Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
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 | Sep. 30, 2018 | |
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 | 36,123,297 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 69,242 | $ 45,518 |
Short-term marketable securities | 114,021 | 84,057 |
Accounts receivable (net of allowance for doubtful accounts; 2018—$1,041 2017—$3,884) | 51,553 | 31,161 |
Prepaid expenses and other current assets | 11,886 | 13,524 |
Total current assets | 246,702 | 174,260 |
Property and equipment, net | 39,804 | 46,440 |
Other assets | 13,860 | 10,917 |
Total assets | 300,366 | 231,617 |
Current liabilities: | ||
Accounts payable | 6,545 | 156 |
Accrued compensation and employee benefits | 29,132 | 24,953 |
Accrued expenses and other current liabilities | 14,303 | 14,084 |
Other current liabilities | 425 | 323 |
Total current liabilities | 50,405 | 39,516 |
Other liabilities | 3,944 | 3,810 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock | 3 | 3 |
Additional paid-in capital | 491,409 | 464,637 |
Accumulated other comprehensive loss | (50) | (294) |
Accumulated deficit | (215,235) | (245,945) |
Treasury stock, at cost | (30,110) | (30,110) |
Total stockholders' equity | 246,017 | 188,291 |
Total liabilities and stockholders' equity | $ 300,366 | $ 231,617 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts | $ 1,041 | $ 3,884 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Revenues | $ 101,258 | $ 83,821 | $ 289,502 | $ 253,287 |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Operating expenses: | ||||
Cost of product revenues | $ 15,518 | $ 13,433 | $ 48,635 | $ 40,904 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Research and development | $ 15,433 | $ 17,212 | $ 47,552 | $ 47,868 |
Selling and marketing | 40,051 | 38,303 | 122,143 | 120,464 |
General and administrative | 18,498 | 17,505 | 56,702 | 52,651 |
Total operating expenses | 89,500 | 86,453 | 275,032 | 261,887 |
Income (loss) from operations | 11,758 | (2,632) | 14,470 | (8,600) |
Interest income | 676 | 263 | 1,492 | 627 |
Gain on sale of equity securities | 2,807 | |||
Unrealized gain on equity securities | 127 | 1,538 | ||
Other income (expense), net | 39 | 340 | 101 | 792 |
Income (loss) before income taxes | 12,600 | (2,029) | 17,601 | (4,374) |
Income tax expense | 375 | 162 | 834 | 1,362 |
Net income (loss) | $ 12,225 | $ (2,191) | $ 16,767 | $ (5,736) |
Basic net income (loss) per share (in dollars per share) | $ 0.34 | $ (0.06) | $ 0.47 | $ (0.17) |
Diluted net income (loss) per share (in dollars per share) | $ 0.32 | $ (0.06) | $ 0.45 | $ (0.17) |
Shares used in computing basic net income (loss) per share (in shares) | 35,925 | 34,675 | 35,558 | 34,373 |
Shares used in computing diluted net income (loss) per share (in shares) | 38,026 | 34,675 | 37,044 | 34,373 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income (loss) | $ 12,225 | $ (2,191) | $ 16,767 | $ (5,736) |
Other comprehensive loss: | ||||
Unrealized gain (loss), net, on available-for-sale marketable securities, net of tax of $0 for the three and nine months ended September 30, 2018 and 2017, respectively | 15 | (1) | 64 | (98) |
Reclassification adjustment for net gain on sale of equity securities included in net loss | (1,127) | |||
Comprehensive income (loss) | $ 12,240 | $ (2,192) | $ 16,831 | $ (6,961) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Unrealized loss, net, on available-for-sale marketable securities, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net income (loss) | $ 16,767 | $ (5,736) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 9,348 | 8,573 |
Employee stock-based compensation | 15,742 | 15,257 |
Write-off of previously capitalized software costs | 2,347 | 76 |
Impairment of long-lived assets | 2,095 | 22 |
Loss on disposal of property and equipment | 23 | 35 |
Outside director restricted stock awarded in lieu of fees | 150 | 150 |
Gain on sale of equity securities | (2,807) | |
Unrealized gain on revaluation of equity investment | (1,538) | |
Write-off of convertible promissory note | 1,329 | |
Deferred tax benefit from unrealized gain on available-for-sale marketable securities, net | 820 | |
Changes in assets and liabilities: | ||
Accounts receivable | (6,269) | (405) |
Prepaid expenses and other assets | 1,168 | 2,149 |
Accounts payable | 5,919 | 5,725 |
Accrued compensation and employee benefits | 4,179 | (3,281) |
Accrued expenses and other liabilities | 726 | 890 |
Net cash provided by operating activities | 51,986 | 21,468 |
Investing activities | ||
Purchases of property and equipment | (6,953) | (10,403) |
Proceeds from sale of property and equipment | 10 | |
Purchases of marketable securities | (116,529) | (88,152) |
Maturities of marketable securities | 86,925 | 59,402 |
Proceeds from sales of marketable securities | 10,155 | |
Other investments | (2,500) | |
Net cash used in investing activities | (39,057) | (28,988) |
Financing activities | ||
Proceeds from issuance of common stock under stock plans | 15,989 | 14,685 |
Withholding taxes related to restricted stock units net share settlement | (5,109) | (4,540) |
Net cash provided by financing activities | 10,880 | 10,145 |
Net increase in cash, cash equivalents and restricted cash | 23,809 | 2,625 |
Cash, cash equivalents and restricted cash at the beginning of period | 45,708 | 40,585 |
Cash, cash equivalents and restricted cash at the end of period | 69,517 | 43,210 |
Non-cash investing and financing activities | ||
Accrued purchases of property and equipment | 900 | $ 1,381 |
Change in fair value of investments | $ 209 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
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 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. The tests for invasive breast and colon cancer result in a quantitative score referred to as a Recurrence Score. 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 disease 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, which provides a Genomic Prostate Score (“GPS”) to predict disease aggressiveness in men with low risk prostate cancer and to improve treatment decisions for prostate cancer patients, in conjunction with the Gleason score, or tumor grading. In February 2018, the Oncotype DX AR-V7 Nucleus Detect test for men with metastatic castration-resistant prostate cancer (“mCRPC”) became commercially available. 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 September 30, 2018: 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 eight 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 September 30, 2018, condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2018 and 2017, and condensed consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017 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, 2017 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, 2017. During the first quarter of 2018, the Company adopted new accounting guidance related to revenue recognition, accounting for financial instruments and presentation of restricted cash in the statement of cash flows, each of which is described below. There have been no other significant changes in the Company’s accounting policies during the three and nine months ended September 30, 2018 as compared to the significant accounting policies described in its Annual Report on Form 10-K for the year ended December 31, 2017. The Company recast prior period consolidated statement of cash flows to conform with the adoption of the new accounting guidance related to presentation of restricted cash in the statement of cash flows as described below. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 2 for further discussion on Revenues. Concentration of Risk The Company is subject to credit risk from its portfolio of cash equivalents and marketable securities. The Company invests in money market funds through a major U.S. bank and is exposed to credit risk in the event of default by the financial institution to the extent of amounts recorded on the consolidated balance sheets. The Company invests in short term, investment grade debt instruments and by policy limits the amount in any one type of investment, except for securities issued or guaranteed by the U.S. government. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. The goals of the Company’s investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk; liquidity of investments sufficient to meet cash flow requirements; and a competitive after tax rate of return. The Company is also subject to credit risk from its accounts receivable related to its product sales. The majority of the Company’s accounts receivable arise from product sales in the United States. Reimbursement on behalf of patients covered by Medicare accounted for 23% and 24% of the Company’s product revenues for the three and nine months ended September 30, 2018 and 24% and 23% for the three and nine months ended September 30, 2017. Accounts receivable on behalf of patients directly covered by Medicare represented 15% and 23% of the Company’s total accounts receivable at September 30, 2018 and December 31, 2017, respectively. No other third party payor represented more than 10% of the Company’s product revenues or accounts receivable balances for these periods. Investments in Privately Held Companies The Company determines whether its investments in privately held companies are debt or equity based on their characteristics, in accordance with the applicable accounting guidance for such investments. The Company also evaluates the investee to determine if the entity is a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary of the VIE, in order to determine whether consolidation of the VIE is required in accordance with accounting guidance for consolidations. If consolidation is not required and the Company owns less than 50.1% of the voting interest of the entity, the investment is evaluated to determine if the equity method of accounting should be applied. The equity method applies to investments in common stock or in substance common stock where the Company exercises significant influence over the investee, typically represented by ownership of 20% or more of the voting interests of an entity. Prior to January 1, 2018, if the equity method did not apply, investments in privately held companies determined to be equity securities were accounted for using the cost method. As discussed below, on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which changed the way it accounts for non-marketable securities. The Company adjusts the carrying value of its non-marketable equity securities for changes from observable transactions for identical or similar investments of the same issuer, less impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. Investments in privately held companies determined to be debt securities are accounted for as available-for-sale or held-to-maturity securities, in accordance with the applicable accounting guidance for such investments. During the years ended December 31, 2017 and 2016, the Company invested $1.4 million and $6.1 million, respectively, in the subordinated convertible promissory notes of Epic Sciences, Inc. (“Epic Sciences”). See Note 6, “Collaboration and Commercial Technology Licensing Agreements,” for additional information regarding the terms of this investment. On March 8, 2017, all of the Company’s investment in the subordinated convertible promissory notes were converted into preferred stock of Epic Sciences representing approximately 9% of Epic Sciences’ voting interests, at which time the Company estimated the fair value of the subordinated convertible promissory notes to be approximately $7.1 million. In June 2018, the Company invested an additional $2.5 million in preferred stock of Epic Sciences as part of a new equity financing. As a result of this transaction, the Company’s ownership interest in Epic Sciences was reduced to approximately 8%. The preferred stock represents a variable interest in the investee. The Company has concluded it is not the primary beneficiary and thus has not consolidated the investee pursuant to the requirements of FASB ASC 810, Consolidation . The Company will continue to assess its investment and future commitments to the investee and to the extent its relationship with the investee changes, may be required to consolidate the investee in future periods. The Company determined that the investment is an equity investment for which the Company does not have the ability to exercise significant influence. Prior to the adoption of ASU 2016-01, the Company accounted for such preferred stock using the cost method of accounting and accordingly recorded such preferred stock in other assets. There were no identified events or changes in circumstances that had a significant adverse effect on the fair value of the preferred stock during the remainder of the year ended December 31, 2017. On January 1, 2018, the Company adopted ASU No. 2016-01 which changed the way it accounts for non-marketable equity securities. The Company adjusts the carrying value of its non-marketable equity securities for changes from observable transactions for identical or similar investments of the same issuer, less impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. As of September 30, 2018, the carrying value of the preferred stock of Epic Sciences was $10.8 million, of which $8.3 million was remeasured to fair value based on observable transactions during the six months ended June 30, 2018. There were no observable transactions during the three months ended September 30, 2018. The upward adjustment of $1.2 million during the nine months ended September 30, 2018 was recorded as an unrealized gain on equity securities and included as an adjustment to the carrying value of other assets held at September 30, 2018. The preferred stock of Epic Sciences is classified within Level 3 in the fair value hierarchy because the Company estimated the value during the nine months ended September 30, 2018 utilizing an option pricing model that considered a recent observable transaction and other unobservable inputs including volatility and long-term plans of Epic Sciences. During the year ended December 31, 2017, the Company invested $2.0 million in a convertible promissory note of Cleveland Diagnostics, Inc. (“Cleveland Diagnostics”). The investment in the convertible promissory note represented a variable interest in the investee. The Company had concluded it was not the primary beneficiary and thus had not consolidated the investee pursuant to the requirements of FASB ASC 810. The Company determined that it did not have the ability to exercise significant influence over the investee company. In June 2018, the Company made a business decision to terminate its milestone-based collaboration with Cleveland Diagnostics and wrote off the convertible promissory note. See Note 6, “Collaboration and Commercial Technology Licensing Agreements,” for additional information. Derivative Financial Instruments The Company hedges a portion of its foreign currency exposures related to outstanding monetary assets and liabilities using foreign currency forward contracts. The foreign currency forward contracts, included in other current assets on the consolidated balance sheets, the Company uses to hedge the exposure are not designated as hedges, and as a result, changes in their fair value are recorded in other income (expense). As of September 30, 2018 and December 31, 2017, the Company had foreign currency contracts with notional amounts of $22.6 million and $16.1 million, respectively. Impairment of Long Lived Assets The Company reviews long lived assets, which include property and equipment, intangible assets and investments in privately held companies, for impairment whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. For property and equipment and intangible assets, an impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is assessed using undiscounted cash flows. For investments in non-marketable equity securities, evidence of impairment might include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain an earnings capacity which would justify the carrying amount of the investment. If the fair value of the investment is determined to be less than the carrying value, the asset is written down to its fair value. During the nine months ended September 30, 2018, the Company wrote off $2.1 million and $2.3 million of previously capitalized equipment and software development costs, respectively, due to disposal activities. See Note 11, “Restructuring Costs” for additional information regarding the disposal activities. There was no impairment recorded during the three months ended September 30, 2018. During the three and nine months ended September 30, 2017, the Company wrote off $98,000 of previously capitalized equipment and software development costs. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . Topic 606 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and requires entities to recognize revenue when they transfer control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. The Company recorded an increase to opening accounts receivable, net, and a reduction to opening accumulated deficit of $14.1 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact related to certain payors who were not accrual payors. See Note 2 for additional information. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This ASU changes accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, it clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The Company adopted the ASU as of January 1, 2018 using the modified retrospective method for marketable equity securities and the prospective method for non-marketable equity securities. The Company recorded a reduction to accumulated deficit of $180,000 as of January 1, 2018 due to the cumulative impact of adopting the ASU, with the impact related to unrealized loss of Biocartis N.V. (“Biocartis”) common stock at December 31, 2017. The Company has elected to use the measurement alternative for its non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. The adoption of ASU 2016-01 increases the volatility of other income (expense), net, as a result of the remeasurement of the Company’s equity securities. In November 2016, the FASB issued ASU Nos. 2016-15 and 2016-18 amending the presentation of restricted cash within the statement of cash flows. The guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU became effective retrospectively for reporting periods beginning after December 15, 2017. The Company adopted these standards effective January 1, 2018. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The new guidance requires lessees to recognize a right-of-use asset and a lease liability for almost all leases on the balance sheet. Additional qualitative and quantitative disclosures will also be required. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company will adopt the new standard effective January 1, 2019 using the prospective approach. The Company is currently in the process of the reviewing lease contracts, reviewing other contracts for potential embedded leases, establishing new processes and internal controls and evaluating practical expedient and accounting policy elections. Although the Company is in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company's consolidated balance sheet for real estate operating leases. The adoption of the ASU is not expected to have a material impact to the Company’s consolidated statements of income. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2018 | |
Revenues | |
Revenues | Note 2. Revenues Adoption of ASC Topic 606, Revenue from Contracts with Customers On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605. See Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for the Company’s revenue recognition policy under Topic 605. The Company recorded a one-time increase to opening accounts receivable, net, and a reduction to opening accumulated deficit of $14.1 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact related to certain payors who were not accrual payors. In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company’s condensed consolidated balance sheet as of September 30, 2018 and statements of operations for the three and nine months ended September 30, 2018 was as follows: As Reported Balance Without Adoption of ASC 606 Adjustments (In thousands) Income statement Three Months Ended September 30, 2018 Revenues: Product revenues $ 101,258 $ 100,903 $ 355 Operating expenses: General and administrative 18,498 19,351 (853) Net income 12,225 11,017 1,208 Income statement Nine Months Ended September 30, 2018 Revenues: Product revenues 289,502 290,731 (1,229) Operating expenses: General and administrative 56,702 59,082 (2,380) Net income 16,767 15,616 1,151 Balance Sheet at September 30, 2018 Assets: Accounts receivable, net 51,553 34,667 16,886 Equity: Accumulated deficit (215,235) (230,509) 15,274 Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The estimated uncollectible amounts that were historically classified as bad debt expense are now generally considered implicit price concessions that are a direct reduction to accounts receivable rather than allowance for doubtful accounts. The majority of the Company’s historical product revenues have been derived from the sale of its Oncotype DX breast cancer test. For product revenues, the Company estimates the transaction price which is the amount of consideration it expects to be entitled to receive in exchange for providing services based on its historical collection experience using a portfolio approach as a practical expedient to account for patient contracts as collective groups rather than individually. The Company monitors its estimates of transaction price to depict conditions that exist at each reporting date. If the Company subsequently determines that it will collect more consideration than it originally estimated for a contract with a patient, it will account for the change as an increase in the estimate of the transaction price in the period identified. Similarly, if the Company subsequently determines that the amount it expects to collect from a patient is less than it originally estimated, it will generally account for the change as a decrease in the estimate of the transaction price, provided that such downward adjustment does not result in a significant reversal of cumulative revenue recognized. The Company’s performance obligations are satisfied at one point in time when test reports are delivered. The Company also provides services to patients with whom the Company does not have contracts as defined in Topic 606. The Company recognizes revenue for these patients when contracts as defined in Topic 606 are established at the amount of consideration to which it expects to be entitled or when the Company receives substantially all of the consideration subsequent to the performance obligations being satisfied. During the nine months ended September 30, 2018, cash collections for certain tests delivered during the six months ended June 30, 2018 came in at rates higher than originally accrued. As a result, the Company changed its estimate of the amounts to be recognized for these tests and recognized an additional $1.9 million and $2.8 million of revenue for the three and nine months ended September 30, 2018, respectively. These changes in estimates resulted in increases in diluted net income per share of approximately $0.05 and $0.07 for the three and nine months ended September 30, 2018, respectively. The following table presents the Company’s product revenues disaggregated by revenue source: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Invasive breast cancer test $ 92,063 $ 75,861 $ 263,092 $ 232,435 Prostate cancer test 6,997 5,542 19,614 13,046 Other 2,198 2,418 6,796 7,806 Total product revenues $ 101,258 $ 83,821 $ 289,502 $ 253,287 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. The Company typically uses an input method that recognizes revenue based on the Company’s efforts to satisfy the performance obligation relative to the total expected inputs to the satisfaction of that performance obligation. Advance payments received in excess of revenues recognized are classified as deferred revenue until such time as the revenue recognition criteria have been met. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Net Income (Loss) Per Share | |
Net Income (Loss) Per Share | Note 3. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) for the period by the weighted-average number of common shares outstanding for the period without consideration of potential common shares. Diluted earnings per share is calculated using the weighted-average number of common shares outstanding including the dilutive effect of stock awards as determined under the treasury stock method. In periods when the Company has a net loss, stock awards are excluded from the calculation of diluted net loss per share as their inclusion would have an antidilutive effect. Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands, except per share amounts) Numerator: Net income (loss) $ 12,225 $ (2,191) $ 16,767 $ (5,736) Denominator: Weighted-average shares of common stock outstanding used in the calculation of basic net income (loss) per share 35,925 34,675 35,558 34,373 Effect of dilutive securities: Options to purchase common stock 1,555 — 1,046 — Restricted stock units 522 — 417 — ESPP 24 — 23 — Total 2,101 — 1,486 — Weighted-average shares of common stock outstanding used in the calculation of diluted net income (loss) per share 38,026 34,675 37,044 34,373 Basic net income (loss) per share $ 0.34 $ (0.06) $ 0.47 $ (0.17) Diluted net income (loss) per share $ 0.32 $ (0.06) $ 0.45 $ (0.17) The Company excluded stock awards of 65,000 and 547,000 for the three and nine months ended September 30, 2018 from the computation of diluted net income per share because their effect was anti-dilutive. The Company excluded potentially dilutive stock awards of 793,000 and 782,000 for the three and nine months ended September 30, 2017 from the computation of diluted net loss per share because their effect was anti-dilutive. |
Cash and Cash Equivalents, and
Cash and Cash Equivalents, and Marketable Securities | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents, and Marketable Securities | |
Cash and Cash Equivalents, and Marketable Securities | Note 4. Cash and Cash Equivalents, and Marketable Securities The following tables set forth the Company’s cash and cash equivalents, and marketable securities as of the dates indicated: September 30, December 31, 2018 2017 (In thousands) Cash and cash equivalents Cash $ 43,197 $ 35,303 Money market deposits 18,056 10,215 Commercial paper 7,989 - Total cash and cash equivalents 69,242 45,518 Marketable securities Commercial paper 73,784 30,272 Corporate debt securities 36,417 50,260 Corporate equity securities 3,820 3,525 Total marketable securities 114,021 84,057 Total cash and cash equivalents, and marketable securities $ 183,263 $ 129,575 The following tables summarize the Company’s available-for-sale securities that are measured at fair value as of the dates indicated: September 30, 2018 Cost or Gross Gross Total Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) Commercial paper $ 73,810 $ 4 $ (30) $ 73,784 Corporate debt securities 36,440 — (23) 36,417 Total $ 110,250 $ 4 $ (53) $ 110,201 December 31, 2017 Cost or Gross Gross Total Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) Commercial paper $ 30,315 $ — $ (43) $ 30,272 Corporate debt securities 50,331 2 (73) 50,260 Corporate equity securities 4,020 — (495) 3,525 Total $ 84,666 $ 2 $ (611) $ 84,057 All of the Company’s marketable securities had contractual maturities of one year or less as of September 30, 2018 and December 31, 2017. The following table provides the breakdown of the available-for-sale marketable securities with unrealized losses as of the dates indicated: In a Loss Position for Less Than 12 Months Gross Unrealized Estimated Losses Fair Value (In thousands) As of September 30, 2018: Commercial paper $ (30) $ 62,438 Corporate debt securities (23) 36,417 Total (53) $ 98,855 As of December 31, 2017: Commercial paper $ (43) $ 30,272 Corporate debt securities (73) 45,110 Corporate equity securities (495) 3,525 Total $ (611) $ 78,907 Marketable Equity Securities Prior to January 1, 2018, the Company accounted for its marketable equity securities at fair value with unrealized gains and losses recognized in accumulated other comprehensive income on the balance sheet. Realized gains and losses on marketable equity securities sold or impaired were recognized in other income (expense), net. On January 1, 2018, the Company adopted the ASU No. 2016-01 which changed the way the Company accounts for marketable equity securities. The Company’s marketable equity securities are measured at fair value and starting January 1, 2018, unrealized gains and losses are recognized in other income (expense), net. Upon adoption, the Company reclassified $180,000 of unrealized loss related to marketable equity securities from accumulated other comprehensive income to opening accumulated deficit. In December 2017, the Company invested €3.4 million or $4.0 million in 270,000 shares of the common stock of Biocartis, a public company listed on the Euronext exchange. This corporate equity security investment was accounted for as an available-for-sale marketable security and valued at €3.0 million or $3.5 million at December 31, 2017. During the year ended December 31, 2017, $180,000 of unrealized losses relating to changes in the fair value of this investment were recorded in other comprehensive income. These securities are subject to a lock-up agreement which expires in December 2018. In accordance with ASU No 2016-01, the Company recorded an increase in fair value of $127,000 and $345,000 and a foreign currency revaluation gain of $42,000 and loss of $50,000, in other income (expense), net for the three and nine months ended September 30, 2018, respectively. During the three months ended March 31, 2017, the Company sold its remaining shares of the common stock of Invitae Corporation for net proceeds of $10.2 million based on a cost of $6.28 per share, resulting in a realized gain of $2.8 million. There were no shares sold during the three and nine months ended September 30, 2018. During the three months ended March 31, 2017, $1.1 million of unrealized gain, net of tax of $821,000 related to the shares sold was reclassified out of accumulated other comprehensive income into earnings. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 5. Fair Value Measurements Fair Value Hierarchy 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 and Recorded at Fair Value on a Recurring Basis 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 September 30, 2018 or December 31, 2017. The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017 by level within the fair value hierarchy: Actively Quoted Significant Markets for Other Significant Identical Observable Unobservable Balance at Assets Inputs Inputs September 30, Level 1 Level 2 Level 3 2018 (In thousands) As of September 30, 2018: Assets Money market deposits $ 18,056 $ — $ — $ 18,056 Commercial paper — 81,773 — 81,773 Corporate debt securities — 36,417 — 36,417 Corporate equity securities — 3,820 — 3,820 Total $ 18,056 $ 122,010 $ — $ 140,066 Actively Quoted Significant Markets for Other Significant Identical Observable Unobservable Balance at Assets Inputs Inputs December 31, Level 1 Level 2 Level 3 2017 (In thousands) As of December 31, 2017: Assets Money market deposits $ 10,215 $ — $ — $ 10,215 Commercial paper — 30,272 — 30,272 Corporate debt securities — 50,260 — 50,260 Corporate equity securities — 3,525 — 3,525 Convertible promissory note — — 1,329 1,329 Total $ 10,215 $ 84,057 $ 1,329 $ 95,601 The Company’s commercial paper and corporate debt securities 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. The Company estimated its investment in a convertible promissory note of Cleveland Diagnostics to be approximately $1.3 million at December 31, 2017. The convertible promissory note was classified as Level 3 as it was valued using unobservable inputs that were primarily |
Collaboration and Commercial Te
Collaboration and Commercial Technology Licensing Agreements | 9 Months Ended |
Sep. 30, 2018 | |
Collaboration and Commercial Technology Licensing Agreements | |
Collaboration and Commercial Technology Licensing Agreements | Note 6. 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 $2.6 million and $6.4 million for the three and nine months ended September 30, 2018, respectively, and $4.3 million and $6.2 million for the three and nine months ended September 30, 2017, 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 Company has specified options and rights relating to joint inventions arising out of these 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 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 have annual minimum or maximum amounts. The Company recognized costs recorded under these agreements totaling $64,000 and $198,000 for the three and nine months ended September 30, 2018, respectively, and $68,000 and $258,000 for the three and nine months ended September 30, 2017, respectively, which were included in cost of product revenues. In June 2016, the Company entered into a collaboration agreement with Epic Sciences, under which the Company was granted exclusive distribution rights to commercialize Epic Sciences’ AR-V7 Nucleus Detect test in the United States, which is marketed as Oncotype DX AR-V7 Nucleus Detect. The Company has primary responsibility, in accordance with applicable laws and regulations, for marketing and promoting the test, order fulfillment, billing and collections of receivables, claims appeals, customer support, and providing and maintaining order management systems for the test. Epic Sciences is responsible for performing all tests, performing studies, including analytic and clinical validation studies, and seeking Medicare coverage and a Medicare payment rate from the Centers for Medicare and Medicaid Services (“CMS”) for the test. Future revenues generated from the test will be shared by the Company and Epic Sciences in accordance with the terms of the agreement. During 2016 and 2017, the Company invested $7.5 million in subordinated convertible promissory notes of Epic Sciences that converted into shares of Epic Sciences preferred stock in March 2017. The subordinated convertible promissory notes had been recognized at fair value, which the Company estimated to be approximately $7.1 million while the difference of $375,000 was deferred as of December 31, 2017 and will be recognized as an additional cost of future purchases of Oncotype DX AR-V7 Nucleus Detect tests, which the Company believes will be at a discount to fair value. The Company originally agreed to invest an additional $2.5 million in Epic Sciences preferred stock, upon achievement of one of the milestones. In June 2018, prior to the achievement of the milestone, the Company invested an additional $2.5 million in Epic Sciences preferred stock and the milestone payment was waived by Epic Sciences. Additional terms of the agreement include the Company’s obligation to pay Epic Sciences $4.0 million upon achievement of certain milestones. The collaboration agreement has a term of 10 years, unless terminated earlier under certain circumstances. In September 2017, the Company entered into an exclusive license and development agreement with Biocartis, a molecular diagnostics company based in Belgium, to develop and commercialize an in vitro diagnostic (“IVD”) version of the Oncotype DX breast cancer test on Biocartis’ Idylla platform that can be performed locally by laboratory partners and in hospitals around the world. Under the terms of the license and development agreement, the Company has an exclusive, worldwide, royalty-bearing license to develop and commercialize an IVD version of the Oncotype DX breast cancer test on the Biocartis Idylla platform, and an option to expand the collaboration to include additional tests in oncology and urology. The Company has primary responsibility for developing, validating and obtaining regulatory authorizations and registrations for IVD Oncotype DX tests to be performed on the Idylla platform. The Company is also responsible for manufacturing and commercialization activities with respect to such tests. Pursuant to the license and development agreement, the Company recorded a one-time upfront license and option fee of €2.8 million, or $3.2 million, which is included in research and development expenses in the year ended December 31, 2017. In December 2017, the Company purchased 270,000 ordinary shares of Biocartis at the market price of €12.50 for a total cost of €3.4 million or $4.0 million. This investment is subject to a lock-up agreement that expires in December 2018. The investment has been recognized at fair value, which the Company believes to be $3.8 million and $3.5 million at September 30, 2018 and December 31, 2017, respectively. In September 2018, the Company extended its option to expand the collaboration to include urology, and recorded a €1.0 million, or $1.2 million, expense. Additional terms of the license and development agreement include the Company’s obligation to pay Biocartis an aggregate of €5.5 million in cash upon achievement of certain milestones, and royalties based primarily on the future sales volumes of the Company’s test performed on the Idylla platform and expansion of the collaboration to include additional tests in oncology and urology. In November 2017, the Company entered into an exclusive licensing agreement with Cleveland Diagnostics to develop and commercialize new prostate cancer tests based on Cleveland Diagnostics' IsoPSA reagents and technology. During the year ended December 31, 2017, the Company invested $2.0 million in a convertible promissory note of Cleveland Diagnostics. The convertible promissory note has been recognized at fair value, which the Company estimated to be approximately $1.3 million at December 31, 2017 based on the Company’s estimate of the fair value of the underlying preferred stock into which the note is convertible. In June 2018, the Company made a business decision to discontinue development of the IsoPSA assay and terminate its agreement with Cleveland Diagnostics following its internal review for advancing an early stage technology into the next phase of product development. As a result, the Company wrote off the convertible promissory note and interest accrued through the termination date in the aggregate amount of $1.4 million in the second quarter of 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 7. 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 $1.5 million and $4.7 million for the three and nine months ended September 30, 2018, respectively, and $1.6 million and $4.7 million for the three and nine months ended September 30, 2017, respectively. Future non‑cancelable commitments under these operating leases at September 30, 2018 were as follows: Annual Payments (In thousands) Years Ending December 31, 2018 (remainder of year) $ 1,568 2019 6,841 2020 7,005 2021 4,797 2022 4,174 2023 and thereafter 1,081 Total minimum payments $ 25,466 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. Legal proceedings, including litigation, government investigations and enforcement actions, could result in material costs, occupy significant management resources and entail civil and criminal penalties, even if the Company ultimately prevails. Any of the foregoing consequences could result in serious harm to the Company’s business, results of operations and financial condition. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 8. Stock-Based Compensation Stock Options The following table summarizes the activities for stock options for the nine months ended September 30, 2018: Outstanding Options Number of Weighted-Average Shares Exercise Price (In thousands) Balance at December 31, 2017 3,460 $ 26.42 Options granted 667 $ 35.12 Options exercised (586) $ 22.93 Options forfeited (111) $ 29.68 Options expired — $ 25.59 Balance at September 30, 2018 3,430 $ 28.60 Exercisable at September 30, 2018 2,215 $ 26.94 Vested and expected to vest at September 30, 2018 3,344 $ 28.52 Restricted Stock Units The following table summarizes the activities for restricted stock units (“RSU”s) for the nine months ended September 30, 2018: Weighted-Average Number of Grant Date Fair Shares Value (In thousands) Balance at December 31, 2017 964 $ 28.25 RSUs granted 530 $ 33.88 RSUs vested (422) $ 28.45 RSUs cancelled (206) $ 30.22 Balance at September 30, 2018 866 $ 31.13 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 nine months ended September 30, 2018, the Company issued 4,045 shares of restricted stock to outside directors, with a grant date fair value of $150,000 and a weighted-average grant date fair value of $37.02 per share. Employee Stock Purchase Plan During the nine months ended September 30, 2018, 98,916 shares of common stock were issued pursuant to the Employee Stock Purchase Plan (“ESPP”). As of September 30, 2018, there was $251,000 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 Share-based compensation expense recognized and included in the condensed consolidated statements of operations was allocated as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Cost of product revenues $ 232 $ 187 $ 684 $ 548 Research and development 1,126 1,378 3,459 4,209 Selling and marketing 1,430 1,325 4,062 4,315 General and administrative 2,613 2,065 7,537 6,185 Total $ 5,401 $ 4,955 $ 15,742 $ 15,257 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Segment Information | Note 9. 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. The Company’s Oncotype DX breast, colon and prostate cancer tests have similar economic and other characteristics, including the nature of the products and production processes, type of customers, distribution methods and regulatory environment. As of September 30, 2018, the majority of the Company’s product revenues have been derived from sales of one product, the Oncotype DX breast cancer test. The Company adopted the requirements of Topic 606 on January 1, 2018 using the modified retrospective method, therefore there is a lack of comparability to the prior period presented. See Recently Adopted Accounting Pronouncements in Note 1 for additional information. 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 Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) United States $ 85,747 $ 70,881 $ 246,054 213,878 Outside of the United States 15,511 12,940 43,448 39,409 Total revenues $ 101,258 $ 83,821 $ 289,502 $ 253,287 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes | |
Income Taxes | Note 10. Income Taxes The Company recognized income tax expense of $375,000 and $834,000 for the three and nine months ended September 30, 2018, respectively, and $162,000 and $1.4 million for the three and nine months ended September 30, 2017, respectively, which was computed using the “discrete” (or “cut-off”) method. The income tax expense for the three and nine months ended September 30, 2018 was primarily comprised of foreign income tax expense. The income tax expense for the three and nine months ended September 30, 2017 was primarily comprised of the intraperiod tax allocation of the deferred tax impact for available for sale marketable securities and foreign income tax expense. 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 both September 30, 2018 and December 31, 2017. 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 $2.7 million and $2.4 million of unrecognized tax benefits at September 30, 2018 and December 31, 2017, 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 remains open for the years 2001 through 2018 in U.S. federal and state jurisdictions, and for the years 2012 through 2018 in foreign jurisdictions. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the Act) was signed into law. Accounting Standards Codification 740, Income Taxes , requires companies to recognize the effect of the tax law changes in the period of enactment. However, the SEC staff issued Staff Accounting Bulletin 118, which allows companies to record provisional amounts during a measurement period that is similar to the measurement period used when accounting for business combinations. The Company adjusted its deferred tax assets and liabilities based on the reduction of the U.S. federal corporate tax rate from 35% to 21% as of December 31, 2017 and assessed the realizability of its deferred tax assets based on the current understanding of the provisions of the new law. The Company filed its 2017 federal corporate income tax return and certain state income tax returns after September 30, 2018. As of September 30, 2018, the Company still considers its accounting for the impacts of the new law to be provisional and will continue to assess the impact of the recently enacted tax law on its business and condensed consolidated financial statements over the next three months. The Company does not expect a material change from what was reported in the 2017 tax disclosures. |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring Costs | |
Restructuring Costs | Note 11. Restructuring Costs On March 8, 2018, the Company announced its decision to no longer provide its commercial offering of Oncotype SEQ Liquid Select or any further investment in next generation sequencing (NGS) panels due to a decision to focus the Company’s efforts to develop in vitro diagnostic test solutions and other tests with more predictable reimbursement, higher proprietary value and better prospects for global adoption. With this shift in strategic direction, the Company announced a reduction of its workforce of approximately 10%. In March 2018, the Company recorded charges of $8.5 million consisting of $4.8 million in non-cash asset impairments and $3.7 million in employee separation charges, all of which were recorded as operating expenses in the condensed consolidated statements of operations. During the second quarter of 2018, the Company recorded an additional separation charge of $69,000 and adjustments to reduce non-cash asset impairments for $80,000. Of the $3.7 million of employee separation charges, the Company paid $628,000 during the first quarter of 2018 and paid the remaining $3.1 million during the second quarter of 2018. There were no restructuring costs for the three months ended September 30, 2018 and the three and nine months ended September 30, 2017. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018: 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 eight 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 September 30, 2018, condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2018 and 2017, and condensed consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017 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, 2017 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, 2017. During the first quarter of 2018, the Company adopted new accounting guidance related to revenue recognition, accounting for financial instruments and presentation of restricted cash in the statement of cash flows, each of which is described below. There have been no other significant changes in the Company’s accounting policies during the three and nine months ended September 30, 2018 as compared to the significant accounting policies described in its Annual Report on Form 10-K for the year ended December 31, 2017. The Company recast prior period consolidated statement of cash flows to conform with the adoption of the new accounting guidance related to presentation of restricted cash in the statement of cash flows as described below. |
Revenue Recognition | Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 2 for further discussion on Revenues. |
Concentration of Risk | Concentration of Risk The Company is subject to credit risk from its portfolio of cash equivalents and marketable securities. The Company invests in money market funds through a major U.S. bank and is exposed to credit risk in the event of default by the financial institution to the extent of amounts recorded on the consolidated balance sheets. The Company invests in short term, investment grade debt instruments and by policy limits the amount in any one type of investment, except for securities issued or guaranteed by the U.S. government. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. The goals of the Company’s investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk; liquidity of investments sufficient to meet cash flow requirements; and a competitive after tax rate of return. The Company is also subject to credit risk from its accounts receivable related to its product sales. The majority of the Company’s accounts receivable arise from product sales in the United States. Reimbursement on behalf of patients covered by Medicare accounted for 23% and 24% of the Company’s product revenues for the three and nine months ended September 30, 2018 and 24% and 23% for the three and nine months ended September 30, 2017. Accounts receivable on behalf of patients directly covered by Medicare represented 15% and 23% of the Company’s total accounts receivable at September 30, 2018 and December 31, 2017, respectively. No other third party payor represented more than 10% of the Company’s product revenues or accounts receivable balances for these periods. |
Investments in Privately Held Companies | Investments in Privately Held Companies The Company determines whether its investments in privately held companies are debt or equity based on their characteristics, in accordance with the applicable accounting guidance for such investments. The Company also evaluates the investee to determine if the entity is a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary of the VIE, in order to determine whether consolidation of the VIE is required in accordance with accounting guidance for consolidations. If consolidation is not required and the Company owns less than 50.1% of the voting interest of the entity, the investment is evaluated to determine if the equity method of accounting should be applied. The equity method applies to investments in common stock or in substance common stock where the Company exercises significant influence over the investee, typically represented by ownership of 20% or more of the voting interests of an entity. Prior to January 1, 2018, if the equity method did not apply, investments in privately held companies determined to be equity securities were accounted for using the cost method. As discussed below, on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which changed the way it accounts for non-marketable securities. The Company adjusts the carrying value of its non-marketable equity securities for changes from observable transactions for identical or similar investments of the same issuer, less impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. Investments in privately held companies determined to be debt securities are accounted for as available-for-sale or held-to-maturity securities, in accordance with the applicable accounting guidance for such investments. During the years ended December 31, 2017 and 2016, the Company invested $1.4 million and $6.1 million, respectively, in the subordinated convertible promissory notes of Epic Sciences, Inc. (“Epic Sciences”). See Note 6, “Collaboration and Commercial Technology Licensing Agreements,” for additional information regarding the terms of this investment. On March 8, 2017, all of the Company’s investment in the subordinated convertible promissory notes were converted into preferred stock of Epic Sciences representing approximately 9% of Epic Sciences’ voting interests, at which time the Company estimated the fair value of the subordinated convertible promissory notes to be approximately $7.1 million. In June 2018, the Company invested an additional $2.5 million in preferred stock of Epic Sciences as part of a new equity financing. As a result of this transaction, the Company’s ownership interest in Epic Sciences was reduced to approximately 8%. The preferred stock represents a variable interest in the investee. The Company has concluded it is not the primary beneficiary and thus has not consolidated the investee pursuant to the requirements of FASB ASC 810, Consolidation . The Company will continue to assess its investment and future commitments to the investee and to the extent its relationship with the investee changes, may be required to consolidate the investee in future periods. The Company determined that the investment is an equity investment for which the Company does not have the ability to exercise significant influence. Prior to the adoption of ASU 2016-01, the Company accounted for such preferred stock using the cost method of accounting and accordingly recorded such preferred stock in other assets. There were no identified events or changes in circumstances that had a significant adverse effect on the fair value of the preferred stock during the remainder of the year ended December 31, 2017. On January 1, 2018, the Company adopted ASU No. 2016-01 which changed the way it accounts for non-marketable equity securities. The Company adjusts the carrying value of its non-marketable equity securities for changes from observable transactions for identical or similar investments of the same issuer, less impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. As of September 30, 2018, the carrying value of the preferred stock of Epic Sciences was $10.8 million, of which $8.3 million was remeasured to fair value based on observable transactions during the six months ended June 30, 2018. There were no observable transactions during the three months ended September 30, 2018. The upward adjustment of $1.2 million during the nine months ended September 30, 2018 was recorded as an unrealized gain on equity securities and included as an adjustment to the carrying value of other assets held at September 30, 2018. The preferred stock of Epic Sciences is classified within Level 3 in the fair value hierarchy because the Company estimated the value during the nine months ended September 30, 2018 utilizing an option pricing model that considered a recent observable transaction and other unobservable inputs including volatility and long-term plans of Epic Sciences. During the year ended December 31, 2017, the Company invested $2.0 million in a convertible promissory note of Cleveland Diagnostics, Inc. (“Cleveland Diagnostics”). The investment in the convertible promissory note represented a variable interest in the investee. The Company had concluded it was not the primary beneficiary and thus had not consolidated the investee pursuant to the requirements of FASB ASC 810. The Company determined that it did not have the ability to exercise significant influence over the investee company. In June 2018, the Company made a business decision to terminate its milestone-based collaboration with Cleveland Diagnostics and wrote off the convertible promissory note. See Note 6, “Collaboration and Commercial Technology Licensing Agreements,” for additional information. |
Derivative Financial Instruments | Derivative Financial Instruments The Company hedges a portion of its foreign currency exposures related to outstanding monetary assets and liabilities using foreign currency forward contracts. The foreign currency forward contracts, included in other current assets on the consolidated balance sheets, the Company uses to hedge the exposure are not designated as hedges, and as a result, changes in their fair value are recorded in other income (expense). As of September 30, 2018 and December 31, 2017, the Company had foreign currency contracts with notional amounts of $22.6 million and $16.1 million, respectively. |
Impairment of Long-Lived Assets | Impairment of Long Lived Assets The Company reviews long lived assets, which include property and equipment, intangible assets and investments in privately held companies, for impairment whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. For property and equipment and intangible assets, an impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is assessed using undiscounted cash flows. For investments in non-marketable equity securities, evidence of impairment might include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain an earnings capacity which would justify the carrying amount of the investment. If the fair value of the investment is determined to be less than the carrying value, the asset is written down to its fair value. During the nine months ended September 30, 2018, the Company wrote off $2.1 million and $2.3 million of previously capitalized equipment and software development costs, respectively, due to disposal activities. See Note 11, “Restructuring Costs” for additional information regarding the disposal activities. There was no impairment recorded during the three months ended September 30, 2018. During the three and nine months ended September 30, 2017, the Company wrote off $98,000 of previously capitalized equipment and software development costs. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . Topic 606 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and requires entities to recognize revenue when they transfer control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. The Company recorded an increase to opening accounts receivable, net, and a reduction to opening accumulated deficit of $14.1 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact related to certain payors who were not accrual payors. See Note 2 for additional information. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This ASU changes accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, it clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The Company adopted the ASU as of January 1, 2018 using the modified retrospective method for marketable equity securities and the prospective method for non-marketable equity securities. The Company recorded a reduction to accumulated deficit of $180,000 as of January 1, 2018 due to the cumulative impact of adopting the ASU, with the impact related to unrealized loss of Biocartis N.V. (“Biocartis”) common stock at December 31, 2017. The Company has elected to use the measurement alternative for its non-marketable equity securities, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. The adoption of ASU 2016-01 increases the volatility of other income (expense), net, as a result of the remeasurement of the Company’s equity securities. In November 2016, the FASB issued ASU Nos. 2016-15 and 2016-18 amending the presentation of restricted cash within the statement of cash flows. The guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU became effective retrospectively for reporting periods beginning after December 15, 2017. The Company adopted these standards effective January 1, 2018. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The new guidance requires lessees to recognize a right-of-use asset and a lease liability for almost all leases on the balance sheet. Additional qualitative and quantitative disclosures will also be required. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company will adopt the new standard effective January 1, 2019 using the prospective approach. The Company is currently in the process of the reviewing lease contracts, reviewing other contracts for potential embedded leases, establishing new processes and internal controls and evaluating practical expedient and accounting policy elections. Although the Company is in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company's consolidated balance sheet for real estate operating leases. The adoption of the ASU is not expected to have a material impact to the Company’s consolidated statements of income. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue | |
Schedule of product revenues disaggregated by revenue source | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Invasive breast cancer test $ 92,063 $ 75,861 $ 263,092 $ 232,435 Prostate cancer test 6,997 5,542 19,614 13,046 Other 2,198 2,418 6,796 7,806 Total product revenues $ 101,258 $ 83,821 $ 289,502 $ 253,287 |
ASU 2014-09 | |
Revenue | |
Schedule of the impact of adoption on the Company’s condensed consolidated balance sheet and statements of operations | As Reported Balance Without Adoption of ASC 606 Adjustments (In thousands) Income statement Three Months Ended September 30, 2018 Revenues: Product revenues $ 101,258 $ 100,903 $ 355 Operating expenses: General and administrative 18,498 19,351 (853) Net income 12,225 11,017 1,208 Income statement Nine Months Ended September 30, 2018 Revenues: Product revenues 289,502 290,731 (1,229) Operating expenses: General and administrative 56,702 59,082 (2,380) Net income 16,767 15,616 1,151 Balance Sheet at September 30, 2018 Assets: Accounts receivable, net 51,553 34,667 16,886 Equity: Accumulated deficit (215,235) (230,509) 15,274 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Net Income (Loss) Per Share | |
Schedule of reconciliation of numerator and denominator used in calculation of basic and diluted net income (loss) per share | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands, except per share amounts) Numerator: Net income (loss) $ 12,225 $ (2,191) $ 16,767 $ (5,736) Denominator: Weighted-average shares of common stock outstanding used in the calculation of basic net income (loss) per share 35,925 34,675 35,558 34,373 Effect of dilutive securities: Options to purchase common stock 1,555 — 1,046 — Restricted stock units 522 — 417 — ESPP 24 — 23 — Total 2,101 — 1,486 — Weighted-average shares of common stock outstanding used in the calculation of diluted net income (loss) per share 38,026 34,675 37,044 34,373 Basic net income (loss) per share $ 0.34 $ (0.06) $ 0.47 $ (0.17) Diluted net income (loss) per share $ 0.32 $ (0.06) $ 0.45 $ (0.17) |
Cash and Cash Equivalents, an_2
Cash and Cash Equivalents, and Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents, and Marketable Securities | |
Schedule of cash and cash equivalents, and marketable securities | September 30, December 31, 2018 2017 (In thousands) Cash and cash equivalents Cash $ 43,197 $ 35,303 Money market deposits 18,056 10,215 Commercial paper 7,989 - Total cash and cash equivalents 69,242 45,518 Marketable securities Commercial paper 73,784 30,272 Corporate debt securities 36,417 50,260 Corporate equity securities 3,820 3,525 Total marketable securities 114,021 84,057 Total cash and cash equivalents, and marketable securities $ 183,263 $ 129,575 |
Summary of available-for-sale securities | September 30, 2018 Cost or Gross Gross Total Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) Commercial paper $ 73,810 $ 4 $ (30) $ 73,784 Corporate debt securities 36,440 — (23) 36,417 Total $ 110,250 $ 4 $ (53) $ 110,201 December 31, 2017 Cost or Gross Gross Total Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) Commercial paper $ 30,315 $ — $ (43) $ 30,272 Corporate debt securities 50,331 2 (73) 50,260 Corporate equity securities 4,020 — (495) 3,525 Total $ 84,666 $ 2 $ (611) $ 84,057 |
Schedule of the breakdown of available-for-sale marketable securities with unrealized losses | In a Loss Position for Less Than 12 Months Gross Unrealized Estimated Losses Fair Value (In thousands) As of September 30, 2018: Commercial paper $ (30) $ 62,438 Corporate debt securities (23) 36,417 Total (53) $ 98,855 As of December 31, 2017: Commercial paper $ (43) $ 30,272 Corporate debt securities (73) 45,110 Corporate equity securities (495) 3,525 Total $ (611) $ 78,907 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, Level 1 Level 2 Level 3 2018 (In thousands) As of September 30, 2018: Assets Money market deposits $ 18,056 $ — $ — $ 18,056 Commercial paper — 81,773 — 81,773 Corporate debt securities — 36,417 — 36,417 Corporate equity securities — 3,820 — 3,820 Total $ 18,056 $ 122,010 $ — $ 140,066 Actively Quoted Significant Markets for Other Significant Identical Observable Unobservable Balance at Assets Inputs Inputs December 31, Level 1 Level 2 Level 3 2017 (In thousands) As of December 31, 2017: Assets Money market deposits $ 10,215 $ — $ — $ 10,215 Commercial paper — 30,272 — 30,272 Corporate debt securities — 50,260 — 50,260 Corporate equity securities — 3,525 — 3,525 Convertible promissory note — — 1,329 1,329 Total $ 10,215 $ 84,057 $ 1,329 $ 95,601 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | |
Schedule of future non-cancelable commitments under operating leases | Annual Payments (In thousands) Years Ending December 31, 2018 (remainder of year) $ 1,568 2019 6,841 2020 7,005 2021 4,797 2022 4,174 2023 and thereafter 1,081 Total minimum payments $ 25,466 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock-Based Compensation | |
Summary of option activity | Outstanding Options Number of Weighted-Average Shares Exercise Price (In thousands) Balance at December 31, 2017 3,460 $ 26.42 Options granted 667 $ 35.12 Options exercised (586) $ 22.93 Options forfeited (111) $ 29.68 Options expired — $ 25.59 Balance at September 30, 2018 3,430 $ 28.60 Exercisable at September 30, 2018 2,215 $ 26.94 Vested and expected to vest at September 30, 2018 3,344 $ 28.52 |
Summary of RSU activity | Weighted-Average Number of Grant Date Fair Shares Value (In thousands) Balance at December 31, 2017 964 $ 28.25 RSUs granted 530 $ 33.88 RSUs vested (422) $ 28.45 RSUs cancelled (206) $ 30.22 Balance at September 30, 2018 866 $ 31.13 |
Schedule of share-based compensation expense | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) Cost of product revenues $ 232 $ 187 $ 684 $ 548 Research and development 1,126 1,378 3,459 4,209 Selling and marketing 1,430 1,325 4,062 4,315 General and administrative 2,613 2,065 7,537 6,185 Total $ 5,401 $ 4,955 $ 15,742 $ 15,257 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Summary of total revenue from customers by geographic region | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (In thousands) (In thousands) United States $ 85,747 $ 70,881 $ 246,054 213,878 Outside of the United States 15,511 12,940 43,448 39,409 Total revenues $ 101,258 $ 83,821 $ 289,502 $ 253,287 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Principles of Consolidation) (Details) | 9 Months Ended |
Sep. 30, 2018subsidiary | |
Principles of Consolidation | |
Number of wholly-owned subsidiaries | 2 |
Genomic Health International Holdings, LLC | |
Principles of Consolidation | |
Number of wholly-owned subsidiaries | 8 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies (Concentration of Risk) (Details) - product | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Concentration of Risk | |||||
Number of products from which the majority of the entity's product revenues have been derived | 1 | 1 | |||
Product revenues | Customer | Medicare | |||||
Concentration of Risk | |||||
Concentration risk percentage | 23.00% | 24.00% | 24.00% | 23.00% | |
Net accounts receivable | Credit | Medicare | |||||
Concentration of Risk | |||||
Concentration risk percentage | 15.00% | 23.00% |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies (Investments in Privately Held Companies) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 08, 2017 | |
Investments in Privately Held Companies | |||||||
Debt securities investment | $ 110,201 | $ 110,201 | |||||
Amount invested | 116,529 | $ 88,152 | |||||
Carrying value | 114,021 | 114,021 | $ 84,057 | ||||
Unrealized gain on equity securities | 127 | 1,538 | |||||
Derivative Financial Instruments | |||||||
Foreign currency forward contract | 22,600 | 22,600 | 16,100 | ||||
Corporate equity securities | |||||||
Investments in Privately Held Companies | |||||||
Carrying value | 3,820 | 3,820 | 3,525 | ||||
Epic Sciences, Inc. | Subordinated convertible promissory notes | |||||||
Investments in Privately Held Companies | |||||||
Amount invested in notes | 1,400 | $ 6,100 | |||||
Percentage of ownership interest in private company | 9.00% | ||||||
Debt securities investment | $ 7,100 | ||||||
Epic Sciences, Inc. | Corporate equity securities | |||||||
Investments in Privately Held Companies | |||||||
Percentage of ownership interest in private company | 8.00% | ||||||
Amount invested | $ 2,500 | ||||||
Carrying value | $ 10,800 | 10,800 | |||||
Estimated fair value | $ 8,300 | ||||||
Unrealized gain on equity securities | $ 1,200 | ||||||
Cleveland Diagnostics | Convertible promissory notes | |||||||
Investments in Privately Held Companies | |||||||
Amount invested in notes | $ 2,000 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies (Impairment) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disposal | ||||
Impairment of equipment held for sale | $ 2,095,000 | $ 22,000 | ||
Impairment of capitalized software development costs | 2,347,000 | 76,000 | ||
Impairments | $ 0 | |||
Equipment | ||||
Disposal | ||||
Impairments | 2,100,000 | |||
Capitalized software development | ||||
Disposal | ||||
Impairments | $ 2,300,000 | |||
Capitalized equipment and software development costs | ||||
Disposal | ||||
Impairments | $ 98,000 | $ 98,000 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies (Recently Issued Accounting Pronouncements) (Details) - USD ($) | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Recently Issued Accounting Pronouncements | |||
Accounts receivable, net | $ 51,553,000 | $ 31,161,000 | |
Accumulated deficit | (215,235,000) | $ (245,945,000) | |
ASU 2016-01 | |||
Recently Issued Accounting Pronouncements | |||
Accumulated deficit | $ 180,000 | ||
Adjustments | ASU 2014-09 | |||
Recently Issued Accounting Pronouncements | |||
Accounts receivable, net | 16,886,000 | 14,100,000 | |
Accumulated deficit | $ 15,274,000 | $ 14,100,000 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenues: | ||||||
Revenues | $ 101,258 | $ 83,821 | $ 289,502 | $ 253,287 | ||
Operating expenses: | ||||||
General and administrative | 18,498 | 17,505 | 56,702 | 52,651 | ||
Net income | 12,225 | $ (2,191) | 16,767 | $ (5,736) | ||
Assets: | ||||||
Accounts receivable, net | 51,553 | 51,553 | $ 31,161 | |||
Equity: | ||||||
Accumulated deficit | (215,235) | (215,235) | $ (245,945) | |||
Balance Without Adoption of ASC 606 | ASU 2014-09 | ||||||
Revenues: | ||||||
Revenues | 100,903 | 290,731 | ||||
Operating expenses: | ||||||
General and administrative | 19,351 | 59,082 | ||||
Net income | 11,017 | 15,616 | ||||
Assets: | ||||||
Accounts receivable, net | 34,667 | 34,667 | ||||
Equity: | ||||||
Accumulated deficit | (230,509) | (230,509) | ||||
Adjustments | ASU 2014-09 | ||||||
Revenues: | ||||||
Revenues | 355 | (1,229) | ||||
Operating expenses: | ||||||
General and administrative | (853) | (2,380) | ||||
Net income | 1,208 | 1,151 | ||||
Assets: | ||||||
Accounts receivable, net | 16,886 | 16,886 | $ 14,100 | |||
Equity: | ||||||
Accumulated deficit | $ 15,274 | $ 15,274 | $ 14,100 |
Revenues (Revenue Recognition)
Revenues (Revenue Recognition) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | ||||
Revenues | $ 101,258 | $ 83,821 | $ 289,502 | $ 253,287 |
Diluted net income ( loss) per common share (in dollars per share) | $ 0.32 | $ (0.06) | $ 0.45 | $ (0.17) |
Change in Estimate | ||||
Disaggregation of Revenue | ||||
Revenues | $ 1,900 | $ 2,800 | ||
Diluted net income ( loss) per common share (in dollars per share) | $ 0.05 | $ 0.07 |
Revenues (Disaggregation of Rev
Revenues (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | ||||
Total product revenues | $ 101,258 | $ 83,821 | $ 289,502 | $ 253,287 |
Invasive breast cancer test | ||||
Disaggregation of Revenue | ||||
Total product revenues | 92,063 | 75,861 | 263,092 | 232,435 |
Prostate cancer test | ||||
Disaggregation of Revenue | ||||
Total product revenues | 6,997 | 5,542 | 19,614 | 13,046 |
Other | ||||
Disaggregation of Revenue | ||||
Total product revenues | $ 2,198 | $ 2,418 | $ 6,796 | $ 7,806 |
Net Income (Loss) Per Share (Ca
Net Income (Loss) Per Share (Calculation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income (loss) | $ 12,225 | $ (2,191) | $ 16,767 | $ (5,736) |
Denominator: | ||||
Weighted-average shares of common stock outstanding used in the calculation of basic net income (loss) per share | 35,925 | 34,675 | 35,558 | 34,373 |
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 2,101 | 1,486 | ||
Weighted-average shares of common stock outstanding used in the calculation of diluted net income (loss) per share (in shares) | 38,026 | 34,675 | 37,044 | 34,373 |
Basic net income (loss) per share (in dollars per share) | $ 0.34 | $ (0.06) | $ 0.47 | $ (0.17) |
Diluted net income (loss) per share (in dollars per share) | $ 0.32 | $ (0.06) | $ 0.45 | $ (0.17) |
Stock Options | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 1,555 | 1,046 | ||
Restricted stock units | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 522 | 417 | ||
Employee Stock Purchase Plan | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 24 | 23 |
Net Income (Loss) Per Share (Di
Net Income (Loss) Per Share (Dilutive stock awards excluded) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Income (Loss) Per Share | ||||
Stock awards excluded from the computation (in shares) | 65,000 | 793,000 | 547,000 | 782,000 |
Cash and Cash Equivalents, an_3
Cash and Cash Equivalents, and Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Marketable Securities | ||
Total cash and cash equivalents | $ 69,242 | $ 45,518 |
Total marketable securities | 114,021 | 84,057 |
Total cash and cash equivalents, and marketable securities | 183,263 | 129,575 |
Commercial paper | ||
Marketable Securities | ||
Total marketable securities | 73,784 | 30,272 |
Corporate debt securities | ||
Marketable Securities | ||
Total marketable securities | 36,417 | 50,260 |
Corporate equity securities | ||
Marketable Securities | ||
Total marketable securities | 3,820 | 3,525 |
Cash | ||
Marketable Securities | ||
Total cash and cash equivalents | 43,197 | 35,303 |
Money market deposits | ||
Marketable Securities | ||
Total cash and cash equivalents | 18,056 | $ 10,215 |
Commercial paper | ||
Marketable Securities | ||
Total cash and cash equivalents | $ 7,989 |
Cash and Cash Equivalents, an_4
Cash and Cash Equivalents, and Marketable Securities (Available-for-sale Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt securities | ||
Cost or Amortized Cost, Debt Securities | $ 110,250 | |
Gross Unrealized Gains, Debt Securities | 4 | |
Gross Unrealized Losses, Debt Securities | (53) | |
Debt securities | 110,201 | |
Available-for-sale securities | ||
Cost or Amortized Cost | $ 84,666 | |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (611) | |
Total Estimated Fair Value | 84,057 | |
Commercial paper | ||
Debt securities | ||
Cost or Amortized Cost, Debt Securities | 73,810 | |
Gross Unrealized Gains, Debt Securities | 4 | |
Gross Unrealized Losses, Debt Securities | (30) | |
Debt securities | 73,784 | |
Available-for-sale securities | ||
Cost or Amortized Cost | 30,315 | |
Gross Unrealized Losses | (43) | |
Total Estimated Fair Value | 30,272 | |
Corporate debt securities | ||
Debt securities | ||
Cost or Amortized Cost, Debt Securities | 36,440 | |
Gross Unrealized Losses, Debt Securities | (23) | |
Debt securities | $ 36,417 | |
Available-for-sale securities | ||
Cost or Amortized Cost | 50,331 | |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (73) | |
Total Estimated Fair Value | 50,260 | |
Corporate equity securities | ||
Available-for-sale securities | ||
Cost or Amortized Cost | 4,020 | |
Gross Unrealized Losses | (495) | |
Total Estimated Fair Value | $ 3,525 |
Cash and Cash Equivalents, an_5
Cash and Cash Equivalents, and Marketable Securities (Available-For-Sale Marketable Securities with Unrealized losses) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Marketable Securities [Line Items] | ||
Maximum contractual maturities of Company's available-for-sale marketable securities | 1 year | 1 year |
In a Loss Position for Less Than 12 Months, Gross Unrealized Losses | $ (53) | |
In a Loss Position for Less Than 12 Months, Estimated Fair Value | 98,855 | |
In a Loss Position for Less Than 12 Months, Gross Unrealized Losses | $ (611) | |
In a Loss Position for Less Than 12 Months, Estimated Fair Value | 78,907 | |
Commercial paper | ||
Marketable Securities [Line Items] | ||
In a Loss Position for Less Than 12 Months, Gross Unrealized Losses | (30) | |
In a Loss Position for Less Than 12 Months, Estimated Fair Value | 62,438 | |
In a Loss Position for Less Than 12 Months, Gross Unrealized Losses | (43) | |
In a Loss Position for Less Than 12 Months, Estimated Fair Value | 30,272 | |
Corporate debt securities | ||
Marketable Securities [Line Items] | ||
In a Loss Position for Less Than 12 Months, Gross Unrealized Losses | (23) | |
In a Loss Position for Less Than 12 Months, Estimated Fair Value | $ 36,417 | |
In a Loss Position for Less Than 12 Months, Gross Unrealized Losses | (73) | |
In a Loss Position for Less Than 12 Months, Estimated Fair Value | 45,110 | |
Corporate equity securities | ||
Marketable Securities [Line Items] | ||
In a Loss Position for Less Than 12 Months, Gross Unrealized Losses | (495) | |
In a Loss Position for Less Than 12 Months, Estimated Fair Value | $ 3,525 |
Cash and Cash Equivalents, an_6
Cash and Cash Equivalents, and Marketable Securities (ASU 2016-01 and Biocartis) (Details) € in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2017EUR (€)shares | Dec. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($)shares | |
Marketable Securities | |||||||
Accumulated deficit | $ (215,235,000) | $ (215,235,000) | $ (245,945,000) | ||||
Unrealized gain on revaluation of equity investment | 127,000 | 1,538,000 | |||||
Biocartis N.V. | |||||||
Marketable Securities | |||||||
Amount invested in shares of common stock | € 3.4 | $ 4,000,000 | |||||
Estimated fair value, equity securities | € 3 | $ 3,500,000 | |||||
Unrealized losses recorded in other comprehensive income | $ 180,000 | ||||||
Foreign currency revaluation gain (loss) | (50,000) | ||||||
Biocartis N.V. | Common Stock | |||||||
Marketable Securities | |||||||
Number of shares purchased | shares | 270,000 | 270,000 | |||||
ASU 2016-01 | |||||||
Marketable Securities | |||||||
Accumulated deficit | $ 180,000 | ||||||
ASU 2016-01 | Biocartis N.V. | |||||||
Marketable Securities | |||||||
Unrealized gain on revaluation of equity investment | 127,000 | 345,000 | |||||
Foreign currency revaluation gain (loss) | $ 42,000 | $ (50,000) |
Cash and Cash Equivalents, an_7
Cash and Cash Equivalents, and Marketable Securities (Invitae) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disposal | ||||
Amount reclassified out of accumulated other comprehensive income | $ 1,127,000 | |||
Invitae | Sale | Common Stock | ||||
Disposal | ||||
Proceeds from sales of marketable securities | $ 10,200,000 | |||
Cost per share (in dollars per share) | $ 6.28 | |||
Realized gains on available-for-sale marketable securities | $ 2,800,000 | |||
Number of shares sold | 0 | 0 | ||
Amount reclassified out of accumulated other comprehensive income | 1,100,000 | |||
Amount reclassified out of accumulated other comprehensive income, tax portion | $ 821,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets measured at fair value on a recurring basis: | ||
Debt securities | $ 110,201 | |
Commercial paper | ||
Assets measured at fair value on a recurring basis: | ||
Debt securities | 73,784 | |
Corporate debt securities | ||
Assets measured at fair value on a recurring basis: | ||
Debt securities | 36,417 | |
Recurring basis | ||
Assets measured at fair value on a recurring basis: | ||
Money market deposits | 18,056 | $ 10,215 |
Corporate equity securities | 3,820 | 3,525 |
Total assets at fair value | 140,066 | 95,601 |
Recurring basis | Commercial paper | ||
Assets measured at fair value on a recurring basis: | ||
Debt securities | 81,773 | 30,272 |
Recurring basis | Corporate debt securities | ||
Assets measured at fair value on a recurring basis: | ||
Debt securities | 36,417 | 50,260 |
Recurring basis | Convertible promissory notes | ||
Assets measured at fair value on a recurring basis: | ||
Debt securities | 1,329 | |
Recurring basis | Actively Quoted Markets for Identical Assets Level 1 | ||
Assets measured at fair value on a recurring basis: | ||
Money market deposits | 18,056 | 10,215 |
Total assets at fair value | 18,056 | 10,215 |
Recurring basis | Significant Other Observable Inputs Level 2 | ||
Assets measured at fair value on a recurring basis: | ||
Corporate equity securities | 3,820 | 3,525 |
Total assets at fair value | 122,010 | 84,057 |
Recurring basis | Significant Other Observable Inputs Level 2 | Commercial paper | ||
Assets measured at fair value on a recurring basis: | ||
Debt securities | 81,773 | 30,272 |
Recurring basis | Significant Other Observable Inputs Level 2 | Corporate debt securities | ||
Assets measured at fair value on a recurring basis: | ||
Debt securities | $ 36,417 | 50,260 |
Recurring basis | Significant Unobservable Inputs Level 3 | ||
Assets measured at fair value on a recurring basis: | ||
Total assets at fair value | 1,329 | |
Recurring basis | Significant Unobservable Inputs Level 3 | Convertible promissory notes | ||
Assets measured at fair value on a recurring basis: | ||
Debt securities | $ 1,329 |
Fair Value Measurements (Clevel
Fair Value Measurements (Cleveland Diagnostics) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Investment fair value | ||
Debt securities investment | $ 110,201 | |
Significant Unobservable Inputs Level 3 | Convertible promissory notes | Cleveland Diagnostics | ||
Investment fair value | ||
Debt securities investment | $ 1,300 |
Collaboration and Commercial _2
Collaboration and Commercial Technology Licensing Agreements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Collaboration and specimen transfer agreements | ||||
Collaboration agreements | ||||
Collaboration expense | $ 2,600,000 | $ 4,300,000 | $ 6,400,000 | $ 6,200,000 |
Technology license agreements | Cost of product revenues | ||||
Collaboration agreements | ||||
Costs recorded under collaborative arrangements | $ 64,000 | $ 68,000 | $ 198,000 | $ 258,000 |
Collaboration and Commercial _3
Collaboration and Commercial Technology Licensing Agreements (Epic) (Details) | 1 Months Ended | 9 Months Ended | 24 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2016USD ($)item | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Collaboration agreements | |||||
Debt securities investment | $ 110,201,000 | ||||
Amount invested | $ 116,529,000 | $ 88,152,000 | |||
Exclusive distribution rights Epic's AR-V7 Nucleus Detect | |||||
Collaboration agreements | |||||
Amount invested in notes | $ 7,500,000 | ||||
Debt securities investment | 7,100,000 | ||||
Deferred cost | $ 375,000 | ||||
Investment in preferred stock per collaboration agreement | $ 2,500,000 | ||||
Number of milestones needed to be achieved for conversion into preferred stock | item | 1 | ||||
Obligation upon achievement of certain milestones | $ 4,000,000 | ||||
Term of agreement | 10 years | ||||
Exclusive distribution rights Epic's AR-V7 Nucleus Detect | Corporate equity securities | |||||
Collaboration agreements | |||||
Amount invested | $ 2,500,000 |
Collaboration and Commercial _4
Collaboration and Commercial Technology Licensing Agreements (Biocartis) (Details) $ / shares in Units, $ in Thousands, € in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2018EUR (€) | Sep. 30, 2018USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017EUR (€) | |
Collaboration agreements | |||||||||
Amount invested | $ 116,529 | $ 88,152 | |||||||
Exclusive license and development agreement with Biocartis NV | |||||||||
Collaboration agreements | |||||||||
Number of shares purchased | shares | 270,000 | 270,000 | |||||||
Market price | $ / shares | $ 12.50 | $ 12.50 | |||||||
Amount invested | € 3.4 | $ 4,000 | |||||||
Estimated fair value | $ 3,800 | $ 3,500 | $ 3,800 | $ 3,500 | |||||
Cash obligation upon achievement of certain milestones | € | € 5.5 | ||||||||
Investment expense | € 1 | $ 1,200 | |||||||
Exclusive license and development agreement with Biocartis NV | Research and development | |||||||||
Collaboration agreements | |||||||||
Upfront license and option fee payment | € 2.8 | $ 3,200 |
Collaboration and Commercial _5
Collaboration and Commercial Technology Licensing Agreements (Cleveland Diagnostics) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Collaboration agreements | |||
Debt securities investment | $ 110,201 | ||
Exclusive licensing agreement with Cleveland Diagnostics | Convertible promissory notes | |||
Collaboration agreements | |||
Amount invested in notes | $ 2,000 | ||
Debt securities investment | $ 1,300 | ||
Write off of investment | $ 1,400 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Commitments and Contingencies | ||||
Rent expense | $ 1,500 | $ 1,600 | $ 4,700 | $ 4,700 |
Non-cancelable commitments under operating leases | ||||
2018 (remainder of year) | 1,568 | 1,568 | ||
2,019 | 6,841 | 6,841 | ||
2,020 | 7,005 | 7,005 | ||
2,021 | 4,797 | 4,797 | ||
2,022 | 4,174 | 4,174 | ||
2023 and thereafter | 1,081 | 1,081 | ||
Total minimum payments | $ 25,466 | $ 25,466 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Option Activity) (Details) - Stock Options shares in Thousands | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Shares | |
Options outstanding at the beginning of the period (in shares) | shares | 3,460 |
Options granted (in shares) | shares | 667 |
Options exercised (in shares) | shares | (586) |
Options forfeited (in shares) | shares | (111) |
Options outstanding at the end of the period (in shares) | shares | 3,430 |
Exercisable at the end of the period (in shares) | shares | 2,215 |
Vested and expected to vest at the end of the period (in shares) | shares | 3,344 |
Weighted-Average Exercise Price | |
Options outstanding at the beginning of the period (in dollars per share) | $ 26.42 |
Options granted (in dollars per share) | 35.12 |
Options exercised (in dollars per share) | 22.93 |
Options forfeited (in dollars per share) | 29.68 |
Options expired (in dollars per share) | 25.59 |
Options outstanding at the end of the period (in dollars per share) | 28.60 |
Exercisable at the end of the period (in dollars per share) | 26.94 |
Vested and expected to vest at the end of the period (in dollars per share) | $ 28.52 |
Stock-Based Compensation (RSU A
Stock-Based Compensation (RSU Activity) (Details) | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Restricted stock units | |
Number of Shares | |
Balance at the beginning of the period (in shares) | shares | 964,000 |
Granted (in shares) | shares | 530,000 |
Vested (in shares) | shares | (422,000) |
Cancelled (in shares) | shares | (206,000) |
Balance at the end of the period (in shares) | shares | 866,000 |
Weighted-Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 28.25 |
Granted (in dollars per share) | $ / shares | 33.88 |
Vested (in dollars per share) | $ / shares | 28.45 |
Cancelled (in dollars per share) | $ / shares | 30.22 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 31.13 |
Restricted Stock | Outside directors | |
Number of Shares | |
Granted (in shares) | shares | 4,045 |
Weighted-Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 37.02 |
Additional Disclosure | |
Grant-date fair value (in dollars) | $ | $ 150,000 |
Stock-Based Compensation (Emplo
Stock-Based Compensation (Employee Stock Purchase Plan) (Details) - Employee Stock Purchase Plan | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
Employee Stock Purchase Plan | |
Number of shares issued | shares | 98,916 |
Unrecognized compensation expense (in dollars) | $ | $ 251,000 |
Weighted-average period of recognition of unrecognized stock-based compensation expense | 2 months |
Stock-Based Compensation (Emp_2
Stock-Based Compensation (Employee Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Employee Stock Based Compensation Expense | ||||
Stock-based compensation expense (in dollars) | $ 5,401 | $ 4,955 | $ 15,742 | $ 15,257 |
Cost of product revenues | ||||
Employee Stock Based Compensation Expense | ||||
Stock-based compensation expense (in dollars) | 232 | 187 | 684 | 548 |
Research and development | ||||
Employee Stock Based Compensation Expense | ||||
Stock-based compensation expense (in dollars) | 1,126 | 1,378 | 3,459 | 4,209 |
Selling and marketing | ||||
Employee Stock Based Compensation Expense | ||||
Stock-based compensation expense (in dollars) | 1,430 | 1,325 | 4,062 | 4,315 |
General and administrative | ||||
Employee Stock Based Compensation Expense | ||||
Stock-based compensation expense (in dollars) | $ 2,613 | $ 2,065 | $ 7,537 | $ 6,185 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)product | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segmentproduct | Sep. 30, 2017USD ($) | |
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 | 1 | ||
Total product revenues | $ 101,258 | $ 83,821 | $ 289,502 | $ 253,287 |
United States | ||||
Segment information | ||||
Total product revenues | 85,747 | 70,881 | 246,054 | 213,878 |
Outside of the United States | ||||
Segment information | ||||
Total product revenues | $ 15,511 | $ 12,940 | $ 43,448 | $ 39,409 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Taxes | |||||
Income tax expense | $ 375 | $ 162 | $ 834 | $ 1,362 | |
Unrecognized tax benefits | $ 2,700 | $ 2,700 | $ 2,400 |
Income Taxes (Tax Cuts and Jobs
Income Taxes (Tax Cuts and Jobs Acts) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Income Taxes | ||
Corporate tax rate | 21.00% | 35.00% |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) | Mar. 08, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2017 |
Restructuring Costs | |||||||
Percentage reduction of workforce (as a percent) | 10.00% | ||||||
Restructuring charges | $ 0 | $ 0 | $ 0 | ||||
Non-cash asset impairments | $ 0 | ||||||
Payment of employee separation charges | $ 3,100,000 | $ 628,000 | |||||
Operating expenses | |||||||
Restructuring Costs | |||||||
Restructuring charges | $ 8,500,000 | ||||||
Non-cash asset impairments | 4,800,000 | 80,000 | |||||
Employee separation charges | $ 3,700,000 | $ 69,000 |