Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 31, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'GENOMIC HEALTH INC | ' |
Entity Central Index Key | '0001131324 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 31,527,345 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $32,494 | $33,279 |
Short-term marketable securities | 73,209 | 72,071 |
Accounts receivable (net of allowance for doubtful accounts; 2014 - $2,119, 2013 - $1,907) | 31,771 | 29,446 |
Prepaid expenses and other current assets | 9,014 | 10,196 |
Total current assets | 146,488 | 144,992 |
Property and equipment, net | 17,342 | 18,290 |
Other assets | 14,120 | 13,752 |
Total assets | 177,950 | 177,034 |
Current liabilities: | ' | ' |
Accounts payable | 5,560 | 5,160 |
Accrued compensation | 14,213 | 12,776 |
Accrued license fees | 2,313 | 2,554 |
Accrued expenses and other current liabilities | 9,863 | 8,464 |
Deferred revenues | 273 | 586 |
Other current liabilities | 192 | 292 |
Total current liabilities | 32,414 | 29,832 |
Other liabilities | 2,083 | 2,221 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | 3 | 3 |
Additional paid-in capital | 355,889 | 345,345 |
Accumulated other comprehensive income | 3 | 12 |
Accumulated deficit | -182,332 | -170,269 |
Treasury stock, at cost | -30,110 | -30,110 |
Total stockholders' equity | 143,453 | 144,981 |
Total liabilities and stockholders' equity | $177,950 | $177,034 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ' | ' |
Accounts receivable, allowance for doubtful accounts | $2,119 | $1,907 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Product revenues | $70,477 | $63,691 | $137,479 | $126,400 |
Contract revenues | ' | ' | ' | 385 |
Total revenues | 70,477 | 63,691 | 137,479 | 126,785 |
Operating expenses: | ' | ' | ' | ' |
Cost of product revenues | 12,207 | 10,757 | 24,262 | 20,503 |
Research and development | 13,295 | 13,800 | 27,976 | 27,463 |
Selling and marketing | 34,571 | 28,135 | 67,303 | 55,574 |
General and administrative | 15,015 | 13,910 | 29,743 | 27,045 |
Total operating expenses | 75,088 | 66,602 | 149,284 | 130,585 |
Loss from operations | -4,611 | -2,911 | -11,805 | -3,800 |
Interest income | 47 | 57 | 97 | 122 |
Other income (expense), net | 34 | -85 | -192 | -91 |
Loss before income taxes | -4,530 | -2,939 | -11,900 | -3,769 |
Income tax expense | 88 | 55 | 163 | 108 |
Net loss | ($4,618) | ($2,994) | ($12,063) | ($3,877) |
Basic and diluted net loss per share (in dollars per share) | ($0.15) | ($0.10) | ($0.39) | ($0.13) |
Shares used in computing basic and diluted net loss per share | 31,333 | 30,464 | 31,211 | 30,317 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ' | ' | ' | ' |
Net loss | ($4,618) | ($2,994) | ($12,063) | ($3,877) |
Other comprehensive income (loss): | ' | ' | ' | ' |
Unrealized gain (loss) on available-for-sale marketable securities, net of tax | -18 | -12 | -9 | 6 |
Comprehensive loss | ($4,636) | ($3,006) | ($12,072) | ($3,871) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating activities | ' | ' |
Net loss | ($12,063) | ($3,877) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 3,490 | 3,148 |
Employee stock-based compensation | 8,610 | 8,488 |
Outside director restricted stock awarded in lieu of fees | 110 | 110 |
(Gain) loss on disposal of property and equipment | -24 | -1 |
Impairment of assets held for sale | 265 | ' |
Changes in assets and liabilities: | ' | ' |
Accounts receivable | -2,325 | -4,437 |
Prepaid expenses and other assets | 736 | -15 |
Accounts payable | 292 | -1,188 |
Accrued compensation | 1,437 | 793 |
Accrued expenses and other liabilities | 1,885 | 1,742 |
Deferred revenues | -313 | -96 |
Net cash provided by operating activities | 2,100 | 4,667 |
Investing activities | ' | ' |
Purchases of property and equipment | -3,679 | -4,415 |
Proceeds from sale of property and equipment | 117 | 4 |
Purchases of marketable securities | -58,701 | -47,625 |
Maturities of marketable securities | 57,554 | 54,263 |
Net cash provided by (used in) investing activities | -4,709 | 2,227 |
Financing activities | ' | ' |
Net proceeds from issuance of common stock under stock plans | 5,135 | 10,509 |
Withholding taxes related to restricted stock units net share settlement | -3,311 | -2,571 |
Repurchase of common stock | ' | -15 |
Net cash provided by financing activities | 1,824 | 7,923 |
Net increase (decrease) in cash and cash equivalents | -785 | 14,817 |
Cash and cash equivalents at the beginning of the period | 33,279 | 18,005 |
Cash and cash equivalents at the end of the period | 32,494 | 32,822 |
Non-cash investing and financing activities | ' | ' |
Accrued purchase of property and equipment | $264 | $855 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Organization and Summary of Significant Accounting Policies | ' |
Organization and Summary of Significant Accounting Policies | ' |
Note 1. Organization and Summary of Significant Accounting Policies | |
The Company | |
Genomic Health, Inc. (the “Company”) is a global healthcare company that provides actionable genomic information to personalize cancer treatment decisions. The Company develops and globally commercializes genomic-based clinical laboratory services that analyze the underlying biology of cancer, allowing physicians and patients to make individualized treatment decisions. The Company was incorporated in Delaware in August 2000. The Company’s first product, the Oncotype DX invasive breast cancer test, was launched in 2004 and is used for early stage invasive breast cancer patients to predict the likelihood of breast cancer recurrence and the likelihood of chemotherapy benefit. In January 2010, the Company launched its second product, the Oncotype DX colon cancer test, which is used to predict the likelihood of colon cancer recurrence in patients with stage II disease. In December 2011, the Company made Oncotype DX available for patients with ductal carcinoma in situ (“DCIS”), a pre-invasive form of breast cancer. This test provides a DCIS score that is used to predict the likelihood of local recurrence. In June 2012, the Company began offering the Oncotype DX colon cancer test for use in patients with stage III disease treated with oxaliplatin-containing adjuvant therapy. In May 2013, the Company launched the Oncotype DX prostate cancer test. The test provides a Genomic Prostate Score, or GPS, to predict disease aggressiveness in men with low risk disease. This test is used to improve treatment decisions for prostate cancer patients, in conjunction with the Gleason score, or tumor grading. | |
Principles of Consolidation | |
The condensed consolidated financial statements include all the accounts of the Company and its wholly-owned subsidiaries. The Company had three wholly-owned subsidiaries at June 30, 2014: Genomic Health International Sarl, which was established in Switzerland in 2009, and Genomic Health International Holdings, LLC, which was established in Delaware in 2010, both of which support the Company’s international sales and marketing efforts; and Oncotype Laboratories, Inc., which was established in 2012, and is inactive. Genomic Health International Holdings, LLC has nine wholly-owned subsidiaries. The functional currency for the Company’s wholly-owned subsidiaries incorporated outside the United States is the U.S. dollar. All significant intercompany balances and transactions have been eliminated. | |
Basis of Presentation and Use of Estimates | |
The accompanying interim period condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated balance sheet as of June 30, 2014, and the condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the three and six months ended June 30, 2014 and 2013 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of its financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2013 has been derived from audited financial statements, but it does not include certain information and notes required by GAAP for complete consolidated financial statements. | |
The preparation of financial statements in conformity with GAAP requires management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | |
The accompanying interim period condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |
Revenue Recognition | |
The Company derives its revenues from product sales and contract research arrangements. The majority of the Company’s historical product revenues have been derived from the sale of the Oncotype DX breast cancer test. The Company generally bills third-party payors upon generation and delivery of a patient report to the physician. As such, the Company takes assignment of benefits and the risk of collection with the third-party payor. The Company usually bills the patient directly for amounts owed after multiple requests for payment have been denied or only partially paid by the insurance carrier. The Company pursues case-by-case reimbursement where policies are not in place or payment history has not been established. | |
The Company’s product revenues for tests performed are recognized when the following revenue recognition criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Criterion (1) is satisfied when the Company has an arrangement to pay or a contract with the payor in place addressing reimbursement for the Oncotype DX test. In the absence of such arrangements, the Company considers that criterion (1) is satisfied when a third-party payor pays the Company for the test performed. Criterion (2) is satisfied when the Company performs the test and generates and delivers to the physician, or makes available on its web portal, a patient report. Determination of criteria (3) and (4) are based on management’s judgments regarding whether the fee charged for products or services delivered is fixed or determinable, and the collectability of those fees under any contract or arrangement. When evaluating collectability, the Company considers whether it has sufficient history to reliably estimate a payor’s individual payment patterns. Based upon at least several months of payment history, the Company reviews the number of tests paid against the number of tests billed and the payor’s outstanding balance for unpaid tests to determine whether payments are being made at a consistently high percentage of tests billed and at appropriate amounts given the contracted payment amount. To the extent all criteria set forth above are not met when test results are delivered, product revenues are recognized when cash is received from the payor. | |
The Company has exclusive distribution agreements for one or more of its Oncotype DX tests with distributors covering more than 90 countries. The distributor generally provides certain marketing and administrative services to the Company within its territory. As a condition of these agreements, the distributor generally pays the Company an agreed upon fee per test and the Company processes the tests. The same revenue recognition criteria described above generally apply to tests received through distributors. To the extent all criteria set forth above are not met when test results are delivered, product revenues are generally recognized when cash is received from the distributor. | |
From time to time, the Company receives requests for refunds of payments, generally due to overpayments made by third-party payors. Upon becoming aware of a refund request, the Company establishes an accrued liability for tests covered by the refund request until such time as the Company determines whether or not a refund is due. Accrued refunds were $1.0 million and $770,000 at June 30, 2014 and December 31, 2013, respectively, and included in accrued expenses and other current liabilities. | |
Contract revenues are generally derived from studies conducted with biopharmaceutical and pharmaceutical companies. The specific methodology for revenue recognition is determined on a case-by-case basis according to the facts and circumstances applicable to a given contract. Under certain contracts, the Company’s input, measured in terms of full-time equivalent level of effort or running a set of assays through its clinical reference laboratory under a contractual protocol, triggers payment obligations, and revenues are recognized as costs are incurred or assays are processed. Certain contracts have payments that are triggered as milestones are completed, such as completion of a successful set of experiments. Milestones are assessed on an individual basis and revenue is recognized when these milestones are achieved, as evidenced by acknowledgment from collaborators, provided that (1) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement and (2) the milestone payment is non-refundable. Where separate milestones do not meet these criteria, the Company typically defaults to a performance-based model, such as revenue recognition following delivery of effort as compared to an estimate of total expected effort. | |
Advance payments received in excess of revenues recognized are classified as deferred revenue until such time as the revenue recognition criteria have been met. | |
Allowance for Doubtful Accounts | |
The Company accrues an allowance for doubtful accounts against its accounts receivable based on estimates consistent with historical payment experience. Bad debt expense is included in general and administrative expense on the Company’s condensed consolidated statements of operations. Accounts receivable are written off against the allowance when the appeals process is exhausted, when an unfavorable coverage decision is received or when there is other substantive evidence that the account will not be paid. The Company’s allowance for doubtful accounts as of June 30, 2014 and December 31, 2013 was $2.1 million and $1.9 million, respectively. Write-offs for doubtful accounts of $1.4 million and $2.9 million were recorded against the allowance during the three and six months ended June 30, 2014, respectively, and write-offs of $1.3 million and $2.3 million were recorded against the allowance during the three and six months ended June 30, 2013, respectively. Bad debt expense was $1.6 million and $3.2 million for the three and six months ended June 30, 2014, respectively, and $1.6 million and $2.9 million for the three and six months ended June 30, 2013, respectively. | |
Research and Development Expenses | |
Research and development expenses are comprised of costs incurred to develop technology and carry out clinical studies and include salaries and benefits, reagents and supplies used in research and development laboratory work, infrastructure expenses, including allocated facility occupancy and information technology costs, contract services, and other outside costs. Research and development expenses also include costs related to activities performed under contracts with biopharmaceutical and pharmaceutical companies. Research and development costs are expensed as incurred. | |
The Company enters into collaboration and clinical trial agreements with clinical collaborators and records these costs as research and development expenses. The Company records accruals for estimated study costs comprised of work performed by its collaborators under contract terms. Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized and recognized as expense as the goods are delivered or the related services are performed. | |
Income Taxes | |
The Company uses the liability method for income taxes, whereby deferred income taxes are provided on items recognized for financial reporting purposes over different periods than for income tax purposes. Valuation allowances are provided when the expected realization of tax assets does not meet a more-likely-than-not criterion. | |
The Company accounts for uncertain income tax positions using a benefit recognition model with a two-step approach, a more-likely-than-not recognition criterion and a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement, in accordance with the accounting guidance for uncertain tax positions. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit is recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense when and if incurred. See Note 8, “Income Taxes,” for additional information regarding unrecognized tax benefits. | |
Investments in PrivatelyHeld Companies | |
The Company determines whether its investments in privately held companies are debt or equity based on their characteristics, in accordance with accounting guidance for investments. The Company also evaluates the investee to determine if the entity is a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary of the VIE, in order to determine whether consolidation of the VIE is required in accordance with accounting guidance for consolidations. If consolidation is not required and the Company owns less than 50.1% of the voting interest of the entity, the investment is evaluated to determine if the equity method of accounting should be applied. The equity method applies to investments in common stock or in-substance common stock where the Company exercises significant influence over the investee, typically represented by ownership of 20% or more of the voting interests of an entity. If the equity method does not apply, investments in privately held companies determined to be equity securities are accounted for using the cost method. Investments in privately held companies determined to be debt securities are accounted for as available-for-sale or held-to-maturity securities, in accordance with accounting guidance for investments. | |
In December 2010, the Company invested $500,000 in the preferred stock of a private company, representing 21% of the entity’s outstanding voting shares. The Company determined that it was not the primary beneficiary of this VIE and, accordingly, applied the equity method of accounting. In June 2012, the Company invested an additional $400,000 in the preferred stock of this company as part of a new equity financing, which was not proportionate with the Company’s interest, thus reducing the Company’s holdings to approximately 16% of the entity’s outstanding voting shares. As of June 30, 2012, as a result of the Company’s ownership interest falling below 20% and not having the ability to exercise influence over the investee entity, the Company changed its method of accounting for this investment to the cost method. Each of the Company’s equity investments is reviewed at least annually for impairment or whenever events or changes in circumstances indicate that the carrying value of the investment might not be recoverable. At December 31, 2013, the Company concluded that the indicators of impairment of its investment in this privately held company were other than temporary and wrote off the remaining asset balance of $643,000. Therefore, the net carrying value of this investment was $0 at June 30, 2014 and December 31, 2013. | |
In March 2011, the Company invested $2.3 million in the redeemable preferred stock of a private company representing 21% of the entity’s outstanding voting shares. The Company determined that the investment was a held-to-maturity debt security and that the investee was not subject to consolidation. In August 2012, the Company participated in the first tranche of a second preferred stock financing of this private company and purchased $1.0 million of preferred stock with no redemption privileges. In connection with this financing, the terms of the Company’s initial redeemable preferred stock investment were modified to become preferred stock with no redemption privileges. As a result of this transaction, the Company’s ownership interest was reduced to approximately 19% and the investment held by the Company is considered to be an investment in non-marketable equity securities. In October 2012, the Company participated in the second tranche of the second financing and purchased an additional $3.6 million of preferred stock, resulting in an ownership percentage of approximately 18%. In November 2013, the Company participated in an additional round of financing and purchased an additional $5.0 million of preferred stock. At both June 30, 2014 and December 31, 2013, the Company’s ownership in this entity was approximately 12%. The investee is not consolidated because the Company owns less than 20% of the investee, and the Company does not have the ability to exercise significant influence over the investee. As a result, the Company will continue to use the cost method of accounting for this investment. The carrying value of this investment was $11.9 million at both June 30, 2014 and December 31, 2013, and no impairment has been recognized for this investment through June 30, 2014. | |
Recently Issued Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) to provide guidance on revenue recognition. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective in the first quarter of fiscal 2017. Early adoption is not permitted. Upon adoption, ASU 2014-09 can be applied retrospectively to all periods presented or only to the most current period presented with the cumulative effect of changes reflected in the opening balance of retained earnings in the most current period presented. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements. |
Net_Income_Loss_Per_Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2014 | |
Net Income (Loss) Per Share | ' |
Net Income (Loss) Per Share | ' |
Note 2. Net Income (Loss) Per Share | |
Basic net income (loss) per share is calculated by dividing net income (loss) for the period by the weighted-average number of common shares outstanding for the period without consideration of potential common shares. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and dilutive potential common shares for the period determined using the treasury-stock method. For purposes of this calculation, options to purchase common stock and restricted stock unit awards are considered to be potential common shares and are not included in the calculation of diluted net loss per share because their effect is anti-dilutive. | |
Options to purchase 1.0 million and 1.1 million shares of the Company’s common stock were outstanding during each of the three and six months ended June 30, 2014 and 57,000 and 98,000 restricted stock units were outstanding during each of the three and six months ended June 30, 2014, but were not included in the computation of diluted net loss per share because their effect is anti-dilutive. Options to purchase 1.5 million shares of the Company’s common stock were outstanding during each of the three and six months ended June 30, 2013 and 126,000 and 116,000 restricted stock units were outstanding during each of the three and six months ended June 30, 2013, but were not included in the computation of diluted net loss per share because their effect is anti-dilutive. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
Note 3. Fair Value Measurements | ||||||||||||||
The Company measures certain financial assets, including cash equivalents and marketable securities, at their fair value on a recurring basis. The fair value of these financial assets was determined based on a hierarchy of three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: | ||||||||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities; | ||||||||||||||
Level 2: Observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | ||||||||||||||
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company did not have any non-financial assets or liabilities that were measured or disclosed at fair value on a recurring basis at June 30, 2014 and December 31, 2013, respectively. The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis at June 30, 2014 and December 31, 2013 by level within the fair value hierarchy: | ||||||||||||||
Actively Quoted | Significant Other | Significant | Balance at | |||||||||||
Markets for | Observable | Unobservable | June 30, | |||||||||||
Identical Assets | Inputs | Inputs | 2014 | |||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
(In thousands) | ||||||||||||||
As of June 30, 2014: | ||||||||||||||
Assets | ||||||||||||||
Money market deposits | $ | 15,368 | $ | — | $ | — | $ | 15,368 | ||||||
Commercial paper | — | 25,746 | — | 25,746 | ||||||||||
Corporate debt securities | — | 47,463 | — | 47,463 | ||||||||||
Total | $ | 15,368 | $ | 73,209 | $ | — | $ | 88,577 | ||||||
Actively Quoted | Significant Other | Significant | Balance at | |||||||||||
Markets for | Observable | Unobservable | December 31, | |||||||||||
Identical Assets | Inputs | Inputs | 2013 | |||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
(In thousands) | ||||||||||||||
As of December 31, 2013: | ||||||||||||||
Assets | ||||||||||||||
Money market deposits | $ | 15,690 | $ | — | $ | — | $ | 15,690 | ||||||
Commercial paper | — | 37,643 | — | 37,643 | ||||||||||
Corporate debt securities | — | 35,428 | — | 35,428 | ||||||||||
Total | $ | 15,690 | $ | 73,071 | $ | — | $ | 88,761 | ||||||
The Company’s commercial paper and corporate bonds are classified as Level 2 as they are valued using multi-dimensional relational pricing models that use observable market inputs, including benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. Not all inputs listed are available for use in the evaluation process on any given day for each security evaluation. In addition, market indicators, industry and economic events are monitored and may serve as a trigger to acquire further corroborating market data. There were no transfers between Level 1 and Level 2 categories during the three months ended June 30, 2014 and 2013, respectively. | ||||||||||||||
All of the Company’s marketable securities are classified as available-for-sale. The following tables illustrate the Company’s available-for-sale marketable securities as of the dates indicated: | ||||||||||||||
June 30, 2014 | ||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
Commercial paper | $ | 25,723 | $ | 23 | $ | — | $ | 25,746 | ||||||
Corporate debt securities | 47,483 | 2 | (22 | ) | 47,463 | |||||||||
Total | $ | 73,206 | $ | 25 | $ | (22 | ) | $ | 73,209 | |||||
December 31, 2013 | ||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
Commercial paper | $ | 36,625 | $ | 18 | $ | — | $ | 36,643 | ||||||
Corporate debt securities | 35,434 | 3 | (9 | ) | 35,428 | |||||||||
Total | $ | 72,059 | $ | 21 | $ | (9 | ) | $ | 72,071 | |||||
The Company had no realized gains or losses on available-for-sale marketable securities for the three and six months ended June 30, 2014 and 2013, respectively. | ||||||||||||||
All of the Company’s available-for-sale marketable securities had contractual maturities of one year or less as of June 30, 2014 and December 31, 2013, respectively. |
Collaboration_and_Commercial_T
Collaboration and Commercial Technology Licensing Agreements | 6 Months Ended |
Jun. 30, 2014 | |
Collaboration and Commercial Technology Licensing Agreements | ' |
Collaboration and Commercial Technology Licensing Agreements | ' |
Note 4. Collaboration and Commercial Technology Licensing Agreements | |
The Company has entered into a variety of collaboration and specimen transfer agreements relating to its development efforts. The Company recorded collaboration expenses of $1.0 million and $2.2 million for the three and six months ended June 30, 2014 and $639,000 and $1.1 million for the three and six months ended June 30, 2013, respectively, relating to services provided in connection with these agreements. In addition to these expenses, some of the agreements contain provisions for royalties from inventions resulting from these collaborations. The Company has specified options and rights relating to joint inventions arising out of the collaborations. | |
In August 2013, the Company entered into a collaboration agreement to conduct an additional large DCIS clinical study to validate the relationship between the Oncotype DX DCIS score and the likelihood of local recurrence in patients with DCIS. The agreement, which is estimated to be completed in 2017, includes a study fee and milestone payments dependent on the completion of certain key milestones. In 2013, the Company capitalized the milestone payments of $392,000 related to this agreement. During the three and six months ended June 30, 2014, the Company recorded collaboration expenses related to this agreement of $164,000 and $401,000, respectively. All future milestone payments are contingent on certain accomplishments, and therefore the timing for any related payments cannot be estimated. | |
In November 2013, the Company entered into an exclusive license agreement to develop and commercialize a test to predict benefit from DNA damage-based chemotherapy drugs, such as anthracycline-based regimens, in high risk breast cancer. The Company made an up-front payment of $9.0 million, which was recognized in research and development expense in the fourth quarter of 2013, and will make milestone payments as certain clinical and commercial endpoints are achieved in the future. All future milestone payments are contingent on certain milestone accomplishments, and therefore the timing for future milestone payments cannot be estimated. With successful commercialization of a test, the Company will be obligated to pay royalties. | |
In January 2014, the Company entered into a collaboration agreement to conduct a prostate study with a goal to determine the association between the Genomic Prostate Score, or GPS provided by the assay and the likelihood of experiencing disease progression while on active surveillance. In February 2014, the Company capitalized a milestone payment of $367,000 related to this agreement which is included in the other assets in the accompanying condensed consolidated balance sheets. All future milestone payments to be received under this agreement are contingent on certain accomplishments, and therefore the timing for any related payments cannot be estimated. | |
The Company is a party to various agreements under which it licenses technology on a non-exclusive basis in the field of human diagnostics. Access to these licenses enables the Company to process its Oncotype DX tests. While certain agreements contain provisions for fixed annual payments, license fees are generally calculated as a percentage of product revenues, with rates that vary by agreement and may be tiered, and payments that may be capped at annual minimum or maximum amounts. The Company recognized costs recorded under these agreements totaling $2.5 million and $4.8 million for the three and six months ended June 30, 2014 and $2.3 million and $4.4 million for the three and six months ended June 30, 2013, respectively, which were included in cost of product revenues. | |
At June 30, 2014, fixed future annual payments, exclusive of royalty payments, relating to the launch and commercialization of the Oncotype DX colon cancer test and the Oncotype DX prostate cancer test totaled $550,000 and are fully payable in 2015. These payments are recorded in cost of product revenues as license fees. If at any time the Company discontinues the sale of the products covered by the agreement, no future annual payments will be payable and the Company will have no further obligation under the applicable agreement. | |
Contract Research Arrangements | |
In November 2007, the Company entered into a Collaborative Diagnostic Development Agreement with Pfizer Inc. to provide research and development services for the development of a diagnostic product for renal cell cancer. The Company received an initial payment of $1.5 million and was initially eligible to receive a payment of $2.2 million upon joint agreement on a gene identification plan, $5.0 million in additional payments upon the earlier of Pfizer’s election to initiate the next phase of development or a specified number of months from the date the Company received the sample set and related clinical data necessary to conduct the first phase of development, and a final payment of $1.5 million upon completion of clinical validation. The Company recognized the final $1.5 million substantive milestone payment upon completion of clinical validation in December 2013. The Company did not recognize any revenue related to substantive milestones under this agreement during the three and six months ended and June 30, 2013. |
Commitments
Commitments | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments | ' | ||||
Commitments | ' | ||||
Note 5. Commitments | |||||
Lease Obligations | |||||
In September 2005, the Company entered into a non-cancelable lease for 48,000 square feet of laboratory and office space that the Company currently occupies in Redwood City, California. In November 2010, the Company executed an amendment to extend the term of the lease through March 2019, with an option for the Company to extend the term of the lease for an additional five years. The agreement included lease incentive obligations of $834,000 that are being amortized on a straight line basis over the life of the lease. | |||||
In January 2007, the Company entered into a non-cancelable lease for an additional 48,000 square feet of laboratory and office space in a nearby location. In November 2010, the Company executed an amendment to extend the term of the lease through March 2018, with an option for the Company to extend the lease for an additional five years. The agreement included lease incentive obligations totaling $283,000 that are being amortized on a straight line basis over the life of the lease. | |||||
In October 2009, the Company entered into a non-cancelable agreement to lease an additional 30,500 square feet of office space near the locations the Company occupied. The lease expires in March 2018, with an option for the Company to extend the term of the lease for an additional five years. The agreement includes lease incentive obligations of $307,000 that are being amortized on a straight line basis over the life of the lease. | |||||
In August 2013, the Company entered into a non-cancelable agreement to lease an additional 18,400 square feet of laboratory and office space near the locations the Company currently occupies. The lease expires in March 2019, with an option for the Company to extend the term of the lease for an additional five years. In July 2014, the Company leased an additional 5,500 square feet in the same location on the same terms. The initial agreement includes lease incentive obligations of $276,000 which are being amortized on a straight line basis over the life of the lease. | |||||
In May 2010, the Company’s European subsidiary entered into a non-cancelable lease for approximately 2,500 square feet of office space in Geneva, Switzerland. In May 2014, the Company executed an amendment to extend the terms of the lease and executed a new lease for approximately 5,000 square feet of additional space in the same location. Both lease agreements expire in May 2016. Additionally, the Company has offices in France, Germany, Ireland, Italy and the United Kingdom with short term rental agreements. | |||||
Future non-cancelable commitments under these operating leases at June 30, 2014 were as follows: | |||||
Annual | |||||
Payments | |||||
(In thousands) | |||||
Years Ending December 31, | |||||
2014 (remainder of year) | $ | 1,856 | |||
2015 | 3,799 | ||||
2016 | 3,726 | ||||
2017 | 3,706 | ||||
2018 | 2,310 | ||||
2019 and thereafter | 461 | ||||
Total minimum payments | $ | 15,858 | |||
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Note 6. Stock-Based Compensation | ||||||||||||||
Stock Option Grants | ||||||||||||||
The Company granted options to purchase 70,000 shares and 442,010 shares of common stock to employees during the three and six months ended June 30, 2014, respectively, and 57,750 shares and 375,250 shares of common stock to employees during the three and six months ended June 30, 2013, respectively. For the three and six months ended June 30, 2014, the Company issued 164,441 and 258,750 shares of common stock in connection with the exercise of stock options with a weighted-average exercise price of $11.51 and $11.16 per share, respectively. For the three and six months ended June 30, 2013, the Company issued 311,794 and 507,318 shares of common stock in connection with the exercise of stock options with a weighted-average exercise price of $17.04 and $16.70 per share, respectively. | ||||||||||||||
Restricted Stock Units | ||||||||||||||
During the three and six months ended June 30, 2014, the Company awarded 13,934 and 345,187 restricted stock units (“RSUs”) with a grant-date fair value equal to $370,226 and $10.1 million, respectively. During the three and six months ended June 30, 2013, the Company awarded 15,760 and 268,523 RSUs with a grant-date fair value equal to $441,000 and $7.7 million, respectively. Each RSU entitles the recipient to receive one share of the Company’s common stock upon vesting. RSUs awarded to employees generally vest as to one-third of the total number of shares awarded annually over a three-year period. During the three and six months ended June 30, 2014, the Company issued 8,141 and 172,673 shares of common stock in connection with the vesting of RSUs with a weighted-average grant date fair value of $31.95 and $28.17 per share, respectively. During the three and six months ended June 30, 2013, the Company issued 9,508 and 211,463 shares of common stock, respectively, in connection with the vesting of RSUs with a weighted-average grant date fair value of $32.05 and $26.69 per share, respectively. | ||||||||||||||
Performance-Based Vesting Restricted Stock Units | ||||||||||||||
In March 2014, the Company approved awards of performance-based restricted stock units (“PVRSUs”) for certain senior officers under the Company’s 2005 Stock Incentive Plan, as amended and restated by the Board of Directors on March 24, 2014. The awards were subject to approval of the amended and restated plan by the Company’s stockholders at the 2014 Annual Meeting. In order for the senior officers to be eligible to earn any of the PVRSUs, the Company must achieve certain corporate-level objectives. The amount potentially available under a PVRSU is subject to the attainment of pre-established, objective performance goals over a specified period. The PVRSUs vest based on achievement of three performance milestones, not to exceed 100% in the aggregate: a revenue milestone, weighted from 0% to 100%: a tests delivered milestone, weighted from 0% to 100%; and a reimbursement-related milestone, weighted from 0% to 33 1/3%. In addition, the awards also have a service vesting criteria following the achievement of performance criteria through February 2016. As of June 30, 2014, there were 40,600 PVRSUs outstanding with a grant date fair value of $1.1 million. | ||||||||||||||
The Company recognizes the fair value of these awards to the extent the achievement of the related performance criteria is estimated to be probable. If a performance criteria is subsequently determined to not be probable of achievement, any related expense is reversed in the period such determination is made. Conversely, if a performance criteria is not currently expected to be achieved but is later determined to be probable of achievement, a “catch-up” entry is recorded in the period such determination is made for the expense that would have been recognized had the performance criteria been probable of achievement since the grant of the award. As of June 30, 2014, the achievement of the performance criteria is estimated not to be probable and no expense has been recognized related to the PVRSUs during either the three or six months ended June 30, 2014. Changes in the Company’s assessment of the probability of achievement of performance criteria could have a material effect on the results of operations in future periods. | ||||||||||||||
Restricted Stock in Lieu of Directors’ Fees | ||||||||||||||
Outside members of the Company’s Board of Directors may elect to receive fully-vested restricted stock in lieu of cash compensation for services as a director. During the three and six months ended June 30, 2014, the Company issued 2,256 and 3,961 shares of restricted stock to outside directors, with a grant date fair value of $60,000 and $110,000, respectively, and a weighted-average grant date fair value of $26.57 and $27.73 per share, respectively. During the three and six months ended June 30, 2013, the Company issued 2,142 and 3,977 shares of restricted stock to outside directors, with a grant date fair value of $60,000 and $110,000, respectively, and a weighted-average grant date fair value of $27.99 and $27.64 per share, respectively. | ||||||||||||||
Employee Stock Purchase Plan | ||||||||||||||
During the three and six months ended June 30, 2014, 101,701 shares were issued under the employee stock purchase plan (“ESPP”). A total of 1,250,000 shares of common stock have been reserved for issuance under the ESPP, of which 849,355 shares were available for issuance as of June 30, 2014. As of June 30, 2014, there was $528,000 of unrecognized compensation expense related to the ESPP, which is expected to be recognized over an estimated weighted-average period of five months. | ||||||||||||||
Employee Stock-Based Compensation Expense | ||||||||||||||
The Company recognized employee stock-based compensation expense of $4.3 million and $8.6 million for the three and six months ended June 30, 2014, respectively, and $4.1 million and $8.5 million for the three and six months ended June 30, 2013, respectively. Employee stock-based compensation expense includes expense related to stock option grants, RSU awards to employees, restricted stock issued in lieu of outside director fees and stock purchased under the Company’s ESPP. Stock-based compensation expense is calculated based on options and RSUs ultimately expected to vest and has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates | ||||||||||||||
Valuation Assumptions | ||||||||||||||
The Company values its stock option grants using the Black-Scholes option valuation model. Option valuation models require the input of highly subjective assumptions that can vary over time. The Company’s assumptions regarding expected volatility are based on the historical volatility of the Company’s common stock. The expected life of options granted is estimated based on historical option exercise data and assumptions related to unsettled options. The risk-free interest rate is estimated using published rates for U.S. Treasury securities with a remaining term approximating the expected life of the options granted. The Company uses a dividend yield of zero as it has never paid cash dividends and does not anticipate paying cash dividends in the foreseeable future. The weighted-average fair values and assumptions used in calculating such values during each period are as follows: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Expected volatility: | ||||||||||||||
Stock options | 44 | % | 45 | % | 44 | % | 46 | % | ||||||
ESPP | 36 | % | 44 | % | 35 | % | 47 | % | ||||||
Risk-free interest rate: | ||||||||||||||
Stock options | 1.91 | % | 1.46 | % | 1.97 | % | 1.29 | % | ||||||
ESPP | 0.09 | % | 0.12 | % | 0.09 | % | 0.13 | % | ||||||
Expected life in years: | ||||||||||||||
Stock options | 6.33 | 6.66 | 6.61 | 6.65 | ||||||||||
ESPP | 0.5 | 0.5 | 0.5 | 0.5 | ||||||||||
Weighted-average fair value: | ||||||||||||||
Stock options | $ | 12.63 | $ | 16.71 | $ | 14.13 | $ | 13.73 | ||||||
ESPP | $ | 7.55 | $ | 7.68 | $ | 7.84 | $ | 7.59 | ||||||
Segment_Information
Segment Information | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Segment Information | ' | |||||||||||||
Segment Information | ' | |||||||||||||
Note 7. Segment Information | ||||||||||||||
The Company operates in one business segment, which primarily focuses on the development and global commercialization of genomic based clinical laboratory services that analyze the underlying biology of cancer, allowing physicians and patients to make individualized treatment decisions. As of June 30, 2014, the majority of the Company’s product revenues have been derived from sales of one product, the Oncotype DX breast cancer test. | ||||||||||||||
The following table summarizes total revenues from customers and collaboration partners by geographic region. Product revenues are attributed to countries based on ship-to location. Contract revenues are attributed to countries based on the location of the collaboration partner. | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
United States | $ | 58,617 | $ | 54,520 | $ | 114,085 | $ | 109,083 | ||||||
Outside of the United States | 11,860 | 9,171 | 23,394 | 17,702 | ||||||||||
Total revenues | $ | 70,477 | $ | 63,691 | $ | 137,479 | $ | 126,785 | ||||||
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
Note 8. Income Taxes | |
The Company recognized income tax expense of $88,000 and $163,000 for the three and six months ended June 30, 2014, respectively, which was computed using the “discrete” (or “cut-off”) method and was principally comprised of state income taxes and foreign taxes. The Company recorded income tax expense of $55,000 and $108,000 for the three and six months ended June 30, 2013, respectively, which was computed using the same method and was principally comprised of state income taxes and foreign taxes. The difference between the income tax expense actually recorded and the statutory rate applied to the Company’s loss before income taxes was primarily due to the impact of nondeductible stock-based compensation expenses and nondeductible meals and entertainment for the three and six months ended June 30, 2014 and June 30, 2013. | |
Based on all available objective evidence, the Company believes that it is more likely than not that its net deferred tax assets will not be fully realized. Accordingly, the Company maintained a valuation allowance against all of its net deferred tax assets as of both June 30, 2014 and December 31, 2013. The Company will continue to maintain a full valuation allowance until there is sufficient evidence to support recoverability of its deferred tax assets. | |
The Company had $2.2 million of unrecognized tax benefits at both June 30, 2014 and December 31, 2013, respectively. The Company does not anticipate a material change to its unrecognized tax benefits over the next twelve months that would affect its effective tax rate. Unrecognized tax benefits may change during the next twelve months for items that arise in the ordinary course of business. | |
Accrued interest and penalties related to unrecognized tax benefits are recognized as part of the Company’s income tax provision in its condensed consolidated statements of operations. The statute of limitations remain open for the years 2000 through 2014 in U.S. federal and state jurisdictions, and for the years 2009 through 2014 in foreign jurisdictions. |
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Organization and Summary of Significant Accounting Policies | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The condensed consolidated financial statements include all the accounts of the Company and its wholly-owned subsidiaries. The Company had three wholly-owned subsidiaries at June 30, 2014: Genomic Health International Sarl, which was established in Switzerland in 2009, and Genomic Health International Holdings, LLC, which was established in Delaware in 2010, both of which support the Company’s international sales and marketing efforts; and Oncotype Laboratories, Inc., which was established in 2012, and is inactive. Genomic Health International Holdings, LLC has nine wholly-owned subsidiaries. The functional currency for the Company’s wholly-owned subsidiaries incorporated outside the United States is the U.S. dollar. All significant intercompany balances and transactions have been eliminated. | |
Basis of Presentation and Use of Estimates | ' |
Basis of Presentation and Use of Estimates | |
The accompanying interim period condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated balance sheet as of June 30, 2014, and the condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the three and six months ended June 30, 2014 and 2013 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of its financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2013 has been derived from audited financial statements, but it does not include certain information and notes required by GAAP for complete consolidated financial statements. | |
The preparation of financial statements in conformity with GAAP requires management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the Company’s condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | |
The accompanying interim period condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company derives its revenues from product sales and contract research arrangements. The majority of the Company’s historical product revenues have been derived from the sale of the Oncotype DX breast cancer test. The Company generally bills third-party payors upon generation and delivery of a patient report to the physician. As such, the Company takes assignment of benefits and the risk of collection with the third-party payor. The Company usually bills the patient directly for amounts owed after multiple requests for payment have been denied or only partially paid by the insurance carrier. The Company pursues case-by-case reimbursement where policies are not in place or payment history has not been established. | |
The Company’s product revenues for tests performed are recognized when the following revenue recognition criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Criterion (1) is satisfied when the Company has an arrangement to pay or a contract with the payor in place addressing reimbursement for the Oncotype DX test. In the absence of such arrangements, the Company considers that criterion (1) is satisfied when a third-party payor pays the Company for the test performed. Criterion (2) is satisfied when the Company performs the test and generates and delivers to the physician, or makes available on its web portal, a patient report. Determination of criteria (3) and (4) are based on management’s judgments regarding whether the fee charged for products or services delivered is fixed or determinable, and the collectability of those fees under any contract or arrangement. When evaluating collectability, the Company considers whether it has sufficient history to reliably estimate a payor’s individual payment patterns. Based upon at least several months of payment history, the Company reviews the number of tests paid against the number of tests billed and the payor’s outstanding balance for unpaid tests to determine whether payments are being made at a consistently high percentage of tests billed and at appropriate amounts given the contracted payment amount. To the extent all criteria set forth above are not met when test results are delivered, product revenues are recognized when cash is received from the payor. | |
The Company has exclusive distribution agreements for one or more of its Oncotype DX tests with distributors covering more than 90 countries. The distributor generally provides certain marketing and administrative services to the Company within its territory. As a condition of these agreements, the distributor generally pays the Company an agreed upon fee per test and the Company processes the tests. The same revenue recognition criteria described above generally apply to tests received through distributors. To the extent all criteria set forth above are not met when test results are delivered, product revenues are generally recognized when cash is received from the distributor. | |
From time to time, the Company receives requests for refunds of payments, generally due to overpayments made by third-party payors. Upon becoming aware of a refund request, the Company establishes an accrued liability for tests covered by the refund request until such time as the Company determines whether or not a refund is due. Accrued refunds were $1.0 million and $770,000 at June 30, 2014 and December 31, 2013, respectively, and included in accrued expenses and other current liabilities. | |
Contract revenues are generally derived from studies conducted with biopharmaceutical and pharmaceutical companies. The specific methodology for revenue recognition is determined on a case-by-case basis according to the facts and circumstances applicable to a given contract. Under certain contracts, the Company’s input, measured in terms of full-time equivalent level of effort or running a set of assays through its clinical reference laboratory under a contractual protocol, triggers payment obligations, and revenues are recognized as costs are incurred or assays are processed. Certain contracts have payments that are triggered as milestones are completed, such as completion of a successful set of experiments. Milestones are assessed on an individual basis and revenue is recognized when these milestones are achieved, as evidenced by acknowledgment from collaborators, provided that (1) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement and (2) the milestone payment is non-refundable. Where separate milestones do not meet these criteria, the Company typically defaults to a performance-based model, such as revenue recognition following delivery of effort as compared to an estimate of total expected effort. | |
Advance payments received in excess of revenues recognized are classified as deferred revenue until such time as the revenue recognition criteria have been met. | |
Allowance for Doubtful Accounts | ' |
Allowance for Doubtful Accounts | |
The Company accrues an allowance for doubtful accounts against its accounts receivable based on estimates consistent with historical payment experience. Bad debt expense is included in general and administrative expense on the Company’s condensed consolidated statements of operations. Accounts receivable are written off against the allowance when the appeals process is exhausted, when an unfavorable coverage decision is received or when there is other substantive evidence that the account will not be paid. The Company’s allowance for doubtful accounts as of June 30, 2014 and December 31, 2013 was $2.1 million and $1.9 million, respectively. Write-offs for doubtful accounts of $1.4 million and $2.9 million were recorded against the allowance during the three and six months ended June 30, 2014, respectively, and write-offs of $1.3 million and $2.3 million were recorded against the allowance during the three and six months ended June 30, 2013, respectively. Bad debt expense was $1.6 million and $3.2 million for the three and six months ended June 30, 2014, respectively, and $1.6 million and $2.9 million for the three and six months ended June 30, 2013, respectively. | |
Research and Development Expenses | ' |
Research and Development Expenses | |
Research and development expenses are comprised of costs incurred to develop technology and carry out clinical studies and include salaries and benefits, reagents and supplies used in research and development laboratory work, infrastructure expenses, including allocated facility occupancy and information technology costs, contract services, and other outside costs. Research and development expenses also include costs related to activities performed under contracts with biopharmaceutical and pharmaceutical companies. Research and development costs are expensed as incurred. | |
The Company enters into collaboration and clinical trial agreements with clinical collaborators and records these costs as research and development expenses. The Company records accruals for estimated study costs comprised of work performed by its collaborators under contract terms. Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized and recognized as expense as the goods are delivered or the related services are performed. | |
Income Taxes | ' |
Income Taxes | |
The Company uses the liability method for income taxes, whereby deferred income taxes are provided on items recognized for financial reporting purposes over different periods than for income tax purposes. Valuation allowances are provided when the expected realization of tax assets does not meet a more-likely-than-not criterion. | |
The Company accounts for uncertain income tax positions using a benefit recognition model with a two-step approach, a more-likely-than-not recognition criterion and a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement, in accordance with the accounting guidance for uncertain tax positions. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit is recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense when and if incurred. See Note 8, “Income Taxes,” for additional information regarding unrecognized tax benefits. | |
Investments in Privately Held Companies | ' |
Investments in PrivatelyHeld Companies | |
The Company determines whether its investments in privately held companies are debt or equity based on their characteristics, in accordance with accounting guidance for investments. The Company also evaluates the investee to determine if the entity is a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary of the VIE, in order to determine whether consolidation of the VIE is required in accordance with accounting guidance for consolidations. If consolidation is not required and the Company owns less than 50.1% of the voting interest of the entity, the investment is evaluated to determine if the equity method of accounting should be applied. The equity method applies to investments in common stock or in-substance common stock where the Company exercises significant influence over the investee, typically represented by ownership of 20% or more of the voting interests of an entity. If the equity method does not apply, investments in privately held companies determined to be equity securities are accounted for using the cost method. Investments in privately held companies determined to be debt securities are accounted for as available-for-sale or held-to-maturity securities, in accordance with accounting guidance for investments. | |
In December 2010, the Company invested $500,000 in the preferred stock of a private company, representing 21% of the entity’s outstanding voting shares. The Company determined that it was not the primary beneficiary of this VIE and, accordingly, applied the equity method of accounting. In June 2012, the Company invested an additional $400,000 in the preferred stock of this company as part of a new equity financing, which was not proportionate with the Company’s interest, thus reducing the Company’s holdings to approximately 16% of the entity’s outstanding voting shares. As of June 30, 2012, as a result of the Company’s ownership interest falling below 20% and not having the ability to exercise influence over the investee entity, the Company changed its method of accounting for this investment to the cost method. Each of the Company’s equity investments is reviewed at least annually for impairment or whenever events or changes in circumstances indicate that the carrying value of the investment might not be recoverable. At December 31, 2013, the Company concluded that the indicators of impairment of its investment in this privately held company were other than temporary and wrote off the remaining asset balance of $643,000. Therefore, the net carrying value of this investment was $0 at June 30, 2014 and December 31, 2013. | |
In March 2011, the Company invested $2.3 million in the redeemable preferred stock of a private company representing 21% of the entity’s outstanding voting shares. The Company determined that the investment was a held-to-maturity debt security and that the investee was not subject to consolidation. In August 2012, the Company participated in the first tranche of a second preferred stock financing of this private company and purchased $1.0 million of preferred stock with no redemption privileges. In connection with this financing, the terms of the Company’s initial redeemable preferred stock investment were modified to become preferred stock with no redemption privileges. As a result of this transaction, the Company’s ownership interest was reduced to approximately 19% and the investment held by the Company is considered to be an investment in non-marketable equity securities. In October 2012, the Company participated in the second tranche of the second financing and purchased an additional $3.6 million of preferred stock, resulting in an ownership percentage of approximately 18%. In November 2013, the Company participated in an additional round of financing and purchased an additional $5.0 million of preferred stock. At both June 30, 2014 and December 31, 2013, the Company’s ownership in this entity was approximately 12%. The investee is not consolidated because the Company owns less than 20% of the investee, and the Company does not have the ability to exercise significant influence over the investee. As a result, the Company will continue to use the cost method of accounting for this investment. The carrying value of this investment was $11.9 million at both June 30, 2014 and December 31, 2013, and no impairment has been recognized for this investment through June 30, 2014. | |
Recently Issued Accounting Pronouncements | ' |
Recently Issued Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) to provide guidance on revenue recognition. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective in the first quarter of fiscal 2017. Early adoption is not permitted. Upon adoption, ASU 2014-09 can be applied retrospectively to all periods presented or only to the most current period presented with the cumulative effect of changes reflected in the opening balance of retained earnings in the most current period presented. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Schedule of financial instruments measured at fair value on recurring basis | ' | |||||||||||||
Actively Quoted | Significant Other | Significant | Balance at | |||||||||||
Markets for | Observable | Unobservable | June 30, | |||||||||||
Identical Assets | Inputs | Inputs | 2014 | |||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
(In thousands) | ||||||||||||||
As of June 30, 2014: | ||||||||||||||
Assets | ||||||||||||||
Money market deposits | $ | 15,368 | $ | — | $ | — | $ | 15,368 | ||||||
Commercial paper | — | 25,746 | — | 25,746 | ||||||||||
Corporate debt securities | — | 47,463 | — | 47,463 | ||||||||||
Total | $ | 15,368 | $ | 73,209 | $ | — | $ | 88,577 | ||||||
Actively Quoted | Significant Other | Significant | Balance at | |||||||||||
Markets for | Observable | Unobservable | December 31, | |||||||||||
Identical Assets | Inputs | Inputs | 2013 | |||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
(In thousands) | ||||||||||||||
As of December 31, 2013: | ||||||||||||||
Assets | ||||||||||||||
Money market deposits | $ | 15,690 | $ | — | $ | — | $ | 15,690 | ||||||
Commercial paper | — | 37,643 | — | 37,643 | ||||||||||
Corporate debt securities | — | 35,428 | — | 35,428 | ||||||||||
Total | $ | 15,690 | $ | 73,071 | $ | — | $ | 88,761 | ||||||
Summary of available-for-sale marketable securities | ' | |||||||||||||
June 30, 2014 | ||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
Commercial paper | $ | 25,723 | $ | 23 | $ | — | $ | 25,746 | ||||||
Corporate debt securities | 47,483 | 2 | (22 | ) | 47,463 | |||||||||
Total | $ | 73,206 | $ | 25 | $ | (22 | ) | $ | 73,209 | |||||
December 31, 2013 | ||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||
Cost | Gains | Losses | Fair Value | |||||||||||
(In thousands) | ||||||||||||||
Commercial paper | $ | 36,625 | $ | 18 | $ | — | $ | 36,643 | ||||||
Corporate debt securities | 35,434 | 3 | (9 | ) | 35,428 | |||||||||
Total | $ | 72,059 | $ | 21 | $ | (9 | ) | $ | 72,071 | |||||
Commitments_Tables
Commitments (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments | ' | ||||
Schedule of future non-cancelable commitments under operating leases | ' | ||||
Annual | |||||
Payments | |||||
(In thousands) | |||||
Years Ending December 31, | |||||
2014 (remainder of year) | $ | 1,856 | |||
2015 | 3,799 | ||||
2016 | 3,726 | ||||
2017 | 3,706 | ||||
2018 | 2,310 | ||||
2019 and thereafter | 461 | ||||
Total minimum payments | $ | 15,858 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Schedule of weighted-average fair values and assumptions used in calculation of fair value of stock options and employee stock purchase plan | ' | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Expected volatility: | ||||||||||||||
Stock options | 44 | % | 45 | % | 44 | % | 46 | % | ||||||
ESPP | 36 | % | 44 | % | 35 | % | 47 | % | ||||||
Risk-free interest rate: | ||||||||||||||
Stock options | 1.91 | % | 1.46 | % | 1.97 | % | 1.29 | % | ||||||
ESPP | 0.09 | % | 0.12 | % | 0.09 | % | 0.13 | % | ||||||
Expected life in years: | ||||||||||||||
Stock options | 6.33 | 6.66 | 6.61 | 6.65 | ||||||||||
ESPP | 0.5 | 0.5 | 0.5 | 0.5 | ||||||||||
Weighted-average fair value: | ||||||||||||||
Stock options | $ | 12.63 | $ | 16.71 | $ | 14.13 | $ | 13.73 | ||||||
ESPP | $ | 7.55 | $ | 7.68 | $ | 7.84 | $ | 7.59 |
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Segment Information | ' | |||||||||||||
Summary of total revenues from customers and collaboration partners by geographic region | ' | |||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in thousands) | ||||||||||||||
United States | $ | 58,617 | $ | 54,520 | $ | 114,085 | $ | 109,083 | ||||||
Outside of the United States | 11,860 | 9,171 | 23,394 | 17,702 | ||||||||||
Total revenues | $ | 70,477 | $ | 63,691 | $ | 137,479 | $ | 126,785 |
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 6 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2012 | Dec. 31, 2013 | Jun. 30, 2014 | Nov. 30, 2013 | Oct. 31, 2012 | Aug. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2011 | Dec. 31, 2010 | Jun. 30, 2014 | |
subsidiary | Private company 1, Cost Method Investment | Private company 1, Cost Method Investment | Private company 1, Cost Method Investment | Private company 2 | Private company 2 | Private company 2 | Private company 2 | Private company 2 | Private company 2 | Private company 1, Equity Method Investment | Genomic Health International Holdings, LLC | |||||
country | subsidiary | |||||||||||||||
test | ||||||||||||||||
Organization and summary of significant accounting policies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of wholly-owned subsidiaries | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9 |
Revenue Recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum number of Oncotype DX tests by exclusive distribution agreements | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum number of countries covered for distribution agreements establishment | ' | ' | 90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued refunds | $1,000,000 | ' | $1,000,000 | ' | $770,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for Doubtful Accounts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for doubtful accounts | 2,119,000 | ' | 2,119,000 | ' | 1,907,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write-offs for doubtful accounts recorded against allowance | 1,400,000 | 1,300,000 | 2,900,000 | 2,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bad debt expense | 1,600,000 | 1,600,000 | 3,200,000 | 2,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investments in Privately Held Companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount invested in preferred stock of a private company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' |
Percentage of ownership interest in private company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21.00% | ' |
Additional investment made in preferred stock of a private company | ' | ' | ' | ' | ' | 400,000 | ' | ' | 5,000,000 | 3,600,000 | 1,000,000 | ' | ' | ' | ' | ' |
Percentage of ownership interest in private company accounted for under the cost method of accounting | ' | ' | ' | ' | ' | 16.00% | ' | ' | ' | 18.00% | 19.00% | 12.00% | 12.00% | ' | ' | ' |
Investment in redeemable preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,000 | ' | ' |
Investment in the redeemable preferred stock of a private company, percent of the entity's outstanding voting shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21.00% | ' | ' |
Impairment recognized | ' | ' | ' | ' | ' | ' | 643,000 | ' | ' | ' | ' | 0 | ' | ' | ' | ' |
Carrying value of investments in privately held companies | ' | ' | ' | ' | ' | ' | $0 | $0 | ' | ' | ' | $11,900,000 | $11,900,000 | ' | ' | ' |
Net_Income_Loss_Per_Share_Deta
Net Income (Loss) Per Share (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Options to purchase common stock | ' | ' | ' | ' |
Net Income (Loss) Per Share | ' | ' | ' | ' |
Awards outstanding but not included in the computation of diluted net loss per share (in shares) | 1,000,000 | 1,500,000 | 1,100,000 | 1,500,000 |
Restricted stock units | ' | ' | ' | ' |
Net Income (Loss) Per Share | ' | ' | ' | ' |
Awards outstanding but not included in the computation of diluted net loss per share (in shares) | 57,000 | 126,000 | 98,000 | 116,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | Recurring basis | ||
Actively Quoted Markets for Identical Assets Level 1 | Actively Quoted Markets for Identical Assets Level 1 | Actively Quoted Markets for Identical Assets Level 1 | Actively Quoted Markets for Identical Assets Level 1 | Significant Other Observable Inputs Level 2 | Significant Other Observable Inputs Level 2 | Significant Other Observable Inputs Level 2 | Significant Other Observable Inputs Level 2 | Significant Other Observable Inputs Level 2 | Significant Other Observable Inputs Level 2 | Fair value | Fair value | Fair value | Fair value | Fair value | Fair value | Fair value | Fair value | |||
Money market deposits | Money market deposits | Commercial paper | Commercial paper | Corporate debt securities | Corporate debt securities | Money market deposits | Money market deposits | Commercial paper | Commercial paper | Corporate debt securities | Corporate debt securities | |||||||||
Assets measured at fair value on a recurring basis: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets at fair value | ' | ' | $15,368 | $15,690 | $15,368 | $15,690 | $73,209 | $73,071 | $25,746 | $37,643 | $47,463 | $35,428 | $88,577 | $88,761 | $15,368 | $15,690 | $25,746 | $37,643 | $47,463 | $35,428 |
Transfer of assets from level 1 to level 2 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfer of assets from level 2 to level 1 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfer of liabilities from level 1 to level 2 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfer of liabilities from level 2 to level 1 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Marketable securities classified as available-for-sale | ' | ' | ' | ' | ' |
Amortized Cost | $73,206 | ' | $73,206 | ' | $72,059 |
Unrealized Gains | 25 | ' | 25 | ' | 21 |
Unrealized Losses | -22 | ' | -22 | ' | -9 |
Estimated Fair Value | 73,209 | ' | 73,209 | ' | 72,071 |
Realized gains on available-for-sale marketable securities | 0 | 0 | 0 | 0 | ' |
Realized losses on available-for-sale marketable securities | 0 | 0 | 0 | 0 | ' |
Maximum contractual maturities of Company's available-for-sale marketable securities | ' | ' | '1 year | ' | '1 year |
Commercial paper | ' | ' | ' | ' | ' |
Marketable securities classified as available-for-sale | ' | ' | ' | ' | ' |
Amortized Cost | 25,723 | ' | 25,723 | ' | 36,625 |
Unrealized Gains | 23 | ' | 23 | ' | 18 |
Estimated Fair Value | 25,746 | ' | 25,746 | ' | 36,643 |
Corporate debt securities | ' | ' | ' | ' | ' |
Marketable securities classified as available-for-sale | ' | ' | ' | ' | ' |
Amortized Cost | 47,483 | ' | 47,483 | ' | 35,434 |
Unrealized Gains | 2 | ' | 2 | ' | 3 |
Unrealized Losses | -22 | ' | -22 | ' | -9 |
Estimated Fair Value | $47,463 | ' | $47,463 | ' | $35,428 |
Collaboration_and_Commercial_T1
Collaboration and Commercial Technology Licensing Agreements (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Feb. 28, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | |
Specimen transfer agreements | Specimen transfer agreements | Specimen transfer agreements | Specimen transfer agreements | Oncotype DX DCIS score agreement | Oncotype DX DCIS score agreement | Oncotype DX DCIS score agreement | Exclusive license agreement | Genomic Prostate Score agreement | Technology license agreements | Technology license agreements | Technology license agreements | Technology license agreements | Oncotype DX colon cancer test and Oncotype DX prostate cancer test | |
Collaboration and Commercial Technology Licensing Agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaboration expense | $1,000,000 | $639,000 | $2,200,000 | $1,100,000 | $164,000 | $401,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized milestone payment | ' | ' | ' | ' | ' | ' | 392,000 | ' | 367,000 | ' | ' | ' | ' | ' |
Up-front payment | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | ' | ' | ' | ' | ' | ' |
Costs recorded under collaborative arrangements | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | 2,300,000 | 4,800,000 | 4,400,000 | ' |
Fixed future annual payments, exclusive of royalty payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $550,000 |
Collaboration_and_Commercial_T2
Collaboration and Commercial Technology Licensing Agreements (Details 2) (Collaborative Diagnostic Development Agreement with Pfizer Inc., USD $) | 1 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Nov. 30, 2007 |
Collaborative Diagnostic Development Agreement with Pfizer Inc. | ' | ' |
Contract research arrangements | ' | ' |
Initial payment received upon joint agreement | ' | $1.50 |
Payment receivable upon joint agreement on gene identification plan | ' | 2.2 |
Additional payments receivable to conduct next phase of development | ' | 5 |
Final payment receivable upon completion of clinical validation | ' | 1.5 |
Final substantive milestone payment recognized | $1.50 | ' |
Commitments_Details
Commitments (Details) (USD $) | Jun. 30, 2014 | Nov. 30, 2010 | Sep. 30, 2005 | Nov. 30, 2010 | Jan. 31, 2007 | Oct. 31, 2009 | Aug. 31, 2013 | Jul. 31, 2014 | 31-May-14 | 31-May-10 |
Leased laboratory and office space located in Redwood City, California | Leased laboratory and office space located in Redwood City, California | Leased laboratory and office space located near the leased facility in Redwood City, California | Leased laboratory and office space located near the leased facility in Redwood City, California | Leased office space located near the leased facility in Redwood City, California | Second leased laboratory and office space located near the leased facility in Redwood City, California | Second leased laboratory and office space located near the leased facility in Redwood City, California | Leased office space located in Geneva, Switzerland | Leased office space located in Geneva, Switzerland | ||
sqft | sqft | sqft | sqft | Subsequent event | European subsidiary | European subsidiary | ||||
sqft | sqft | sqft | ||||||||
Non-cancelable operating leases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Area leased under non-cancelable operating lease agreement (in square feet) | ' | ' | 48,000 | ' | 48,000 | 30,500 | 18,400 | ' | ' | 2,500 |
Period of time for which entity has an option to extend lease term | ' | '5 years | ' | '5 years | ' | '5 years | '5 years | ' | ' | ' |
Additional area leased (in square feet) | ' | ' | ' | ' | ' | ' | ' | 5,500 | 5,000 | ' |
Lease incentive obligations | ' | ' | $834,000 | ' | $283,000 | $307,000 | $276,000 | ' | ' | ' |
Non-cancelable commitments under operating leases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 (remainder of year) | 1,856,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 3,799,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 3,726,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 3,706,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 2,310,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019 and thereafter | 461,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total minimum payments | $15,858,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Employee Stock-Based Compensation Expense | ' | ' | ' | ' |
Stock-based compensation expense (in dollars) | $4,300,000 | $4,100,000 | $8,600,000 | $8,500,000 |
Weighted-average fair values and assumptions used in calculation of fair value | ' | ' | ' | ' |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Employee Stock Purchase Plan | ' | ' | ' | ' |
Employee Stock Purchase Plan | ' | ' | ' | ' |
Number of shares issued | 101,701 | ' | 101,701 | ' |
Shares of common stock reserved for issuance under the ESPP | 1,250,000 | ' | 1,250,000 | ' |
Shares available for issuance | 849,355 | ' | 849,355 | ' |
Unrecognized compensation expense (in dollars) | 528,000 | ' | 528,000 | ' |
Weighted-average period of recognition of unrecognized stock-based compensation expense | ' | ' | '5 months | ' |
Weighted-average fair values and assumptions used in calculation of fair value | ' | ' | ' | ' |
Expected volatility (as a percent) | 36.00% | 44.00% | 35.00% | 47.00% |
Risk-free interest rate (as a percent) | 0.09% | 0.12% | 0.09% | 0.13% |
Expected life | '6 months | '6 months | '6 months | '6 months |
Weighted-average grant date fair value (in dollars per share) | $7.55 | $7.68 | $7.84 | $7.59 |
Stock Options | ' | ' | ' | ' |
Stock Option Grants | ' | ' | ' | ' |
Common stock issued in connection with the exercise of stock options (in shares) | 164,441 | 311,794 | 258,750 | 507,318 |
Weighted-average exercise price of common stock issued (in dollars per share) | $11.51 | $17.04 | $11.16 | $16.70 |
Weighted-average fair values and assumptions used in calculation of fair value | ' | ' | ' | ' |
Expected volatility (as a percent) | 44.00% | 45.00% | 44.00% | 46.00% |
Risk-free interest rate (as a percent) | 1.91% | 1.46% | 1.97% | 1.29% |
Expected life | '6 years 3 months 29 days | '6 years 7 months 28 days | '6 years 7 months 10 days | '6 years 7 months 24 days |
Weighted-average grant date fair value (in dollars per share) | $12.63 | $16.71 | $14.13 | $13.73 |
Employee Stock Options | ' | ' | ' | ' |
Stock Option Grants | ' | ' | ' | ' |
Options granted to purchase shares of common stock to employees (in shares) | 70,000 | 57,750 | 442,010 | 375,250 |
Restricted Stock Units | Service-Based Vesting | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Stock awards (in shares) | 13,934 | 15,760 | 345,187 | 268,523 |
Grant-date fair value (in dollars) | 370,226 | 441,000 | 10,100,000 | 7,700,000 |
Number of shares of common stock to be received for each restricted stock unit | ' | ' | 1 | ' |
Shares of common stock issued in connection with the vesting of the stock award | 8,141 | 9,508 | 172,673 | 211,463 |
Weighted-average fair value (in dollars per share) | $31.95 | $32.05 | $28.17 | $26.69 |
Restricted Stock Units | Performance-Based Vesting | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Stock outstanding (in shares) | 40,600 | ' | 40,600 | ' |
Grant-date fair value (in dollars) | ' | ' | 1,100,000 | ' |
Number of performance milestones on which vesting of awards is based | ' | ' | 3 | ' |
Employee Stock-Based Compensation Expense | ' | ' | ' | ' |
Stock-based compensation expense (in dollars) | 0 | ' | 0 | ' |
Restricted Stock Units | Performance-Based Vesting | Maximum | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Vesting percentage | ' | ' | 100.00% | ' |
Restricted Stock Units | Vesting on achievement of revenue milestone | Minimum | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Vesting percentage | ' | ' | 0.00% | ' |
Restricted Stock Units | Vesting on achievement of revenue milestone | Maximum | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Vesting percentage | ' | ' | 100.00% | ' |
Restricted Stock Units | Vesting on achievement of tests delivered milestone | Minimum | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Vesting percentage | ' | ' | 0.00% | ' |
Restricted Stock Units | Vesting on achievement of tests delivered milestone | Maximum | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Vesting percentage | ' | ' | 100.00% | ' |
Restricted Stock Units | Vesting on achievement of reimbursement-related milestone | Minimum | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Vesting percentage | ' | ' | 0.00% | ' |
Restricted Stock Units | Vesting on achievement of reimbursement-related milestone | Maximum | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Vesting percentage | ' | ' | 33.33% | ' |
Restricted Stock Units | Employees | Annual vesting over vesting period | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Vesting percentage | ' | ' | 33.00% | ' |
Vesting period | ' | ' | '3 years | ' |
Restricted Stock | Outside directors | ' | ' | ' | ' |
Stock awards other than options | ' | ' | ' | ' |
Stock awards (in shares) | 2,256 | 2,142 | 3,961 | 3,977 |
Grant-date fair value (in dollars) | $60,000 | $60,000 | $110,000 | $110,000 |
Weighted-average fair value (in dollars per share) | $26.57 | $27.99 | $27.73 | $27.64 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
product | segment | |||
product | ||||
Segment Information | ' | ' | ' | ' |
Number of business segments in which the entity operates | ' | ' | 1 | ' |
Number of products from which the majority of the entity's product revenues have been derived | 1 | ' | 1 | ' |
Segment information | ' | ' | ' | ' |
Total revenues | $70,477 | $63,691 | $137,479 | $126,785 |
United States | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' |
Total revenues | 58,617 | 54,520 | 114,085 | 109,083 |
Outside of the United States | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' |
Total revenues | $11,860 | $9,171 | $23,394 | $17,702 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Income Taxes | ' | ' | ' | ' | ' |
Income tax expense | $88,000 | $55,000 | $163,000 | $108,000 | ' |
Unrecognized tax benefits | $2,200,000 | ' | $2,200,000 | ' | $2,200,000 |