Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | GENOMIC HEALTH INC | |
Entity Central Index Key | 1131324 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,263,664 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $22,938 | $29,726 |
Short-term marketable securities | 105,042 | 73,934 |
Accounts receivable (net of allowance for doubtful accounts; 2015 - $3,574, 2014 - $3,628) | 34,979 | 34,916 |
Prepaid expenses and other current assets | 12,085 | 9,944 |
Total current assets | 175,044 | 148,520 |
Property and equipment, net | 25,171 | 21,860 |
Other assets | 1,755 | 15,541 |
Total assets | 201,970 | 185,921 |
Current liabilities: | ||
Accounts payable | 7,952 | 6,987 |
Accrued compensation and employee benefits | 16,388 | 17,708 |
Accrued license fees | 2,249 | 2,656 |
Accrued expenses and other current liabilities | 15,510 | 10,444 |
Deferred revenues | 268 | 335 |
Other current liabilities | 208 | 208 |
Total current liabilities | 42,575 | 38,338 |
Other liabilities | 2,667 | 2,070 |
Commitments | ||
Stockholders' equity: | ||
Common stock | 3 | 3 |
Additional paid- in capital | 373,674 | 370,496 |
Accumulated other comprehensive income (loss) | 17,515 | -15 |
Accumulated deficit | -204,354 | -194,861 |
Treasury stock, at cost | 30,110 | 30,110 |
Total stockholders' equity | 156,728 | 145,513 |
Total liabilities and stockholders' equity | $201,970 | $185,921 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts | $3,574 | $3,628 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
Product revenues | $68,152,000 | $67,002,000 |
Operating expenses: | ||
Cost of product revenues | 12,762,000 | 12,055,000 |
Research and development | 19,118,000 | 14,005,000 |
Selling and marketing | 35,352,000 | 33,408,000 |
General and administrative | 15,589,000 | 14,728,000 |
Total operating expenses | 82,821,000 | 74,196,000 |
Loss from operations | -14,669,000 | -7,194,000 |
Interest income | 54,000 | 50,000 |
Other expense, net | -374,000 | -226,000 |
Loss before income taxes | -14,989,000 | -7,370,000 |
Income tax (benefit) expense | -5,496,000 | 75,000 |
Net loss | ($9,493,000) | ($7,445,000) |
Basic and diluted net loss per share (in dollars per share) | ($0.30) | ($0.24) |
Shares used in computing basic and diluted net loss per share | 32,055 | 31,087 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net loss | ($9,493) | ($7,445) |
Other comprehensive income: | ||
Unrealized gain on available-for-sale marketable securities, net of tax of $5,626 and $0 | 17,530 | 9 |
Comprehensive income (loss) | $8,037 | ($7,436) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthtical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Unrealized gain on available-for-sale marketable securities, net of tax | $5,626 | $0 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities | ||
Net loss | ($9,493) | ($7,445) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 1,728 | 1,757 |
Employee stock-based compensation | 4,176 | 4,356 |
Write-off of previously capitalized software costs | 87 | |
Impairment of assets held for sale | 265 | |
Outside director restricted stock awarded in lieu of fees | 50 | 50 |
(Gain) loss on disposal of property and equipment | -19 | 33 |
Changes in assets and liabilities: | ||
Accounts receivable | -63 | 545 |
Prepaid expenses and other assets | -7,878 | -315 |
Accounts payable | 239 | 2,367 |
Accrued compensation and employee benefits | -1,320 | -1,377 |
Accrued expenses and other liabilities | 5,283 | 468 |
Deferred revenues | -67 | -578 |
Net cash (used in) provided by operating activities | -7,277 | 126 |
Investing activities | ||
Purchases of property and equipment | -4,369 | -1,169 |
Purchases of marketable securities | -31,274 | -23,326 |
Maturities of marketable securities | 37,180 | 21,500 |
Net cash provided by (used in) investing activities | 1,537 | -2,995 |
Financing activities | ||
Net proceeds from issuance of common stock under stock plans | 2,379 | 996 |
Withholding taxes related to restricted stock units net share settlement | -3,427 | -3,165 |
Net cash used in financing activities | -1,048 | -2,169 |
Net decrease in cash and cash equivalents | -6,788 | -5,038 |
Cash and cash equivalents at the beginning of the period | 29,726 | 33,279 |
Cash and cash equivalents at the end of the period | 22,938 | 28,241 |
Non-cash investing and financing activities | ||
Accrued purchase of property and equipment | 2,501 | 1,750 |
Change in fair value of corporate equity securities | $23,145 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
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 accompanying condensed consolidated financial statements include all the accounts of the Company and its wholly-owned subsidiaries. The Company had two wholly-owned subsidiaries at March 31, 2015: Genomic Health International Holdings, LLC, which was established in Delaware in 2010 and supports 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 10 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 March 31, 2015, and the condensed consolidated statements of operations, comprehensive income (loss), and cash flows for the three months ended March 31, 2015 and 2014 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, 2014 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, 2014. | |
Certain reclassifications have been made to prior period amounts to conform to the current period presentation. For the period ended March 31, 2014, a reclassification of certain expenses from research and development to selling and marketing was made in the condensed consolidated statements of operations to conform to the current period presentation. | |
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 medical 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. When evaluating whether the fee is fixed or determinable and collectibility, we consider whether we have sufficient history to reliably estimate the total fee that will be received from a payor and a payor’s individual payment patterns. 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. 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. The estimated accrual amounts per test, recorded upon delivery of a patient report, are calculated for each accrual payor and are based on the contracted price adjusted for individual payment patterns resulting from co-payment amounts and excluded services in healthcare plans. The Company also reduces sales for an estimate of amounts that qualify as patient assistance and related deductions that do not qualify for revenue recognition. When a payment received for an individual test is either higher or lower than the estimated accrual amount, the Company recognizes the difference as either cash revenue, in the case of higher payments, or in the case of lower payments, against either the patient assistance program and related deductions reserve or the allowance for doubtful accounts, as applicable. | |
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 $1.1 million and $944,000 at March 31, 2015 and December 31, 2014, 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. There was no contract revenue for the three months ended March 31, 2015 and 2014. | |
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 March 31, 2015 and December 31, 2014 was $3.6 million. Write-offs for doubtful accounts of $1.0 million and $1.5 million were recorded against the allowance during the three months ended March 31, 2015 and 2014, respectively. Bad debt expense was $1.0 million and $1.5 million for the three months ended March 31, 2015 and 2014, respectively. | |
Investments in Equity Securities | |
Beginning in 2011, the Company made investments in various tranches of the preferred stock of a private company such that the carrying value of this investment was $13.9 million at December 31, 2014. On February 18, 2015, the investee completed an initial public offering of its common stock and the Company’s investment automatically converted into 2,207,793 shares of common stock. This investment is accounted for under the cost method as an available-for-sale marketable security and valued at $37.0 million at March 31, 2015. These securities are subject to a lock-up agreement that expires in August 2015. | |
Property and Equipment | |
Property and equipment, including purchased and internally developed software are stated at cost. Depreciation is calculated using the straight‑line method over the estimated useful lives of the assets, which generally range from three to seven years. Leasehold improvements are amortized using the straight‑line method over the estimated useful lives of the assets or the remaining term of the lease, whichever is shorter. | |
Recently Issued Accounting Pronouncements | |
In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-05). This amendment provides guidance to help entities determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Upon adoption, an entity has the option to apply the provisions of ASU 2015-05 either prospectively to all arrangements entered into or materially modified, or retrospectively. The Company is currently evaluating the effects, if any, the adoption of ASU 2015-05 will have upon our consolidated financial position, results of operations or cash flows. | |
In May 2014, the FASB 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_Loss_Per_Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2015 | |
Net Loss Per Share | |
Net Loss Per Share | Note 2. Net Loss Per Share |
Basic net loss per share is calculated by dividing net loss for the period by the weighted-average number of common shares outstanding for the period without consideration of potential common shares. Diluted net loss per share is calculated by dividing net 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 (“RSU”) 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 1.1 million shares of the Company’s common stock and 172,000 RSUs were outstanding during the three months ended March 31, 2015, but were not included in the computation of diluted net loss per share because their effect is anti-dilutive. Options to purchase 1.2 million shares of the Company’s common stock and 140,000 RSUs were outstanding during the three months ended March 31, 2014, 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 | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
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 March 31, 2015 and December 31, 2014, respectively. The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014 by level within the fair value hierarchy: | |||||||||||||
Actively Quoted | Significant | ||||||||||||
Markets for | Other | Significant | |||||||||||
Identical | Observable | Unobservable | Balance at | ||||||||||
Assets | Inputs | Inputs | March 31, | ||||||||||
Level 1 | Level 2 | Level 3 | 2015 | ||||||||||
(In thousands) | |||||||||||||
As of March 31, 2015: | |||||||||||||
Assets | |||||||||||||
Money market deposits | $ | 10,625 | $ | — | $ | — | $ | 10,625 | |||||
Commercial paper | — | 19,748 | — | 19,748 | |||||||||
Corporate debt securities | — | 48,292 | — | 48,292 | |||||||||
Corporate equity securities | — | 37,002 | — | 37,002 | |||||||||
Total | $ | 10,625 | $ | 105,042 | $ | — | $ | 115,667 | |||||
Actively Quoted | Significant | ||||||||||||
Markets for | Other | Significant | |||||||||||
Identical | Observable | Unobservable | Balance at | ||||||||||
Assets | Inputs | Inputs | December 31, | ||||||||||
Level 1 | Level 2 | Level 3 | 2014 | ||||||||||
(In thousands) | |||||||||||||
As of December 31, 2014: | |||||||||||||
Assets | |||||||||||||
Money market deposits | $ | 12,397 | $ | — | $ | — | $ | 12,397 | |||||
Commercial paper | — | 29,749 | — | 29,749 | |||||||||
Corporate debt securities | — | 46,435 | — | 46,435 | |||||||||
Total | $ | 12,397 | $ | 76,184 | $ | — | $ | 88,581 | |||||
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. The Company’s corporate equity securities are classified as Level 2 while subject to a lock-up provision. There were no transfers between Level 1 and Level 2 categories during the three months ended March 31, 2015 and 2014, respectively. The corporate equity securities were previously recorded as investments in privately held company in other assets as of December 31, 2014. | |||||||||||||
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: | |||||||||||||
31-Mar-15 | |||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||
(In thousands) | |||||||||||||
Commercial paper | $ | 19,734 | $ | 14 | $ | — | $ | 19,748 | |||||
Corporate debt securities | 48,310 | — | -18 | 48,292 | |||||||||
Corporate equity securities | 13,857 | 23,145 | — | 37,002 | |||||||||
Total | $ | 81,901 | $ | 23,159 | $ | -18 | $ | 105,042 | |||||
December 31, 2014 | |||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||
(In thousands) | |||||||||||||
Commercial paper | $ | 29,730 | $ | 19 | $ | — | $ | 29,749 | |||||
Corporate debt securities | 44,219 | — | -34 | 44,185 | |||||||||
Total | $ | 73,949 | $ | 19 | $ | -34 | $ | 73,934 | |||||
The Company had no realized gains or losses on available-for-sale marketable securities for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||
All of the Company’s available-for-sale marketable securities had contractual maturities of one year or less as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||||
Collaboration_and_Commercial_T
Collaboration and Commercial Technology Licensing Agreements | 3 Months Ended |
Mar. 31, 2015 | |
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 $7.1 million and $1.2 million for the three months ended March 31, 2015 and 2014, 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. | |
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 $2.2 million and $2.3 million for the three months ended March 31, 2015 and 2014, respectively, which were included in cost of product revenues. | |
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 milestone payments would be required 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 would be obligated to pay royalties. During the quarter ended March 31, 2015, the Company accrued $5.5 million in anticipation of the wind-down of this license agreement and development program, which was recognized as research and development expense in the accompanying condensed consolidated statement of operations. The license agreement was terminated in May 2015 and, as a result, the Company has no future obligations under this agreement. | |
At March 31, 2015, fixed future annual payments, exclusive of royalty payments, relating to the launch and commercialization of the Oncotype DX prostate cancer test totaled $100,000 and is 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. Further, we are required to make a series of fixed annual payments under a collaboration agreement beginning with a one year anniversary of achieving a key milestone for our DCIS clinical study in June 2014. As of March 31, 2015, future annual payments under this agreement totaled $1.7 million, including payments of $604,000, $604,000, and $504,000 due in 2015, 2016, and 2017, respectively. | |
Commitments
Commitments | 3 Months Ended | |||
Mar. 31, 2015 | ||||
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 agreements include lease incentive obligations of $358,000 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. | ||||
Future non-cancelable commitments under these operating leases at March 31, 2015 were as follows: | ||||
Annual | ||||
Payments | ||||
(In thousands) | ||||
Years Ending December 31, | ||||
2015 (remainder of year) | $ | 2,958 | ||
2016 | 3,872 | |||
2017 | 3,867 | |||
2018 | 2,476 | |||
2019 | 504 | |||
Total minimum payments | $ | 13,677 | ||
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 6. Stock-Based Compensation |
Stock Option | |
The Company granted options to purchase 355,667 shares and 372,010 shares of common stock to employees during the three months ended March 31, 2015 and 2014, respectively. For the three months ended March 31, 2015, the Company issued 157,067 shares of common stock in connection with the exercise of stock options with a weighted-average exercise price of $15.14 per share. For the three months ended March 31, 2014, the Company issued 94,309 shares of common stock in connection with the exercise of stock options with a weighted-average exercise price of $10.56 per share. | |
Performance-Based Vesting Stock Options | |
During the three months ended March 31, 2015, the Company granted performance-based vesting stock options to purchase 148,100 shares of common stock (“PV stock options”). There were no PV stock options granted during the three months ended March 31, 2014. The number of shares potentially available under PV stock options is subject to the attainment of pre-established, objective performance goals over a specified period. In addition, the awards also have a service vesting criteria following the achievement of performance criteria through February 2019. | |
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 March 31, 2015, the achievement of the performance criteria is estimated to be probable and $119,000 of stock-based compensation expense has been recognized related to the PV stock options during the three months ended March 31, 2015. Changes in the Company’s assessment of the probability of achievement of performance criteria could result in expense being reversed in future periods. | |
Restricted Stock Units | |
During the three months ended March 31, 2015, the Company awarded 359,616 RSUs with a grant-date fair value of $11.2 million, or $31.14 per share. During the three months ended March 31, 2014, the Company awarded 331,253 RSUs with a grant-date fair value of $9.7 million, or $29.27 per share. 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 months ended March 31, 2015, the Company issued 156,838 shares of common stock in connection with the vesting of RSUs with a weighted-average grant date fair value of $29.59 per share. During the three months ended March 31, 2014, the Company issued 164,532 shares of common stock in connection with the vesting of RSUs with a weighted-average grant date fair value of $27.98 per share. | |
Performance-Based Vesting Restricted Stock Units | |
During the three months ended March 31, 2015, the Company awarded 22,980 performance-based restricted stock units (“PVRSUs”) with a grant-date fair value of $715,000, or $31.12 per share. The amount potentially available under a PVRSU is subject to the attainment of pre-established, objective performance goals over a specified period. In addition, the awards also have a service vesting criteria following the achievement of performance criteria through February 2018. During the three months ended March 31, 2014, the Company awarded 44,630 PVRSUs with a grant-date fair value of $1.2 million or $27.21 per share. In addition, these awards also have a service vesting criteria following the achievement of performance criteria through February 2016. During the three months ended March, 31, 2015, the Company issued 4,227 shares of common stock in connection with the vesting of PVRSUs with a weighted-average grant date fair value of $27.21 per share. As of March 31, 2015, there were 29,133 PVRSUs outstanding with a grant date fair value of $883,000. | |
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 March 31, 2015, the achievement of the performance criteria is estimated to be probable and $108,000 has been recognized related to the PVRSUs during the three months ended March 31, 2015. Changes in the Company’s assessment of the probability of achievement of performance criteria could result in expense being recorded 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 months ended March 31, 2015, the Company issued 1,560 shares of restricted stock to outside directors, with a grant date fair value of $50,000, and a weighted-average grant date fair value of $31.97 per share. During the three months ended March 31, 2014, the Company issued 1,705 shares of restricted stock to outside directors, with a grant date fair value of $50,000, and a weighted-average grant date fair value of $29.27 per share. | |
Employee Stock Purchase Plan | |
During the three months ended March 31, 2015 and 2014, no 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 759,738 shares were available for issuance as of March 31, 2015. As of March 31, 2015, there was $229,000 of unrecognized compensation expense related to the ESPP, which is expected to be recognized over a period of two months. | |
Employee Stock-Based Compensation Expense | |
The Company recognized employee stock-based compensation expense of $4.2 million and $4.4 million for the three months ended March 31, 2015 and 2014, respectively. Employee stock-based compensation expense includes expense related to stock option grants, RSU awards to employees, 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. | |
Segment_Information
Segment Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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 March 31, 2015, 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 | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
United States | $ | 57,717 | $ | 55,468 | |||||
Outside of the United States | 10,435 | 11,534 | |||||||
Total revenues | $ | 68,152 | $ | 67,002 | |||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Income Taxes | Note 8. Income Taxes |
The Company recorded an income tax benefit of $5.5 million and expense of $75,000 for the three months ended March 31, 2015 and 2014, respectively, which was computed using the “discrete” (or “cut-off”) method. The income tax benefit for the period ended March 31, 2015 is principally comprised of a deferred tax benefit generated by the unrealized gain recognized in this period on available-for-sale marketable securities, which is included in other comprehensive income. The intraperiod tax allocation rules limit the amount of benefit recognized to the extent of current period pre-tax loss. Thus, if the Company recognizes pre-tax losses in subsequent periods in 2015 and the related unrealized gain in other comprehensive income is retained, additional benefits may be recognized. The deferred tax benefit recorded in the current quarter was offset by $130,000 of miscellaneous state income tax and foreign income tax expense on earnings of our foreign subsidiaries. The income tax expense for the period ended March 31, 2014, 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 months ended March 31, 2014. | |
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 March 31, 2015 and December 31, 2014. 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 $1.6 million of unrecognized tax benefits at both March 31, 2015 and December 31, 2014. 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 2015 in U.S. federal and state jurisdictions, and for the years 2010 through 2015 in foreign jurisdictions. | |
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Organization and Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation |
The accompanying condensed consolidated financial statements include all the accounts of the Company and its wholly-owned subsidiaries. The Company had two wholly-owned subsidiaries at March 31, 2015: Genomic Health International Holdings, LLC, which was established in Delaware in 2010 and supports 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 10 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 March 31, 2015, and the condensed consolidated statements of operations, comprehensive income (loss), and cash flows for the three months ended March 31, 2015 and 2014 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, 2014 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, 2014. | |
Certain reclassifications have been made to prior period amounts to conform to the current period presentation. For the period ended March 31, 2014, a reclassification of certain expenses from research and development to selling and marketing was made in the condensed consolidated statements of operations to conform to the current period presentation. | |
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 medical 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. When evaluating whether the fee is fixed or determinable and collectibility, we consider whether we have sufficient history to reliably estimate the total fee that will be received from a payor and a payor’s individual payment patterns. 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. 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. The estimated accrual amounts per test, recorded upon delivery of a patient report, are calculated for each accrual payor and are based on the contracted price adjusted for individual payment patterns resulting from co-payment amounts and excluded services in healthcare plans. The Company also reduces sales for an estimate of amounts that qualify as patient assistance and related deductions that do not qualify for revenue recognition. When a payment received for an individual test is either higher or lower than the estimated accrual amount, the Company recognizes the difference as either cash revenue, in the case of higher payments, or in the case of lower payments, against either the patient assistance program and related deductions reserve or the allowance for doubtful accounts, as applicable. | |
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 $1.1 million and $944,000 at March 31, 2015 and December 31, 2014, 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. There was no contract revenue for the three months ended March 31, 2015 and 2014. | |
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 March 31, 2015 and December 31, 2014 was $3.6 million. Write-offs for doubtful accounts of $1.0 million and $1.5 million were recorded against the allowance during the three months ended March 31, 2015 and 2014, respectively. Bad debt expense was $1.0 million and $1.5 million for the three months ended March 31, 2015 and 2014, respectively | |
Investments in Equity Securities | Investments in Equity Securities |
Beginning in 2011, the Company made investments in various tranches of the preferred stock of a private company such that the carrying value of this investment was $13.9 million at December 31, 2014. On February 18, 2015, the investee completed an initial public offering of its common stock and the Company’s investment automatically converted into 2,207,793 shares of common stock. This investment is accounted for under the cost method as an available-for-sale marketable security and valued at $37.0 million at March 31, 2015. These securities are subject to a lock-up agreement that expires in August 2015. | |
Property and Equipment | Property and Equipment |
Property and equipment, including purchased and internally developed software are stated at cost. Depreciation is calculated using the straight‑line method over the estimated useful lives of the assets, which generally range from three to seven years. Leasehold improvements are amortized using the straight‑line method over the estimated useful lives of the assets or the remaining term of the lease, whichever is shorter. | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-05). This amendment provides guidance to help entities determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Upon adoption, an entity has the option to apply the provisions of ASU 2015-05 either prospectively to all arrangements entered into or materially modified, or retrospectively. The Company is currently evaluating the effects, if any, the adoption of ASU 2015-05 will have upon our consolidated financial position, results of operations or cash flows. | |
In May 2014, the FASB 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) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Measurements | |||||||||||||
Schedule of financial instruments measured at fair value on recurring basis | |||||||||||||
Actively Quoted | Significant | ||||||||||||
Markets for | Other | Significant | |||||||||||
Identical | Observable | Unobservable | Balance at | ||||||||||
Assets | Inputs | Inputs | March 31, | ||||||||||
Level 1 | Level 2 | Level 3 | 2015 | ||||||||||
(In thousands) | |||||||||||||
As of March 31, 2015: | |||||||||||||
Assets | |||||||||||||
Money market deposits | $ | 10,625 | $ | — | $ | — | $ | 10,625 | |||||
Commercial paper | — | 19,748 | — | 19,748 | |||||||||
Corporate debt securities | — | 48,292 | — | 48,292 | |||||||||
Corporate equity securities | — | 37,002 | — | 37,002 | |||||||||
Total | $ | 10,625 | $ | 105,042 | $ | — | $ | 115,667 | |||||
Actively Quoted | Significant | ||||||||||||
Markets for | Other | Significant | |||||||||||
Identical | Observable | Unobservable | Balance at | ||||||||||
Assets | Inputs | Inputs | December 31, | ||||||||||
Level 1 | Level 2 | Level 3 | 2014 | ||||||||||
(In thousands) | |||||||||||||
As of December 31, 2014: | |||||||||||||
Assets | |||||||||||||
Money market deposits | $ | 12,397 | $ | — | $ | — | $ | 12,397 | |||||
Commercial paper | — | 29,749 | — | 29,749 | |||||||||
Corporate debt securities | — | 46,435 | — | 46,435 | |||||||||
Total | $ | 12,397 | $ | 76,184 | $ | — | $ | 88,581 | |||||
Summary of available-for-sale marketable securities | |||||||||||||
31-Mar-15 | |||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||
(In thousands) | |||||||||||||
Commercial paper | $ | 19,734 | $ | 14 | $ | — | $ | 19,748 | |||||
Corporate debt securities | 48,310 | — | -18 | 48,292 | |||||||||
Corporate equity securities | 13,857 | 23,145 | — | 37,002 | |||||||||
Total | $ | 81,901 | $ | 23,159 | $ | -18 | $ | 105,042 | |||||
December 31, 2014 | |||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||
(In thousands) | |||||||||||||
Commercial paper | $ | 29,730 | $ | 19 | $ | — | $ | 29,749 | |||||
Corporate debt securities | 44,219 | — | -34 | 44,185 | |||||||||
Total | $ | 73,949 | $ | 19 | $ | -34 | $ | 73,934 | |||||
Commitments_Tables
Commitments (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Commitments | ||||
Schedule of future non-cancelable commitments under operating leases | ||||
Annual | ||||
Payments | ||||
(In thousands) | ||||
Years Ending December 31, | ||||
2015 (remainder of year) | $ | 2,958 | ||
2016 | 3,872 | |||
2017 | 3,867 | |||
2018 | 2,476 | |||
2019 | 504 | |||
Total minimum payments | $ | 13,677 | ||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Information | |||||||||
Summary of total revenues from customers, payors and collaboration partners by geographic region | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
United States | $ | 57,717 | $ | 55,468 | |||||
Outside of the United States | 10,435 | 11,534 | |||||||
Total revenues | $ | 68,152 | $ | 67,002 | |||||
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies Principles of Consolidation (Details) (USD $) | 0 Months Ended | 3 Months Ended | ||
Feb. 18, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
country | ||||
subsidiary | ||||
Test | ||||
Principles of Consolidation | ||||
Number of wholly-owned subsidiaries | 2 | |||
Revenue Recognition | ||||
Minimum Number of Tests by Exclusive Distribution Agreements | 1 | |||
Minimum Number of Countries Covered for Exclusive Distribution Agreements | 90 | |||
Accrued refunds | $1,100,000 | $944,000 | ||
Contracts Revenue | 0 | 0 | ||
Allowance for Doubtful Accounts | ||||
Allowance for Doubtful Accounts Receivable, Write-offs | 1,000,000 | 1,500,000 | ||
Bad debt expense | 1,000,000 | 1,500,000 | ||
Investments in Privately Held Companies | ||||
Initial public offering of its common stock and converted to common stock (in shares) | 2,207,793 | |||
Available-for-sale marketable security | 37,000,000 | |||
Property and equipment | Minimum | ||||
Property and Equipment and Internal-Use Software | ||||
Estimated useful lives of the assets | 3 years | |||
Property and equipment | Maximum | ||||
Property and Equipment and Internal-Use Software | ||||
Estimated useful lives of the assets | 7 years | |||
Private company 2 | ||||
Investments in Privately Held Companies | ||||
Carrying value of investments in privately held companies | $13,900,000 | |||
Genomic Health International Holdings, LLC | ||||
Principles of Consolidation | ||||
Number of wholly-owned subsidiaries | 10 |
Net_Loss_Per_Share_Details
Net Loss Per Share (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Options to purchase common stock | ||
Net Loss Per Share | ||
Awards outstanding but not included in the computation of diluted net income (loss) per share (in shares) | 1,100,000 | 1,200,000 |
Restricted Stock Units | ||
Net Loss Per Share | ||
Awards outstanding but not included in the computation of diluted net income (loss) per share (in shares) | 172,000 | 140,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |||
Assets measured at fair value on a recurring basis: | |||
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 | |
Recurring basis | Actively Quoted Markets for Identical Assets Level 1 | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 10,625 | 12,397 | |
Recurring basis | Actively Quoted Markets for Identical Assets Level 1 | Money market deposits | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 10,625 | 12,397 | |
Recurring basis | Significant Other Observable Inputs Level 2 | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 105,042 | 76,184 | |
Recurring basis | Significant Other Observable Inputs Level 2 | Commercial paper | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 19,748 | 29,749 | |
Recurring basis | Significant Other Observable Inputs Level 2 | Corporate debt securities | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 48,292 | 46,435 | |
Recurring basis | Significant Other Observable Inputs Level 2 | Corporate equity securities | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 37,002 | ||
Recurring basis | Fair value | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 115,667 | 88,581 | |
Recurring basis | Fair value | Money market deposits | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 10,625 | 12,397 | |
Recurring basis | Fair value | Commercial paper | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 19,748 | 29,749 | |
Recurring basis | Fair value | Corporate debt securities | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | 48,292 | 46,435 | |
Recurring basis | Fair value | Corporate equity securities | |||
Assets measured at fair value on a recurring basis: | |||
Total assets at fair value | $37,002 |
Fair_Value_Measurements_Availa
Fair Value Measurements Available-For-Sale Marketable Securities (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Marketable securities classified as available-for-sale | |||
Amortized Cost | $81,901 | $73,949 | |
Unrealized Gains | 23,159 | 19 | |
Unrealized Losses | -18 | -34 | |
Estimated Fair Value | 105,042 | 73,934 | |
Realized gains on available-for-sale marketable securities | 0 | 0 | |
Realized losses on available-for-sale marketable securities | 0 | 0 | |
Available For Sale Marketable Securities Maturity Maximum | 1 year | 1 year | |
Commercial paper | |||
Marketable securities classified as available-for-sale | |||
Amortized Cost | 19,734 | 29,730 | |
Unrealized Gains | 14 | 19 | |
Estimated Fair Value | 19,748 | 29,749 | |
Corporate debt securities | |||
Marketable securities classified as available-for-sale | |||
Amortized Cost | 48,310 | 44,219 | |
Unrealized Losses | -18 | -34 | |
Estimated Fair Value | 48,292 | 44,185 | |
Corporate equity securities | |||
Marketable securities classified as available-for-sale | |||
Amortized Cost | 13,857 | ||
Unrealized Gains | 23,145 | ||
Estimated Fair Value | $37,002 |
Collaboration_and_Commercial_T1
Collaboration and Commercial Technology Licensing Agreements (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | |
Collaboration and Commercial Technology Licensing Agreements | |||
Milestone payment | $5,500,000 | ||
Specimen transfer agreements | |||
Collaboration and Commercial Technology Licensing Agreements | |||
Collaboration expense | 7,100,000 | 1,200,000 | |
Oncotype DX DCIS score agreement | |||
Fixed annual payments | |||
Capitalized milestone payment | 1,700,000 | ||
2015 | 604,000 | ||
2016 | 604,000 | ||
2017 | 504,000 | ||
Exclusive license agreement | |||
Collaboration and Commercial Technology Licensing Agreements | |||
Up-front payment | 9,000,000 | ||
Technology license agreements | |||
Collaboration and Commercial Technology Licensing Agreements | |||
Costs recorded under collaborative arrangements | 2,200,000 | 2,300,000 | |
Oncotype DX colon cancer test and Oncotype DX prostate cancer test | |||
Fixed future annual payments, exclusive of royalty payments | |||
2015 | $100,000 |
Commitments_Details
Commitments (Details) (USD $) | 1 Months Ended | ||||||||
Nov. 30, 2010 | Oct. 31, 2009 | Aug. 31, 2013 | Mar. 31, 2015 | Sep. 30, 2005 | Jan. 31, 2007 | Jul. 31, 2014 | 31-May-14 | 31-May-10 | |
sqft | sqft | sqft | sqft | sqft | sqft | sqft | |||
Non-cancelable commitments under operating leases | |||||||||
2015 (remainder of year) | $2,958,000 | ||||||||
2016 | 3,872,000 | ||||||||
2017 | 3,867,000 | ||||||||
2018 | 2,476,000 | ||||||||
2019 | 504,000 | ||||||||
Total minimum payments | 13,677,000 | ||||||||
Leased laboratory and office space located in Redwood City, California | |||||||||
Non-cancelable operating leases | |||||||||
Area leased under non-cancelable operating lease agreement (in square feet) | 48,000 | ||||||||
Period of time for which entity has an option to extend lease term | 5 years | ||||||||
Lease incentive obligations | 834,000 | ||||||||
Leased laboratory and office space located near the leased facility in Redwood City, California | |||||||||
Non-cancelable operating leases | |||||||||
Area leased under non-cancelable operating lease agreement (in square feet) | 48,000 | ||||||||
Period of time for which entity has an option to extend lease term | 5 years | ||||||||
Lease incentive obligations | 283,000 | ||||||||
Leased office space located near the leased facility in Redwood City, California | |||||||||
Non-cancelable operating leases | |||||||||
Area leased under non-cancelable operating lease agreement (in square feet) | 30,500 | ||||||||
Period of time for which entity has an option to extend lease term | 5 years | ||||||||
Lease incentive obligations | 307,000 | ||||||||
Second leased laboratory and office space located near the leased facility in Redwood City, California | |||||||||
Non-cancelable operating leases | |||||||||
Area leased under non-cancelable operating lease agreement (in square feet) | 18,400 | ||||||||
Period of time for which entity has an option to extend lease term | 5 years | ||||||||
Additional area leased (in square feet) | 5,500 | ||||||||
Lease incentive obligations | $358,000 | ||||||||
Leased office space located in Geneva, Switzerland | European subsidiary | |||||||||
Non-cancelable operating leases | |||||||||
Area leased under non-cancelable operating lease agreement (in square feet) | 2,500 | ||||||||
Additional area leased (in square feet) | 5,000 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Employee Stock-Based Compensation Expense | |||
Allocated Share-based Compensation Expense | $4,200,000 | $4,400,000 | $4,400,000 |
Weighted-average fair values and assumptions used in calculation of fair value | |||
Dividend yield (as a percent) | 0.00% | 0.00% | |
Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan | |||
Number of shares issued | 0 | 0 | |
Shares of common stock reserved for issuance under the ESPP | 1,250,000 | ||
Shares of common stock available for future grant | 759,738 | ||
Unrecognized compensation expense (in dollars) | 229,000 | ||
Weighted-average period of recognition of unrecognized stock-based compensation expense | 2 months | ||
Employee Stock Options | |||
Stock Option Grants | |||
Options granted (in shares) | 355,667 | 372,010 | |
Stock Options | |||
Stock Option Grants | |||
Options exercised (in shares) | 157,067 | 94,309 | |
Options exercised (in dollars per share) | $15.14 | $10.56 | |
Stock Options | Performance-Based Vesting | |||
Stock Option Grants | |||
Options granted (in shares) | 0 | ||
Employee Stock Purchase Plan | |||
Shares of common stock available for future grant | 148,100 | ||
Employee Stock-Based Compensation Expense | |||
Allocated Share-based Compensation Expense | 119,000 | ||
Restricted Stock Units | Performance-Based Vesting | |||
Stock-based compensation | |||
Granted (in shares) | 22,980 | 44,630 | |
Weighted-average grant date fair value (in dollars per share) | $31.12 | $27.21 | |
Stock outstanding (in shares) | 29,133 | ||
Stock Option Grants | |||
Options exercised (in shares) | 4,227 | ||
Options exercised (in dollars per share) | $27.21 | ||
Stock awards other than options | |||
Grant-date fair value (in dollars) | 715,000 | 1,200,000 | |
Grant-date fair value outstanding (in dollars) | 883,000 | ||
Employee Stock-Based Compensation Expense | |||
Allocated Share-based Compensation Expense | 108,000 | ||
Restricted Stock Units | Service-Based Vesting | |||
Stock-based compensation | |||
Granted (in shares) | 359,616 | 331,253 | |
Weighted-average grant date fair value (in dollars per share) | $31.14 | $29.27 | |
Stock awards other than options | |||
Grant-date fair value (in dollars) | 11,200,000 | 9,700,000 | |
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 | 156,838 | 164,532 | |
Vested (in dollars per share) | $29.59 | $27.98 | |
Restricted Stock Units | Employees | Annual vesting over vesting period | |||
Stock-based compensation | |||
Vesting percentage | 33.00% | ||
Vesting period | 3 years | ||
Restricted Stock | Outside directors | |||
Stock-based compensation | |||
Granted (in shares) | 1,560 | 1,705 | |
Weighted-average grant date fair value (in dollars per share) | $31.97 | $29.27 | |
Stock awards other than options | |||
Grant-date fair value (in dollars) | $50,000 | $50,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
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 | |
Segment information | ||
Total revenues | $68,152 | $67,002 |
United States | ||
Segment information | ||
Total revenues | 57,717 | 55,468 |
Outside of the United States | ||
Segment information | ||
Total revenues | $10,435 | $11,534 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Income Taxes | |||
Income tax (benefit) expense | ($5,496,000) | $75,000 | |
Miscellaneous state income tax and foreign income tax expense on earnings of our foreign subsidiaries | 130,000 | ||
Unrecognized Tax Benefits | $1,600,000 | $1,600,000 |