Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | GENOMIC HEALTH INC | |
Entity Central Index Key | 1,131,324 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
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 | 33,015,163 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 30,705 | $ 32,533 |
Short-term marketable securities | 55,671 | 62,410 |
Accounts receivable (net of allowance for doubtful accounts; 2016—$3,996, 2015—$3,988) | 38,829 | 37,164 |
Prepaid expenses and other current assets | 11,352 | 10,843 |
Total current assets | 136,557 | 142,950 |
Property and equipment, net | 39,311 | 39,746 |
Other assets | 1,853 | 1,921 |
Total assets | 177,721 | 184,617 |
Current liabilities: | ||
Accounts payable | 4,702 | 8,585 |
Accrued compensation and employee benefits | 20,058 | 22,239 |
Accrued license fees | 2,495 | 2,287 |
Accrued expenses and other current liabilities | 9,599 | 8,922 |
Deferred revenues | 374 | 431 |
Other current liabilities | 208 | 208 |
Total current liabilities | 37,436 | 42,672 |
Other liabilities | $ 2,874 | $ 2,410 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock | $ 3 | $ 3 |
Additional paid- in capital | 397,337 | 395,059 |
Accumulated other comprehensive income | 4,701 | 2,752 |
Accumulated deficit | (234,520) | (228,169) |
Treasury stock, at cost | (30,110) | (30,110) |
Total stockholders' equity | 137,411 | 139,535 |
Total liabilities and stockholders' equity | $ 177,721 | $ 184,617 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts | $ 3,996 | $ 3,988 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||
Product revenues | $ 80,894 | $ 68,152 |
Operating expenses: | ||
Cost of product revenues | 15,800 | 12,762 |
Research and development | 15,963 | 19,118 |
Selling and marketing | 39,500 | 35,352 |
General and administrative | 18,438 | 15,589 |
Total operating expenses | 89,701 | 82,821 |
Loss from operations | (8,807) | (14,669) |
Interest income | 78 | 54 |
Gain on sales of equity securities | 1,333 | |
Other income (expense), net | 87 | (374) |
Loss before income taxes | (7,309) | (14,989) |
Income tax benefit | (958) | (5,496) |
Net loss | $ (6,351) | $ (9,493) |
Basic and diluted net loss per share (in dollars per share) | $ (0.19) | $ (0.30) |
Shares used in computing basic and diluted net loss per share (in shares) | 32,900 | 32,055 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net loss | $ (6,351) | $ (9,493) |
Other comprehensive income (loss): | ||
Unrealized gain on available-for-sale marketable securities, net of tax of $1,358 and $5,626, respectively | 2,391 | 17,530 |
Reclassification adjustment for net gain on sale of equity securities included in net loss | (442) | |
Comprehensive income (loss) | $ (4,402) | $ 8,037 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Unrealized gain on available-for-sale marketable securities, tax | $ 1,358 | $ 5,626 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities | ||
Net loss | $ (6,351) | $ (9,493) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,179 | 1,728 |
Employee stock-based compensation | 4,542 | 4,176 |
Write-off of previously capitalized software costs | 87 | |
Impairment of assets held for sale and long-lived assets | 56 | |
Gain on disposal of property and equipment | (19) | |
Outside director restricted stock awarded in lieu of fees | 50 | 50 |
Gain on sale of equity securities | (1,333) | |
Deferred tax benefit from unrealized gain on available-for-sale marketable securities | 1,000 | 5,600 |
Deferred tax benefit from unrealized gain on available-for-sale marketable securities | (1,358) | (5,626) |
Changes in assets and liabilities: | ||
Accounts receivable | (1,665) | (63) |
Prepaid expenses and other assets | (480) | (2,252) |
Accounts payable | (2,441) | 239 |
Accrued compensation and employee benefits | (2,181) | (1,320) |
Accrued expenses and other liabilities | 3,690 | 5,283 |
Deferred revenues | (57) | (67) |
Net cash used in operating activities | (5,349) | (7,277) |
Investing activities | ||
Purchases of property and equipment | (5,311) | (4,369) |
Purchases of marketable securities | (12,207) | (31,274) |
Maturities of marketable securities | 19,757 | 37,180 |
Proceeds from sales of marketable securities | 3,579 | |
Net cash provided by investing activities | 5,818 | 1,537 |
Financing activities | ||
Net proceeds from issuance of common stock under stock plans | 632 | 2,379 |
Withholding taxes related to restricted stock units net share settlement | (2,929) | (3,427) |
Net cash used in financing activities | (2,297) | (1,048) |
Net decrease in cash and cash equivalents | (1,828) | (6,788) |
Cash and cash equivalents at the beginning of the period | 32,533 | 29,726 |
Cash and cash equivalents at the end of the period | 30,705 | 22,938 |
Non-cash investing and financing activities | ||
Accrued purchase of property and equipment | 291 | 2,501 |
Change in fair value of equity investment | $ 3,787 | $ 23,145 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
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 clinically-actionable genomic information to personalize cancer treatment. 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 is translating significant amounts of genomic data that will be useful for treatment planning throughout the cancer patient’s journey, from diagnosis to treatment selection and monitoring. The Company was incorporated in Delaware in August 2000. The Company’s first product, the Onco type 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 Onco type 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 Onco type 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 Onco type 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 Onco type 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, 2016: 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, 2016, condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2016 and 2015, and condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 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, 2015 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, 2015. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Revenue Recognition The Company derives its revenues from product sales. The majority of the Company’s historical product revenues have been derived from the sale of the Onco type 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 generally 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 Onco type 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 collectible, the Company considers whether it has 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 arrangement or 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 arrangement or 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, a charge 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 Onco type DX tests with distributors covering more than 90 countries outside of the United States. 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 $501,000 and $609,000 at March 31, 2016 and December 31, 2015, respectively, and are included in accrued expenses and other current liabilities. 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 both March 31, 2016 and December 31, 2015 was $4.0 million . Write-offs for doubtful accounts of $2.4 million and $1.0 million were recorded against the allowance during the three months ended March 31, 2016 and 2015, respectively. Bad debt expense was $2.3 million and $1.0 million for the three months ended March 31, 2016 and 2015, respectively. Marketable Securities The Company invests in marketable securities, primarily money market funds, obligations of U.S. Government agencies and government sponsored entities, corporate bonds, commercial paper and equity securities. The Company considers all investments with a maturity date of less than one year as of the balance sheet date to be short term investments. Those investments with a maturity date greater than one year as of the balance sheet date are considered to be long term investments. During the three months ended March 31, 2016, the Company sold 357,883 shares of the common stock of Invitae Corporation for net proceeds of $3.6 million at a cost of $6.28 per share, resulting in a realized gain of $1.3 million. The carrying value of the remaining investment was $11.6 million at March 31, 2016. This investment, which is accounted for under the cost method, is valued at $18.9 million at March 31, 2016. Unrealized gains or losses resulting from changes in the fair value of this investment will be recorded in other comprehensive income until the securities are sold. During the three months ended March 31, 2016, $442,000 of unrealized gain, net of tax of $251,000 , related to the shares sold was reclassified out of accumulated other comprehensive income into earnings. These securities are subject to the resale limitations of Rule 144 under the Securities Act of 1933. As of March 31, 2016 and December 31, 2015, respectively, all investments in marketable securities were classified as available for sale. The Company does not intend to sell these securities and management believes it is not more likely than not that the Company will be required to sell these securities prior to the recovery of their amortized cost basis. These securities are carried at estimated fair value with unrealized gains and losses included in stockholders’ equity. Realized gains and losses and declines in value, if any, judged to be other than temporary on available for sale securities are reported in other income or expense. When securities are sold, any associated unrealized gain or loss initially recorded as a separate component of stockholders’ equity is reclassified out of accumulated other comprehensive income on a specific identification basis and recorded in earnings for the period. The cost of securities sold is determined using specific identification. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” to provide guidance on revenue recognition. This ASU 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. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of December 15, 2016 (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. In March and April 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property. The Company is continuing to evaluate its method of adoption and the impact this ASU will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-2, “Leases.” This ASU is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This ASU is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019, and all annual and interim reporting periods thereafter. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting, ” which simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. The Company is currently assessing how the adoption of this standard will impact its consolidated financial statements and related disclosures. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2016 | |
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 659,000 shares of the Company’s common stock and 141,000 RSUs were outstanding during the three months ended March 31, 2016, but were not included in the computation of diluted net loss per share because their effect is anti-dilutive. Options to purchase 1.1 million shares of the Company’s common 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. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
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 either March 31, 2016 or December 31, 2015. The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis at March 31, 2016 and December 31, 2015 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 2016 (In thousands) As of March 31, 2016: Assets Money market deposits $ $ — $ — $ Commercial paper — — Corporate debt securities — — Corporate equity securities — — Total $ $ $ — $ Actively Quoted Significant Markets for Other Significant Identical Observable Unobservable Balance at Assets Inputs Inputs December 31, Level 1 Level 2 Level 3 2015 (In thousands) As of December 31, 2015: Assets Money market deposits $ $ — $ — $ Commercial paper — — Corporate debt securities — — Corporate equity securities — — Total $ $ $ — $ 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 and 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 certain restrictions on sale. 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: March 31, 2016 Cost or Gross Gross Total Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) Commercial paper $ $ $ — $ Corporate debt securities — Corporate equity securities — Total $ $ $ — $ December 31, 2015 Cost or Gross Gross Total Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) Commercial paper $ $ $ — $ Corporate debt securities — Corporate equity securities — Total $ $ $ $ The Company had reali zed g ains of $1.3 million on available-for-sale marketable securities for the three months ended March 31, 2016. The Company had no realized gains or losses on available-for-sale marketable securities for the three months ended March 31, 2015. All of the Company’s available-for-sale marketable securities had contractual maturities of one year or less as of March 31, 2016 and December 31, 2015. |
Collaboration and Commercial Te
Collaboration and Commercial Technology Licensing Agreements | 3 Months Ended |
Mar. 31, 2016 | |
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 $938,000 and $7.1 million for the three months ended March 31, 2016 and 2015, 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 the collaborations. The $7.1 million of collaboration expense of the three months ended March 31, 2015 includes a one-time $5.5 million expense for the wind-down of a license agreement and development program as described below. 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 Onco type 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 $2.2 million for the three months ended March 31, 2016 and 2015, respectively. 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 have been required if certain clinical and commercial endpoints were achieved in the future. With successful commercialization of a test, the Company would have been 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 statements of operations. The license agreement was terminated in May 2015 and, as a result, the Company has no future obligations under this agreement. The Company is required to make a series of fixed annual payments under a collaboration agreement beginning with the one year anniversary of achieving a key milestone for the Company’s DCIS clinical study in June 2014. As of March 31, 2016, future annual payments include payments of $604,000 , and $504,000 in 2016 and 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies | |
Commitments | Note 5. Commitments and Contingencies Lease Obligations The Company has entered into non-cancellable operating leases for laboratory and office facilities. Rental expense under operating lease agreements was $1.3 million and $956,000 for the three months ended March 31, 2016 and 2015, respectively. Future non ‑cancelable commitments under these operating leases at March 31, 2016 were as follows: Annual Payments (In thousands) Years Ending December 31, 2016 (remainder of year) $ 2017 2018 2019 2020 2021 and thereafter Total minimum payments $ Contingencies From time to time, the Company may be subject to various legal proceedings and claims arising in the ordinary course of business. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its consolidated financial statements. An estimated loss contingency is accrued in the consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 6. Stock-Based Compensation On September 8, 2005, the Board of Directors approved the 2005 Stock Incentive Plan (the “2005 Plan”), which was later approved by the Company’s stockholders. Pursuant to the 2005 Plan, stock options, restricted shares, stock units, including RSUs, and stock appreciation rights may be granted to employees, consultants, and outside directors of the Company. Options granted may be either incentive stock options or nonstatutory stock options. The Company initially reserved 5,000,000 shares of the Company’s common stock for issuance under the 2005 Plan, effective upon the closing of the Company’s initial public offering on October 4, 2005. On June 8, 2009, the Company’s stockholders approved an amendment to the 2005 Plan to increase the shares reserved for issuance under the 2005 Plan by 3,980,000 shares. The amended and restated plan also extends the term under which awards may be granted under the 2005 Plan until January 27, 2019. On June 11, 2015, the Company’s stockholders approved an amendment to the amended and restated 2005 Plan to increase the shares reserved for issuance under the 2005 Plan by 1,500,000 shares. Stock Options A summary of the stock option activity under the Company’s 2005 Plan for the three months ended March 31, 2016 is as follows: Outstanding Options Number of Weighted-Average Shares Exercise Price (In thousands) Balance at December 31, 2015 $ Options granted $ Options exercised $ Options forfeited $ Options expired $ Balance at March 31, 2016 $ Exercisable at March 31, 2016 $ Vested and expected to vest at March 31, 2016 $ Restricted Stock Units A summary of the RSU activity under the Company’s 2005 Plan for the three months ended March 31, 2016 is as follows: Weighted-Average Number of Grant Date Fair Shares Value (In thousands) Balance at December 31, 2015 $ RSUs granted $ RSUs vested $ RSUs cancelled $ Balance at March 31, 2016 $ Performance-Based Vesting Restricted Stock Units A summary of the performance-based restricted stock unit (“PVRSU”) activity under the Company’s 2005 Plan for the three months ended March 31, 2016 is as follows: Weighted-Average Number of Grant Date Fair Shares Value (In thousands) Balance at December 31, 2015 $ PVRSUs granted — $ — PVRSUs vested $ PVRSUs cancelled — $ — Balance at March 31, 2016 — $ — 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, 2016, the Company issued 1,420 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 $35.20 per share. Employee Stock Purchase Plan A total of 1,250,000 shares of common stock have been reserved for issuance under the Employee Stock Purchase Plan (“ESPP”), of which 555,896 shares were available for issuance as of March 31, 2016. Shares are issued twice yearly at the end of each offering period. There were no shares issued during the three months ended March 31, 2016 or 2015. As of March 31, 2016, there was $294,000 of unrecognized compensation expense related to the ESPP, which is expected to be recognized over a period of tw o months. Employee Stock-Based Compensation Expense Share-based compensation expense recognized and included in the condensed consolidated statements of operations and comprehensive income (loss) was allocated as follows: Three Months Ended March 31, 2016 2015 (In thousands) Cost of product revenues $ $ Research and development Selling and marketing General and administrative Total $ $ |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
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, 2016, the majority of the Company’s product revenues have been derived from sales of one product, the Onco type DX breast cancer test. The following table summarizes total revenue from customers by geographic region. Product revenues are attributed to countries based on ship-to location. Three Months Ended March 31, 2016 2015 (In thousands) United States $ $ Outside of the United States Total revenues $ $ |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes | |
Income Taxes | Note 8. Income Taxes The Company recognized income tax benefit of $1.0 million and $ 5.5 million for the three months ended March 31, 2016 and 2015, respectively, which was computed using the “discrete” (or “cut-off”) method. The income tax benefit for the three months ended March 31, 2016 and March 31, 2015 is principally comprised of a deferred tax benefit generated by the unrealized gain recognized during the quarter on available-for-sale marketable securities, which are included in other comprehensive income. The intraperiod tax allocation rules limit the amount of benefit recognized to the lesser of year-to-date pre-tax loss or year-to-date unrealized gain recognized on available-for-sale marketable securities included in other comprehensive income. Therefore, the tax benefit will change accordingly in subsequent periods. For the three months ended March 31, 2016, the deferred tax benefit of $1.0 million is comprised of a $1.3 million deferred tax benefit for unrealized gains for securities that have not been sold net of a pro-rata reversal of a deferred tax benefit of $251,000 recorded in the prior year from the partial sale of these securities during the current period. The deferred tax benefit in the period was further reduced by $149,000 of miscellaneous state income tax and foreign income tax expense as determined for the three month period. The deferred tax benefit of $5.6 million recorded in the three months ended March 31, 2015 was offset by $130,000 of miscellaneous state income tax and foreign income tax expenses. Based on all available objective evidence, the Company believes that it is still more likely than not that its net deferred tax assets will not be fully realized. Accordingly, the Company maintains a valuation allowance against all of its net deferred tax assets as of each of March 31, 2016 and December 31, 2015. 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 $2.9 million and $2.8 million of unrecognized tax benefits at March 31, 2016 and December 31, 2015, respectively. The Company does not anticipate a material change to its unrecognized tax benefits over the next 12 months that would affect its effective tax rate. Unrecognized tax benefits may change during the next 12 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 2001 through 2016 in U.S. federal and state jurisdictions, and for the years 2010 through 2016 in foreign jurisdictions. |
Organization and Summary of S16
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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, 2016: 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, 2016, condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2016 and 2015, and condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 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, 2015 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, 2015. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. |
Revenue Recognition | Revenue Recognition The Company derives its revenues from product sales. The majority of the Company’s historical product revenues have been derived from the sale of the Onco type 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 generally 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 Onco type 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 collectible, the Company considers whether it has 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 arrangement or 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 arrangement or 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, a charge 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 Onco type DX tests with distributors covering more than 90 countries outside of the United States. 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 $501,000 and $609,000 at March 31, 2016 and December 31, 2015, respectively, and are included in accrued expenses and other current liabilities. 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 both March 31, 2016 and December 31, 2015 was $4.0 million . Write-offs for doubtful accounts of $2.4 million and $1.0 million were recorded against the allowance during the three months ended March 31, 2016 and 2015, respectively. Bad debt expense was $2.3 million and $1.0 million for the three months ended March 31, 2016 and 2015, respectively. |
Marketable Securities | Marketable Securities The Company invests in marketable securities, primarily money market funds, obligations of U.S. Government agencies and government sponsored entities, corporate bonds, commercial paper and equity securities. The Company considers all investments with a maturity date of less than one year as of the balance sheet date to be short term investments. Those investments with a maturity date greater than one year as of the balance sheet date are considered to be long term investments. During the three months ended March 31, 2016, the Company sold 357,883 shares of the common stock of Invitae Corporation for net proceeds of $3.6 million at a cost of $6.28 per share, resulting in a realized gain of $1.3 million. The carrying value of the remaining investment was $11.6 million at March 31, 2016. This investment, which is accounted for under the cost method, is valued at $18.9 million at March 31, 2016. Unrealized gains or losses resulting from changes in the fair value of this investment will be recorded in other comprehensive income until the securities are sold. During the three months ended March 31, 2016, $442,000 of unrealized gain, net of tax of $251,000 , related to the shares sold was reclassified out of accumulated other comprehensive income into earnings. These securities are subject to the resale limitations of Rule 144 under the Securities Act of 1933. As of March 31, 2016 and December 31, 2015, respectively, all investments in marketable securities were classified as available for sale. The Company does not intend to sell these securities and management believes it is not more likely than not that the Company will be required to sell these securities prior to the recovery of their amortized cost basis. These securities are carried at estimated fair value with unrealized gains and losses included in stockholders’ equity. Realized gains and losses and declines in value, if any, judged to be other than temporary on available for sale securities are reported in other income or expense. When securities are sold, any associated unrealized gain or loss initially recorded as a separate component of stockholders’ equity is reclassified out of accumulated other comprehensive income on a specific identification basis and recorded in earnings for the period. The cost of securities sold is determined using specific identification. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” to provide guidance on revenue recognition. This ASU 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. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of December 15, 2016 (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. In March and April 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property. The Company is continuing to evaluate its method of adoption and the impact this ASU will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-2, “Leases.” This ASU is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This ASU is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019, and all annual and interim reporting periods thereafter. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting, ” which simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. The Company is currently assessing how the adoption of this standard will impact its consolidated financial statements and related disclosures. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 2016 (In thousands) As of March 31, 2016: Assets Money market deposits $ $ — $ — $ Commercial paper — — Corporate debt securities — — Corporate equity securities — — Total $ $ $ — $ Actively Quoted Significant Markets for Other Significant Identical Observable Unobservable Balance at Assets Inputs Inputs December 31, Level 1 Level 2 Level 3 2015 (In thousands) As of December 31, 2015: Assets Money market deposits $ $ — $ — $ Commercial paper — — Corporate debt securities — — Corporate equity securities — — Total $ $ $ — $ |
Summary of available-for-sale marketable securities | March 31, 2016 Cost or Gross Gross Total Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) Commercial paper $ $ $ — $ Corporate debt securities — Corporate equity securities — Total $ $ $ — $ December 31, 2015 Cost or Gross Gross Total Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) Commercial paper $ $ $ — $ Corporate debt securities — Corporate equity securities — Total $ $ $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies | |
Schedule of future non-cancelable commitments under operating leases | Annual Payments (In thousands) Years Ending December 31, 2016 (remainder of year) $ 2017 2018 2019 2020 2021 and thereafter Total minimum payments $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of option activity | Outstanding Options Number of Weighted-Average Shares Exercise Price (In thousands) Balance at December 31, 2015 $ Options granted $ Options exercised $ Options forfeited $ Options expired $ Balance at March 31, 2016 $ Exercisable at March 31, 2016 $ Vested and expected to vest at March 31, 2016 $ |
Summary of RSU activity | Weighted-Average Number of Grant Date Fair Shares Value (In thousands) Balance at December 31, 2015 $ RSUs granted $ RSUs vested $ RSUs cancelled $ Balance at March 31, 2016 $ |
Schedule of share-based compensation expense | Three Months Ended March 31, 2016 2015 (In thousands) Cost of product revenues $ $ Research and development Selling and marketing General and administrative Total $ $ |
Performance-Based Vesting | |
Summary of RSU activity | Weighted-Average Number of Grant Date Fair Shares Value (In thousands) Balance at December 31, 2015 $ PVRSUs granted — $ — PVRSUs vested $ PVRSUs cancelled — $ — Balance at March 31, 2016 — $ — |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Information | |
Summary of total revenue from customers by geographic region | Three Months Ended March 31, 2016 2015 (In thousands) United States $ $ Outside of the United States Total revenues $ $ |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies (Principles of Consolidation) (Details) | 3 Months Ended |
Mar. 31, 2016subsidiary | |
Principles of Consolidation | |
Number of wholly-owned subsidiaries | 2 |
Genomic Health International Holdings, LLC | |
Principles of Consolidation | |
Number of wholly-owned subsidiaries | 10 |
Organization and Summary of S22
Organization and Summary of Significant Accounting Policies (Condensed) (Details) | 3 Months Ended | ||
Mar. 31, 2016USD ($)Testcountry$ / sharesshares | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Revenue Recognition | |||
Minimum number of Oncotype DX tests by exclusive distribution agreements | Test | 1 | ||
Minimum number of countries covered for distribution agreements establishment | country | 90 | ||
Accrued refunds | $ 501,000 | $ 609,000 | |
Allowance for Doubtful Accounts | |||
Allowance for doubtful accounts | 3,996,000 | $ 3,988,000 | |
Write-offs for doubtful accounts recorded against allowance | 2,400,000 | $ 1,000,000 | |
Bad debt expense | 2,300,000 | $ 1,000,000 | |
Investments in Equity Securities | |||
Proceeds from sales of marketable securities | 3,579,000 | ||
Realized gains on available-for-sale marketable securities | 1,333,000 | ||
Amount reclassified out of accumulated other comprehensive income | 442,000 | ||
Amount reclassified out of accumulated other comprehensive income, tax portion | 251,000 | ||
Invitae | |||
Investments in Equity Securities | |||
Available-for-sale marketable security | $ 18,900,000 | ||
Common Stock | Sale | Invitae | |||
Investments in Equity Securities | |||
Number of shares of cost method investment sold by entity | shares | 357,883 | ||
Proceeds from sales of marketable securities | $ 3,600,000 | ||
Sale price of cost method investment (in dollars per share) | $ / shares | $ 6.28 | ||
Realized gains on available-for-sale marketable securities | $ 1,300,000 | ||
Available-for-sale marketable security | 11,600,000 | ||
Amount reclassified out of accumulated other comprehensive income | 442,000 | ||
Amount reclassified out of accumulated other comprehensive income, tax portion | $ 251,000 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stock Options | ||
Net Loss Per Share | ||
Awards outstanding but not included in the computation of diluted net income (loss) per share (in shares) | 659,000 | 1,100,000 |
RSUs | ||
Net Loss Per Share | ||
Awards outstanding but not included in the computation of diluted net income (loss) per share (in shares) | 141,000 | 172,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | $ 66,116 | $ 83,637 |
Money market deposits | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 10,445 | 13,928 |
Commercial paper | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 29,724 | 29,224 |
Corporate debt securities | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 7,022 | 22,359 |
Corporate equity securities | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 18,925 | 18,126 |
Actively Quoted Markets for Identical Assets Level 1 | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 10,445 | 13,928 |
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 | 10,445 | 13,928 |
Significant Other Observable Inputs Level 2 | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 55,671 | 69,709 |
Significant Other Observable Inputs Level 2 | Commercial paper | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 29,724 | 29,224 |
Significant Other Observable Inputs Level 2 | Corporate debt securities | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 7,022 | 22,359 |
Significant Other Observable Inputs Level 2 | Corporate equity securities | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | $ 18,925 | $ 18,126 |
Fair Value Measurements (Availa
Fair Value Measurements (Available-For-Sale Marketable Securities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Marketable securities classified as available-for-sale | |||
Cost or Amortized Cost | $ 48,315 | $ 58,110 | |
Gross Unrealized Gains | 7,356 | 4,310 | |
Gross Unrealized Losses | (10) | ||
Total Estimated Fair Value | 55,671 | $ 62,410 | 62,410 |
Realized gains on available-for-sale marketable securities | $ 1,333 | ||
Maximum contractual maturities of Company's available-for-sale marketable securities | 1 year | 1 year | |
Commercial paper | |||
Marketable securities classified as available-for-sale | |||
Cost or Amortized Cost | $ 29,683 | 23,684 | |
Gross Unrealized Gains | 41 | 41 | |
Total Estimated Fair Value | 29,724 | 23,725 | |
Corporate debt securities | |||
Marketable securities classified as available-for-sale | |||
Cost or Amortized Cost | 7,021 | 20,569 | |
Gross Unrealized Gains | 1 | ||
Gross Unrealized Losses | (10) | ||
Total Estimated Fair Value | 7,022 | 20,559 | |
Corporate equity securities | |||
Marketable securities classified as available-for-sale | |||
Cost or Amortized Cost | 11,611 | 13,857 | |
Gross Unrealized Gains | 7,314 | 4,269 | |
Total Estimated Fair Value | $ 18,925 | $ 18,126 |
Collaboration and Commercial 26
Collaboration and Commercial Technology Licensing Agreements (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2013 | |
Specimen transfer agreements | |||
Collaboration payments and costs | |||
Collaboration expense | $ 938,000 | $ 7,100,000 | |
Technology license agreements | |||
Collaboration payments and costs | |||
Costs recorded under collaborative arrangements | 2,500,000 | 2,200,000 | |
Exclusive license agreement | |||
Collaboration payments and costs | |||
Collaboration expense | 5,500,000 | ||
Estimated total remaining obligation, including milestone payments | $ 0 | ||
Exclusive license agreement | Research and development expense. | |||
Collaboration payments and costs | |||
Up-front payment | $ 9,000,000 | ||
Milestone payment | $ 5,500,000 | ||
Oncotype DX DCIS score agreement | |||
Collaboration payments and costs | |||
Period from achieving key milestone entity required to make fixed annual payments | 1 year | ||
Fixed annual payments | |||
2,016 | $ 604,000 | ||
2,017 | $ 504,000 |
Commitments and Contingencies27
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Commitments and Contingencies | ||
Rent expense | $ 1,300,000 | $ 956,000 |
Non-cancelable commitments under operating leases | ||
2016 (remainder of year) | 3,560,000 | |
2,017 | 5,221,000 | |
2,018 | 5,960,000 | |
2,019 | 6,748,000 | |
2,020 | 7,077,000 | |
2021 and thereafter | 9,940,000 | |
Total minimum payments | $ 38,506,000 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - 2005 Stock Incentive Plan - shares | Jun. 11, 2015 | Jun. 08, 2009 | Sep. 08, 2005 |
Stock awards other than options | |||
Shares of common stock reserved for issuance | 5,000,000 | ||
Increase in shares reserved for issuance | 1,500,000 | 3,980,000 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Option Activity) (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Number of Shares | |
Options outstanding at the beginning of the period (in shares) | shares | 3,630 |
Options granted (in shares) | shares | 583 |
Options exercised (in shares) | shares | (36) |
Options forfeited (in shares) | shares | (11) |
Options expired (in shares) | shares | (3) |
Options outstanding at the end of the period (in shares) | shares | 4,163 |
Exercisable at the end of the period (in shares) | shares | 3,023 |
Vested and expected to vest at the end of the period (in shares) | shares | 4,033 |
Weighted-Average Exercise Price | |
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 23.80 |
Options granted (in dollars per share) | $ / shares | 27 |
Options exercised (in dollars per share) | $ / shares | 17.72 |
Options forfeited (in dollars per share) | $ / shares | 29.94 |
Options expired (in dollars per share) | $ / shares | 20.64 |
Options outstanding at the end of the period (in dollars per share) | $ / shares | 24.29 |
Exercisable at the end of the period (in dollars per share) | $ / shares | 22.66 |
Vested and expected to vest at the end of the period (in dollars per share) | $ / shares | $ 24.16 |
Stock-Based Compensation (RSU A
Stock-Based Compensation (RSU Activity) (Details) | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
RSUs | |
Number of Shares | |
Balance at the beginning of the period (in shares) | shares | 682,000 |
Granted (in shares) | shares | 526,000 |
Vested (in shares) | shares | (266,000) |
Cancelled (in shares) | shares | (17,000) |
Balance at the end of the period (in shares) | shares | 925,000 |
Weighted-Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 30.18 |
Granted (in dollars per share) | $ / shares | 27.55 |
Vested (in dollars per share) | $ / shares | 30.31 |
Cancelled (in dollars per share) | $ / shares | 30.18 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 28.65 |
Restricted Stock | Performance-Based Vesting | |
Number of Shares | |
Balance at the beginning of the period (in shares) | shares | 6,000 |
Vested (in shares) | shares | (6,000) |
Weighted-Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 27.21 |
Vested (in dollars per share) | $ / shares | $ 27.21 |
Restricted Stock | Outside directors | |
Number of Shares | |
Granted (in shares) | shares | 1,420 |
Weighted-Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 35.20 |
Additional Disclosure | |
Grant-date fair value (in dollars) | $ | $ 50,000 |
Stock-Based Compensation (Emplo
Stock-Based Compensation (Employee Stock Purchase Plan) (Details) - Employee Stock Purchase Plan - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Employee Stock Purchase Plan | ||
Shares of common stock reserved for issuance | 1,250,000 | |
Shares of common stock available for future grant | 555,896 | |
Number of shares issued | 0 | 0 |
Unrecognized compensation expense (in dollars) | $ 294,000 | |
Weighted-average period of recognition of unrecognized stock-based compensation expense | 2 months |
Stock-Based Compensation (Emp32
Stock-Based Compensation (Employee Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Employee Stock Based Compensation Expense | ||
Stock-based compensation expense (in dollars) | $ 4,542 | $ 4,176 |
Cost of product revenues | ||
Employee Stock Based Compensation Expense | ||
Stock-based compensation expense (in dollars) | 160 | 135 |
Research and development expense. | ||
Employee Stock Based Compensation Expense | ||
Stock-based compensation expense (in dollars) | 1,253 | 1,041 |
Selling and marketing | ||
Employee Stock Based Compensation Expense | ||
Stock-based compensation expense (in dollars) | 1,438 | 1,081 |
General and administrative | ||
Employee Stock Based Compensation Expense | ||
Stock-based compensation expense (in dollars) | $ 1,691 | $ 1,919 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)segmentproduct | Mar. 31, 2015USD ($) | |
Segment information | ||
Number of business segments in which the entity operates | segment | 1 | |
Number of products from which the majority of the entity's product revenues have been derived | product | 1 | |
Total revenues | $ 80,894 | $ 68,152 |
United States | ||
Segment information | ||
Total revenues | 70,495 | 57,717 |
Outside of the United States | ||
Segment information | ||
Total revenues | $ 10,399 | $ 10,435 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income tax expense (benefit) | $ (958,000) | $ (5,496,000) |
Deferred tax expense (benefit) | (1,000,000) | (5,600,000) |
Deferred tax benefit for unrealized gains for securities | 1,358,000 | 5,626,000 |
Reversal of deferred tax benefit | 251,000 | |
Unrecognized tax benefits | 2,900,000 | 2,800,000 |
State and foreign tax authority | ||
Income tax expense (benefit) | $ 149,000 | $ 130,000 |