provision contained in the warrant. As a result of this exercise for a gross amount of 80,000 shares, in lieu of paying a cash exercise price, MAYO forfeited its right with respect to 10,587 shares leaving it with a net amount of 69,413 shares. Following this exercise, all of MAYO’s warrants to purchase the Company’s common stock were fully exercised. | |
Royalty Payments | |
The Company will make royalty payments to MAYO based on a percentage of net sales of products developed from the licensed technology starting in the third year of the agreement. Minimum royalty payments were $10,000 in 2012, $25,000 in each of 2013 and 2014 and will be $25,000 per year thereafter through 2033, the year the last patent expires. | |
Other Payments | |
Other payments under the License Agreement include an upfront payment of $80,000, a milestone payment of $250,000 on the commencement of patient enrollment in a human cancer screening clinical, and a $500,000 payment upon FDA approval of the Company’s Cologuard test. The upfront payment of $80,000 was made in the third quarter of 2009 and expensed to research and development in the second quarter of 2009. The Company began enrollment in its FDA trial in June 2011 and the milestone payment of $250,000 was made and expensed to research and development in June 2011. The Company received FDA approval for its Cologuard test in August 2014 and the milestone payment of $500,000 was made and expensed to research and development in August 2014. | |
In addition, the Company is paying MAYO for research and development efforts. As part of the Company’s research collaboration with MAYO, the Company has incurred charges of $2.3 million and has made payments of $0.7 million for the year ended December 31, 2014. The Company has recorded an estimated liability in the amount of $1.4 million for research and development efforts as of December 31, 2014. The Company incurred $1.7 million and made payments of $1.0 million for the year ended December 31, 2013. The Company recorded an estimated liability in the amount of $0.7 million for research and development efforts at December 31, 2013. The Company incurred charges of $1.2 million and made payments of $1.1 million for the year ended December 31, 2012. | |
May 2012 Amendment | |
In May 2012 the Company expanded the relationship with MAYO through an amendment to the License Agreement. As part of the amendment, MAYO expanded the Company’s license to include all gastrointestinal cancers and diseases, and new cancer screening applications of stool‑ and blood‑based testing. As consideration for the expanded license, the Company granted MAYO 97,466 shares of restricted stock, one quarter of which vested immediately, with the remainder to vest in three equal annual installments. The Company recognized $1.0 million in research and development licensing expense during the twelve months ended December 31, 2012 in connection with the restricted stock grant. The Company sought rights to the Mayo intellectual property for the specific purpose of developing future non‑invasive, stool‑based DNA screening tests for gastrointestinal diseases other than colorectal cancer. The Company does not believe there are alternative future uses for the intellectual property. In addition, at the time the restricted stock grant expense was recorded for the intellectual property license, the Company believed it was unlikely they would proceed with the tests for other gastrointestinal diseases unless the significant risks related to the colorectal cancer screening test receiving FDA approval were mitigated. Because of the significant uncertainty of receiving FDA approval for the colorectal cancer diagnostic, coupled with the uncertainty associated with funding future development of tests for other gastrointestinal diseases, the Company could not conclude that commencement of any future projects related to the acquired intellectual property was reasonably expected at the time of this license agreement amendment. | |
As part of the amendment, the Company will also be responsible for making additional restricted stock grants to MAYO as certain milestones are met with respect to commercial launch of the Company’s second and third licensed products. Additionally, the Company will make milestone payments once certain sales levels are reached on the second and third licensed products. It is uncertain as to when or if these milestones will be met; therefore, the milestone payments have not been recorded as a liability. The Company evaluates the status of the milestone payments at each reporting date to determine if a liability should be recorded for the milestone payment. | |
ISSUANCES_OF_EQUITY
ISSUANCES OF EQUITY | 12 Months Ended |
Dec. 31, 2014 | |
ISSUANCES OF EQUITY | |
ISSUANCES OF EQUITY | (5) ISSUANCES OF EQUITY |
Underwritten Public Offerings | |
On August 13, 2012, the Company completed an underwritten public offering of 6.3 million shares of common stock at a price of $9.75 per share to the public. The Company received approximately $57.8 million of net proceeds from the offering, after deducting $3.9 million for the underwriting discount and other stock issuance costs paid by the Company. | |
On June 21, 2013, the Company completed an underwritten public offering of 6.3 million shares of common stock at a price of $12.35 per share to the public. The Company received approximately $73.3 million of net proceeds from the offering, after deducting $4.8 million for the underwriting discount and other stock issuance costs paid by the Company. | |
On April 2, 2014, the Company completed an underwritten public offering of 11.5 million shares of common stock at a price of $12.75 per share to the public. The Company received approximately $137.7 million of net proceeds from the offering, after deducting the $8.9 million for the underwriting discount and other stock issuance costs paid by the Company. | |
On December 16, 2014, the Company completed an underwritten public offering of 4.0 million shares of common stock at a price of $25.75 per share to the public. The Company received approximately $100.9 million of net proceeds from the offering, after deducting $2.1 million for the underwriting discount and other stock issuance costs paid by the Company. | |
Rights Agreement | |
In February 2011, the Company adopted a rights agreement and subsequently distributed to the Company’s stockholders preferred stock purchase rights. Under certain circumstances, each right can be exercised for one one‑thousandth of a share of Series A Junior Participating Preferred Stock. In general, the rights will become exercisable in the event of an announcement of an acquisition of 15% or more of the Company’s outstanding common stock or the commencement or announcement of an intention to make a tender offer or exchange offer for 15% or more of the Company’s outstanding common stock. If any person or group acquires 15% or more of the Company’s common stock, the Company’s stockholders, other than the acquiror, will have the right to purchase additional shares of the Company’s common stock (in lieu of the Series A Junior Participating Preferred Stock) at a substantial discount to the then prevailing market price. The rights agreement could significantly dilute such acquiror’s ownership position in the Company’s shares, thereby making a takeover prohibitively expensive and encouraging such acquiror to negotiate with the Company’s board of directors. The ability to exercise these rights is contingent on events that the Company has determined to be unlikely at this time, and therefore this provision has not been considered in the computation of equity or earnings per share. | |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
STOCK-BASED COMPENSATION | ||||||||||||||
STOCK-BASED COMPENSATION | (6) STOCK‑BASED COMPENSATION | |||||||||||||
Stock‑Based Compensation Plans | ||||||||||||||
The Company maintains the 2010 Omnibus Long‑Term Incentive Plan, the 2010 Employee Stock Purchase Plan and the 2000 Stock Option and Incentive Plan (collectively, the “Stock Plans”). | ||||||||||||||
2000 Stock Option and Incentive Plan The Company adopted the 2000 Option and Incentive Plan (the “2000 Option Plan”) on October 17, 2000. The 2000 Option Plan expired October 17, 2010 and after such date no further awards could be granted under the plan. Under the terms of the 2000 Option Plan, the Company was authorized to grant incentive stock options, as defined under the Internal Revenue Code, non‑ qualified options, restricted stock awards and other stock awards to employees, officers, directors, consultants and advisors. Options granted under the 2000 Option Plan expire ten years from the date of grant. Grants made from the 2000 Option Plan generally vest over a period of three to four years. | ||||||||||||||
The 2000 Option Plan was administered by the compensation committee of the Company’s board of directors, which selected the individuals to whom equity‑based awards would be granted and determined the option exercise price and other terms of each award, subject to the provisions of the 2000 Option Plan. The 2000 Option Plan provides that upon an acquisition of the Company, all options to purchase common stock will accelerate by a period of one year. In addition, upon the termination of an employee without cause or for good reason prior to the first anniversary of the completion of the acquisition, all options then outstanding under the 2000 Option Plan held by that employee will immediately become exercisable. At December 31, 2014, options to purchase 3,358,800 shares were outstanding under the 2000 Option Plan. There were no shares of restricted stock outstanding under the 2000 Option Plan. | ||||||||||||||
2010 Omnibus Long‑Term Incentive Plan The Company adopted the 2010 Omnibus Long‑Term Incentive Plan (the “2010 Stock Plan”) on July 16, 2010. The 2010 Stock Plan will expire on July 16, 2020 and after such date no further awards may be granted under the plan. Under the terms of the 2010 Stock Plan, the Company is authorized to grant incentive stock options, as defined under the Internal Revenue Code, non‑ qualified options, restricted stock awards and other stock awards to employees, officers, directors, consultants and advisors. Options granted under the 2010 Stock Plan expire ten years from the date of grant. Grants made from the 2010 Stock Plan generally vest over a period of three to four years. | ||||||||||||||
The 2010 Stock Plan is administered by the compensation committee of the Company’s board of directors, which selects the individuals to whom equity‑based awards will be granted and determines the option exercise price and other terms of each award, subject to the provisions of the 2010 Stock Plan. The 2010 Stock Plan provides that upon an acquisition of the Company, all equity will accelerate by a period of one year. In addition, upon the termination of an employee without cause or for good reason prior to the first anniversary of the completion of the acquisition, all equity awards then outstanding under the 2010 Stock Plan held by that employee will immediately vest. At December 31, 2014, options to purchase 1,575,517 shares were outstanding under the 2010 Stock Plan and 1,541,114 shares of restricted stock and restricted stock units were outstanding. At December 31, 2014, there were 1,638,187 shares available for future grant under the 2010 Stock Plan. | ||||||||||||||
2010 Employee Stock Purchase Plan The 2010 Employee Stock Purchase Plan (the “2010 Purchase Plan”) was adopted by the Company on July 16, 2010. The 2010 Purchase Plan provides participating employees the right to purchase common stock at a discount through a series of offering periods. The 2010 Purchase Plan will expire on October 31, 2020. On July 24, 2014 the stockholders of Exact Sciences Corporation approved an amendment to the 2010 Employee Stock Purchase Plan to increase the number of shares available for purchase thereunder by 500,000 shares. At December 31, 2014, there were 540,177 shares of common stock available for purchase by participating employees under the 2010 Purchase Plan. | ||||||||||||||
The compensation committee of the Company’s board of directors administers the 2010 Purchase Plan. Generally, all employees whose customary employment is more than 20 hours per week and more than five months in any calendar year are eligible to participate in the 2010 Purchase Plan. Participating employees authorize an amount, between 1% and 15% of the employee’s compensation, to be deducted from the employee’s pay during the offering period. On the last day of the offering period, the employee is deemed to have exercised the employee’s option to purchase shares of Company common stock, at the option exercise price, to the extent of accumulated payroll deductions. Under the terms of the 2010 Purchase Plan, the option exercise price is an amount equal to 85% of the fair market value, as defined under the 2010 Purchase Plan and no employee can purchase more than $25,000 of Company common stock under the 2010 Purchase Plan in any calendar year. Rights granted under the 2010 Purchase Plan terminate upon an employee’s voluntary withdrawal from the 2010 Purchase Plan at any time or upon termination of employment. At December 31, 2014, there were 259,823 cumulative shares issued under the 2010 Purchase Plan, and 88,166 shares were issued in the year ended December 31, 2014, as follows: | ||||||||||||||
Weighted Average | ||||||||||||||
Offering period ended | Number of Shares | price per Share | ||||||||||||
April 30, 2014 | 40,846 | $ | 8.25 | |||||||||||
October 31, 2014 | 47,320 | $ | 8.95 | |||||||||||
Stock‑Based Compensation Expense | ||||||||||||||
The Company recorded approximately $11.5 million in stock‑based compensation expense during the year ended December 31, 2014, in connection with the amortization of restricted stock and restricted stock unit awards, stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees, non‑employee consultants and non‑employee directors. The Company recorded $7.7 million in stock‑based compensation expense during the year ended December 31, 2013 in connection with the amortization of restricted stock and restricted stock unit awards, stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees and non‑employee directors. The Company recorded approximately $5.5 million in stock‑based compensation expense during the year ended December 31, 2012 in connection with the amortization of awards of common stock, restricted common stock and stock options granted to employees, non‑employee directors and non‑employee consultants. Non‑cash stock‑based compensation expense by department for the years ended December 31, 2014, 2013, and 2012 are as follows, and amounts included in the table are in thousands: | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Cost of sales | $ | 279 | $ | — | $ | — | ||||||||
Research and development | 4,135 | 2,817 | 2,396 | |||||||||||
General and administrative | 5,589 | 3,054 | 2,579 | |||||||||||
Sales and marketing | 1,517 | 1,873 | 518 | |||||||||||
Total stock-based compensation | $ | 11,520 | $ | 7,744 | $ | 5,493 | ||||||||
In connection with the June 7, 2013 resignation of the Company’s former Chief Commercial Officer, the Company modified the vesting of 100,000 shares of her previously unvested restricted stock units of which 41,250 of the restricted stock units vested upon the execution of the separation agreement, 10,000 will vest in March 2014, and the remaining 48,750 will vest in twenty‑four equal monthly installments beginning in April 2014, subject to her continuing compliance with the terms of the separation agreement. She forfeited all other unvested restricted stock units and stock option awards. It was determined that the continuing compliance and service to be provided to the Company under the separation agreement was not substantive and, as a result, the Company recorded the full value of the modified restricted stock units as additional stock‑based compensation expense in the second quarter of 2013. | ||||||||||||||
Determining Fair Value | ||||||||||||||
Valuation and Recognition—The fair value of each option award is estimated on the date of grant using the Black‑Scholes option‑pricing model based on the assumptions in the table below. The estimated fair value of employee stock options is recognized to expense using the straight‑line method over the vesting period. | ||||||||||||||
Expected Term—The Company uses the simplified calculation of expected life, described in the SEC’s Staff Accounting Bulletins 107 and 110, as the Company does not currently have sufficient historical exercise data on which to base an estimate of expected life. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted. | ||||||||||||||
Expected Volatility—Expected volatility is based on the Company’s historical stock volatility data over the expected term of the awards. | ||||||||||||||
Risk‑Free Interest Rate—The Company bases the risk‑free interest rate used in the Black‑Scholes valuation model on the implied yield currently available on U.S. Treasury zero‑coupon issues with an equivalent expected term. | ||||||||||||||
Forfeitures—The Company records stock‑based compensation expense only for those awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. The Company’s forfeiture used in the twelve months ended December 31, 2014, 2013 and 2012 was 4.99%, 2.76%, and 1.38%, respectively. | ||||||||||||||
The fair value of each restricted stock and restricted stock unit award is determined on the date of grant using the closing stock price on that day. The fair value of each option award is estimated on the date of grant using the Black‑Scholes option pricing model based on the assumptions in the following table: | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Option Plan Shares | ||||||||||||||
Risk-free interest rates | 1.96% - 2.01% | 0.94% - 1.73% | 0.81% - 1.00% | |||||||||||
Expected term (in years) | 6 | 6 | 6 | |||||||||||
Expected volatility | 77.6% - 80.8% | 82.9% - 84.0% | 85% - 92% | |||||||||||
Dividend yield | 0% | 0% | 0% | |||||||||||
Weighted average fair value per share of options granted during the period | $10.05 | $8.12 | $6.90 | |||||||||||
ESPP Shares | ||||||||||||||
Risk-free interest rates | 0.1% - 0.5% | 0.1% - 0.33% | 0.18% - 0.30% | |||||||||||
Expected term (in years) | 0.5 - 2 | 0.5 - 2 | 0.5 - 2 | |||||||||||
Expected volatility | 42.5% - 62.7% | 39.1% - 45.6% | 34.0% - 54.9% | |||||||||||
Dividend yield | 0% | 0% | 0% | |||||||||||
Weighted average fair value per share of stock purchase rights granted during the period | $6.30 | $3.13 | $2.84 | |||||||||||
Stock Option, Restricted Stock, and Restricted Stock Unit Activity | ||||||||||||||
A summary of stock option activity under the Stock Plans during the years ended 2014, 2013 and 2012 is as follows: | ||||||||||||||
Weighted | ||||||||||||||
Weighted | Average | |||||||||||||
Average | Remaining | Aggregate | ||||||||||||
Exercise | Contractual | Intrinsic | ||||||||||||
Options | Shares | Price | Term (Years) | Value(1) | ||||||||||
(Aggregate intrinsic value in thousands) | ||||||||||||||
Outstanding, January 1, 2012 | 6,453,584 | $ | 2.27 | |||||||||||
Granted | 499,198 | 9.18 | ||||||||||||
Exercised | -691,471 | 3.45 | ||||||||||||
Forfeited | -79,375 | 7.6 | ||||||||||||
Outstanding, December 31, 2012 | 6,181,936 | $ | 2.62 | |||||||||||
Granted | 290,570 | 11.36 | ||||||||||||
Exercised | -274,919 | 5.17 | ||||||||||||
Forfeited | -135,000 | 10.08 | ||||||||||||
Outstanding, December 31, 2013 | 6,062,587 | $ | 2.78 | 6.6 | ||||||||||
Granted | 266,477 | 14.28 | ||||||||||||
Exercised | -1,378,372 | 1.91 | ||||||||||||
Forfeited | -16,375 | 6.37 | ||||||||||||
Outstanding, December 31, 2014 | 4,934,317 | $ | 3.63 | 5.2 | $ | 117,503 | ||||||||
Exercisable, December 31, 2014 | 4,186,502 | $ | 2.27 | 4.7 | $ | 105,384 | ||||||||
Vested and expected to vest, December 31, 2014 | 4,897,001 | $ | 3.57 | 5.2 | $ | 116,898 | ||||||||
-1 | The aggregate intrinsic value of options outstanding at December 31, 2014 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the 4,934,317 options that had exercise prices that were lower than the $27.44 market price of our common stock at December 31, 2014. The aggregate intrinsic value of options exercisable at December 31, 2014 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the 4,186,502 options that had exercise prices that were lower than the $27.44 market price of our common stock at December 31, 2014. The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was $29.2 million, $1.9 million, $4.5 million, respectively, determined as of the date of exercise. | |||||||||||||
Warrants to purchase 75,000 shares of common stock were issued in connection with a consulting agreement in 2009 to provide specific assistance to the Company in attaining FDA approval of Cologuard. The 75,000 warrants vested in the third quarter of 2014 upon successful approval for Cologuard. The Company recorded $1.3 million, the fair value of the warrant on the vesting date as stock-based compensation expense during the third quarter of 2014 in connection with the vesting of this warrant. | ||||||||||||||
A summary of restricted stock and restricted stock unit activity under the Stock Plans during the years ended December 31, 2014, 2013 and 2012 is as follows: | ||||||||||||||
Weighted | ||||||||||||||
Restricted | Average Grant | |||||||||||||
Shares | Date Fair Value | |||||||||||||
Outstanding, January 1, 2012 | 401,490 | $ | 6.24 | |||||||||||
Granted | 602,268 | 9.47 | ||||||||||||
Released | -185,116 | 5.67 | ||||||||||||
Forfeited | -4,687 | 7.69 | ||||||||||||
Outstanding, December 31, 2012 | 813,955 | $ | 8.51 | |||||||||||
Granted | 1,147,553 | 11.76 | ||||||||||||
Released | -344,611 | 8.56 | ||||||||||||
Forfeited | -466,203 | 9.73 | ||||||||||||
Outstanding, December 31, 2013 | 1,150,694 | $ | 11.23 | |||||||||||
Granted | 926,171 | 15.61 | ||||||||||||
Released | -491,370 | 11.17 | ||||||||||||
Forfeited | -44,381 | 12.44 | ||||||||||||
Outstanding, December 31, 2014 | 1,541,114 | $ | 13.86 | |||||||||||
As of December 31, 2014, there was approximately $19.5 million of total unrecognized compensation cost related to non‑vested share‑based compensation arrangements granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for future changes in forfeitures. The Company expects to recognize that cost over a weighted average period of 2.8 years. | ||||||||||||||
The Company received approximately $2.6 million, $1.3 million and $2.4 million from stock option exercises during the years ended December 31, 2014, 2013 and 2012, respectively. During the years ended December 31, 2014, 2013 and 2012, 88,166, 59,932 and 63,611 shares of common stock, respectively, were issued under the Company’s 2010 Purchase Plan resulting in proceeds to the company of $0.8 million, $0.5 million and $0.4 million, respectively. | ||||||||||||||
The following table summarizes information relating to currently outstanding and exercisable stock options as of December 31, 2014: | ||||||||||||||
Outstanding | Exercisable | |||||||||||||
Weighted | ||||||||||||||
Average | Weighted | Weighted | ||||||||||||
Remaining | Average | Average | ||||||||||||
Number of | Contractual | Exercise | Number of | Exercise | ||||||||||
Exercise Price | Options | Life (Years) | Price | Options | Price | |||||||||
$0.00 - $1.00 | 2,887,500 | 4.2 | $ | 0.83 | 2,887,500 | $ | 0.83 | |||||||
$1.01 - $3.00 | 438,000 | 4.6 | 2.79 | 438,000 | 2.79 | |||||||||
$3.01 - $5.00 | 319,347 | 5.5 | 3.95 | 319,347 | 3.95 | |||||||||
$5.01 - $7.00 | 184,960 | 6.2 | 5.94 | 122,273 | 6.01 | |||||||||
$7.01 - $9.00 | 141,248 | 6.5 | 8.16 | 127,623 | 8.22 | |||||||||
$9.01 - $11.00 | 646,785 | 7.5 | 9.65 | 279,259 | 9.49 | |||||||||
$11.01 - $15.00 | 283,000 | 9.0 | 14.04 | 12,500 | 14.4 | |||||||||
$15.01- $16.52 | 33,477 | 9.6 | 16.52 | — | — | |||||||||
4,934,317 | 5.2 | $ | 3.63 | 4,186,502 | $ | 2.27 | ||||||||
During the first quarter of 2012, the Company granted a total of 262,500 restricted stock units to certain executives that would have vested based upon the satisfaction of certain service and performance conditions. The Company performed an evaluation of internal and external factors, and determined the number of shares that were most likely to vest based on the probability of what performance conditions were met. The expense for the fair value of the awards that were expected to vest of $0.6 million was recognized during the year ended December 31, 2012. The service and performance conditions were not met and the expense of $0.6 million was reversed in the first quarter of the year ended December 31, 2013. | ||||||||||||||
During the first quarter of 2013, the Company granted a total of 180,750 restricted stock units to certain executives that vest based upon the satisfaction of certain 2013 performance conditions. Based on the conditions that were met 100,800 shares were earned. The shares vest equally over three years with the first vesting date at December 31, 2013. The company recognized $0.4 million during the year ended December 31, 2013 related to this restricted stock unit grant. | ||||||||||||||
Shares Reserved for Issuance | ||||||||||||||
The Company has reserved shares of its authorized common stock for issuance pursuant to its employee stock purchase and stock option plans, including all outstanding stock option grants noted above at December 31, 2014, as follows: | ||||||||||||||
Shares reserved for issuance | ||||||||||||||
2010 Option Plan | 1,638,187 | |||||||||||||
2010 Purchase Plan | 540,177 | |||||||||||||
2,178,364 | ||||||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
COMMITMENTS AND CONTINGENCIES | |||||
COMMITMENTS AND CONTINGENCIES | (7) COMMITMENTS AND CONTINGENCIES | ||||
Operating Leases | |||||
During November 2009, the Company entered into a five year lease for a 17,500 square foot laboratory office facility in Madison, Wisconsin. This lease contains periodic rent escalation adjustments. During November 2010, the Company entered into an amended lease agreement to lease an additional 7,072 square feet of laboratory and office space for a total of 24,572 square feet The amended agreement covers the same term as the original term and is also subject to periodic rent escalation adjustments. During March 2012, the Company entered into an amended lease agreement to lease an additional 10,428 square feet of laboratory and office space for a total of 35,000 square feet. The amended agreement covers the same term as the original term and is also subject to periodic rent escalation adjustments. During November 2014, the Company entered into an amended lease agreement to extend the terms of the lease on the 35,000 square feet of laboratory and office space. The lease is not subject to periodic rent escalation adjustments. | |||||
During the second quarter of 2013, the Company entered into a five year lease for a 29,000 square foot facility in Madison, Wisconsin that is to house its commercial lab operations. This lease contains periodic rent escalation adjustments and includes provisions for tenant improvements. During August 2014, the Company entered into an amended lease agreement to lease an additional 3,189 square feet of office space to house its contact center operations. The amended agreement covers the same term as the original term and is also subject to periodic rent escalation adjustments. During November 2014, the Company entered into an amended lease agreement to lease to lease adjacent land for the construction of a parking lot. The amended agreement covers the same term as the original term and is also subject to periodic rent escalation adjustments. The Company has two options to extend the term of the lease for five years each. | |||||
As part of the lease agreement, the landlord agreed to pay for a portion of leasehold improvements constructed. These payments are recorded as a lease incentive obligation and will be amortized over the five year term of the lease as a reduction of rent expense. As of December 31, 2014, the lease incentive obligation was $2.7 million. Construction of the laboratory facility was substantially complete at December 31, 2013 and the leasehold improvements related to the laboratory were placed into service. The amortization of the lease incentive obligation began in December of 2013. As part of August 2014 amendment, the landlord has agreed to pay for a portion of leasehold improvements constructed. These payments are recorded as a lease incentive obligation and will be amortized over the remaining lease term as a reduction of rent expense. As of December 31, 2014, the lease incentive obligation was $53.0 thousand. The amortization of the lease incentive obligation began in November of 2014. | |||||
During November 2014, the Company entered into a two year lease agreement for a 620 square foot office facility in London, United Kingdom that is to house European operations. This lease contains periodic rent escalation adjustments. | |||||
Future minimum payments under operating leases as of December 31, 2014 are as follows. Amounts included in the table are in thousands. | |||||
Year Ending December 31, | |||||
2015 | $ | 1,310 | |||
2016 | 1,225 | ||||
2017 | 763 | ||||
2018 | 704 | ||||
2019 | — | ||||
Thereafter | — | ||||
Total lease obligations | $ | 4,002 | |||
Rent expense included in the accompanying consolidated statements of operations was approximately $1.0 million, $0.7 million, and $0.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||
During the fourth quarter of 2009, the Company entered into a sublease agreement (the “2009 Sublease Agreement”) with an unrelated party to sublease approximately 5,086 square feet of rentable area in the Company’s Madison facility. The term of the 2009 Sublease Agreement, which commenced on November 1, 2009, was 36 months. The Company has received approximately $0.2 million in sublease payments over the life of the 2009 Sublease Agreement. Pursuant to the Sublease Agreement, the unrelated party has no rights to renew or extend the 2009 Sublease Agreement. The Company did not receive sublease payments in 2014 or 2013. The Company received $66,800 in sublease payments in 2012. The 2009 Sublease Agreement expired on November 1, 2012. | |||||
License Agreements | |||||
The Company licenses, on a non‑exclusive basis, certain technologies that are, or may be, incorporated into its technology under several license agreements. Generally, the license agreements require the Company to pay royalties based on net revenues received using the technologies, and may require minimum royalty amounts or maintenance fees. | |||||
MAYO | |||||
On June 11, 2009, the Company entered into a patent licensing agreement with MAYO. Under the license agreement, MAYO granted the Company an exclusive, worldwide license within the field of stool or blood based cancer diagnostics and screening (excluding a specified proteomic target) with regard to certain MAYO patents and patent applications, as well as a non‑exclusive, worldwide license within such field with regard to certain MAYO know‑how. The licensed MAYO patents and patent applications contain both method and composition‑of‑matter claims that relate to sample processing, analytical testing and data analysis associated with nucleic screening for cancers and other diseases. The jurisdictions covered by these patents and patent applications include the U.S., Canada, the European Union and Japan. In addition to granting the Company a license to the covered MAYO intellectual property, MAYO agreed to make available personnel to provide the Company product development and research and development assistance. | |||||
Under the license agreement, the Company assumed the obligation and expense of prosecuting and maintaining the licensed MAYO patents and is obligated to make commercially reasonable efforts to bring to market products using the licensed MAYO intellectual property. Pursuant to the license agreement, the Company granted MAYO two common stock purchase warrants with an exercise price of $1.90 per share covering 1,000,000 and 250,000 shares of common stock. The Company agreed to pay MAYO a low single digit royalty on the Company’s net sales of products using the licensed MAYO intellectual property. The Company was also required to pay minimum annual royalty fees of $10,000 on June 12, 2012 and $25,000 on June 12, 2013 and June 12, 2014. The Company is required to continue to pay minimum annual royalty fees of $25,000 each year through 2033.. The MAYO license agreement required various other payments, including an upfront payment of $80,000, which the Company paid in the third quarter of 2009, a milestone payment of $250,000 on the commencement of patient enrollment in FDA trials for the Company’s Cologuard pre‑cancer and cancer screening test, which the Company paid in June 2011 The Company received FDA approval for its Cologuard test in August 2014, and the milestone payment of $500,000 was made and expensed to research and development in August 2014. | |||||
In May 2012 the Company expanded its relationship with MAYO through an amendment to the license agreement. As part of the amendment, MAYO expanded the license to include all gastrointestinal cancers and diseases, and new cancer screening applications of stool‑ and blood‑based testing. As consideration for the expanded license, the Company granted MAYO 97,466 shares of its common stock, one quarter of which vested immediately, with the remainder to vest in three equal annual installments. The Company sought rights to the MAYO intellectual property for the specific purpose of developing future non‑invasive, stool‑based DNA screening tests for gastrointestinal diseases other than colorectal cancer. In addition, the Company agreed to issue MAYO shares of the Company’s common stock with a value of $200,000 upon commercial launch of the Company’s second and third products that use the licensed MAYO intellectual property. Additionally, the Company agreed in the amendment to pay MAYO, for each of the Company’s products that use licensed MAYO intellectual property, $200,000 cash upon such product reaching $5 million in cumulative net sales, $750,000 cash upon such product reaching $20 million in cumulative net sales, and $2 million cash upon such product reaching $50 million in cumulative net sales. | |||||
See Note 4 for additional information related to the MAYO license agreement. | |||||
Hologic | |||||
On October 14, 2009, the Company entered into a technology license agreement with Hologic, Inc. (“Hologic”). Under the license agreement, Hologic granted the Company an exclusive, worldwide license within the field of human stool based colorectal cancer and pre‑cancer detection or identification with regard to certain Hologic patents, patent applications and improvements, including Hologic’s Invader detection chemistry (the “Covered Hologic IP”). The licensed patents and patent applications contain both method and composition‑of‑matter claims. The jurisdictions covered by these patents and patent applications include the U.S., Canada, the European Union, Australia and Japan. The license agreement also provided the Company with non‑exclusive, worldwide licenses to the Covered Hologic IP within the field of clinical diagnostic purposes relating to colorectal cancer (including cancer diagnosis, treatment, monitoring or staging) and the field of detection or identification of colorectal cancer and pre‑cancers through means other than human stool samples. In December 2012 the Company entered into an amendment to this license agreement with Hologic pursuant to which Hologic granted the Company a non‑exclusive worldwide license to the Covered Hologic IP within the field of any disease or condition within, related to or affecting the gastrointestinal tract and/or appended mucosal surfaces. | |||||
The Company paid Hologic $50,000 upon executing the license agreement in 2009 and $100,000 when the Company began enrollment in its FDA trial in June 2011. The Company is required to pay Hologic a low single digit royalty on the Company’s net sales of products using the Covered Hologic IP. The Company received FDA approval for its Cologuard test in August 2014, and the milestone payment of $100,000 was made and expensed to research and development in August 2014. | |||||
MDx Health | |||||
On July 26, 2010, the Company entered into a technology license and royalty agreement with MDx Health (formerly Oncomethylome Sciences, S.A.). Under the license agreement, MDx Health granted the Company a royalty bearing exclusive, worldwide license to certain patents. Under the licensing agreement, the Company is obligated to make commercially reasonable efforts to bring products covered by the license agreement to market. The Company is required to pay MDx Health a minimum royalty fee of $100,000 on each anniversary of the agreement for the life of the contract. The Company also agreed to pay $100,000 upon the first commercial sale of a licensed product after the receipt of FDA approval and $150,000 after the Company has reached net sales of $10 million of a licensed product after receipt of FDA approval, $750,000 after the Company has reached net sales of $50 million, and $1 million after the Company has reached net sales of $50 million in a single calendar year. The Company is also required to pay MDx Health a royalty fee based on a certain percentage of the Company’s net sales of the licensed products. | |||||
The Company has recorded research and development expense associated with license agreements of $2.3 million, $1.8 million, and $1.4 million, respectively, for the years ended December 31, 2014, 2013 and 2012. Future minimum payments due under the Company’s technology licenses as of December 31, 2014 are as follows. Amounts included in the table are in thousands. | |||||
Year ending December 31, | |||||
2015 | $ | 698 | |||
2016 | 256 | ||||
2017 | 256 | ||||
2018 | 256 | ||||
2019 | 256 | ||||
Thereafter | 1,775 | ||||
$ | 3,497 | ||||
Capital Lease | |||||
In 2012 the Company entered into a lease agreement which is accounted for as a capital lease. The leased equipment is recorded at $1.2 million and is included in the balance sheet as laboratory equipment. The cost of the leased equipment is depreciated over the three year lease term, and the expense is recorded as depreciation expense. Accumulated depreciation of the leased equipment at December 31, 2014 was approximately $674.5 thousand. The Company is required to make principal and interest payments of approximately $32,000 per month over the three year term of the lease agreement. | |||||
The future minimum lease payments required under the capital lease and the present value of the net minimum lease payments as of December 31, 2014 are as follows (in thousands): | |||||
Year ending December 31, | |||||
2015 | $ | 369 | |||
Total lease obligations | $ | 369 | |||
Less imputed interest | -9 | ||||
Present value of minimum lease payments | 360 | ||||
Less current maturities of capital lease obligations | -360 | ||||
Long term capital lease obligations | $ | — | |||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | (8) RELATED PARTY TRANSACTIONS |
In August 2013, the Company renewed a one year consulting agreement with a non‑employee director for an additional year. In accordance with the agreement, the Company granted a restricted stock award for 4,277 shares of common stock that vests over one year, and will make cash payments totaling $60,000 over the one year term of the agreement. The Company recorded expense related to this consulting agreement of $25,000 in 2013. | |
In August 2012, the Company entered into a one year consulting agreement with a non‑employee director under which the director agreed to provide advisory services in support of the Company’s commercialization activities. In accordance with the agreement, the Company granted a restricted stock award for 4,873 shares of common stock that vested over one year, and made cash payments totaling $60,000 over the initial one year term of the agreement. The Company recorded expense related to this consulting agreement of $35,000 in 2013 and $25,000 in 2012. | |
ACCRUED_LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
ACCRUED LIABILITIES | ||||||||
ACCRUED LIABILITIES | (9) ACCRUED LIABILITIES | |||||||
Accrued liabilities at December 31, 2014 and 2013 consisted of the following. Amounts included in the table are in thousands. | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Compensation | $ | 5,668 | $ | 2,838 | ||||
Professional fees | 5,764 | 826 | ||||||
Research and trial related expenses | 1,447 | 689 | ||||||
Licenses | 646 | 539 | ||||||
Miscellaneous taxes | 261 | 24 | ||||||
Other | 122 | 58 | ||||||
Occupancy costs | 52 | 71 | ||||||
Assets under construction | — | 649 | ||||||
$ | 13,960 | $ | 5,694 | |||||
LONG_TERM_DEBT
LONG TERM DEBT | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
LONG TERM DEBT | |||||
LONG TERM DEBT | (10) LONG TERM DEBT | ||||
During November 2009, the Company entered into a loan agreement with the Wisconsin Department of Commerce pursuant to which the Wisconsin Department of Commerce agreed to lend up to $1 million to the Company subject to the Company’s satisfaction of certain conditions. The Company received the $1 million in December 2009. The terms of the loan are such that portions of the loan become forgivable if the Company meets certain job creation requirements at a specified wage rate. After the Company creates 100 full time positions, the principal shall be reduced at the rate of $5,405 for each new position created thereafter during the measurement period. If the Company has created 185 new full‑time positions as of June 30, 2015, the full amount of principal shall be forgiven. The loan bears an interest rate of 2%, which is subject to an increase to 4% if the Company does not meet certain job creation requirements. Both principal and interest payments under the loan agreement are deferred for five years. Based on the Company’s estimation of the loan obligation, the table below represents the future principal obligations as of December 31, 2014: | |||||
Year ending December 31, | |||||
2015 | $ | — | |||
2016 | 145 | ||||
2017 | 217 | ||||
2018 | 221 | ||||
2019 | 225 | ||||
Thereafter | 192 | ||||
$ | 1,000 | ||||
EMPLOYEE_BENEFIT_PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2014 | |
EMPLOYEE BENEFIT PLAN | |
EMPLOYEE BENEFIT PLAN | (11) EMPLOYEE BENEFIT PLAN |
The Company maintains a qualified 401(k) retirement savings plan (the “401(k) Plan”) covering all employees. Under the terms of the 401(k) Plan, participants may elect to defer a portion of their compensation into the 401(k) Plan, subject to certain limitations. Company matching contributions may be made at the discretion of the Board of Directors. | |
The Company’s Board of Directors approved 401(k) Plan matching contributions for the years ended December 31, 2014, 2013 and 2012 in the form of Company common stock equal to 100% up to 6% of the participant’s salary for that year. The Company recorded compensation expense of approximately $0.8 million, $0.5 million, and $0.4 million, respectively, in the statements of operations for the years ended December 31, 2014, 2013 and 2012 in connection with 401(k) Plan matching contributions. | |
NEW_MARKET_TAX_CREDIT
NEW MARKET TAX CREDIT | 12 Months Ended | |||
Dec. 31, 2014 | ||||
NEW MARKET TAX CREDIT | ||||
NEW MARKET TAX CREDIT | (12) NEW MARKET TAX CREDIT | |||
During the fourth quarter of 2014, the Company received approximately $2.4 million in net proceeds from financing agreements related to working capital and capital improvements at one of its Madison, Wisconsin facilities. This financing arrangement was structured with an unrelated third party financial institution (the “Investor”), an investment fund, and its majority owned community development entity in connection with the Company’s participation in transactions qualified under the federal New Markets Tax Credit program, pursuant to Section 45D of the Internal Revenue Code of 1986, as amended. Through its participation in this program, the Company has secured low interest financing and the potential for future debt forgiveness related to the Madison, Wisconsin facility. Upon closing of this transaction, the Company provided an aggregate of approximately $5.1 million to the Investor, in the form of a loan receivable, with a term of seven years, bearing an interest rate of 2.74% per annum. This $5.1 million in proceeds plus $2.4 million of capital from the Investor was used to make an aggregate $7.5 million loan to a subsidiary of the Company. This financing arrangement is not secured by any assets of the Company. On December 1, 2021, the Company would receive a repayment of its approximately $5.1 million loan. The $5.1 million is eliminated in the consolidation of the financial statements. This transaction also includes a put/call feature which becomes enforceable at the end of the seven-year compliance period, whereby we may be obligated or entitled to repurchase the Investor’s interest in the investment fund. The value attributable to the put/call is nominal. | ||||
The Investor is subject to 100% recapture of the New Markets Tax Credits it receives for a period of seven years as provided in the Internal Revenue Code and applicable U.S. Treasury regulations. The Company is required to be in compliance with various regulations and contractual provisions that apply to the New Markets Tax Credit arrangement. Noncompliance with applicable requirements could result in the Investor’s projected tax benefits not being realized and, therefore, require the Company to indemnify the Investor for any loss or recapture of New Markets Tax Credits related to the financing until such time as the recapture provisions have expired under the applicable statute of limitations. The Company does not anticipate any credit recapture will be required in connection with this financing arrangement. | ||||
Also in the fourth quarter, in connection with the New Markets Tax Credit transaction, the Company entered into an agreement that grants it the option to purchase certain real property adjacent to its current Madison, Wisconsin facilities. The option is renewable annually in exchange for a fee. If the Company decides not to exercise its option, it must, at that time, repay $1.2 million of the $2.4 million previously received from the Investor which could be applied to the repayment of the $2.4 million loan. | ||||
At December 31, 2014, the net loan balance of $2.4 million is recorded in Other Long Term Liabilities on the consolidated balance sheets. The Company incurred approximately $0.2 million of debt issuance costs related to the above transactions, which are being amortized over the life of the agreements. | ||||
The investment fund and the community development entity are considered Variable Interest Entities (VIEs) and the Company is the primary beneficiary of the VIEs. This conclusion was reached based on the following: | ||||
· | The ongoing activities of the VIEs—collecting and remitting interest and fees and NMTC compliance—were all considered in the initial design and are not expected to significantly affect performance throughout the life of the VIE; | |||
· | Contractual arrangements obligate the Company to comply with NMTC rules and regulations and provide various other guarantees to the Investor and community development entity; | |||
· | The Investor lacks a material interest in the underling economics of the project; and | |||
· | The Company is obligated to absorb losses of the VIEs. | |||
Because the Company is the primary beneficiary of the VIEs, they have been included in the consolidated financial statements. There are no other assets, liabilities or transactions in these VIEs outside of the financing transactions executed as part of the NMTC arrangement. The Investor’s contribution of $2.4 million is included in Cash and Cash Equivalents at December 31, 2014 and the offsetting Investor interest in the financing arrangement is included in Other Long Term Liabilities in the accompanying consolidated balance sheets. | ||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
INCOME TAXES | ||||||||
INCOME TAXES | (13) INCOME TAXES | |||||||
The Company is subject to taxation in the U.S. and various state jurisdictions. All of the Company’s tax years are subject to examination by the U.S. and state tax authorities due to the carryforward of unutilized net operating losses. | ||||||||
Under financial accounting standards, deferred tax assets or liabilities are computed based on the differences between the financial statement and income tax bases of assets and liabilities using the enacted tax rates. Deferred income tax expense or benefit represents the change in the deferred tax assets or liabilities from period to period. At December 31, 2014, the Company had federal net operating loss and state net operating loss carryforwards of approximately $422.7 million and $232.0 million, respectively for financial reporting purposes, which may be used to offset future taxable income. The Company also had federal and state research tax credit carryforwards of $6.5 million and $15.6 million, respectively which may be used to offset future income tax liability. The federal and state carryforwards expire beginning 2014 through 2032 and are subject to review and possible adjustment by the Internal Revenue Service. In the event of a change of ownership, the federal and state net operating loss and research and development tax credit carryforwards may be subject to annual limitations provided by the Internal Revenue Code and similar state provisions. | ||||||||
As of December 31, 2014 and 2013, the Company had $39.8 million and $16.5 million, respectively, in excess tax benefit stock option deductions. The excess tax benefit arising from these deductions is credited to additional paid in capital as the benefit is realized. | ||||||||
The components of the net deferred tax asset with the approximate income tax effect of each type of carryforward, credit and temporary differences are as follows. Amounts included in the table are in thousands. | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Deferred tax assets: | ||||||||
Operating loss carryforwards | $ | 140,471 | $ | 101,942 | ||||
Tax credit carryforwards | 16,915 | 18,061 | ||||||
Deferred revenue | 11 | 117 | ||||||
Other temporary differences | 4,543 | 4,429 | ||||||
Tax assets before valuation allowance | 161,940 | 124,549 | ||||||
Less—Valuation allowance | -161,940 | -124,549 | ||||||
Net deferred taxes | $ | — | $ | — | ||||
A valuation allowance to reduce the deferred tax assets is reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has incurred significant losses since its inception and due to the uncertainty of the amount and timing of future taxable income, management has determined that a $161.9 million and $124.5 million valuation allowance at December 31, 2014 and 2013 is necessary to reduce the tax assets to the amount that is more likely than not to be realized. The change in valuation allowance for December 31, 2014 and 2013 was $37.4 million and $20.6 million, respectively. Due to the existence of the valuation allowance, future changes in our unrecognized tax benefits will not impact the Company’s effective tax rate. | ||||||||
The effective tax rate differs from the statutory tax rate due to the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | 2012 | ||||||
U.S. Federal statutory rate | 34.0 | % | 34.0 | % | 34.0 | % | ||
State taxes | 5.5 | 4.8 | 1.7 | |||||
Research and development tax credit | -1.1 | 16.9 | 5.1 | |||||
Stock-based compensation expense | -0.5 | -1.1 | -0.6 | |||||
Other adjustments | -0.8 | -0.3 | -0.1 | |||||
Valuation allowance | -37.1 | -54.3 | -40.1 | |||||
Effective tax rate | 0.0 | % | 0.0 | % | 0.0 | % | ||
There are no unrecognized tax benefits as of December 2014, 2013 and 2012, nor are there any tax positions where it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the 12 months following December 31, 2014. | ||||||||
As of December 31, 2014, due to the carryforward of unutilized net operating losses and research and development credits, the Company is subject to U.S. Federal income tax examinations for the tax years 1995 through 2014, and to state income tax examinations for the tax years 1995 through 2013. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2014, 2013 and 2012. | ||||||||
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2014 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | (14) SUBSEQUENT EVENT |
In February 2015 the Company amended and restated its license agreement with MAYO to extend the arrangement with MAYO for an additional five years and broaden the Company’s and MAYO’s collaboration efforts to develop screening, surveillance and diagnostic tests and tools for use in connection with gastrointestinal cancers, precancers, diseases and conditions. MAYO agreed to continue to make available personnel during the additional five year period to provide the Company product development and research and development assistance. The amended and restated license agreement defines “gastrointestinal” to include certain airway organs (including the pharynx, larynx, trachea, bronchi and lungs) and certain head and neck organs (including nasal passages, mouth and throat). The amended and restated license agreement also reflects an expanded list of patent rights that MAYO licenses to the Company. | |
Pursuant to the amended and restated license agreement, the Company agreed to pay MAYO an additional $5,000,000, payable in five annual installments, the first of which was due February 10, 2015. | |
QUARTERLY_RESULTS_OF_OPERATION
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | ||||||||||||||
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | (15) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |||||||||||||
The following table sets forth unaudited quarterly statement of operations data for each of the eight quarters ended December 31, 2014 and 2013. In the opinion of management, this information has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this Form 10‑K, and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the unaudited quarterly results of operations. The quarterly data should be read in conjunction with our audited consolidated financial statements and the notes to the consolidated financial statements appearing elsewhere in this Form 10‑K. | ||||||||||||||
Quarter Ended | ||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||
2014 | ||||||||||||||
Laboratory service revenue | $ | — | $ | — | $ | — | $ | 1,504 | ||||||
License fee revenue | 294 | — | — | — | ||||||||||
Cost of revenue | — | — | 924 | 3,401 | ||||||||||
Gross profit | 294 | — | -924 | -1,897 | ||||||||||
Research and development | 7,430 | 7,174 | 9,073 | 4,992 | ||||||||||
General and administrative | 4,586 | 6,230 | 8,994 | 10,625 | ||||||||||
Sales and marketing | 4,456 | 6,166 | 13,217 | 15,069 | ||||||||||
Loss from operations | -16,178 | -19,570 | -32,208 | -32,583 | ||||||||||
Investment income | 86 | 146 | 160 | 150 | ||||||||||
Interest expense | -15 | -13 | -12 | -11 | ||||||||||
Net loss | $ | -16,107 | $ | -19,437 | $ | -32,060 | $ | -32,444 | ||||||
Net loss per share—basic and diluted | $ | -0.23 | $ | -0.24 | $ | -0.39 | $ | -0.38 | ||||||
Weighted average common shares outstanding—basic and diluted | 70,987 | 82,048 | 82,941 | 84,734 | ||||||||||
2013 | ||||||||||||||
Revenue | $ | 1,036 | $ | 1,036 | $ | 1,036 | $ | 1,036 | ||||||
Cost of revenue | — | — | — | — | ||||||||||
Gross profit | 1,036 | 1,036 | 1,036 | 1,036 | ||||||||||
Research and development | 7,526 | 6,457 | 6,982 | 6,713 | ||||||||||
General and administrative | 2,648 | 3,628 | 3,686 | 3,687 | ||||||||||
Sales and marketing | 1,759 | 3,302 | 1,615 | 2,902 | ||||||||||
Loss from operations | -10,897 | -12,351 | -11,247 | -12,266 | ||||||||||
Investment income | 62 | 55 | 103 | 96 | ||||||||||
Interest expense | -19 | -18 | -16 | -16 | ||||||||||
Net loss | $ | -10,854 | $ | -12,314 | $ | -11,160 | $ | -12,186 | ||||||
Net loss per share—basic and diluted | $ | -0.17 | $ | -0.19 | $ | -0.16 | $ | -0.17 | ||||||
Weighted average common shares outstanding—basic and diluted | 63,836 | 64,699 | 70,559 | 70,757 | ||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||||||||||
The accompanying consolidated financial statements include the accounts of the Company’s wholly‑owned subsidiaries, Exact Sciences Laboratories, LLC, Exact Sciences Finance Corporation, Exact Sciences Europe LTD, and variable interest entities. See Note 12 for the discussion of financing arrangements involving certain entities that are variable interest entities that are included in our consolidated financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. | |||||||||||||||||||
References to “Exact”, “we”, “us”, “our”, or the “Company” refer to Exact Sciences Corporation and its wholly owned subsidiaries. | |||||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||||
The Company considers cash on hand, demand deposits in bank, money market funds, and all highly liquid investments with an original maturity of 90 days or less to be cash and cash equivalents. The Company had no restricted cash at December 31, 2014 and 2013. | |||||||||||||||||||
Marketable Securities | Marketable Securities | ||||||||||||||||||
Management determines the appropriate classification of debt securities at the time of purchase and re‑evaluates such designation as of each balance sheet date. Debt securities carried at amortized cost are classified as held‑to‑maturity when the Company has the positive intent and ability to hold the securities to maturity. Marketable equity securities and debt securities not classified as held‑to‑maturity are classified as available‑for‑sale. Available‑for‑sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive income. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight‑line method. Such amortization is included in investment income. Realized gains and losses and declines in value judged to be other‑than‑temporary on available‑for‑sale securities are included in investment income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available‑for‑sale are included in investment income. | |||||||||||||||||||
At December 31, 2014 and December 31, 2013 the Company’s investments were comprised of fixed income investments and all were deemed available‑for‑sale. The objectives of the Company’s investment strategy are to provide liquidity and safety of principal while striving to achieve the highest rate of return consistent with these two objectives. The Company’s investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations (including those with a contractual term greater than one year from the date of purchase) are classified as current. All of the Company’s investments are considered current. Realized gains were $11,000, $9,639, and $6,231, net of insignificant realized losses, for the years ended December 31, 2014, 2013, and 2012, respectively. Unrealized losses on investments recorded in other comprehensive income were $159,908 and $7,190 for the years ended December 31, 2014 and 2013, respectively. Unrealized gains on investments recorded in other comprehensive income were $45,808 and $132,663 for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||
Available‑for‑sale securities at December 31, 2014 consist of the following: | |||||||||||||||||||
December 31, 2014 | |||||||||||||||||||
Gains in Accumulated | Losses in Accumulated | ||||||||||||||||||
Other Comprehensive | Other Comprehensive | Estimated Fair | |||||||||||||||||
(In thousands) | Amortized Cost | Income | Income | Value | |||||||||||||||
Corporate bonds | $ | 141,239 | $ | 21 | $ | -136 | $ | 141,124 | |||||||||||
U.S. government agency securities | 18,687 | 8 | -7 | 18,688 | |||||||||||||||
Asset backed securities | 60,821 | 17 | -18 | 60,820 | |||||||||||||||
Commercial paper | 3,993 | — | — | 3,993 | |||||||||||||||
Total available-for-sale securities | $ | 224,740 | $ | 46 | $ | -161 | $ | 224,625 | |||||||||||
Available‑for‑sale securities at December 31, 2013 consist of the following: | |||||||||||||||||||
December 31, 2013 | |||||||||||||||||||
Gains in Accumulated | Losses in Accumulated | ||||||||||||||||||
Other Comprehensive | Other Comprehensive | Estimated Fair | |||||||||||||||||
(In thousands) | Amortized Cost | Income | Income | Value | |||||||||||||||
Corporate bonds | $ | 77,935 | $ | 82 | $ | -7 | $ | 78,010 | |||||||||||
U.S. government agency securities | 34,291 | 46 | — | 34,337 | |||||||||||||||
Certificates of deposit | 6,558 | 4 | — | 6,562 | |||||||||||||||
Commercial paper | 1,499 | — | — | 1,499 | |||||||||||||||
Total available-for-sale securities | $ | 120,283 | $ | 132 | $ | -7 | $ | 120,408 | |||||||||||
Changes in Accumulated Other Comprehensive Income | Changes in Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||
The amount recognized in accumulated other comprehensive income (loss) (AOCI) for the years ended December 31, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Beginning balance | $ | 125 | $ | 78 | $ | -14 | |||||||||||||
Other comprehensive (loss) income before reclassifications | -200 | 90 | 84 | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | -40 | -43 | 8 | ||||||||||||||||
Net current period change in accumulated other comprehensive income (loss) | -240 | 47 | 92 | ||||||||||||||||
Ending balance | $ | -115 | $ | 125 | $ | 78 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) for the years ended December 31, 2014 and 2013 were as follows (in thousands): | |||||||||||||||||||
Affected Line Item in the | Year Ended December 31, | ||||||||||||||||||
Details about AOCI Components | Statement of Operations | 2014 | 2013 | 2012 | |||||||||||||||
Change in value of available-for-sale investments | |||||||||||||||||||
Sales and maturities of available-for-sale investments | Investment income | $ | -40 | $ | -43 | $ | 8 | ||||||||||||
Total reclassifications | $ | -40 | $ | -43 | $ | 8 | |||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||||||
Property and equipment are stated at cost and depreciated using the straight‑line method over the assets’ estimated useful lives. Maintenance and repairs are expensed when incurred; additions and improvements are capitalized. The estimated useful lives of fixed assets are as follows: | |||||||||||||||||||
Estimated | |||||||||||||||||||
Asset Classification | Useful Life | ||||||||||||||||||
Laboratory equipment | 3 - 5 years | ||||||||||||||||||
Office, computer equipment and computer software | 3 years | ||||||||||||||||||
Leasehold improvements | Lesser of the remaining lease term or useful life | ||||||||||||||||||
Furniture and fixtures | 3 years | ||||||||||||||||||
Depreciation expense for the years ended December 31, 2014, 2013, and 2012 was $3.7 million, $1.4 million, and $1.0 million, respectively. | |||||||||||||||||||
At December 31, 2014, the Company had $1.6 million of assets under construction which consisted of $1.2 million of capitalized costs related to software and computer hardware projects and $0.4 million of costs related to leasehold improvement projects. Depreciation will begin on these assets once they are placed into service. We expect that it will cost $0.2 million to complete the leasehold improvement projects and $0.1 million to complete the software projects, and these projects are expected to be completed in 2015. | |||||||||||||||||||
Software Capitalization Policy | Software Capitalization Policy | ||||||||||||||||||
Software development costs related to internal use software are incurred in three stages of development: the preliminary project stage, the application development stage, and the post‑implementation stage. Costs incurred during the preliminary project and post‑implementation stages are expensed as incurred. Costs in the application development stage that meet the criteria for capitalization are capitalized and amortized using the straight‑line basis over the estimated economic useful life of the software. | |||||||||||||||||||
Patent Costs | Patent Costs | ||||||||||||||||||
Patent costs, which have historically consisted of related legal fees, are capitalized as incurred, only if the Company determines that there is some probable future economic benefit derived from the transaction. The capitalized patents are amortized beginning when patents are approved over an estimated useful life of five years. Capitalized patent costs are expensed upon disapproval, upon a decision by the Company to no longer pursue the patent or when the related intellectual property is either sold or deemed to be no longer of value to the Company. The Company determined that all patent costs incurred during the year ended December 31, 2014, 2013 and 2012 should be expensed and not capitalized as the future economic benefit derived from the transactions cannot be determined. | |||||||||||||||||||
Net Loss Per Share | Net Loss Per Share | ||||||||||||||||||
Basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share is the same because all outstanding common stock equivalents have been excluded, as they are anti‑dilutive as a result of the Company’s losses. | |||||||||||||||||||
The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti‑dilutive effect due to net losses for each period (amounts are in thousands): | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Shares issuable upon exercise of stock options | 4,934 | 6,063 | 6,182 | ||||||||||||||||
Shares issuable upon exercise of outstanding warrants(1) | — | 155 | 325 | ||||||||||||||||
Shares issuable upon the release of restricted stock awards | 1,541 | 1,151 | 814 | ||||||||||||||||
Shares issuable upon the vesting of restricted stock awards related to licensing agreement | 24 | 49 | 73 | ||||||||||||||||
6,499 | 7,418 | 7,394 | |||||||||||||||||
-1 | At December 31, 2013, represents warrants to purchase 80,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. At December 31, 2012, represents warrants to purchase 250,000 shares of common stock issued under a licensing agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. | ||||||||||||||||||
Accounting for Stock-Based Compensation | Accounting for Stock‑Based Compensation | ||||||||||||||||||
The Company requires all share‑based payments to employees, including grants of employee stock options, restricted stock, restricted stock units and shares purchased under an ESPP (if certain parameters are not met), to be recognized in the financial statements based on their fair values. | |||||||||||||||||||
Revenue Recognition | |||||||||||||||||||
Revenue Recognition | |||||||||||||||||||
Laboratory service revenue. The Company’s revenues are primarily generated by the Cologuard test. Revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. The Company assesses whether the fee is fixed or determinable and if the collectability is reasonable based on the nature of the fee charged for the laboratory services delivered and whether there are existing contractual arrangements with customers, third-party commercial payors (insurance carriers and health plans) or coverage of the test by Centers for Medicare & Medicaid Services (CMS). In addition, when evaluating collectability, the Company considers factors such as collection experience for the healthcare industry, the financial standing of customers or third-party commercial payors, and whether it has sufficient collection history to reliably estimate a payor’s individual payment patterns. | |||||||||||||||||||
A significant portion of laboratory service revenues earned by the Company will be initially recognized on a cash basis because the above criteria will not have been met at the time the test results are delivered. The Company generally bills third-party payors upon generation and delivery of a test result to the ordering physician following completion of a test. As such, the Company takes assignment of benefits and risk of collection with the third-party payor. Patients may have out-of-pocket costs for amounts not covered by their insurance reimbursement policies. Consequently, the Company pursues reimbursement on a case-by-case basis directly from the patient. | |||||||||||||||||||
For laboratory services performed, where the collectability is not reasonably assured, the Company will continue to recognize revenues upon cash collection until it can reliably estimate the amount that would be ultimately collected for the Cologuard test. In order to begin to record revenue on an accrual basis in these scenarios, the Company expects to use at least several months of payment history, review the number of test paid against the number of tests billed, and consider the payor’s outstanding balance for unpaid test to determine whether payments are being made for a consistently high percentage of tests billed and at appropriate amounts given the contracted or historical payment amount. Cologuard became available upon FDA approval on August 11, 2014. The national coverage decision for Cologuard was released by CMS on October 9, 2014. | |||||||||||||||||||
The Company recognized approximately $1.5 million in laboratory service revenue for the year ended December 31, 2014. | |||||||||||||||||||
License fees. License fees for the licensing of product rights are recorded as deferred revenue upon receipt of cash and recognized as revenue on a straight‑line basis over the license period. | |||||||||||||||||||
As more fully described in Note 3 below, in connection with the Company’s transaction with Genzyme Corporation, Genzyme agreed to pay the Company a total of $18.5 million, of which $16.65 million was paid on January 27, 2009 and $1.85 million was subject to a holdback by Genzyme to satisfy certain potential indemnification obligations in exchange for the assignment and licensing of certain intellectual property to Genzyme. The Company’s on‑going performance obligations to Genzyme under the Collaboration, License and Purchase Agreement (the “CLP Agreement”), as described below, including its obligation to deliver through licenses certain intellectual property improvements to Genzyme, if improvements are made during the initial five‑year collaboration period, were deemed to be undelivered elements of the CLP Agreement on the date of closing. Accordingly, the Company deferred the initial $16.65 million in cash received at closing and is amortizing that up‑front payment on a straight line basis into revenue over the initial five‑year collaboration period ending in January 2014. The Company received the first holdback amount of $962,000, which included accrued interest, due from Genzyme during the first quarter of 2010. The Company received the second holdback amount of $934,250 which included accrued interest due, from Genzyme during the third quarter of 2010. The amounts were deferred and were amortized on a straight‑line basis into revenue over the remaining term of the collaboration at the time of receipt. | |||||||||||||||||||
In addition, Genzyme purchased 3,000,000 shares of common stock purchased from the Company on January 27, 2009 for $2.00 per share, representing a premium of $0.51 per share above the closing price of the Company’s common stock on that date of $1.49 per share. The aggregate premium paid by Genzyme over the closing price of the Company’s common stock on the date of the transaction of $1.53 million is deemed to be a part of the total consideration for the CLP Agreement. Accordingly, the Company deferred the aggregate $1.53 million premium and amortized that amount on a straight line basis into revenue over the initial five‑year collaboration period ending in January 2014. | |||||||||||||||||||
The Company recognized approximately $0.3 million in license fee revenue for the year ended December 31, 2014 and $4.1 million in license fee revenue in connection with the amortization of the up‑front payments from Genzyme during the years ended December 31, 2013, and 2012, respectively. | |||||||||||||||||||
Inventory | Inventory | ||||||||||||||||||
Inventory is stated at the lower of cost or market value (net realizable value). The Company determines the cost of inventory using the first-in, first out method (FIFO). The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and records a charge to cost of sales for such inventory as appropriate. In addition, the Company’s products are subject to strict quality control and monitoring which the Company performs throughout the production process. If certain batches or units of product no longer meet quality specifications or become obsolete due to expiration, the Company records a charge to cost of sales to write down such unmarketable inventory to its estimated realizable value. | |||||||||||||||||||
Direct and indirect manufacturing costs incurred during process validation and for other research and development activities, which are not permitted to be sold, have been expensed to research and development. Raw material inventory that was purchased in prior periods, and expensed to research and development, may still be on hand and used toward the production of commercial Cologuard, provided it has an appropriate remaining shelf life. This inventory is expected to provide a gross margin benefit to the Company in future periods of $0.7 million if the entirety of those balances were allocated to inventory produced for resale and not allocated to research and development activities. | |||||||||||||||||||
The Company has invested in its manufacturing operations to support future demand for Cologuard. Because of this investment in the future, the Company is not currently operating at normal capacity. Charges related to excess capacity are included as current period charges to cost of sales, and are not capitalized into inventory. Total excess capacity charged to cost of sales during the year ended December 31, 2014 was $1.6 million. | |||||||||||||||||||
Inventory consists of the following (amount in thousands): | |||||||||||||||||||
December 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Raw Materials | $ | 1,019 | $ | — | |||||||||||||||
Semi-finished and finished goods | 2,998 | — | |||||||||||||||||
Total inventory | $ | 4,017 | $ | — | |||||||||||||||
Advertising Costs | Advertising Costs | ||||||||||||||||||
The Company expenses the costs of media advertising at the time the advertising takes place. The Company expensed approximately $5.3 million, $0.1 million and $0.1 million of media advertising during the years ended December 31, 2014, 2013, and 2012, respectively. | |||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||||||||
The FASB has issued authoritative guidance which requires that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy. The fair value hierarchy establishes and prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. | |||||||||||||||||||
The three levels of the fair value hierarchy established are as follows: | |||||||||||||||||||
Level 1 | Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | ||||||||||||||||||
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. | ||||||||||||||||||
Level 3 | Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available. | ||||||||||||||||||
Fixed‑income securities and mutual funds are valued using a third party pricing agency. The valuation is based on observable inputs including pricing for similar assets and other observable market factors. There has been no material change from period to period. | |||||||||||||||||||
The following table presents the Company’s fair value measurements as of December 31, 2014 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands. | |||||||||||||||||||
Fair Value Measurement at December 31, 2014 Using: | |||||||||||||||||||
Quoted Prices | Significant | ||||||||||||||||||
in Active | Other | Significant | |||||||||||||||||
Markets for | Observable | Unobservable | |||||||||||||||||
Fair Value at | Identical Assets | Inputs | Inputs | ||||||||||||||||
Description | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash and money market | $ | 53,569 | $ | 53,569 | $ | — | $ | — | |||||||||||
Corporate bonds | 4,562 | — | 4,562 | — | |||||||||||||||
Available-for-Sale | |||||||||||||||||||
Marketable securities | |||||||||||||||||||
Corporate bonds | 141,124 | — | 141,124 | — | |||||||||||||||
U.S. government agency securities | 18,688 | — | 18,688 | — | |||||||||||||||
Asset backed securities | 60,820 | — | 60,820 | — | |||||||||||||||
Commercial paper | 3,993 | — | 3,993 | — | |||||||||||||||
Total | $ | 282,756 | $ | 53,569 | $ | 229,187 | $ | — | |||||||||||
The following table presents the Company’s fair value measurements as of December 31, 2013 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands. | |||||||||||||||||||
Fair Value Measurement at December 31, 2013 Using: | |||||||||||||||||||
Quoted Prices | Significant | ||||||||||||||||||
in Active | Other | Significant | |||||||||||||||||
Markets for | Observable | Unobservable | |||||||||||||||||
Fair Value at | Identical Assets | Inputs | Inputs | ||||||||||||||||
Description | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash and money market | $ | 12,851 | $ | 12,851 | $ | — | $ | — | |||||||||||
Available-for-Sale | |||||||||||||||||||
Marketable securities | |||||||||||||||||||
Corporate bonds | 78,010 | — | 78,010 | — | |||||||||||||||
U.S. government agency securities | 34,338 | — | 34,338 | — | |||||||||||||||
Certificates of deposit | 6,561 | — | 6,561 | — | |||||||||||||||
Commercial paper | 1,499 | — | 1,499 | — | |||||||||||||||
Total | $ | 133,259 | $ | 12,851 | $ | 120,408 | $ | — | |||||||||||
The Company monitors investments for other-than-temporary impairment. It was determined that unrealized gains and losses at December 31, 2014 and 2013, are temporary in nature, because the change in market value for those securities has resulted from fluctuating interest rates, rather than a deterioration of the credit worthiness of the issuers. So long as the Company holds these securities to maturity, it is unlikely to experience gains or losses. In the event that the Company disposes of these securities before maturity, it is expected that realized gains or losses, if any, will be immaterial. | |||||||||||||||||||
The following table summarizes the gross unrealized losses and fair values of investments in an unrealized loss position as of December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: | |||||||||||||||||||
31-Dec-14 | |||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | |||||||||||||
Marketable Securities | |||||||||||||||||||
Corporate bonds | $ | 113,960 | $ | -136 | $ | — | $ | — | $ | 113,960 | $ | -136 | |||||||
Asset backed securities | 33,073 | -18 | — | — | 33,073 | -18 | |||||||||||||
U.S. government agency securities | 5,641 | -7 | — | — | 5,641 | -7 | |||||||||||||
Total | $ | 152,674 | $ | -161 | $ | — | $ | — | $ | 152,674 | $ | -161 | |||||||
The following table summarizes the gross unrealized losses and fair value of investments in an unrealized loss position as of December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | |||||||||||||
Marketable Securities | |||||||||||||||||||
Corporate bonds | $ | 7,379 | $ | -6 | $ | — | $ | — | $ | 7,379 | $ | -6 | |||||||
Asset backed securities | 5,062 | -1 | — | — | 5,062 | -1 | |||||||||||||
Commercial paper | 1,499 | — | — | — | 1,499 | — | |||||||||||||
Total | $ | 13,940 | $ | -7 | $ | — | $ | — | $ | 13,940 | $ | -7 | |||||||
The following table summarizes contractual underlying maturities of the Company’s available‑for‑sale investments at December 31, 2014 (in thousands): | |||||||||||||||||||
Due one year or less | Due after one year through two years | ||||||||||||||||||
Description | Cost | Fair Value | Cost | Fair Value | |||||||||||||||
Marketable Securities | |||||||||||||||||||
U.S. government agency securities | $ | 14,788 | $ | 14,796 | $ | 3,899 | $ | 3,892 | |||||||||||
Corporate bonds | 81,461 | 81,423 | 59,777 | 59,701 | |||||||||||||||
Commercial paper | 3,993 | 3,993 | — | — | |||||||||||||||
Asset backed securities | — | — | 60,821 | 60,820 | |||||||||||||||
Total | $ | 100,242 | $ | 100,212 | $ | 124,497 | $ | 124,413 | |||||||||||
Concentration of Credit Risk | Concentration of Credit Risk | ||||||||||||||||||
In accordance with GAAP, the Company is required to disclose any significant off‑balance‑sheet risk and credit risk concentration. The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts or other hedging arrangements. Financial instruments that subject the Company to credit risk consist of cash, cash equivalents and marketable securities. As of December 31, 2014, the Company had cash and cash equivalents deposited in financial institutions in which the balances exceed the federal government agency insured limit of $250,000 by approximately $57.1 million. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk. | |||||||||||||||||||
Subsequent Events | Subsequent Events | ||||||||||||||||||
The Company evaluates events that occur through the filing date and discloses those events or transactions that provide additional evidence with respect to conditions that existed at the date of the balance sheet. In addition, the financial statements are adjusted for any changes in estimates resulting from the use of such evidence. | |||||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The update also creates a new Subtopic 340-40, Other Assets and Deferred Costs – Contracts with Customers, which provides guidance for the incremental costs of obtaining a contract with a customer and those costs incurred in fulfilling a contract with a customer that are not in the scope of another topic. The new revenue standard requires that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entities expect to be entitled in exchange for those goods or services. To achieve that core principle, the standard requires a five step process of identifying the contracts with customers, identifying the performance obligations in the contracts, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, the performance obligations are satisfied. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements. | |||||||||||||||||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The amendment is effective for the annual period beginning after December 15, 2016, and for annual and interim periods thereafter, with early adoption permitted. The amendment requires an entity’s management to evaluate for each annual and interim reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued. If substantial doubt is raised, further analysis and disclosures are required, including management’s plans to mitigate the adverse conditions or events. | |||||||||||||||||||
In July 2013, the FASB issued ASU 2013-11 regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This standard requires entities to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss ("NOL") or tax credit carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. This ASU requires entities to assess whether to net the unrecognized tax benefit with a deferred tax asset as of the reporting date. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company adopted this guidance during the first quarter of 2014, and it did not have a material impact on the consolidated financial statements as we have a full valuation allowance against the deferred tax asset. Refer to footnote 13 for further description. | |||||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||
Schedule of available-for-sale securities | Available‑for‑sale securities at December 31, 2014 consist of the following: | ||||||||||||||||||
December 31, 2014 | |||||||||||||||||||
Gains in Accumulated | Losses in Accumulated | ||||||||||||||||||
Other Comprehensive | Other Comprehensive | Estimated Fair | |||||||||||||||||
(In thousands) | Amortized Cost | Income | Income | Value | |||||||||||||||
Corporate bonds | $ | 141,239 | $ | 21 | $ | -136 | $ | 141,124 | |||||||||||
U.S. government agency securities | 18,687 | 8 | -7 | 18,688 | |||||||||||||||
Asset backed securities | 60,821 | 17 | -18 | 60,820 | |||||||||||||||
Commercial paper | 3,993 | — | — | 3,993 | |||||||||||||||
Total available-for-sale securities | $ | 224,740 | $ | 46 | $ | -161 | $ | 224,625 | |||||||||||
Available‑for‑sale securities at December 31, 2013 consist of the following: | |||||||||||||||||||
December 31, 2013 | |||||||||||||||||||
Gains in Accumulated | Losses in Accumulated | ||||||||||||||||||
Other Comprehensive | Other Comprehensive | Estimated Fair | |||||||||||||||||
(In thousands) | Amortized Cost | Income | Income | Value | |||||||||||||||
Corporate bonds | $ | 77,935 | $ | 82 | $ | -7 | $ | 78,010 | |||||||||||
U.S. government agency securities | 34,291 | 46 | — | 34,337 | |||||||||||||||
Certificates of deposit | 6,558 | 4 | — | 6,562 | |||||||||||||||
Commercial paper | 1,499 | — | — | 1,499 | |||||||||||||||
Total available-for-sale securities | $ | 120,283 | $ | 132 | $ | -7 | $ | 120,408 | |||||||||||
Schedule of amounts recognized in accumulated other comprehensive income (AOCI) | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Beginning balance | $ | 125 | $ | 78 | $ | -14 | |||||||||||||
Other comprehensive (loss) income before reclassifications | -200 | 90 | 84 | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | -40 | -43 | 8 | ||||||||||||||||
Net current period change in accumulated other comprehensive income (loss) | -240 | 47 | 92 | ||||||||||||||||
Ending balance | $ | -115 | $ | 125 | $ | 78 | |||||||||||||
Schedule of amounts reclassified from accumulated other comprehensive income | |||||||||||||||||||
Affected Line Item in the | Year Ended December 31, | ||||||||||||||||||
Details about AOCI Components | Statement of Operations | 2014 | 2013 | 2012 | |||||||||||||||
Change in value of available-for-sale investments | |||||||||||||||||||
Sales and maturities of available-for-sale investments | Investment income | $ | -40 | $ | -43 | $ | 8 | ||||||||||||
Total reclassifications | $ | -40 | $ | -43 | $ | 8 | |||||||||||||
Schedule of estimated useful lives of fixed assets | |||||||||||||||||||
Estimated | |||||||||||||||||||
Asset Classification | Useful Life | ||||||||||||||||||
Laboratory equipment | 3 - 5 years | ||||||||||||||||||
Office, computer equipment and computer software | 3 years | ||||||||||||||||||
Leasehold improvements | Lesser of the remaining lease term or useful life | ||||||||||||||||||
Furniture and fixtures | 3 years | ||||||||||||||||||
Schedule of potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Shares issuable upon exercise of stock options | 4,934 | 6,063 | 6,182 | ||||||||||||||||
Shares issuable upon exercise of outstanding warrants(1) | — | 155 | 325 | ||||||||||||||||
Shares issuable upon the release of restricted stock awards | 1,541 | 1,151 | 814 | ||||||||||||||||
Shares issuable upon the vesting of restricted stock awards related to licensing agreement | 24 | 49 | 73 | ||||||||||||||||
6,499 | 7,418 | 7,394 | |||||||||||||||||
-1 | At December 31, 2013, represents warrants to purchase 80,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. At December 31, 2012, represents warrants to purchase 250,000 shares of common stock issued under a licensing agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. | ||||||||||||||||||
Schedule of inventory | |||||||||||||||||||
December 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Raw Materials | $ | 1,019 | $ | — | |||||||||||||||
Semi-finished and finished goods | 2,998 | — | |||||||||||||||||
Total inventory | $ | 4,017 | $ | — | |||||||||||||||
Schedule of fair value measurements along with the level within the fair value hierarchy in which the fair value measurements fall | The following table presents the Company’s fair value measurements as of December 31, 2014 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands. | ||||||||||||||||||
Fair Value Measurement at December 31, 2014 Using: | |||||||||||||||||||
Quoted Prices | Significant | ||||||||||||||||||
in Active | Other | Significant | |||||||||||||||||
Markets for | Observable | Unobservable | |||||||||||||||||
Fair Value at | Identical Assets | Inputs | Inputs | ||||||||||||||||
Description | December 31, 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash and money market | $ | 53,569 | $ | 53,569 | $ | — | $ | — | |||||||||||
Corporate bonds | 4,562 | — | 4,562 | — | |||||||||||||||
Available-for-Sale | |||||||||||||||||||
Marketable securities | |||||||||||||||||||
Corporate bonds | 141,124 | — | 141,124 | — | |||||||||||||||
U.S. government agency securities | 18,688 | — | 18,688 | — | |||||||||||||||
Asset backed securities | 60,820 | — | 60,820 | — | |||||||||||||||
Commercial paper | 3,993 | — | 3,993 | — | |||||||||||||||
Total | $ | 282,756 | $ | 53,569 | $ | 229,187 | $ | — | |||||||||||
The following table presents the Company’s fair value measurements as of December 31, 2013 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands. | |||||||||||||||||||
Fair Value Measurement at December 31, 2013 Using: | |||||||||||||||||||
Quoted Prices | Significant | ||||||||||||||||||
in Active | Other | Significant | |||||||||||||||||
Markets for | Observable | Unobservable | |||||||||||||||||
Fair Value at | Identical Assets | Inputs | Inputs | ||||||||||||||||
Description | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash and money market | $ | 12,851 | $ | 12,851 | $ | — | $ | — | |||||||||||
Available-for-Sale | |||||||||||||||||||
Marketable securities | |||||||||||||||||||
Corporate bonds | 78,010 | — | 78,010 | — | |||||||||||||||
U.S. government agency securities | 34,338 | — | 34,338 | — | |||||||||||||||
Certificates of deposit | 6,561 | — | 6,561 | — | |||||||||||||||
Commercial paper | 1,499 | — | 1,499 | — | |||||||||||||||
Total | $ | 133,259 | $ | 12,851 | $ | 120,408 | $ | — | |||||||||||
Schedule of gross unrealized losses and fair values of investments in an unrealized loss position | The following table summarizes the gross unrealized losses and fair values of investments in an unrealized loss position as of December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: | ||||||||||||||||||
31-Dec-14 | |||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | |||||||||||||
Marketable Securities | |||||||||||||||||||
Corporate bonds | $ | 113,960 | $ | -136 | $ | — | $ | — | $ | 113,960 | $ | -136 | |||||||
Asset backed securities | 33,073 | -18 | — | — | 33,073 | -18 | |||||||||||||
U.S. government agency securities | 5,641 | -7 | — | — | 5,641 | -7 | |||||||||||||
Total | $ | 152,674 | $ | -161 | $ | — | $ | — | $ | 152,674 | $ | -161 | |||||||
The following table summarizes the gross unrealized losses and fair value of investments in an unrealized loss position as of December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||
(In thousands) | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | |||||||||||||
Marketable Securities | |||||||||||||||||||
Corporate bonds | $ | 7,379 | $ | -6 | $ | — | $ | — | $ | 7,379 | $ | -6 | |||||||
Asset backed securities | 5,062 | -1 | — | — | 5,062 | -1 | |||||||||||||
Commercial paper | 1,499 | — | — | — | 1,499 | — | |||||||||||||
Total | $ | 13,940 | $ | -7 | $ | — | $ | — | $ | 13,940 | $ | -7 | |||||||
Schedule of contractual maturities of available-for-sale investments | The following table summarizes contractual underlying maturities of the Company’s available‑for‑sale investments at December 31, 2014 (in thousands): | ||||||||||||||||||
Due one year or less | Due after one year through two years | ||||||||||||||||||
Description | Cost | Fair Value | Cost | Fair Value | |||||||||||||||
Marketable Securities | |||||||||||||||||||
U.S. government agency securities | $ | 14,788 | $ | 14,796 | $ | 3,899 | $ | 3,892 | |||||||||||
Corporate bonds | 81,461 | 81,423 | 59,777 | 59,701 | |||||||||||||||
Commercial paper | 3,993 | 3,993 | — | — | |||||||||||||||
Asset backed securities | — | — | 60,821 | 60,820 | |||||||||||||||
Total | $ | 100,242 | $ | 100,212 | $ | 124,497 | $ | 124,413 | |||||||||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stock-based compensation | ||||||||||||||
Schedule of non-cash stock-based compensation expense by department | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Cost of sales | $ | 279 | $ | — | $ | — | ||||||||
Research and development | 4,135 | 2,817 | 2,396 | |||||||||||
General and administrative | 5,589 | 3,054 | 2,579 | |||||||||||
Sales and marketing | 1,517 | 1,873 | 518 | |||||||||||
Total stock-based compensation | $ | 11,520 | $ | 7,744 | $ | 5,493 | ||||||||
Schedule of valuation assumptions | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Option Plan Shares | ||||||||||||||
Risk-free interest rates | 1.96% - 2.01% | 0.94% - 1.73% | 0.81% - 1.00% | |||||||||||
Expected term (in years) | 6 | 6 | 6 | |||||||||||
Expected volatility | 77.6% - 80.8% | 82.9% - 84.0% | 85% - 92% | |||||||||||
Dividend yield | 0% | 0% | 0% | |||||||||||
Weighted average fair value per share of options granted during the period | $10.05 | $8.12 | $6.90 | |||||||||||
ESPP Shares | ||||||||||||||
Risk-free interest rates | 0.1% - 0.5% | 0.1% - 0.33% | 0.18% - 0.30% | |||||||||||
Expected term (in years) | 0.5 - 2 | 0.5 - 2 | 0.5 - 2 | |||||||||||
Expected volatility | 42.5% - 62.7% | 39.1% - 45.6% | 34.0% - 54.9% | |||||||||||
Dividend yield | 0% | 0% | 0% | |||||||||||
Weighted average fair value per share of stock purchase rights granted during the period | $6.30 | $3.13 | $2.84 | |||||||||||
Summary of stock option activity under the Stock Plans | ||||||||||||||
Weighted | ||||||||||||||
Weighted | Average | |||||||||||||
Average | Remaining | Aggregate | ||||||||||||
Exercise | Contractual | Intrinsic | ||||||||||||
Options | Shares | Price | Term (Years) | Value(1) | ||||||||||
(Aggregate intrinsic value in thousands) | ||||||||||||||
Outstanding, January 1, 2012 | 6,453,584 | $ | 2.27 | |||||||||||
Granted | 499,198 | 9.18 | ||||||||||||
Exercised | -691,471 | 3.45 | ||||||||||||
Forfeited | -79,375 | 7.6 | ||||||||||||
Outstanding, December 31, 2012 | 6,181,936 | $ | 2.62 | |||||||||||
Granted | 290,570 | 11.36 | ||||||||||||
Exercised | -274,919 | 5.17 | ||||||||||||
Forfeited | -135,000 | 10.08 | ||||||||||||
Outstanding, December 31, 2013 | 6,062,587 | $ | 2.78 | 6.6 | ||||||||||
Granted | 266,477 | 14.28 | ||||||||||||
Exercised | -1,378,372 | 1.91 | ||||||||||||
Forfeited | -16,375 | 6.37 | ||||||||||||
Outstanding, December 31, 2014 | 4,934,317 | $ | 3.63 | 5.2 | $ | 117,503 | ||||||||
Exercisable, December 31, 2014 | 4,186,502 | $ | 2.27 | 4.7 | $ | 105,384 | ||||||||
Vested and expected to vest, December 31, 2014 | 4,897,001 | $ | 3.57 | 5.2 | $ | 116,898 | ||||||||
-1 | The aggregate intrinsic value of options outstanding at December 31, 2014 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the 4,934,317 options that had exercise prices that were lower than the $27.44 market price of our common stock at December 31, 2014. The aggregate intrinsic value of options exercisable at December 31, 2014 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the 4,186,502 options that had exercise prices that were lower than the $27.44 market price of our common stock at December 31, 2014. The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was $29.2 million, $1.9 million, $4.5 million, respectively, determined as of the date of exercise. | |||||||||||||
Summary of restricted stock and restricted stock unit activity under the Stock Plans | ||||||||||||||
Weighted | ||||||||||||||
Restricted | Average Grant | |||||||||||||
Shares | Date Fair Value | |||||||||||||
Outstanding, January 1, 2012 | 401,490 | $ | 6.24 | |||||||||||
Granted | 602,268 | 9.47 | ||||||||||||
Released | -185,116 | 5.67 | ||||||||||||
Forfeited | -4,687 | 7.69 | ||||||||||||
Outstanding, December 31, 2012 | 813,955 | $ | 8.51 | |||||||||||
Granted | 1,147,553 | 11.76 | ||||||||||||
Released | -344,611 | 8.56 | ||||||||||||
Forfeited | -466,203 | 9.73 | ||||||||||||
Outstanding, December 31, 2013 | 1,150,694 | $ | 11.23 | |||||||||||
Granted | 926,171 | 15.61 | ||||||||||||
Released | -491,370 | 11.17 | ||||||||||||
Forfeited | -44,381 | 12.44 | ||||||||||||
Outstanding, December 31, 2014 | 1,541,114 | $ | 13.86 | |||||||||||
Summary of information relating to outstanding and exercisable stock options | ||||||||||||||
Outstanding | Exercisable | |||||||||||||
Weighted | ||||||||||||||
Average | Weighted | Weighted | ||||||||||||
Remaining | Average | Average | ||||||||||||
Number of | Contractual | Exercise | Number of | Exercise | ||||||||||
Exercise Price | Options | Life (Years) | Price | Options | Price | |||||||||
$0.00 - $1.00 | 2,887,500 | 4.2 | $ | 0.83 | 2,887,500 | $ | 0.83 | |||||||
$1.01 - $3.00 | 438,000 | 4.6 | 2.79 | 438,000 | 2.79 | |||||||||
$3.01 - $5.00 | 319,347 | 5.5 | 3.95 | 319,347 | 3.95 | |||||||||
$5.01 - $7.00 | 184,960 | 6.2 | 5.94 | 122,273 | 6.01 | |||||||||
$7.01 - $9.00 | 141,248 | 6.5 | 8.16 | 127,623 | 8.22 | |||||||||
$9.01 - $11.00 | 646,785 | 7.5 | 9.65 | 279,259 | 9.49 | |||||||||
$11.01 - $15.00 | 283,000 | 9.0 | 14.04 | 12,500 | 14.4 | |||||||||
$15.01- $16.52 | 33,477 | 9.6 | 16.52 | — | — | |||||||||
4,934,317 | 5.2 | $ | 3.63 | 4,186,502 | $ | 2.27 | ||||||||
Summary of shares of authorized common stock reserved for issuance | ||||||||||||||
Shares reserved for issuance | ||||||||||||||
2010 Option Plan | 1,638,187 | |||||||||||||
2010 Purchase Plan | 540,177 | |||||||||||||
2,178,364 | ||||||||||||||
Employee Stock Purchase Plan 2010 [Member] | ||||||||||||||
Stock-based compensation | ||||||||||||||
Schedule of shares of common stock issued | ||||||||||||||
Weighted Average | ||||||||||||||
Offering period ended | Number of Shares | price per Share | ||||||||||||
April 30, 2014 | 40,846 | $ | 8.25 | |||||||||||
October 31, 2014 | 47,320 | $ | 8.95 | |||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Schedule of future minimum payments under the operating lease | |||||
Year Ending December 31, | |||||
2015 | $ | 1,310 | |||
2016 | 1,225 | ||||
2017 | 763 | ||||
2018 | 704 | ||||
2019 | — | ||||
Thereafter | — | ||||
Total lease obligations | $ | 4,002 | |||
Schedule of future minimum payments under the entity's technology licenses | |||||
Year ending December 31, | |||||
2015 | $ | 698 | |||
2016 | 256 | ||||
2017 | 256 | ||||
2018 | 256 | ||||
2019 | 256 | ||||
Thereafter | 1,775 | ||||
$ | 3,497 | ||||
Schedule of future minimum lease payments required under the capital lease and the present value of the net minimum lease payments | |||||
Year ending December 31, | |||||
2015 | $ | 369 | |||
Total lease obligations | $ | 369 | |||
Less imputed interest | -9 | ||||
Present value of minimum lease payments | 360 | ||||
Less current maturities of capital lease obligations | -360 | ||||
Long term capital lease obligations | $ | — | |||
ACCRUED_LIABILITIES_Tables
ACCRUED LIABILITIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
ACCRUED LIABILITIES | ||||||||
Schedule of accrued expenses | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Compensation | $ | 5,668 | $ | 2,838 | ||||
Professional fees | 5,764 | 826 | ||||||
Research and trial related expenses | 1,447 | 689 | ||||||
Licenses | 646 | 539 | ||||||
Miscellaneous taxes | 261 | 24 | ||||||
Other | 122 | 58 | ||||||
Occupancy costs | 52 | 71 | ||||||
Assets under construction | — | 649 | ||||||
$ | 13,960 | $ | 5,694 | |||||
LONG_TERM_DEBT_Tables
LONG TERM DEBT (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
LONG TERM DEBT | |||||
Schedule of future principal obligations | |||||
Year ending December 31, | |||||
2015 | $ | — | |||
2016 | 145 | ||||
2017 | 217 | ||||
2018 | 221 | ||||
2019 | 225 | ||||
Thereafter | 192 | ||||
$ | 1,000 | ||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
INCOME TAXES | ||||||||
Schedule of components of the net deferred tax asset | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Deferred tax assets: | ||||||||
Operating loss carryforwards | $ | 140,471 | $ | 101,942 | ||||
Tax credit carryforwards | 16,915 | 18,061 | ||||||
Deferred revenue | 11 | 117 | ||||||
Other temporary differences | 4,543 | 4,429 | ||||||
Tax assets before valuation allowance | 161,940 | 124,549 | ||||||
Less—Valuation allowance | -161,940 | -124,549 | ||||||
Net deferred taxes | $ | — | $ | — | ||||
Schedule of differences between the effective income tax rate and the statutory tax rate | ||||||||
December 31, | ||||||||
2014 | 2013 | 2012 | ||||||
U.S. Federal statutory rate | 34.0 | % | 34.0 | % | 34.0 | % | ||
State taxes | 5.5 | 4.8 | 1.7 | |||||
Research and development tax credit | -1.1 | 16.9 | 5.1 | |||||
Stock-based compensation expense | -0.5 | -1.1 | -0.6 | |||||
Other adjustments | -0.8 | -0.3 | -0.1 | |||||
Valuation allowance | -37.1 | -54.3 | -40.1 | |||||
Effective tax rate | 0.0 | % | 0.0 | % | 0.0 | % | ||
QUARTERLY_RESULTS_OF_OPERATION1
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | ||||||||||||||
Schedule of quarterly statement of operations | ||||||||||||||
Quarter Ended | ||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||
2014 | ||||||||||||||
Laboratory service revenue | $ | — | $ | — | $ | — | $ | 1,504 | ||||||
License fee revenue | 294 | — | — | — | ||||||||||
Cost of revenue | — | — | 924 | 3,401 | ||||||||||
Gross profit | 294 | — | -924 | -1,897 | ||||||||||
Research and development | 7,430 | 7,174 | 9,073 | 4,992 | ||||||||||
General and administrative | 4,586 | 6,230 | 8,994 | 10,625 | ||||||||||
Sales and marketing | 4,456 | 6,166 | 13,217 | 15,069 | ||||||||||
Loss from operations | -16,178 | -19,570 | -32,208 | -32,583 | ||||||||||
Investment income | 86 | 146 | 160 | 150 | ||||||||||
Interest expense | -15 | -13 | -12 | -11 | ||||||||||
Net loss | $ | -16,107 | $ | -19,437 | $ | -32,060 | $ | -32,444 | ||||||
Net loss per share—basic and diluted | $ | -0.23 | $ | -0.24 | $ | -0.39 | $ | -0.38 | ||||||
Weighted average common shares outstanding—basic and diluted | 70,987 | 82,048 | 82,941 | 84,734 | ||||||||||
2013 | ||||||||||||||
Revenue | $ | 1,036 | $ | 1,036 | $ | 1,036 | $ | 1,036 | ||||||
Cost of revenue | — | — | — | — | ||||||||||
Gross profit | 1,036 | 1,036 | 1,036 | 1,036 | ||||||||||
Research and development | 7,526 | 6,457 | 6,982 | 6,713 | ||||||||||
General and administrative | 2,648 | 3,628 | 3,686 | 3,687 | ||||||||||
Sales and marketing | 1,759 | 3,302 | 1,615 | 2,902 | ||||||||||
Loss from operations | -10,897 | -12,351 | -11,247 | -12,266 | ||||||||||
Investment income | 62 | 55 | 103 | 96 | ||||||||||
Interest expense | -19 | -18 | -16 | -16 | ||||||||||
Net loss | $ | -10,854 | $ | -12,314 | $ | -11,160 | $ | -12,186 | ||||||
Net loss per share—basic and diluted | $ | -0.17 | $ | -0.19 | $ | -0.16 | $ | -0.17 | ||||||
Weighted average common shares outstanding—basic and diluted | 63,836 | 64,699 | 70,559 | 70,757 | ||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Restricted cash | $0 | $0 | |
Number of objectives of the entity's investment strategy | 2 | ||
Minimum contractual term of certain current investments which can be liquidated | 1 year | ||
Realized gains | 11,000 | 9,639 | 6,231 |
Unrealized losses on investments | -159,908 | 7,190 | |
Unrealized gains on investments | 45,808 | 132,663 | |
Available-for-sale securities | |||
Amortized Cost | 224,740,000 | 120,283,000 | |
Gains in Accumulated Other Comprehensive Income | 46,000 | 132,000 | |
Losses in Accumulated Other Comprehensive Income | -161,000 | -7,000 | |
Estimated Fair Value | 224,625,000 | 120,408,000 | |
Corporate bonds [Member] | |||
Available-for-sale securities | |||
Amortized Cost | 141,239,000 | 34,291,000 | |
Gains in Accumulated Other Comprehensive Income | 21,000 | 46,000 | |
Losses in Accumulated Other Comprehensive Income | -136,000 | ||
Estimated Fair Value | 141,124,000 | 34,337,000 | |
U. S. government agency securities [Member] | |||
Available-for-sale securities | |||
Amortized Cost | 18,687,000 | 77,935,000 | |
Gains in Accumulated Other Comprehensive Income | 8,000 | 82,000 | |
Losses in Accumulated Other Comprehensive Income | -7,000 | -7,000 | |
Estimated Fair Value | 18,688,000 | 78,010,000 | |
Certificates of deposit [Member] | |||
Available-for-sale securities | |||
Amortized Cost | 60,821,000 | 6,558,000 | |
Gains in Accumulated Other Comprehensive Income | 17,000 | 4,000 | |
Losses in Accumulated Other Comprehensive Income | -18,000 | ||
Estimated Fair Value | 60,820,000 | 6,562,000 | |
Commercial paper [Member] | |||
Available-for-sale securities | |||
Amortized Cost | 3,993,000 | 1,499,000 | |
Estimated Fair Value | $3,993,000 | $1,499,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Beginning Balance | $125 | ||
Net current period change in accumulated other comprehensive income (loss) | -240 | 47 | 92 |
Ending Balance | -115 | 125 | |
Accumulated Net Unrealized Investment Gain Loss [Member] | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Beginning Balance | 125 | 78 | -14 |
Other comprehensive income (loss) before reclassifications | -200 | 90 | 84 |
Amounts reclassified from accumulated other comprehensive income (loss) | -40 | -43 | 8 |
Net current period change in accumulated other comprehensive income (loss) | -240 | 47 | 92 |
Ending Balance | ($115) | $125 | $78 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Details about AOCI Components | |||||||||||
Investment income | $150 | $160 | $146 | $86 | $96 | $103 | $55 | $62 | $542 | $316 | $262 |
Reclassification Out Of Accumulated Other Comprehensive Income (Loss) [Member] | |||||||||||
Details about AOCI Components | |||||||||||
Investment income | -40 | -43 | 8 | ||||||||
Accumulated Net Unrealized Investment Gain Loss [Member] | Reclassification Out Of Accumulated Other Comprehensive Income (Loss) [Member] | |||||||||||
Details about AOCI Components | |||||||||||
Investment income | ($40) | ($43) | $8 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | |||
Property and equipment | |||
Depreciation expense | $3,700,000 | $1,400,000 | $1,000,000 |
Assets under construction | 1,552,000 | 2,592,000 | |
Software Capitalization Policy | |||
Software development stages | 3 | ||
Patent Costs | |||
Estimated useful life of patents | 5 years | ||
Labratory equipment [Member] | Minimum [Member] | |||
Property and equipment | |||
Estimated Useful Life | 3 years | ||
Labratory equipment [Member] | Maximum [Member] | |||
Property and equipment | |||
Estimated Useful Life | 5 years | ||
Office and computer equipment [Member] | |||
Property and equipment | |||
Estimated Useful Life | 3 years | ||
Furniture and fixtures [Member] | |||
Property and equipment | |||
Estimated Useful Life | 3 years | ||
Software and Computer Hardware [Member] | |||
Property and equipment | |||
Assets under construction | 1,200,000 | ||
Leasehold Improvements [Member] | |||
Property and equipment | |||
Assets under construction | 400,000 | ||
Expected cost to complete construction of project | 200,000 | ||
Software Development [Member] | |||
Property and equipment | |||
Expected cost to complete construction of project | $100,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Common shares not included in the computation of diluted net loss per share | |||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 6,499,000 | 7,418,000 | 7,394,000 |
Additional disclosure | |||
Number of shares of common stock that can be purchased through issuance of warrants under a license agreement | 80,000 | 250,000 | |
Number of shares of common stock that can be purchased through issuance of warrants under a consulting agreement | 75,000 | 75,000 | |
Stock Options [Member] | |||
Common shares not included in the computation of diluted net loss per share | |||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 4,934,000 | 6,063,000 | 6,182,000 |
Warrants [Member] | |||
Common shares not included in the computation of diluted net loss per share | |||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 155,000 | 325,000 | |
Restricted Stock Awards [Member] | |||
Common shares not included in the computation of diluted net loss per share | |||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 1,541,000 | 1,151,000 | 814,000 |
Restricted Stock Related To Licensing Agreement [Member] | |||
Common shares not included in the computation of diluted net loss per share | |||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 24,000 | 49,000 | 73,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||
Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 27, 2009 | Jan. 27, 2009 | Sep. 30, 2010 | Mar. 31, 2010 | Dec. 16, 2014 | Apr. 02, 2014 | Jun. 21, 2013 | Aug. 13, 2012 | |
Revenue Recognition | |||||||||||||
Laboratory service revenue | $1,504,000 | $1,504,000 | |||||||||||
Sale of common stock (in shares) | 88,626,042 | 88,626,042 | 71,071,838 | ||||||||||
Closing price of common stock (in dollars per share) | $27.44 | $27.44 | $25.75 | $12.75 | $12.35 | $9.75 | |||||||
License fee revenue | 294,000 | 294,000 | 4,144,000 | 4,144,000 | |||||||||
Inventory | |||||||||||||
Inventory gross margin benefit expected to be realized in future periods if inventory balance is allocated to inventory produced for resale and not allocated to research and development activiites | 700,000 | 700,000 | |||||||||||
Excess capacity charges to cost of sales | 1,600,000 | ||||||||||||
Raw materials | 1,019,000 | 1,019,000 | |||||||||||
Semi-finished and finished goods | 2,998,000 | 2,998,000 | |||||||||||
Total inventory | 4,017,000 | 4,017,000 | |||||||||||
Advertising Costs | |||||||||||||
Advertising expense | 5,300,000 | 100,000 | 100,000 | ||||||||||
Collaboration License And Purchase Agreement [Member] | Genzyme Corporation [Member] | |||||||||||||
Revenue Recognition | |||||||||||||
Total agreed consideration amount | 18,500,000 | 18,500,000 | |||||||||||
Amount of Deferred Revenue | 16,650,000 | 16,650,000 | |||||||||||
Amount subject to holdback | 1,850,000 | 1,850,000 | |||||||||||
Initial collaboration period | 5 years | 5 years | |||||||||||
Amount received | 16,650,000 | 934,250 | 962,000 | ||||||||||
Sale of common stock (in shares) | 3,000,000 | 3,000,000 | |||||||||||
Price at which share of common stock are sold (in dollars per share) | $2 | $2 | |||||||||||
Premium above closing price of common stock at which shares are sold (in dollars per share) | $0.51 | $0.51 | |||||||||||
Closing price of common stock (in dollars per share) | $1.49 | $1.49 | |||||||||||
Aggregate premium received over the closing price of common stock | 1,530,000 | 1,530,000 | |||||||||||
Amount of premium being amortized | 1,530,000 | 1,530,000 | |||||||||||
License fee revenue | $300,000 | $4,100,000 | $4,100,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 7) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Fair value measurements | ||||
Cash and cash equivalents | $58,131 | $12,851 | $13,345 | $35,781 |
Marketable securities | 224,625 | 120,408 | ||
Fair Value Inputs Level1 [Member] | ||||
Fair value measurements | ||||
Total | 53,569 | 12,851 | ||
Fair Value Inputs Level1 [Member] | Cash and Money Market [Member] | ||||
Fair value measurements | ||||
Cash and cash equivalents | 53,569 | 12,851 | ||
Fair Value Inputs Level2 [Member] | ||||
Fair value measurements | ||||
Total | 229,187 | 120,408 | ||
Fair Value Inputs Level2 [Member] | Corporate bonds [Member] | ||||
Fair value measurements | ||||
Cash and cash equivalents | 4,562 | |||
Marketable securities | 141,124 | 78,010 | ||
Fair Value Inputs Level2 [Member] | U. S. government agency securities [Member] | ||||
Fair value measurements | ||||
Marketable securities | 18,688 | 34,338 | ||
Fair Value Inputs Level2 [Member] | Certificates of deposit [Member] | ||||
Fair value measurements | ||||
Marketable securities | 60,820 | 6,561 | ||
Fair Value Inputs Level2 [Member] | Commercial Paper [Member] | ||||
Fair value measurements | ||||
Marketable securities | 3,993 | 1,499 | ||
Estimate Of Fair Value Fair Value Disclosure [Member] | ||||
Fair value measurements | ||||
Total | 282,756 | 133,259 | ||
Estimate Of Fair Value Fair Value Disclosure [Member] | Cash and Money Market [Member] | ||||
Fair value measurements | ||||
Cash and cash equivalents | 53,569 | 12,851 | ||
Estimate Of Fair Value Fair Value Disclosure [Member] | Corporate bonds [Member] | ||||
Fair value measurements | ||||
Cash and cash equivalents | 4,562 | |||
Marketable securities | 141,124 | 78,010 | ||
Estimate Of Fair Value Fair Value Disclosure [Member] | U. S. government agency securities [Member] | ||||
Fair value measurements | ||||
Marketable securities | 18,688 | 34,338 | ||
Estimate Of Fair Value Fair Value Disclosure [Member] | Certificates of deposit [Member] | ||||
Fair value measurements | ||||
Marketable securities | 60,820 | 6,561 | ||
Estimate Of Fair Value Fair Value Disclosure [Member] | Commercial Paper [Member] | ||||
Fair value measurements | ||||
Marketable securities | $3,993 | $1,499 |
Recovered_Sheet1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 8) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Fair value of investments in unrealized loss positions | ||
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | $152,674,000 | $13,940,000 |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 152,674,000 | 13,940,000 |
Gross unrealized loss of investments in unrealized loss positions | ||
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | -161,000 | -7,000 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | -161,000 | -7,000 |
Contractual maturities of the available-for-sale investments in debt securities, Cost | ||
Due in one year or less | 100,242,000 | |
Due after one year through two years | 124,497,000 | |
Contractual maturities of the available-for-sale investments in debt securities, Fair Value | ||
Due in one year or less | 100,212,000 | |
Due after one year through two years | 124,413,000 | |
Concentration of Credit Risk | ||
Cash and cash equivalents, federal government agency insured limit | 250,000 | |
Cash and cash equivalents in excess of federal government agency insured limit | 57,100,000 | |
Corporate bonds [Member] | ||
Fair value of investments in unrealized loss positions | ||
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | 113,960,000 | 7,379,000 |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 113,960,000 | 7,379,000 |
Gross unrealized loss of investments in unrealized loss positions | ||
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | -136,000 | -6,000 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | -136,000 | -6,000 |
Contractual maturities of the available-for-sale investments in debt securities, Cost | ||
Due in one year or less | 81,461,000 | |
Due after one year through two years | 59,777,000 | |
Contractual maturities of the available-for-sale investments in debt securities, Fair Value | ||
Due in one year or less | 81,423,000 | |
Due after one year through two years | 59,701,000 | |
Asset backed securities [Member] | ||
Fair value of investments in unrealized loss positions | ||
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | 33,073,000 | 5,062,000 |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 33,073,000 | 5,062,000 |
Gross unrealized loss of investments in unrealized loss positions | ||
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | -18,000 | -1,000 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | -18,000 | -1,000 |
Contractual maturities of the available-for-sale investments in debt securities, Cost | ||
Due after one year through two years | 60,821,000 | |
Contractual maturities of the available-for-sale investments in debt securities, Fair Value | ||
Due after one year through two years | 60,820,000 | |
U. S. government agency securities [Member] | ||
Fair value of investments in unrealized loss positions | ||
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | 5,641,000 | |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 5,641,000 | |
Gross unrealized loss of investments in unrealized loss positions | ||
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | -7,000 | |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | -7,000 | |
Contractual maturities of the available-for-sale investments in debt securities, Cost | ||
Due in one year or less | 14,788,000 | |
Due after one year through two years | 3,899,000 | |
Contractual maturities of the available-for-sale investments in debt securities, Fair Value | ||
Due in one year or less | 14,796,000 | |
Due after one year through two years | 3,892,000 | |
Commercial Paper [Member] | ||
Fair value of investments in unrealized loss positions | ||
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | 1,499,000 | |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 1,499,000 | |
Contractual maturities of the available-for-sale investments in debt securities, Cost | ||
Due in one year or less | 3,993,000 | |
Contractual maturities of the available-for-sale investments in debt securities, Fair Value | ||
Due in one year or less | $3,993,000 |
GENZYME_STRATEGIC_TRANSACTION_
GENZYME STRATEGIC TRANSACTION (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||
Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 27, 2009 | Jan. 27, 2009 | Sep. 30, 2010 | Mar. 31, 2010 | Dec. 16, 2014 | Apr. 02, 2014 | Jun. 21, 2013 | Aug. 13, 2012 | |
Revenue Recognition | ||||||||||||
Sale of common stock (in shares) | 88,626,042 | 71,071,838 | ||||||||||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | $0.01 | |||||||||
Closing price of common stock (in dollars per share) | $27.44 | $25.75 | $12.75 | $12.35 | $9.75 | |||||||
License fee revenue | $294,000 | $294,000 | $4,144,000 | $4,144,000 | ||||||||
Collaboration License And Purchase Agreement [Member] | Genzyme Corporation [Member] | ||||||||||||
Revenue Recognition | ||||||||||||
Total agreed consideration amount | 18,500,000 | 18,500,000 | ||||||||||
Proceeds from Genzyme Collaboration, License and Purchase Agreement | 16,650,000 | 934,250 | 962,000 | |||||||||
Amount subject to holdback | 1,850,000 | 1,850,000 | ||||||||||
Initial collaboration period | 5 years | 5 years | ||||||||||
Sale of common stock (in shares) | 3,000,000 | 3,000,000 | ||||||||||
Price at which share of common stock are sold (in dollars per share) | $2 | $2 | ||||||||||
Aggregate purchase price | 6,000,000 | |||||||||||
Premium above closing price of common stock at which shares are sold (in dollars per share) | $0.51 | $0.51 | ||||||||||
Closing price of common stock (in dollars per share) | $1.49 | $1.49 | ||||||||||
Aggregate premium received over the closing price of common stock | 1,530,000 | 1,530,000 | ||||||||||
License fee revenue | $300,000 | $4,100,000 | $4,100,000 |
MAYO_LICENSE_AGREEMENT_Details
MAYO LICENSE AGREEMENT (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | |||||||||||||||||
Dec. 16, 2014 | Apr. 02, 2014 | Jun. 21, 2013 | Aug. 13, 2012 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2014 | 31-May-12 | Jun. 30, 2011 | Jun. 30, 2009 | Sep. 30, 2009 | Jun. 30, 2014 | Jun. 30, 2013 | Jan. 31, 2013 | |
installment | item | ||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
Number of shares of common stock covered by warrants | 75,000 | 75,000 | |||||||||||||||||||||
Royalty payments | $25,000 | $25,000 | $10,000 | ||||||||||||||||||||
Other Payments | |||||||||||||||||||||||
Charges incurred as part of the research collaboration | 4,992,000 | 9,073,000 | 7,174,000 | 7,430,000 | 6,713,000 | 6,982,000 | 6,457,000 | 7,526,000 | 28,669,000 | 27,678,000 | 42,131,000 | ||||||||||||
May 2012 Amendment | |||||||||||||||||||||||
Number of shares of restricted stock granted as a consideration for the expanded license | 4,000,000 | 11,500,000 | 6,300,000 | 6,300,000 | |||||||||||||||||||
Minimum [Member] | Scenario, Forecast [Member] | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
Royalty payments | 25,000 | ||||||||||||||||||||||
Licensing Agreements [Member] | |||||||||||||||||||||||
Other Payments | |||||||||||||||||||||||
Charges incurred as part of the research collaboration | 2,300,000 | 1,800,000 | 1,400,000 | ||||||||||||||||||||
Licensing Agreements [Member] | M A Y O Foundation [Member] | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
Number of common stock purchase warrants granted | 2 | ||||||||||||||||||||||
Other Payments | |||||||||||||||||||||||
Upfront payment | 80,000 | ||||||||||||||||||||||
Milestone payment on the commencement of patient enrollment in a human cancer screening clinical | 250,000 | ||||||||||||||||||||||
Milesone payments made upon approval of the FDA | 500,000 | ||||||||||||||||||||||
Charges incurred as part of the research collaboration | 2,300,000 | 1,700,000 | 1,200,000 | ||||||||||||||||||||
Payments for research and development efforts | 700,000 | 1,000,000 | 1,100,000 | ||||||||||||||||||||
Estimated liability for research and development efforts | 1,400,000 | 700,000 | 1,400,000 | 700,000 | |||||||||||||||||||
May 2012 Amendment | |||||||||||||||||||||||
Number of shares of restricted stock granted as a consideration for the expanded license | 97,466 | ||||||||||||||||||||||
Vesting right percentage of restricted stock | 25.00% | ||||||||||||||||||||||
Number of equal annual installments in which restricted stock are to be vested | 3 | ||||||||||||||||||||||
Research and development licensing expense recognized in connection with the restricted stock grant | $1,000,000 | ||||||||||||||||||||||
Licensing Agreements [Member] | Warrant Covering One Million Shares [Member] | M A Y O Foundation [Member] | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
Exercise price (in dollars per share) | 1.9 | ||||||||||||||||||||||
Number of shares of common stock covered by warrants | 1,000,000 | ||||||||||||||||||||||
Licensing Agreements [Member] | Warrant Covering Two Hundred Fifty Thousand Shares [Member] | M A Y O Foundation [Member] | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
Exercise price (in dollars per share) | 1.9 | ||||||||||||||||||||||
Number of shares of common stock covered by warrants | 250,000 | ||||||||||||||||||||||
Warrants, vesting period | 4 years | ||||||||||||||||||||||
Warrants exercised, gross (in shares) | 80,000 | 85,000 | 85,000 | ||||||||||||||||||||
Warrants forfeited (in shares) | 10,587 | 12,765 | 14,008 | ||||||||||||||||||||
Warrants exercised, net of forfeiture (in shares) | 69,413 | 72,235 | 70,992 |
ISSUANCES_OF_EQUITY_Details
ISSUANCES OF EQUITY (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||||||||
Share data in Millions, except Per Share data, unless otherwise specified | Dec. 16, 2014 | Apr. 02, 2014 | Jun. 21, 2013 | Aug. 13, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 16, 2014 | Apr. 02, 2014 | Jun. 21, 2013 | Aug. 13, 2012 |
ISSUANCES OF EQUITY | |||||||||||
Issuance of stock on underwritten public offering (in shares) | 4 | 11.5 | 6.3 | 6.3 | |||||||
Price of common stock (in dollars per share) | $27.44 | $25.75 | $12.75 | $12.35 | $9.75 | ||||||
Net proceeds received from the offerings | $100,900,000 | $137,700,000 | $73,300,000 | $57,800,000 | $238,580,000 | $73,296,000 | $57,755,000 | ||||
Underwriting discount and other stock issuance costs | $2,100,000 | $8,900,000 | $4,800,000 | $3,900,000 |
ISSUANCES_OF_EQUITY_Details_2
ISSUANCES OF EQUITY (Details 2) (Right Agreement [Member]) | 1 Months Ended |
Feb. 28, 2011 | |
ISSUANCES OF EQUITY | |
Number of shares of series A junior participating preferred stock which a holder is entitled to purchase upon exercise of the rights | 0.001 |
Minimum [Member] | |
ISSUANCES OF EQUITY | |
Percentage of outstanding common stock to be acquired by potential acquirer | 15.00% |
Percentage of outstanding common stock that is tendered in an offer or exchanged under offer | 15.00% |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 12 Months Ended | 54 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | |
Stock-based compensation | ||||
Shares available for future grant | 2,178,364 | 2,178,364 | ||
Proceeds from stock option exercise | $2,600,000 | $1,300,000 | $2,400,000 | |
Stock Option And Incentive Plan 2000 [Member] | ||||
Stock-based compensation | ||||
Further grants or awards after termination of plan (in shares) | 0 | |||
Period by which all options to purchase common stock will accelerate upon an acquisition of the company | 1 year | |||
Stock Option And Incentive Plan 2000 [Member] | Minimum [Member] | ||||
Stock-based compensation | ||||
Vesting period | 3 years | |||
Stock Option And Incentive Plan 2000 [Member] | Maximum [Member] | ||||
Stock-based compensation | ||||
Vesting period | 4 years | |||
Stock Option And Incentive Plan 2000 [Member] | Stock Options [Member] | ||||
Stock-based compensation | ||||
Expiration period from the date of grant | 10 years | |||
Shares outstanding | 3,358,800 | 3,358,800 | ||
Omnibus Long Term Incentive Plan 2010 [Member] | ||||
Stock-based compensation | ||||
Further grants or awards after termination of plan (in shares) | 0 | |||
Period by which all options to purchase common stock will accelerate upon an acquisition of the company | 1 year | |||
Shares available for future grant | 1,638,187 | 1,638,187 | ||
Omnibus Long Term Incentive Plan 2010 [Member] | Minimum [Member] | ||||
Stock-based compensation | ||||
Vesting period | 3 years | |||
Omnibus Long Term Incentive Plan 2010 [Member] | Maximum [Member] | ||||
Stock-based compensation | ||||
Vesting period | 4 years | |||
Omnibus Long Term Incentive Plan 2010 [Member] | Stock Options [Member] | ||||
Stock-based compensation | ||||
Expiration period from the date of grant | 10 years | |||
Shares outstanding | 1,575,517 | 1,575,517 | ||
Omnibus Long Term Incentive Plan 2010 [Member] | Restricted Stock Awards [Member] | ||||
Stock-based compensation | ||||
Shares outstanding | 1,541,114 | 1,541,114 | ||
Employee Stock Purchase Plan 2010 [Member] | ||||
Stock-based compensation | ||||
Increase in number of shares reserved for issuance | 500,000 | |||
Shares available for future grant | 540,177 | 540,177 | ||
Option exercise price, expressed as a percentage of fair market value | 85.00% | |||
Maximum value of shares that an employee is permitted to purchase | 25,000 | |||
Number of Shares | 88,166 | 59,932 | 63,611 | 259,823 |
Proceeds from stock option exercise | $800,000 | $500,000 | $400,000 | |
Employee Stock Purchase Plan 2010 [Member] | Thirty April2013 [Member] | ||||
Stock-based compensation | ||||
Number of Shares | 40,846 | |||
Weighted Average Price per Share (in dollars per share) | $8.25 | |||
Employee Stock Purchase Plan 2010 [Member] | Thirty One October2013 [Member] | ||||
Stock-based compensation | ||||
Number of Shares | 47,320 | |||
Weighted Average Price per Share (in dollars per share) | $8.95 | |||
Employee Stock Purchase Plan 2010 [Member] | Minimum [Member] | ||||
Stock-based compensation | ||||
Number of hours per week of customary employment required to participate in the plan | 20 | |||
Number of months of customary employment required to participate in the plan | 5 months | |||
Percentage of employee's compensation to be deducted from the employee's pay | 1.00% | |||
Employee Stock Purchase Plan 2010 [Member] | Maximum [Member] | ||||
Stock-based compensation | ||||
Percentage of employee's compensation to be deducted from the employee's pay | 15.00% |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock-based compensation expense | |||
Stock-based compensation expense | $11,520 | $7,744 | $5,493 |
Cost of Sales [Member] | |||
Stock-based compensation expense | |||
Stock-based compensation expense | 279 | ||
Research And Development Expense [Member] | |||
Stock-based compensation expense | |||
Stock-based compensation expense | 4,135 | 2,817 | 2,396 |
General And Administrative Expense [Member] | |||
Stock-based compensation expense | |||
Stock-based compensation expense | 5,589 | 3,054 | 2,579 |
Selling And Marketing Expense [Member] | |||
Stock-based compensation expense | |||
Stock-based compensation expense | $1,517 | $1,873 | $518 |
STOCKBASED_COMPENSATION_Detail2
STOCK-BASED COMPENSATION (Details 3) (Chief Commercial Officer [Member]) | 12 Months Ended | ||
Dec. 31, 2013 | Jun. 07, 2013 | Dec. 31, 2011 | |
item | |||
Stock-based compensation | |||
Number of shares affected by modification of options held by former employee | 41,250 | 100,000 | |
March2014 [Member] | |||
Stock-based compensation | |||
Number of shares that will vest | 10,000 | ||
Number of installments for vesting of shares | 24 | ||
April2014 [Member] | |||
Stock-based compensation | |||
Number of shares that will vest | 48,750 |
STOCKBASED_COMPENSATION_Detail3
STOCK-BASED COMPENSATION (Details 4) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 54 Months Ended | ||||||
Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 16, 2014 | Apr. 02, 2014 | Jun. 21, 2013 | Aug. 13, 2012 | |
STOCK-BASED COMPENSATION | ||||||||||
Forfeiture rate (as a percent) | 4.99% | 2.76% | 1.38% | |||||||
Additional disclosures | ||||||||||
Options outstanding that had exercise prices that were lower than the market price of common stock (in shares) | 4,934,317 | |||||||||
Options exercisable that had exercise prices that were lower than the market price of common stock (in shares) | 4,186,502 | |||||||||
Market price (in dollars per share) | $27.44 | 27.44 | $25.75 | $12.75 | $12.35 | $9.75 | ||||
Total intrinsic value of options exercised | $29,200,000 | $1,900,000 | $4,500,000 | |||||||
Number of shares of common stock covered by warrants issued in connection with a consulting agreement | 75,000 | |||||||||
Expense related to stock warrants | 1,300,000 | |||||||||
Weighted Average Grant Date Fair Value | ||||||||||
Unrecognized compensation cost | 19,500,000 | 19,500,000 | ||||||||
Weighted average period for recognition of unrecognized compensation cost | 2 years 9 months 18 days | |||||||||
Proceeds from stock option exercise | 2,600,000 | 1,300,000 | 2,400,000 | |||||||
Stock Options [Member] | ||||||||||
Valuation assumptions | ||||||||||
Risk-free interest rates, minimum (as a percent) | 1.96% | 0.94% | 0.81% | |||||||
Risk-free interest rates, maximum (as a percent) | 2.01% | 1.73% | 1.00% | |||||||
Expected term | 6 years | 6 years | 6 years | |||||||
Expected volatility, minimum (as a percent) | 77.60% | 82.90% | 85.00% | |||||||
Expected volatility, maximum (as a percent) | 80.80% | 84.00% | 92.00% | |||||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | |||||||
Weighted average fair value per share of options granted during the period (in dollars per share) | $10.05 | $8.12 | $6.90 | |||||||
Employee Stock [Member] | ||||||||||
Valuation assumptions | ||||||||||
Risk-free interest rates, minimum (as a percent) | 0.10% | 0.10% | 0.18% | |||||||
Risk-free interest rates, maximum (as a percent) | 0.50% | 0.33% | 0.30% | |||||||
Expected volatility, minimum (as a percent) | 42.50% | 39.10% | 34.00% | |||||||
Expected volatility, maximum (as a percent) | 62.70% | 45.60% | 54.90% | |||||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | |||||||
Weighted average fair value per share of options granted during the period (in dollars per share) | $6.30 | $3.13 | $2.84 | |||||||
Shares | ||||||||||
Outstanding at the beginning of the period (in shares) | 6,062,587 | 6,181,936 | 6,453,584 | |||||||
Granted (in shares) | 266,477 | 290,570 | 499,198 | |||||||
Exercised (in shares) | -1,378,372 | -274,919 | -691,471 | |||||||
Forfeited (in shares) | -16,375 | -135,000 | -79,375 | |||||||
Outstanding at the end of the period (in shares) | 4,934,317 | 6,062,587 | 6,181,936 | 4,934,317 | ||||||
Exercisable at the end of the period (in shares) | 4,186,502 | 4,186,502 | ||||||||
Vested and expected to vest at the end of the period (in shares) | 4,897,001 | 4,897,001 | ||||||||
Weighted Average Exercise Price | ||||||||||
Outstanding at the beginning of the period (in dollars per share) | $2.78 | $2.62 | $2.27 | |||||||
Granted (in dollars per share) | $14.28 | $11.36 | $9.18 | |||||||
Exercised (in dollars per share) | $1.91 | $5.17 | $3.45 | |||||||
Forfeited (in dollars per share) | $6.37 | $10.08 | $7.60 | |||||||
Outstanding at the end of the period (in dollars per share) | $3.63 | $2.78 | $2.62 | 3.63 | ||||||
Exercisable at the end of the period (in dollars per share) | $2.27 | 2.27 | ||||||||
Vested and expected to vest at the end of the period (in dollars per share) | $3.57 | 3.57 | ||||||||
Weighted Average Remaining Contractual Term | ||||||||||
Outstanding at the end of the period | 5 years 2 months 12 days | 6 years 7 months 6 days | ||||||||
Exercisable at the end of the period | 4 years 8 months 12 days | |||||||||
Vested and expected to vest at the end of the period | 5 years 2 months 12 days | |||||||||
Aggregate Intrinsic Value | ||||||||||
Outstanding at the end of the period | 117,503,000 | 117,503,000 | ||||||||
Exercisable at the end of the period | 105,384,000 | 105,384,000 | ||||||||
Vested and expected to vest at the end of the period | 116,898,000 | 116,898,000 | ||||||||
Employee Stock [Member] | Minimum [Member] | ||||||||||
Valuation assumptions | ||||||||||
Expected term | 6 months | 6 months | 6 months | |||||||
Employee Stock [Member] | Maximum [Member] | ||||||||||
Valuation assumptions | ||||||||||
Expected term | 2 years | 2 years | 2 years | |||||||
Restricted Stock Awards And Restricted Stock Units R S U [Member] | ||||||||||
Restricted Shares | ||||||||||
Outstanding at the beginning of the period (in shares) | 1,150,694 | 813,955 | 401,490 | 401,490 | ||||||
Granted (in shares) | 926,171 | 1,147,553 | 602,268 | |||||||
Released (in shares) | -491,370 | -344,611 | -185,116 | |||||||
Forfeited (in shares) | -44,381 | -466,203 | -4,687 | |||||||
Outstanding at the end of the period (in shares) | 1,541,114 | 1,150,694 | 813,955 | 1,541,114 | ||||||
Weighted Average Grant Date Fair Value | ||||||||||
Outstanding at the beginning of the period (in dollars per share) | $11.23 | $8.51 | $6.24 | $6.24 | ||||||
Granted (in dollars per share) | $15.61 | $11.76 | $9.47 | |||||||
Released (in dollars per share) | $11.17 | $8.56 | $5.67 | |||||||
Forfeited (in dollars per share) | $12.44 | $9.73 | $7.69 | |||||||
Outstanding at the end of the period (in dollars per share) | $13.86 | $11.23 | $8.51 | 13.86 | ||||||
Employee Stock Purchase Plan 2010 [Member] | ||||||||||
Weighted Average Grant Date Fair Value | ||||||||||
Proceeds from stock option exercise | $800,000 | $500,000 | $400,000 | |||||||
Stock issued under the Company's stock purchase plan | 88,166 | 59,932 | 63,611 | 259,823 |
STOCKBASED_COMPENSATION_Detail4
STOCK-BASED COMPENSATION (Details 5) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Outstanding | |
Number of Options | 4,934,317 |
Weighted Average Remaining Contractual Life | 5 years 2 months 12 days |
Weighted Average Exercise Price (in dollars per share) | $3.63 |
Exercisable | |
Number of Options | 4,186,502 |
Weighted Average Exercise Price (in dollars per share) | $2.27 |
Exercise Price Range One [Member] | |
Information relating to outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $0 |
Exercise price, high end of range (in dollars per share) | $1 |
Outstanding | |
Number of Options | 2,887,500 |
Weighted Average Remaining Contractual Life | 4 years 2 months 12 days |
Weighted Average Exercise Price (in dollars per share) | $0.83 |
Exercisable | |
Number of Options | 2,887,500 |
Weighted Average Exercise Price (in dollars per share) | $0.83 |
Exercise Price Range Two [Member] | |
Information relating to outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $1.01 |
Exercise price, high end of range (in dollars per share) | $3 |
Outstanding | |
Number of Options | 438,000 |
Weighted Average Remaining Contractual Life | 4 years 7 months 6 days |
Weighted Average Exercise Price (in dollars per share) | $2.79 |
Exercisable | |
Number of Options | 438,000 |
Weighted Average Exercise Price (in dollars per share) | $2.79 |
Exercise Price Range Three [Member] | |
Information relating to outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $3.01 |
Exercise price, high end of range (in dollars per share) | $5 |
Outstanding | |
Number of Options | 319,347 |
Weighted Average Remaining Contractual Life | 5 years 6 months |
Weighted Average Exercise Price (in dollars per share) | $3.95 |
Exercisable | |
Number of Options | 319,347 |
Weighted Average Exercise Price (in dollars per share) | $3.95 |
Exercise Price Range Four [Member] | |
Information relating to outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $5.01 |
Exercise price, high end of range (in dollars per share) | $7 |
Outstanding | |
Number of Options | 184,960 |
Weighted Average Remaining Contractual Life | 6 years 2 months 12 days |
Weighted Average Exercise Price (in dollars per share) | $5.94 |
Exercisable | |
Number of Options | 122,273 |
Weighted Average Exercise Price (in dollars per share) | $6.01 |
Exercise Price Range Five [Member] | |
Information relating to outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $7.01 |
Exercise price, high end of range (in dollars per share) | $9 |
Outstanding | |
Number of Options | 141,248 |
Weighted Average Remaining Contractual Life | 6 years 6 months |
Weighted Average Exercise Price (in dollars per share) | $8.16 |
Exercisable | |
Number of Options | 127,623 |
Weighted Average Exercise Price (in dollars per share) | $8.22 |
Exercise Price Range Six [Member] | |
Information relating to outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $9.01 |
Exercise price, high end of range (in dollars per share) | $11 |
Outstanding | |
Number of Options | 646,785 |
Weighted Average Remaining Contractual Life | 7 years 6 months |
Weighted Average Exercise Price (in dollars per share) | $9.65 |
Exercisable | |
Number of Options | 279,259 |
Weighted Average Exercise Price (in dollars per share) | $9.49 |
Exercise Price Range Seven [Member] | |
Information relating to outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $11.01 |
Exercise price, high end of range (in dollars per share) | $15 |
Outstanding | |
Number of Options | 283,000 |
Weighted Average Remaining Contractual Life | 9 years |
Weighted Average Exercise Price (in dollars per share) | $14.04 |
Exercisable | |
Number of Options | 12,500 |
Weighted Average Exercise Price (in dollars per share) | $14.40 |
Exercise Price Range Eight [Member] | |
Information relating to outstanding and exercisable stock options | |
Exercise price, low end of range (in dollars per share) | $15.01 |
Exercise price, high end of range (in dollars per share) | $16.52 |
Outstanding | |
Number of Options | 33,477 |
Weighted Average Remaining Contractual Life | 9 years 7 months 6 days |
Weighted Average Exercise Price (in dollars per share) | $16.52 |
STOCKBASED_COMPENSATION_Detail5
STOCK-BASED COMPENSATION (Details 6) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2013 | Mar. 31, 2012 |
Stock-based compensation | ||||||
Share based compensation expense | $11,520 | $7,744 | $5,493 | |||
Shares reserved for issuance | ||||||
Shares reserved for issuance | 2,178,364 | |||||
Restricted Stock Awards And Restricted Stock Units R S U [Member] | ||||||
Stock-based compensation | ||||||
Granted (in shares) | 926,171 | 1,147,553 | 602,268 | |||
Number of shares earned | 491,370 | 344,611 | 185,116 | |||
Omnibus Long Term Incentive Plan 2010 [Member] | ||||||
Shares reserved for issuance | ||||||
Shares reserved for issuance | 1,638,187 | |||||
Employee Stock Purchase Plan 2010 [Member] | ||||||
Shares reserved for issuance | ||||||
Shares reserved for issuance | 540,177 | |||||
Certain Executives [Member] | Restricted Stock Units R S U [Member] | ||||||
Stock-based compensation | ||||||
Granted (in shares) | 180,750 | 262,500 | ||||
Share based compensation expense | $400 | $600 | ($600) | |||
Number of shares earned | 100,800 | |||||
Vesting period of awards granted | 3 years |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Nov. 30, 2010 | Nov. 30, 2009 | Aug. 31, 2014 | Jun. 30, 2013 | Nov. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2009 | |
sqft | sqft | sqft | sqft | sqft | sqft | item | |||||
item | |||||||||||
Future minimum payments under operating leases | |||||||||||
2015 | $1,310,000 | ||||||||||
2016 | 1,225,000 | ||||||||||
2017 | 763,000 | ||||||||||
2018 | 704,000 | ||||||||||
Total lease obligations | 4,002,000 | ||||||||||
Additional disclosure | |||||||||||
Rent expense | 1,000,000 | 700,000 | 400,000 | ||||||||
Lease One Madison WI [Member] | |||||||||||
Operating Leases | |||||||||||
Initial term of the lease | 5 years | ||||||||||
Area of space under operating lease (in square feet) | 35,000 | 24,572 | 17,500 | ||||||||
Additional area of space under operating lease (in square feet) | 10,428 | 7,072 | |||||||||
Lease Two Madison WI [Member] | |||||||||||
Operating Leases | |||||||||||
Initial term of the lease | 5 years | ||||||||||
Area of space under operating lease (in square feet) | 29,000 | ||||||||||
Additional area of space under operating lease (in square feet) | 3,189 | ||||||||||
Number of extensions of lease term | 2 | ||||||||||
Extension term | 5 years | ||||||||||
Additional disclosure | |||||||||||
Lease incentive obligation | 2,700,000 | ||||||||||
Lease Two 2014 Amendment Madison WI [Member] | |||||||||||
Additional disclosure | |||||||||||
Lease incentive obligation | 53,000 | ||||||||||
Office Lease London United Kingdom [Member] | |||||||||||
Operating Leases | |||||||||||
Initial term of the lease | 2 years | ||||||||||
Area of space under operating lease (in square feet) | 620 | ||||||||||
Sublease Agreement 2009 [Member] | |||||||||||
Additional disclosure | |||||||||||
Rentable area under the sublease agreement (in square feet) | 5,086 | ||||||||||
Proceeds from the sublease agreement | 66,800 | ||||||||||
Term of the sublease agreement | 36 months | ||||||||||
Amount expected to be received in sublease payments over the life of the sublease agreement | $200,000 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 16, 2014 | Apr. 02, 2014 | Jun. 21, 2013 | Aug. 13, 2012 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-12 | Jun. 30, 2011 | Sep. 30, 2009 | Jun. 12, 2014 | Jun. 12, 2013 | Jun. 12, 2012 | Jun. 30, 2011 | Dec. 31, 2009 | Jun. 11, 2009 | |
Commitments and contingencies | ||||||||||||||||||||||||
Number of shares of common stock covered by warrants | 75,000 | 75,000 | ||||||||||||||||||||||
Annual royalty fees | $25,000 | $25,000 | $10,000 | |||||||||||||||||||||
Number of shares of restricted stock granted as a consideration for the expanded license | 4,000,000 | 11,500,000 | 6,300,000 | 6,300,000 | ||||||||||||||||||||
Research and development expense | 4,992,000 | 9,073,000 | 7,174,000 | 7,430,000 | 6,713,000 | 6,982,000 | 6,457,000 | 7,526,000 | 28,669,000 | 27,678,000 | 42,131,000 | |||||||||||||
Future minimum payments due under the entity's technology licenses | ||||||||||||||||||||||||
2015 | 698,000 | 698,000 | ||||||||||||||||||||||
2016 | 256,000 | 256,000 | ||||||||||||||||||||||
2017 | 256,000 | 256,000 | ||||||||||||||||||||||
2018 | 256,000 | 256,000 | ||||||||||||||||||||||
2019 | 256,000 | 256,000 | ||||||||||||||||||||||
Thereafter | 1,775,000 | 1,775,000 | ||||||||||||||||||||||
Total | 3,497,000 | 3,497,000 | ||||||||||||||||||||||
Licensing Agreements [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Research and development expense | 2,300,000 | 1,800,000 | 1,400,000 | |||||||||||||||||||||
Licensing Agreements [Member] | M A Y O Foundation [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Upfront payment | 80,000 | |||||||||||||||||||||||
Milestone payment contingent upon FDA approval | 500,000 | 250,000 | ||||||||||||||||||||||
Number of shares of restricted stock granted as a consideration for the expanded license | 97,466 | |||||||||||||||||||||||
Value of stock agreed to be issued upon commercial launch of the second and third products | 200,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | M A Y O Foundation [Member] | Minimum [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Annual royalty fees | 25,000 | 25,000 | 10,000 | |||||||||||||||||||||
Licensing Agreements [Member] | M A Y O Foundation [Member] | Warrant Covering One Million Shares [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Exercise price (in dollars per share) | $1.90 | |||||||||||||||||||||||
Number of shares of common stock covered by warrants | 1,000,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | M A Y O Foundation [Member] | Warrant Covering Two Hundred Fifty Thousand Shares [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Number of shares of common stock covered by warrants | 250,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | M A Y O Foundation [Member] | Sales Milestone Range Two [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Amount agreed to be paid upon reaching the specified amount of net sales | 2,000,000 | 2,000,000 | ||||||||||||||||||||||
Net sales of a licensed product | 50,000,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | M A Y O Foundation [Member] | Sales Milestone Range Four [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Amount agreed to be paid upon reaching the specified amount of net sales | 200,000 | 200,000 | ||||||||||||||||||||||
Net sales of a licensed product | 5,000,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | M A Y O Foundation [Member] | Sales Milestone Range Five [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Amount agreed to be paid upon reaching the specified amount of net sales | 750,000 | 750,000 | ||||||||||||||||||||||
Net sales of a licensed product | 20,000,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | Hologic Inc [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Upfront payment | 50,000 | |||||||||||||||||||||||
Amount paid upon enrollment in FDA trial | 100,000 | |||||||||||||||||||||||
Milestone payment contingent upon FDA approval | 100,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | M Dx Health [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Minimum royalty fee that the entity is required to pay on each anniversary | 100,000 | 100,000 | ||||||||||||||||||||||
Amount agreed to be paid upon the first commercial sale of a licensed product | 100,000 | 100,000 | ||||||||||||||||||||||
Licensing Agreements [Member] | M Dx Health [Member] | Sales Milestone Range One [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Amount agreed to be paid upon reaching the specified amount of net sales | 150,000 | 150,000 | ||||||||||||||||||||||
Net sales of a licensed product | 10,000,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | M Dx Health [Member] | Sales Milestone Range Two [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Amount agreed to be paid upon reaching the specified amount of net sales | 750,000 | 750,000 | ||||||||||||||||||||||
Net sales of a licensed product | 50,000,000 | |||||||||||||||||||||||
Licensing Agreements [Member] | M Dx Health [Member] | Sales Milestone Range Three [Member] | ||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Amount agreed to be paid upon reaching the specified amount of net sales | 1,000,000 | 1,000,000 | ||||||||||||||||||||||
Net sales of a licensed product | $50,000,000 |
COMMITMENTS_AND_CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
COMMITMENTS AND CONTINGENCIES | ||
Laboratory equipment | $1,200,000 | |
Lease term of leased equipment | 3 years | |
Accumulated depreciation of the leased equipment | 674,500 | |
Rental payment per month | 32,000 | |
Future minimum lease payments required under the capital lease | ||
2015 | 369,000 | |
Total lease obligations | 369,000 | |
Less imputed interest | -9,000 | |
Present value of minimum lease payments | 360,000 | |
Less current maturities of capital lease obligations | -360,000 | -351,000 |
Long term capital lease obligations | $360,000 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (Director [Member], Restricted Stock Awards [Member], USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |
Aug. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2013 | |
Consulting Agreement With Related Party One [Member] | ||||
RELATED PARTY TRANSACTIONS | ||||
Consulting agreement term | 1 year | |||
Shares of common stock granted | 4,873 | |||
Vesting period of awards granted | 1 year | |||
Cash payable over term of agreement | $60,000 | |||
Consulting agreement expenses | 35,000 | 25,000 | ||
Consulting Agreement With Related Party Two [Member] | ||||
RELATED PARTY TRANSACTIONS | ||||
Consulting agreement term | 1 year | |||
Shares of common stock granted | 4,277 | |||
Vesting period of awards granted | 1 year | |||
Cash payable over term of agreement | 60,000 | |||
Consulting agreement expenses | $25,000 |
ACCRUED_LIABILITIES_Details
ACCRUED LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ACCRUED LIABILITIES | ||
Compensation | $5,668 | $2,838 |
Professional fees | 5,764 | 826 |
Research and trial related expenses | 1,447 | 689 |
Licenses | 646 | 539 |
Micellaneous taxes | 261 | 24 |
Other | 122 | 58 |
Occupancy costs | 52 | 71 |
Assets under construction | 649 | |
Accrued liabilities | $13,960 | $5,694 |
LONG_TERM_DEBT_Details
LONG TERM DEBT (Details) (Loans Payable [Member], USD $) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2009 | Dec. 31, 2014 | Nov. 30, 2009 | |
item | |||
Long term debt | |||
Proceeds from long term debt | $1,000,000 | ||
Number of new full time positions required to be created for reduction in principal amount by specified amount | 100 | ||
Reduction in the principal amount for each new position created | 5,405 | ||
Full time positions required to be created for forgiveness of full amount of principal | 185 | ||
Interest rate (as a percent) | 2.00% | ||
Interest rate if job creation requirements are not met (as a percent) | 4.00% | ||
Period for which both principal and interest payments are deferred | 5 years | ||
Future principal obligations | |||
2016 | 145,000 | ||
2017 | 217,000 | ||
2018 | 221,000 | ||
2019 | 225,000 | ||
Thereafter | 192,000 | ||
Total | 1,000,000 | ||
Maximum [Member] | |||
Long term debt | |||
Loan amount | $1,000,000 |
EMPLOYEE_BENEFIT_PLAN_Details
EMPLOYEE BENEFIT PLAN (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
EMPLOYEE BENEFIT PLAN | |||
Matching contribution by employer (as a percent) | 100.00% | 100.00% | 100.00% |
Percentage of participant's salary matched by employer | 6.00% | 6.00% | 6.00% |
Compensation expense in connection with the 401 (k) Plan | $0.80 | $0.50 | $0.40 |
NEW_MARKET_TAX_CREDIT_Details
NEW MARKET TAX CREDIT (Details) (New Market Tax Credit Program [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Disclosures related to New Market Tax Credit | |
Net proceeds received from financing arrangements | $2.40 |
Loan issued to a subsidiary of the Company by the Investor | 7.5 |
Loan transaction eliminated in Company's consolidated financial statements | 5.1 |
Fee related to not exercising the option to purchase certain real property under a specified agreement | 1.2 |
Variable Interest Entity, Primary Beneficiary [Member] | |
Disclosures related to New Market Tax Credit | |
Debt issuance costs | 0.2 |
Variable Interest Entity, Primary Beneficiary [Member] | Other Long-Term Liabilities [Member] | |
Disclosures related to New Market Tax Credit | |
Financing arrangement, amount outstanding | 2.4 |
Investor [Member] | |
Disclosures related to New Market Tax Credit | |
Loan receivable issued to Investor | 5.1 |
Term of the loan receivable | 7 years |
Loan receivable interest rate (as a percent) | 2.74% |
Recapture (as a percentage) | 100.00% |
Recapture period | 7 years |
Investor [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Cash and Cash Equivalents Balance Sheet Location [Member] | |
Disclosures related to New Market Tax Credit | |
Financing arrangement, investor contribution | $2.40 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other information | |||
Excess tax benefit arising from stock option deductions credited to additional paid in capital | $39,800,000 | $16,500,000 | |
Deferred tax assets: | |||
Operating loss carryforwards | 140,471,000 | 101,942,000 | |
Tax credit carryforwards | 16,915,000 | 18,061,000 | |
Deferred revenue | 11,000 | 117,000 | |
Other temporary differences | 4,543,000 | 4,429,000 | |
Tax assets before valuation allowance | 161,940,000 | 124,549,000 | |
Less-Valuation allowance | -161,940,000 | -124,549,000 | |
Valuation allowance | |||
Change in valuation allowance | 37,400,000 | 20,600,000 | |
Differences between the effective income tax rate and the statutory tax rate | |||
U.S. Federal statutory rate (as a percent) | 34.00% | 34.00% | 34.00% |
State taxes (as a percent) | 5.50% | 4.80% | 1.70% |
Research and development tax credit (as a percent) | -1.10% | 16.90% | 5.10% |
Stock-based compensation expense (as a percent) | -0.50% | -1.10% | -0.60% |
Other adjustments (as a percent) | -0.80% | -0.30% | -0.10% |
Valuation allowance (as a percent) | -37.10% | -54.30% | -40.10% |
Effective tax rate (as a percent) | 0.00% | 0.00% | 0.00% |
Unrecognized tax benefits | 0 | 0 | 0 |
Accrued interest or penalties | 0 | 0 | 0 |
Recognized interest or penalties | 0 | 0 | 0 |
Internal Revenue Service I R S [Member] | |||
Operating loss carryforwards and tax credit carryforwards | |||
Operating loss carryforwards | 422,700,000 | ||
Internal Revenue Service I R S [Member] | Research [Member] | |||
Operating loss carryforwards and tax credit carryforwards | |||
Tax credit carryforwards | 6,500,000 | ||
State And Local Jurisdiction [Member] | |||
Operating loss carryforwards and tax credit carryforwards | |||
Operating loss carryforwards | 232,000,000 | ||
State And Local Jurisdiction [Member] | Research [Member] | |||
Operating loss carryforwards and tax credit carryforwards | |||
Tax credit carryforwards | $15,600,000 |
SUBSEQUENT_EVENT_Details
SUBSEQUENT EVENT (Details) (M A Y O Foundation [Member], Licensing Agreements [Member], Subsequent Event [Member], USD $) | 1 Months Ended |
Feb. 28, 2015 | |
installment | |
M A Y O Foundation [Member] | Licensing Agreements [Member] | Subsequent Event [Member] | |
Subsequent event | |
Extension period | 5 years |
License fees payable in five annual installments | $5,000,000 |
Number of annual installments in which license fees are payable | 5 |
QUARTERLY_RESULTS_OF_OPERATION2
QUARTERLY RESULTS OF OPERATIONS (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |||||||||||
Laboratory service revenue | $1,504 | $1,504 | |||||||||
License fee revenue | 294 | 294 | 4,144 | 4,144 | |||||||
Revenue | 1,036 | 1,036 | 1,036 | 1,036 | |||||||
Cost of revenue | 3,401 | 924 | 4,325 | ||||||||
Gross margin | -1,897 | -924 | 294 | 1,036 | 1,036 | 1,036 | 1,036 | -2,527 | 4,144 | 4,144 | |
Research and development | 4,992 | 9,073 | 7,174 | 7,430 | 6,713 | 6,982 | 6,457 | 7,526 | 28,669 | 27,678 | 42,131 |
General and administrative | 10,625 | 8,994 | 6,230 | 4,586 | 3,687 | 3,686 | 3,628 | 2,648 | 30,435 | 13,649 | 9,900 |
Sales and marketing | 15,069 | 13,217 | 6,166 | 4,456 | 2,902 | 1,615 | 3,302 | 1,759 | 38,908 | 9,578 | 4,755 |
Loss from operations | -32,583 | -32,208 | -19,570 | -16,178 | -12,266 | -11,247 | -12,351 | -10,897 | -100,539 | -46,761 | -52,642 |
Investment income | 150 | 160 | 146 | 86 | 96 | 103 | 55 | 62 | 542 | 316 | 262 |
Interest expense | -11 | -12 | -13 | -15 | -16 | -16 | -18 | -19 | -51 | -69 | -41 |
Net loss | ($32,444) | ($32,060) | ($19,437) | ($16,107) | ($12,186) | ($11,160) | ($12,314) | ($10,854) | ($100,048) | ($46,514) | ($52,421) |
Net loss per share-basic and diluted (in dollars per share) | ($0.38) | ($0.39) | ($0.24) | ($0.23) | ($0.17) | ($0.16) | ($0.19) | ($0.17) | ($1.25) | ($0.69) | ($0.88) |
Weighted average common shares outstanding-basic and diluted (in shares) | 84,734 | 82,941 | 82,048 | 70,987 | 70,757 | 70,559 | 64,699 | 63,836 | 80,232 | 67,493 | 59,481 |