Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 04, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | GLAUKOS Corp | |
Entity Central Index Key | 0001192448 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 001-37463 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0945406 | |
Entity Address, Address Line One | 229 Avenida Fabricante | |
Entity Address, City or Town | San Clemente | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92672 | |
City Area Code | 949 | |
Local Phone Number | 367-9600 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | GKOS | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,961,417 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 80,994 | $ 62,430 |
Short-term investments | 307,441 | 111,553 |
Accounts receivable, net | 32,885 | 38,417 |
Inventory, net | 19,890 | 42,578 |
Prepaid expenses and other current assets | 13,235 | 7,900 |
Total current assets | 454,445 | 262,878 |
Restricted cash | 9,326 | 9,326 |
Property and equipment, net | 23,408 | 22,056 |
Operating lease right-of-use asset | 18,760 | 15,704 |
Finance lease right-of-use asset | 51,975 | 54,048 |
Intangible assets, net | 363,921 | 382,605 |
Goodwill | 66,134 | 66,134 |
Deposits and other assets | 6,545 | 5,649 |
Total assets | 994,514 | 818,400 |
Current liabilities: | ||
Accounts payable | 6,774 | 5,781 |
Accrued liabilities | 39,919 | 51,919 |
Total current liabilities | 46,693 | 57,700 |
Convertible senior notes | 186,676 | |
Operating lease liability | 18,734 | 14,195 |
Finance lease liability | 60,702 | 58,435 |
Deferred tax liability, net | 14,164 | 9,632 |
Other liabilities | 5,982 | 5,166 |
Total liabilities | 332,951 | 145,128 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.001 par value; 150,000 shares authorized; 44,855 and 43,530 shares issued and 44,827 and 43,502 shares outstanding as of September 30, 2020 and December 31, 2019, respectively | 45 | 44 |
Additional paid-in capital | 959,186 | 861,740 |
Accumulated other comprehensive income | 1,874 | 1,330 |
Accumulated deficit | (299,410) | (189,710) |
Less treasury stock (28 shares as of September 30, 2020 and December 31, 2019) | (132) | (132) |
Total stockholders' equity | 661,563 | 673,272 |
Total liabilities and stockholders' equity | $ 994,514 | $ 818,400 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares shares in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000 | 150,000 |
Common stock, shares issued | 44,855 | 43,530 |
Common stock, shares outstanding | 44,827 | 43,502 |
Treasury stock, shares | 28 | 28 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 64,831 | $ 58,509 | $ 151,725 | $ 171,135 |
Cost of sales | 17,932 | 7,703 | 72,129 | 22,684 |
Gross profit | 46,899 | 50,806 | 79,596 | 148,451 |
Operating expenses: | ||||
Selling, general and administrative | 38,947 | 44,443 | 127,609 | 117,024 |
Research and development | 20,304 | 17,278 | 64,148 | 48,277 |
In-process research and development | 1,500 | 3,745 | ||
Total operating expenses | 59,251 | 63,221 | 191,757 | 169,046 |
Loss from operations | (12,352) | (12,415) | (112,161) | (20,595) |
Non-operating (expense) income: | ||||
Interest income | 595 | 780 | 1,881 | 2,368 |
Interest expense | (5,732) | (1,028) | (8,485) | (2,041) |
Other income (expense), net | 852 | (656) | 342 | (508) |
Total non-operating expense | (4,285) | (904) | (6,262) | (181) |
Loss before taxes | (16,637) | (13,319) | (118,423) | (20,776) |
Income tax (benefit) provision | (889) | 187 | (8,723) | 381 |
Net loss | $ (15,748) | $ (13,506) | $ (109,700) | $ (21,157) |
Basic and diluted net loss per share (in dollar per share) | $ (0.35) | $ (0.37) | $ (2.48) | $ (0.58) |
Weighted average shares used to compute basic and diluted net loss per share (in shares) | 44,706 | 36,831 | 44,302 | 36,507 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (15,748) | $ (13,506) | $ (109,700) | $ (21,157) |
Other comprehensive (loss) income: | ||||
Foreign currency translation (loss) gain | (423) | 530 | 141 | 364 |
Unrealized (loss) gain on short-term investments | (170) | 74 | 403 | 735 |
Other comprehensive income | (593) | 604 | 544 | 1,099 |
Total comprehensive loss | $ (16,341) | $ (12,902) | $ (109,156) | $ (20,058) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in-Capital | Accumulated Other Comprehensive Income (loss) | Accumulated Deficit | Treasury Stock | Total |
Balance at Dec. 31, 2018 | $ 36 | $ 378,352 | $ 738 | $ (205,134) | $ (132) | $ 173,860 |
Balance (in shares) at Dec. 31, 2018 | 36,135 | (28) | ||||
Stockholders' Deficit | ||||||
Common stock issued under stock plans | 5,406 | 5,406 | ||||
Common stock issued under stock plans (in shares) | 226 | |||||
Stock-based compensation | 7,129 | 7,129 | ||||
Other comprehensive income (loss) | 436 | 436 | ||||
Net loss | (1,342) | (1,342) | ||||
Balance at Mar. 31, 2019 | $ 36 | 390,887 | 1,174 | (206,476) | $ (132) | 185,489 |
Balance (in shares) at Mar. 31, 2019 | 36,361 | (28) | ||||
Balance at Dec. 31, 2018 | $ 36 | 378,352 | 738 | (205,134) | $ (132) | 173,860 |
Balance (in shares) at Dec. 31, 2018 | 36,135 | (28) | ||||
Stockholders' Deficit | ||||||
Other comprehensive income (loss) | 1,099 | |||||
Net loss | (21,157) | |||||
Balance at Sep. 30, 2019 | $ 37 | 414,665 | 1,837 | (226,291) | $ (132) | 190,116 |
Balance (in shares) at Sep. 30, 2019 | 36,945 | (28) | ||||
Balance at Mar. 31, 2019 | $ 36 | 390,887 | 1,174 | (206,476) | $ (132) | 185,489 |
Balance (in shares) at Mar. 31, 2019 | 36,361 | (28) | ||||
Stockholders' Deficit | ||||||
Common stock issued under stock plans | $ 1 | 318 | 319 | |||
Common stock issued under stock plans (in shares) | 305 | |||||
Stock-based compensation | 8,247 | 8,247 | ||||
Other comprehensive income (loss) | 59 | 59 | ||||
Net loss | (6,309) | (6,309) | ||||
Balance at Jun. 30, 2019 | $ 37 | 399,452 | 1,233 | (212,785) | $ (132) | 187,805 |
Balance (in shares) at Jun. 30, 2019 | 36,666 | (28) | ||||
Stockholders' Deficit | ||||||
Common stock issued under stock plans | 6,666 | 6,666 | ||||
Common stock issued under stock plans (in shares) | 279 | |||||
Stock-based compensation | 8,547 | 8,547 | ||||
Other comprehensive income (loss) | 604 | 604 | ||||
Net loss | (13,506) | (13,506) | ||||
Balance at Sep. 30, 2019 | $ 37 | 414,665 | 1,837 | (226,291) | $ (132) | 190,116 |
Balance (in shares) at Sep. 30, 2019 | 36,945 | (28) | ||||
Balance at Dec. 31, 2019 | $ 44 | 861,740 | 1,330 | (189,710) | $ (132) | $ 673,272 |
Balance (in shares) at Dec. 31, 2019 | 43,530 | (28) | 43,502 | |||
Stockholders' Deficit | ||||||
Common stock issued under stock plans | 4,220 | $ 4,220 | ||||
Common stock issued under stock plans (in shares) | 589 | |||||
Stock-based compensation | 17,176 | 17,176 | ||||
Other comprehensive income (loss) | 689 | 689 | ||||
Net loss | (54,058) | (54,058) | ||||
Balance at Mar. 31, 2020 | $ 44 | 883,136 | 2,019 | (243,768) | $ (132) | 641,299 |
Balance (in shares) at Mar. 31, 2020 | 44,119 | (28) | ||||
Balance at Dec. 31, 2019 | $ 44 | 861,740 | 1,330 | (189,710) | $ (132) | $ 673,272 |
Balance (in shares) at Dec. 31, 2019 | 43,530 | (28) | 43,502 | |||
Stockholders' Deficit | ||||||
Other comprehensive income (loss) | $ 544 | |||||
Net loss | (109,700) | |||||
Balance at Sep. 30, 2020 | $ 45 | 959,186 | 1,874 | (299,410) | $ (132) | $ 661,563 |
Balance (in shares) at Sep. 30, 2020 | 44,855 | (28) | 44,827 | |||
Balance at Mar. 31, 2020 | $ 44 | 883,136 | 2,019 | (243,768) | $ (132) | $ 641,299 |
Balance (in shares) at Mar. 31, 2020 | 44,119 | (28) | ||||
Stockholders' Deficit | ||||||
Common stock issued under stock plans | $ 1 | 1,633 | 1,634 | |||
Common stock issued under stock plans (in shares) | 459 | |||||
Stock-based compensation | 13,062 | 13,062 | ||||
Equity component of convertible senior notes, net of transaction costs of $3,267 and taxes of $12,891 | 81,554 | 81,554 | ||||
Purchase of capped calls related to issuance of convertible senior notes | (35,679) | (35,679) | ||||
Other comprehensive income (loss) | 448 | 448 | ||||
Net loss | (39,894) | (39,894) | ||||
Balance at Jun. 30, 2020 | $ 45 | 943,706 | 2,467 | (283,662) | $ (132) | 662,424 |
Balance (in shares) at Jun. 30, 2020 | 44,578 | (28) | ||||
Stockholders' Deficit | ||||||
Common stock issued under stock plans | 5,821 | 5,821 | ||||
Common stock issued under stock plans (in shares) | 277 | |||||
Stock-based compensation | 9,659 | 9,659 | ||||
Other comprehensive income (loss) | (593) | (593) | ||||
Net loss | (15,748) | (15,748) | ||||
Balance at Sep. 30, 2020 | $ 45 | $ 959,186 | $ 1,874 | $ (299,410) | $ (132) | $ 661,563 |
Balance (in shares) at Sep. 30, 2020 | 44,855 | (28) | 44,827 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands | 3 Months Ended |
Jun. 30, 2020USD ($) | |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |
Convertible debt transaction costs | $ 3,267 |
Convertible debt taxes | $ 12,891 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Activities | ||
Net loss | $ (109,700) | $ (21,157) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 21,981 | 2,674 |
Amortization of lease right-of-use assets | 3,836 | 2,405 |
Amortization of debt discount and issuance costs | 3,234 | |
Deferred income tax benefit | (9,340) | |
Loss on disposal of fixed assets | 287 | 26 |
Stock-based compensation | 37,733 | 23,923 |
Change in fair value of cash settled stock options | (3,172) | |
Unrealized foreign currency losses | 22 | 469 |
Amortization of discount on short-term investments | 229 | (298) |
Other liabilities | 3,343 | 3,666 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 5,629 | (5,828) |
Inventory, net | 22,578 | 414 |
Prepaid expenses and other current assets | (4,329) | (2,326) |
Accounts payable and accrued liabilities | (6,141) | (60) |
Other assets | 218 | (86) |
Net cash (used in) provided by operating activities | (33,592) | 3,822 |
Investing activities | ||
Purchases of short-term investments | (273,798) | (63,556) |
Proceeds from sales and maturities of short-term investments | 78,084 | 61,870 |
Purchases of property and equipment | (4,790) | (3,530) |
Investment in company-owned life insurance | (1,097) | (1,170) |
Net cash used in investing activities | (201,601) | (6,386) |
Financing activities | ||
Proceeds from convertible senior notes | 287,500 | |
Payment of convertible senior notes transaction costs | (9,614) | |
Purchase of capped calls related to issuance of convertible senior notes | (35,679) | |
Proceeds from exercise of stock options | 10,258 | 14,005 |
Proceeds from share purchases under Employee Stock Purchase Plan | 4,025 | 3,388 |
Payment of employee taxes related to vested restricted stock units | (2,607) | (5,002) |
Net cash provided by financing activities | 253,883 | 12,391 |
Effect of exchange rate changes on cash and cash equivalents | (126) | (8) |
Net increase in cash, cash equivalents and restricted cash | 18,564 | 9,819 |
Cash, cash equivalents and restricted cash at beginning of period | 71,756 | 38,596 |
Cash, cash equivalents and restricted cash at end of period | 90,320 | 48,415 |
Supplemental disclosures of cash flow information | ||
Taxes paid | $ 418 | $ 96 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation Organization and business Glaukos Corporation (Glaukos or the Company), incorporated in Delaware on July 14, 1998, is an ophthalmic medical technology and pharmaceutical company focused on developing novel therapies for the treatment of glaucoma, corneal disorders, and retinal disease. The Company developed Micro-Invasive Glaucoma Surgery (MIGS) to serve as an alternative to the traditional glaucoma treatment paradigm and launched its first MIGS device commercially in 2012. The Company also offers commercially a proprietary bio-activated pharmaceutical therapy for the treatment of a corneal disorder, keratoconus, that was approved by the U.S. Food and Drug Administration in 2016 and is developing a pipeline of surgical devices, sustained pharmaceutical therapies, and implantable biosensors intended to treat glaucoma progression, corneal disorders such as keratoconus, dry eye and refractive vision correction, and retinal diseases such as neovascular age-related macular degeneration and diabetic macular edema. The accompanying condensed consolidated financial statements include the accounts of Glaukos and its wholly-owned subsidiaries. All significant intercompany balances and transactions among the consolidated entities have been eliminated in consolidation. Basis of presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited interim financial statements have been prepared on a basis consistent with the audited financial statements. As permitted under those rules, certain footnotes and other financial information that are normally required by GAAP have been condensed or omitted. In the opinion of management, the unaudited interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial information contained herein. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements at that date, but excludes disclosures required by GAAP for complete financial statements. These interim financial statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2019, which are contained in the Company’s Annual Report on Form 10-K filed with the United States (U.S.) Securities and Exchange Commission (SEC) on March 2, 2020. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period. Recent Developments Convertible Senior Notes In June 2020 the Company issued $287.5 million in aggregate principal amount of 2.75% Convertible Senior Notes due in 2027 (Convertible Notes) pursuant to an indenture dated June 11, 2020. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 2.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The Convertible Notes will mature on June 15, 2027, unless earlier converted, redeemed or repurchased. The Convertible Notes are convertible into cash, shares of the Company’s common stock, or a combination of cash and shares, at the Company’s election. In connection with issuing the Convertible Notes, the Company received $242.2 million in proceeds, after deducting fees and offering expenses and paying the cost of certain capped call transactions. The Company may not redeem the Convertible Notes prior to June 20, 2024 and n o sinking fund is provided for the Convertible Notes. Note 9, Convertible Senior Notes Acquisition of Avedro, Inc. On August 7, 2019, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with Atlantic Merger Sub, Inc. (Merger Sub) and Avedro, Inc. (Avedro), pursuant to which Merger Sub would merge with and into Avedro, with Avedro continuing as the surviving corporation and a wholly owned subsidiary of the Company (the Avedro Merger). Avedro is a hybrid ophthalmic pharmaceutical and medical technology company focused on developing therapies designed to treat corneal diseases and disorders and correct refractive conditions. On November 21, 2019, the Avedro Merger was consummated in a stock-for-stock transaction for total consideration of $437.8 million (Merger Consideration). See Note 4, Fair Value Measurements , Note 6, Business Combinations , Note 7, Intangible Assets and Goodwill and Note 10, Stock-Based Compensation for additional details regarding the impact of the Avedro Merger on the Company’s condensed consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies There have been no significant changes in the Company’s significant accounting policies during the nine months ended September 30, 2020, as compared with those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 2, 2020, including the Company’s adoption of the accounting pronouncements noted below in the sub-heading “ Recently Adopted Accounting Pronouncements Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates and assumptions. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these condensed consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. The most significant estimates in the accompanying condensed consolidated financial statements relate to revenue recognition, the fair value of the liability component of the Convertible Notes, the incremental borrowing rate related to the Company’s leased assets, stock-based compensation expense and the valuation of certain intangible assets related to the Company’s acquisition of Avedro. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, this process may result in actual results differing materially from those estimated amounts used in the preparation of the condensed consolidated financial statements. In Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that equate to the amount reported in the condensed consolidated statement of cash flows as of the beginning and end of the nine months ended September 30, 2020 (in thousands): September 30, December 31, 2020 2019 Cash and cash equivalents $ 80,994 $ 62,430 Restricted cash 9,326 9,326 Cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows $ 90,320 $ 71,756 Accounts Receivable The Company sells its products directly to ambulatory surgery centers, hospitals, and physician private practices, with distributors being used in certain international locations where the Company does not have a direct commercial presence and the Company is exposed to credit losses primarily through sales of its products. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and periodic evaluation of customers’ receivables balances. Management estimates the adequacy of the allowance by using relevant available information, from internal and external sources, relating to past events, current conditions and forecasts. Historical credit loss experience provides the basis for estimation of expected credit losses and are adjusted as necessary using the relevant information available. The allowance for credit losses is measured on a collective basis when similar risk characteristic exists. The Company has identified one portfolio segment based on evaluation of the following risk characteristics: geographic regions, product lines, default rates and customer specific factors. Additionally, specific allowance amounts may be established to record the appropriate provision for customers that have a higher probability of non-payment. The Company charges off uncollectible receivables against the allowance when all attempts to collect the receivable have failed. The allowance for credit losses represents management’s best estimate of the amount of current expected credit losses and totaled approximately $1.4 million and $1.2 million as of September 30, 2020 and December 31, 2019, respectively, and there were immaterial bad-debt write offs charged during the nine months ended September 30, 2020. As of September 30, 2020, the Company evaluated the current and expected future economic and market conditions surrounding the COVID-19 pandemic as it relates to collectability of its accounts receivable and determined the estimate of expected credit losses was not materially impacted. The Company will continue to re-evaluate the estimate of credit losses related to COVID-19 in conjunction with its assessment of expected credit losses in subsequent quarters. Additionally, no customer accounted for more than 10% of net accounts receivable as of September 30, 2020 or December 31, 2019. Inventory Except for inventory acquired in connection with the Avedro Merger, further described in Note 6, Business Combinations Management evaluates inventory for excess quantities and obsolescence and records an allowance to reduce the carrying value of inventory as determined necessary. During the nine months ended September 30, 2020, the Company recorded inventory write-off charges and COVID-19 related excess and obsolete reserves, a portion of which included the associated fair-value step up of acquired Avedro inventory, totaling a net $4.3 million. Convertible Senior Notes The Company evaluates embedded conversion features within convertible debt under Accounting Standards Codification (ASC) 815, Derivatives and Hedging Debt with Conversion and Other Options The carrying amount of the liability component is calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option is determined by deducting the fair value of the liability component from the par value of the convertible notes. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (i.e., debt discount) will be amortized to interest expense over the term of the convertible notes. The Company may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of convertible debt. These costs may be paid in the form of cash or equity (such as warrants). These costs are allocated between debt and equity, with the portion allocated to debt amortized to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Income Taxes Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates, along with net operating loss (NOL) and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. Management has considered estimated taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. Based upon the weight of available evidence, which includes the Company’s historical operating performance and limited potential to utilize tax credit carryforwards, the Company has determined that a portion of its deferred tax assets should be offset by a valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes increases or decreases, respectively, in the period such determination is made. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The Company also files income tax returns in the foreign countries in which its subsidiaries operate. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement, and classification in the condensed consolidated financial statements of tax positions taken or expected to be taken in a tax return. Stock-Based Compensation The Company recognizes compensation expense for all stock-based awards granted to employees and nonemployees, including members of its board of directors. The fair value of stock option awards is estimated at the grant date using the Black-Scholes option pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period using the straight-line method. The determination of the fair value-based measurement of stock options on the date of grant using an option pricing model is affected by the determination of the fair value of the underlying stock as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s stock price volatility over the expected term of the grants, and actual and projected stock option exercise behaviors. In the future, as additional empirical evidence regarding these estimates becomes available, the Company may change or refine its approach of deriving them, and these changes could impact the fair value-based measurement of stock options granted in the future. Changes in the fair value-based measurement of stock awards could materially impact the Company’s operating results. The fair value of restricted stock unit (RSU) awards made to employees and nonemployees is equal to the closing market price of the Company’s common stock on the grant date. Interest Expense Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares that were outstanding for the period, without consideration for common stock equivalents. For periods when the Company realizes a net loss, no common stock equivalents are included in the calculation of weighted average number of dilutive common stock equivalents as the effect of applying the treasury stock method is considered anti-dilutive. For periods when the Company realizes net income, diluted net income per share is calculated by dividing the net income by the weighted average number of common shares plus the sum of the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury stock method. Common stock equivalents are comprised of stock options outstanding and unvested RSUs under the Company’s incentive compensation plans, and shares issuable under the Company’s Employee Stock Purchase Plan (ESPP). Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive were as follows (in common stock equivalent shares, in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Stock options outstanding 4,490 3,602 4,579 3,636 Unvested restricted stock units 519 232 499 364 Employee stock purchase plan 14 1 14 5 5,023 3,835 5,092 4,005 The Convertible Notes did not have an impact on the Company’s diluted share count as the average stock price of the Company’s common stock did not exceed $56.10 during the periods presented. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU0 No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments—Credit Losses Additionally, for available-for-sale debt securities with unrealized losses, ASU 2016-13 now requires allowances to be recorded instead of reducing the amortized cost of the investment. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. Given the composition of the Company’s available-for-sale securities, adoption of ASU 2016-13 did not have a material impact on the condensed consolidated financial statements as of September 30, 2020. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU No. 2018-15 , Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Note 12 Commitments and Contingencies In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606 In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06) , which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after December 15, 202 1 , including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company may adopt ASU 2020-06 effective January 1, 2021 and is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Sep. 30, 2020 | |
Balance Sheet Details | |
Balance Sheet Details | Note 3. Balance Sheet Details Short-term Investments Short-term investments consisted of the following (in thousands): At September 30, 2020 Maturity Amortized cost Unrealized Unrealized Estimated (in years) or cost gains losses fair value U.S. government agency bonds less than 3 206,294 137 (51) 206,380 Bank certificates of deposit less than 1 16,900 25 — 16,925 Commercial paper less than 1 2,997 3 — 3,000 Corporate notes less than 3 62,828 417 (1) 63,244 Asset-backed securities less than 5 17,627 265 — 17,892 Total $ 306,646 $ 847 $ (52) $ 307,441 At December 31, 2019 Maturity Amortized cost Unrealized Unrealized Estimated (in years) or cost gains losses fair value Bank certificates of deposit less than 1 12,999 7 — 13,006 Commercial paper less than 1 7,475 8 — 7,483 Corporate notes less than 3 65,354 295 (10) 65,639 Asset-backed securities less than 3 25,333 99 (7) 25,425 Total $ 111,161 $ 409 $ (17) $ 111,553 Accounts Receivable, Net Accounts receivable consisted of the following (in thousands): September 30, December 31, 2020 2019 Accounts receivable $ 34,267 $ 39,657 Allowance for credit losses (1,382) (1,240) $ 32,885 $ 38,417 Inventory, Net Inventory, net consisted of the following (in thousands): September 30, December 31, 2020 2019 Finished goods $ 6,305 $ 32,108 Work in process 4,316 3,884 Raw material 9,269 6,586 $ 19,890 $ 42,578 Included in the finished goods amount for the periods ended September 30, 2020 and December 31, 2019 is the applicable remaining portion of the original fair market value inventory adjustment that was recorded as part of the acquisition of Avedro. This adjustment is being amortized to cost of sales over the inventory’s expected turnover period. See also Note 6, Business Combinations Accrued Liabilities Accrued liabilities consisted of the following (in thousands): September 30, December 31, 2020 2019 Accrued bonuses $ 9,655 $ 13,525 Accrued vacation benefits 3,693 2,784 Accrued payroll taxes 3,406 1,133 Accrued interest 2,394 - Other accrued liabilities 20,771 34,477 $ 39,919 $ 51,919 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 4. Fair Value Measurements Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. The valuation of assets and liabilities is subject to fair value measurements using a three-tiered approach and fair value measurements are classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): At September 30, 2020 Quoted prices Significant in active other Significant markets for observable unobservable September 30, identical assets inputs inputs 2020 (Level 1) (Level 2) (Level 3) Assets Cash equivalents: Money market funds (i) $ 7,936 $ 7,936 $ - $ - Available for sale securities: U.S. government agency bonds (ii) 206,380 - 206,380 - Bank certificates of deposit (ii)(iii) 18,925 - 18,925 - Commercial paper (ii) 3,000 - 3,000 - Corporate notes (ii) 63,244 - 63,244 - Asset-backed securities (ii) 17,892 - 17,892 - Investments held for deferred compensation plans 4,608 4,608 Total Assets $ 321,985 $ 7,936 $ 314,049 $ - Liabilities Deferred compensation plans $ 4,530 $ - $ 4,530 $ - Total Liabilities $ 4,530 - $ 4,530 $ - At December 31, 2019 Quoted prices Significant in active other Significant markets for observable unobservable December 31, identical assets inputs inputs 2019 (Level 1) (Level 2) (Level 3) Assets Cash equivalents: Money market funds (i) $ 2,530 $ 2,530 $ - $ - Available for sale securities: Bank certificates of deposit (ii) (iii) 14,208 - 14,208 - Commercial paper (ii) 7,484 - 7,484 - Corporate notes (ii) 65,638 - 65,638 - Asset-backed securities (ii) 25,424 - 25,424 - Investments held for deferred compensation plans 3,511 3,511 Total Assets $ 118,795 $ 2,530 $ 116,265 $ - Liabilities Cash-settled stock options $ 6,685 - 6,685 - Deferred compensation plans 3,669 - 3,669 - Total Liabilities $ 10,354 $ - $ 10,354 $ - (i) Included in cash and cash equivalents with a maturity of three months or less from date of purchase on the condensed consolidated balance sheets. (ii) Included in short-term investments on the condensed consolidated balance sheets. (iii) As of September 30, 2020 and December 31, 2019, a bank certificate of deposit totaling $2,000 and $1,201 (in thousands), respectively, is included in cash and cash equivalents on the condensed consolidated balance sheets, as the investment has a maturity of three months or less from the date of purchase on the condensed consolidated balance sheets. Money market funds and currency are highly liquid investments and are actively traded. The pricing information on these investment instruments is readily available and can be independently validated as of the measurement date. U.S. government agency bonds, U.S. government bonds, bank certificates of deposit, commercial paper, corporate notes and asset-backed securities are measured at fair value using Level 2 inputs. The Company reviews trading activity and pricing for these investments as of each measurement date. Pursuant to the Company’s deferred compensation plan (the Deferred Compensation Plan), the Company has also established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability. The investments of the rabbi trust and Deferred Compensation Plan liability consist of company-owned life insurance policies (COLIs) and the pricing on these investments can be independently evaluated. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from third party data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. This approach results in the classification of these securities as Level 2 of the fair value hierarchy. The fair value of cash-settled stock options is based on the Black-Scholes option valuation model utilizing the Company’s stock price, the cash-settled options’ remaining term, expected stock price volatility, and the risk-free interest rate as of the measurement date. The changes in the fair value are reflected in compensation expense within selling, general and administrative expense on the consolidated income statement. See Note 10 Stock-Based Compensation There were no transfers between levels within the fair value hierarchy during the periods presented. Convertible Senior Notes As of September 30, 2020, the fair value of the Convertible Notes was $331.0 million. The fair value was determined on the basis of the market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy. See Note 9, Convertible Senior Notes |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Leases | Note 5. Leases The Company has operating and finance leases for facilities and certain equipment. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of ASC 842, the Company combines lease and non-lease components. The Company’s leases have remaining non-cancelable lease terms of approximately one year to thirteen years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the lease within one year. The exercise of lease renewal options is at the Company’s sole discretion. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for common area maintenance, landlord incentives and/or inflation. On November 14, 2018, the Company entered into an office building lease pursuant to which the Company will lease one property containing three existing office buildings, comprising approximately 160,000 rentable square feet of space, located in Aliso Viejo, California (Aliso Facility) which was accounted for as a finance lease. The term of the Aliso Facility commenced on April 1, 2019 and continues for thirteen years . The agreement contains an option to extend the lease for two additional five year periods at market rates. The Company currently intends to relocate its corporate administrative headquarters, along with certain laboratory, research and development and warehouse space, to the Aliso Facility in 2021. The lease landlord agreed to provide the Company with a tenant improvement allowance in the amount of the cost of any leasehold improvements, not to exceed approximately $12.6 million, upon the Company providing the necessary documentation evidencing the costs of the allowable leasehold improvements. The Company leases two adjacent facilities located in San Clemente, California. In July 2020, the Company extended the term of each of the leases for its two San Clemente, California headquarters facilities by five years and five months . Each of these leases now expires on May 31, 2030, and each contains an option to extend the lease for one additional five year period at market rates. In conjunction with these extensions, each of the lease landlords agreed to provide the Company with a tenant improvement allowance in the amount of the cost of certain leasehold improvements, upon the Company providing the necessary documentation evidencing the costs of the allowable leasehold improvements, and rent abatement totaling approximately $0.8 million in the aggregate. The Company’s San Clemente locations will continue to serve as its main manufacturing locations through 2030. As a result of the Avedro Merger, the Company leases approximately 27,000 square feet of office and laboratory space in Waltham, Massachusetts, pursuant to a lease agreement that expires in 2023. The Company also currently occupies approximately 19,000 square feet of leased manufacturing space in Burlington, Massachusetts (Burlington Lease). The Company’s remaining U.S.-based and foreign subsidiaries’ leased office space totals less than 14,000 square feet. The current portion of the Company’s operating lease liability is included in accrued liabilities on the condensed consolidated balance sheets. The following table presents the maturity of the Company’s operating and finance lease liabilities as of September 30, 2020: Maturity of Lease Liabilities Operating Finance (in thousands) Leases (a) Leases (b) Remainder of 2020 $ 577 $ — 2021 2,700 — 2022 3,245 — 2023 2,230 3,156 2024 2,023 5,184 2025 2,050 5,340 2026 2,110 5,500 Thereafter 18,521 107,522 Total lease payments $ 33,456 $ 126,702 Less: imputed interest 13,207 66,000 Total lease liabilities $ 20,249 $ 60,702 (a) Operating lease payments include $11.9 million related to options to extend lease terms that are reasonably certain of being exercised. (b) Finance lease payments include $75.8 million related to options to extend lease terms that are reasonably certain of being exercised. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations | |
Business Combinations | Note 6. Business Combinations As a result of the Avedro Merger discussed in Note 1, Organization and Basis of Presentation The fair value of the Merger Consideration transferred at closing was $437.8 million, and consisted of Glaukos common stock worth $406.8 million issued to replace Avedro common stock, Glaukos common stock worth $0.2 million to replace certain vested Avedro warrants, and $30.8 million of value attributable to the pre-combination services associated with Replacement Awards. See Note 10, Stock-based Compensation Avedro shares of common stock outstanding at closing 17,670,003 Exchange Ratio 0.365 Right to receive shares of Glaukos 6,449,551 Glaukos closing stock price on November 21, 2019 $ 63.07 Fair value of Glaukos common stock issued in the Avedro Merger, plus an immaterial amount of cash paid for fractional shares $ 406,776 Fair value of Glaukos common stock issued to replace certain vested Avedro warrants $ 189 Fair value of Replacement Awards attributable to pre-combination services $ 30,786 Total Merger Consideration $ 437,751 The Company performed a valuation analysis of the fair market value of Avedro’s assets and liabilities as of closing of the Avedro Merger. The following table sets forth a preliminary allocation of the Merger Consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, with the excess recorded to goodwill. This allocation of the Merger Consideration as of November 21, 2019 may be subject to revision if new facts and circumstances arise over the measurement period, which may extend up to one year from closing (in thousands): Assets Acquired: Cash $ 49,101 Accounts receivable 13,113 Inventory 33,339 Prepaid expenses and other current assets 2,522 Restricted cash 551 Property and equipment 1,489 Intangible assets 385,200 Goodwill 66,134 Liabilities Assumed: Accounts payable 7,056 Accrued liabilities 6,776 Deferred revenue 1,389 Debt 22,496 Deferred revenue, non-current 43 Deferred tax liability 75,938 Fair value of net assets acquired $ 437,751 Goodwill represents the excess of the Merger Consideration over the preliminary fair value of the underlying assets acquired and liabilities assumed. Goodwill is attributable to the assembled workforce of experienced personnel at Avedro and expected synergies, and is not deductible for tax purposes. Additionally, the fair market value inventory adjustment totaled approximately $29.0 million and is being amortized to cost of sales over the inventory’s expected turnover period. The fair value and estimated useful lives of the Avedro intangible assets are as follows (in thousands, except where noted): Estimated Fair Useful Life Value (in years) Intangible assets subject to amortization: Developed technology $ 252,200 11.4 Customer relationships 14,100 5 Total $ 266,300 Intangible assets not subject to amortization: In-process research and development (IPR&D) $ 118,900 Indefinite Total intangible assets $ 385,200 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | Note 7. Intangible Assets and Goodwill Avedro intangible assets As part of the Avedro Merger on November 21, 2019, the Company acquired identifiable intangible assets for (1) developed technology related to Photrexa The fair value of developed technology and IPR&D assets were determined using an excess earnings methodology. Significant assumptions used in the valuation include: (i) the period in which material net cash inflows are expected to commence, which was estimated to be 2021 for developed technology and 2023 for IPR&D assets, and (ii) the risk-adjusted discount rate of 11% for developed technology and 13% for IPR&D assets. For the three months ended September 30, 2020, amortization expense related to the above finite-lived intangible assets was approximately $5.5 million and $0.7 million, recorded in cost of sales and selling, general and administrative expenses, respectively, in the condensed consolidated statement of operations. For the nine months ended September 30, 2020, amortization expense related to the above finite-lived intangible assets was approximately $16.6 million and $2.1 million, recorded in cost of sales and selling, general and administrative expenses, respectively, in the condensed consolidated statement of operations. There was no amortization expense related to these intangible assets during the three and nine months ended September 30, 2019. The Company evaluated its indefinite-lived intangible assets for impairment in connection with the COVID-19 pandemic utilizing the methodology pursuant to the adoption of ASU 2017-04 and concluded these intangible assets were not impaired as of September 30, 2020. Goodwill As a result of the Avedro Merger, $66.1 million in goodwill was recorded as of December 31, 2019. For additional details, refer to Note 6, Business Combinations The following table presents the composition of our intangible assets and goodwill (in thousands): Estimated As of September 30, 2020 As of December 31, 2019 Useful Gross Gross Life Carrying Accumulated Net Carrying Accumulated Net (in years) Amount Amortization Amount Amount Amortization Amount Developed technology 11.4 $ 252,200 (18,870) 233,330 252,200 (2,301) 249,899 Customer relationships 5.0 14,100 (2,409) 11,691 14,100 (294) 13,806 Intangible assets subject to amortization 266,300 (21,279) 245,021 266,300 (2,595) 263,705 In-process research and development Indefinite $ 118,900 — 118,900 118,900 — 118,900 Goodwill Indefinite $ 66,134 — 66,134 66,134 — 66,134 Total $ 451,334 $ (21,279) $ 430,055 $ 451,334 $ (2,595) $ 448,739 As of September 30, 2020, expected amortization expense for unamortized finite-lived intangible assets for the next five years and thereafter is as follows (in thousands): Amortization Expense Remainder of 2020 $ 6,228 2021 24,912 2022 24,912 2023 24,912 2024 24,619 Thereafter 139,438 Total amortization $ 245,021 Actual amortization expense to be reported in future periods could differ from these estimates as a result of asset impairments, acquisitions, or other facts and circumstances. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | Note 8. Revenue from Contracts with Customers The Company’s net sales are generated primarily from sales of iStent Photrexa Revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services, and all of the Company’s net sales are considered revenue from contracts with customers. Disaggregation of Revenue The Company’s revenues disaggregated by product category, for the three and nine months ended September 30, 2020 and September 30, 2019 was as follows (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Glaucoma $ 51,926 $ 58,509 $ 121,007 $ 171,135 Corneal Health 12,905 — 30,718 — Total $ 64,831 $ 58,509 $ 151,725 $ 171,135 The following table presents the Company’s revenues disaggregated by geography for the three and nine months ended September 30, 2020 and September 30, 2019 (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 United States $ 50,599 $ 47,588 $ 116,152 $ 139,893 International 14,232 10,921 35,573 31,242 Total net sales $ 64,831 $ 58,509 $ 151,725 $ 171,135 Contract Balances Contract Assets Amounts are recorded as accounts receivable when the Company’s right to consideration becomes unconditional. Payment terms on invoiced amounts are typically 30 days for glaucoma and corneal health products, though extended payment terms on corneal health products may be offered. However, the Company does not consider any significant financing components in customer contracts given the expected time between transfer of the promised products and the payment of the associated consideration is less than one year. As of September 30, 2020 and December 31, 2019, all amounts included in accounts receivable, net on the condensed consolidated balance sheets are related to contracts with customers. Sales commissions earned on U.S. sales of KXL systems are capitalized as the commissions represent costs to obtain a contract and the amortization period is deemed greater than one year. These costs are deferred in other assets on the Company’s condensed consolidated balance sheet, net of the short term portion included in prepaid assets and other current assets, and are amortized as a sales and marketing expense on a straight-line basis over the expected period of benefit. Capitalized sales commissions and the related amortization expense included in the condensed consolidated financial statements were immaterial as of September 30, 2020 and December 31, 2019. Aside from the aforementioned contract assets, the Company does not have any contract assets given that the Company does not have any unbilled receivables and sales commissions on other products are expensed within selling, general and administrative expenses within the condensed consolidated statement of operations when incurred as any incremental cost of obtaining contracts with customers would have an amortization period of less than one year. Contract Liabilities Contract liabilities reflect consideration received from customers’ purchases allocated to the Company’s future performance obligations. The Company has a performance obligation to issue a rebate to customers who may be eligible for a rebate at the conclusion of their contract term. This performance obligation is transferred over time and the Company’s method of measuring progress is the output method, whereby the progress is measured by the estimated rebate earned to date over the total rebate estimated to be earned over the contract period. The Company’s rebate allowance is included in accrued liabilities in the condensed consolidated balance sheets and estimated rebates accrued were not material during the periods presented. Additionally, in the U.S. the Company has a performance obligation related to its customers’ right to a future discount on single dose pharmaceutical purchases, and, to a lesser extent, extended warranty service contracts. The amount allocated to the customers’ right to a future discount is expected to be recognized when the customer elects to utilize the discount, which is generally within one year. As of September 30, 2020 and December 31, 2019, this amount was immaterial as was the amount allocated to extended warranty service contracts. During the three and nine months ended September 30, 2020 and September 30, 2019, the Company did not recognize any revenue related to material changes in transaction prices regarding its contracts with customers and did not recognize any material changes in revenue related to amounts included in contract liabilities at the beginning of the period. The Company’s net sales within a fiscal year may be impacted seasonally, as demand for U.S. ophthalmic procedures is typically softer in the first quarter and stronger in the fourth quarter of a given year. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Senior Notes | |
Convertible Senior Notes | Note 9. Convertible Senior Notes In June 2020, the Company issued $287.5 million in aggregate principal amount of Convertible Notes pursuant to an indenture dated June 11, 2020, between the Company and Wells Fargo Bank, National Association, as trustee (the Indenture), in a private offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended. The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 2.75% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The Convertible Notes will mature on June 15, 2027, unless earlier converted, redeemed or repurchased in accordance with their terms. In connection with issuing the Convertible Notes, the Company received $242.2 million in proceeds, after deducting fees and offering expenses and paying the cost of the capped call transactions described below. The Convertible Notes may be converted at the option of the holders at any time prior to the close of business on the business day immediately preceding March 15, 2027, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period immediately after any ten consecutive trading day period (the Measurement Period) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of (i) the last reported sale price of the Company’s common stock and (ii) the conversion rate in effect on each such trading day; (3) with respect to any Convertible Notes the Company calls for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date, even if the Convertible Notes are not otherwise convertible at such time; or (4) upon the occurrence of specified corporate events. On or after March 15, 2027 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the Indenture. The Company’s current intent is to settle the principal amount of the Convertible Notes in cash upon conversion, with any remaining conversion value being delivered in shares of our common stock. The conversion rate for the Convertible Notes is initially 17.8269 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $56.10 per share of the Company’s common stock). The conversion rate is subject to adjustment in some events in accordance with the terms of the Indenture but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event or notice of redemption, as the case may be. The Company may not redeem the Convertible Notes prior to June 20, 2024. The Company may redeem for cash all or any portion of the Convertible Notes, at its option, on or after June 20, 2024 but before the 45th scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect on (i) each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption and (ii) the trading day immediately preceding the date the Company sends such notice, at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes. If the Company undergoes a fundamental change (as defined in the Indenture), holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was $189.8 million, which was calculated by using a discount rate of 9.5% , which was estimated to be the Company’s borrowing rate on the issuance date for a similar debt instrument without the conversion feature. The carrying amount of the equity component was $97.7 million, which represents the conversion option, and was determined by deducting the fair value of the liability component from the par value of the Convertible Notes. The equity component of the Convertible Notes is included in additional paid-in capital in the condensed consolidated balance sheets and will not be subsequently remeasured as long as it continues to meet the conditions for equity classification. The difference between the principal amount of the Convertible Notes and the liability component (the debt discount) is amortized to interest expense in the condensed consolidated statements of operations using the effective interest method over the term of the Convertible Notes. Total transaction costs for the issuance of the Convertible Notes were $9.6 million, consisting of the initial purchasers’ discount, commissions, and other issuance costs. The Company allocated the total transaction costs proportionally to the liability and equity components. The transaction costs attributed to the liability component were $6.3 million, which were recorded as debt issuance costs (presented as contra debt in the Company’s condensed consolidated balance sheets) and are amortized to interest expense in the condensed consolidated statements of operations over the term of the Convertible Notes. The transaction costs attributed to the equity component were $3.3 million, which were included in additional paid-in capital. Interest expense relating to the Convertible Notes in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 are summarized as follows (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2020 Contractual interest expense $ 1,977 $ 2,394 Amortization of debt discount (i) 2,514 3,037 Amortization of debt issuance costs (ii) 163 197 Total interest expense $ 4,654 $ 5,628 (i) The effective interest rate on the liability component of the 2027 Notes was 9.5% for the three and nine months ended September 30, 2020. As of September 30, 2020, the unamortized debt discount was $94.7 million and will be amortized over 6.7 years. (ii) As of September 30, 2020, the unamortized debt issuance cost for the Convertible Notes was $6.1 million. As of September 30, 2020, the convertible senior notes on the condensed consolidated balance sheets represented the carrying amount of the liability component of the Convertible Notes, net of unamortized debt discounts and debt issuance costs, which are summarized as follows (in thousands): Convertible Notes $ 287,500 Less: Unamortized debt discount and debt issuance costs (100,824) Carrying amount of Convertible Notes $ 186,676 Capped Call Transactions In connection with the offering of the Convertible Notes, in June 2020 the Company entered into privately negotiated capped call transactions with certain financial institutions (the Option Counterparties) and used an aggregate $35.7 million of the net proceeds from the Convertible Notes to pay the cost of the capped call transactions. The capped call transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the Convertible Notes or at the Company’s election (subject to certain conditions) offset any cash payments the Company is required to make in excess of the aggregate principal amount of converted Convertible Notes, as the case may be, with such reduction or offset subject to a cap based on the cap price. The cap price of the capped call transactions is initially $86.30 per share, which represents a premium of 100% over the last reported sale price of the Company’s common stock on June 8, 2020, and is subject to certain adjustments under the terms of the capped call transactions. The capped calls have an initial strike price of approximately $56.10 per share, subject to certain adjustments, which corresponds to the conversion option strike price in the Convertible Notes. The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the Convertible Notes (or approximately 5.1 million shares of the Company’s common stock). The capped call transactions are separate transactions that the Company entered into with the Option Counterparties, are not part of the terms of the Convertible Notes and will not change the holders’ rights under the Convertible Notes. As the capped call transactions meet certain accounting criteria, the cost of the capped call transactions of $35.7 million was recorded as a reduction in additional paid-in capital in the condensed consolidated balance sheets and will not be remeasured to fair value as long as the accounting criteria continue to be met. As of September 30, 2020, the Company had not purchased any shares under the capped call transactions. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation. | |
Stock-Based Compensation | Note 10. Stock-Based Compensation The Company has four stock-based compensation plans (collectively, the Stock Plans)—the 2001 Stock Option Plan (the 2001 Stock Plan), the 2011 Stock Plan (the 2011 Stock Plan), the 2015 Omnibus Incentive Compensation Plan (the 2015 Stock Plan) and the ESPP. The 2015 Stock Plan permits grants of RSU awards. The purpose of these Stock Plans is to provide incentives to employees, directors and nonemployee consultants. The Company no longer grants any awards under the 2001 Stock Plan and the 2011 Stock Plan. The maximum term of any stock options granted under the Stock Plans is 10 years. For employees and nonemployees, stock options generally vest 25% on the first anniversary of the original vesting date, with the balance vesting monthly or annually over the remaining three years. Stock options are granted at exercise prices at least equal to the fair value of the underlying stock at the date of the grant. For employees and nonemployees, generally, RSU awards vest 25% on each of the first, second third fourth The Compensation Committee has approved the grant of performance-based equity awards (PBEAs) to the Company’s named executive officers and certain other employees pursuant to the 2015 Stock Plan. These PBEAs will only vest upon the Compensation Committee’s determination that a pre-defined Company operational goals were satisfied. The ESPP permits eligible employees to purchase shares of the Company’s common stock, using contributions via payroll deductions of up to 15% of their earnings, at a price per share equal to 85% of the lower of the stock’s fair market value on the offering date or purchase date. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. On November 21, 2019, in connection with the Avedro Merger, the Company granted the following Replacement Awards to employees of Avedro: (i) approximately 0.2 million cash-settled stock options to certain executives, which became fully vested on December 31, 2019, (ii) approximately 0.1 million stock options and approximately 5,500 restricted stock units to members of Avedro’s board of directors, which were granted with no post-combination vesting requirements, and (iii) approximately 0.7 million stock options and approximately 0.1 million restricted stock units, which are subject to time-based vesting requirements. Approximately $30.8 million of the fair value of the Replacement Awards was attributable to pre-combination service and was included in the purchase price of Avedro (see Note 6 Business Combinations During the second quarter of 2020, the cash-settled options granted to certain former Avedro executives were modified to be equity-settled and to extend the expiration date of certain tranches to December 31, 2020. A liability of $2.2 million All share-based compensation arrangements The following table summarizes the allocation of stock-based compensation related to stock options and RSUs and includes Replacement Awards, as well as cash-settled stock options in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Cost of sales $ 1,029 $ 259 $ 2,001 $ 752 Selling, general and administrative 6,814 6,727 25,460 18,555 Research and development 1,816 1,561 7,100 4,616 Total $ 9,659 $ 8,547 $ 34,561 $ 23,923 At September 30, 2020, the total unamortized stock-based compensation expense was approximately $54.8 million of which $22.8 million was attributable to stock options and is to be recognized over the stock options’ remaining vesting terms of approximately 4.0 years (2.0 years on a weighted average basis). The remaining $32.0 million was attributable to RSUs and is to be recognized over the restricted stock units’ vesting terms of approximately 4.0 years (2.8 years on a weighted-average basis). The total stock-based compensation cost capitalized in inventory was not material for the three and nine month periods ended September 30, 2020 and September 30, 2019. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Taxes | |
Income Taxes | Note 11. Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate. For the three and nine months ended September 30, 2020, the Company’s estimated effective tax rate of 5.3% and 7.4%, respectively, was lower than the U.S. federal statutory rate primarily due to the generation of U.S. NOL carryforwards, which were partially offset by a valuation allowance, as well as state and foreign income taxes. The effective tax rate may be subject to fluctuations during the year as new information is obtained which may affect the assumptions used to estimate the effective tax rate, including factors such as expected utilization of NOL carryforwards, changes in or the interpretation of tax laws in jurisdictions where the Company conducts business, the Company’s expansion into new states or foreign countries, and the amount of valuation allowances against deferred tax assets. Intraperiod tax allocation rules require the Company to allocate the provision for income taxes between continuing operations and other categories of earnings. As a result, for the three and nine months ended September 30, 2020, the Company recorded a benefit for income taxes of $0.9 million and $8.7 million, respectively. For the three and nine months ended September 30, 2019, the Company recorded a provision for income taxes of $0.2 million and $0.4 million, respectively, which was primarily comprised of state and foreign income taxes. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of its assets and liabilities, along with NOL and tax credit carryforwards. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made. For the three and nine months ended September 30, 2020, the Company has recorded a valuation allowance against its deferred tax asset which are more likely than not to be realized. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement and classification in the financial statements of tax positions taken or expected to be taken in a tax return. As of September 30, 2020 and September 30, 2019, the Company had gross unrecognized tax benefits of $19.2 million and $13.8 million, respectively. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act is an emergency economic stimulus package that includes spending and tax relief measures to strengthen the United States economy and fund a nationwide effort to curtail the effects of COVID-19. Some of the more significant provisions which are expected to impact the Company’s condensed consolidated financial statements include increasing the NOL carryback period for certain losses to |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Patent Litigation On April 14, 2018, the Company filed a patent infringement lawsuit against Ivantis, Inc. (Ivantis) in the U.S. District Court for the Central District of California, Southern Division (the Court), alleging that Ivantis’ Hydrus © Microstent device infringes the Company’s U.S. Patent Nos. 6,626,858 and 9,827,143. In August 2018, Ivantis filed counterclaims alleging that the Company’s iStent inject infringes three patents which Ivantis acquired after the start of the litigation (Acquired Patents). On March 18, 2019, the Court granted the Company’s early motion for summary judgment, finding that the Company does not infringe the Acquired Patents. Fact discovery on the Company’s claims against Ivantis closed in September 2019, and trial is scheduled to begin on or around March 9, 2021. Additionally, Ivantis filed five Inter Partes Review (IPR) petitions with the Patent Trial and Appeal Board (PTAB) on the patents the Company has asserted in the litigation. The PTAB denied institution of all five petitions. Secured Letters of Credit The Company had a bank issue a letter of credit in the amount of $8.8 million that is related to its Aliso Facility. The letter of credit is secured with an amount of cash held in a restricted account of approximately $8.8 million as of September 30, 2020 and December 31, 2019. Beginning as of the first day of the thirty-seventh month of the lease term, and on each twelve month anniversary thereafter, the letter of credit will be reduced by 20% until the letter of credit amount has been reduced to $2.0 million. As a result of the Avedro Merger, the Company has two other irrevocable standby letters of credit secured with approximately $0.4 million of cash in a restricted account related to its office lease agreements. Lastly, the Company maintains $0.2 million in restricted cash which is held to collateralize a credit card program. Corporate Restructuring Costs Following the Avedro Merger, the Company initiated a restructuring plan that includes an estimated headcount reduction of 40 employees and a reallocation of responsibilities primarily within the selling, general and administrative functions. The Company measured and accrued the liabilities associated with employee separation costs at fair value as of the date the plan was announced and terminations were communicated to employees, which primarily includes severance pay and other separation costs such as benefit continuation. As of September 30, 2020 the Company has accrued $1.1 million of restructuring plan costs, has paid approximately $4.9 million in separation costs since the inception of the plan, and expects to incur a total of approximately $5.3 million in restructuring charges upon completion of the plan, which is expected to be completed in 2021. The recognition of restructuring charges requires that the Company make certain judgments and estimates regarding the nature, timing and amount of costs associated with the planned reductions of workforce. At the end of each reporting period, the Company will evaluate the remaining accrued balance to ensure appropriateness with the Company’s restructuring plans. A reconciliation of the beginning and ending balance of the restructuring reserve, included in accrued liabilities on the condensed consolidated balance sheet, is as follows (in thousands): Nine months ended September 30, 2020 Balance at beginning of period $ 4,096 Total restructuring accrual charges 1,131 Employee separation payments (4,921) Balance at end of period $ 306 Regents of the University of California On December 30, 2014, the Company executed an agreement (the UC Agreement) with the Regents of the University of California (the University) to correct inventorship in connection with a group of the Company’s U.S. patents (the Patent Rights) and to obtain from the University a covenant that it did not and would not claim any right or title to the Patent Rights and will not challenge or assist any others in challenging the Patent Rights. In connection with the UC Agreement, Glaukos agreed to pay to the University a low single-digit percentage of worldwide net sales of certain current and future products, including the Company’s iStent GMP Visions Solutions, Inc. In November 2013, the Company entered into an amended agreement (the Buyout Agreement) with GMP Vision Solutions, Inc. (GMP) pursuant to which the Company agreed to buyout any remaining royalty obligations related to the transfer and assignment of certain intellectual property from GMP to the Company. Pursuant to the Buyout Agreement, in the event of a Company sale as defined therein, the Company would be required to pay GMP a percentage of the sale consideration above a certain threshold, with such payment not to exceed $2.0 million. Executive Deferred Compensation Plan Pursuant to the Company’s Deferred Compensation Plan, eligible senior level employees are permitted to make elective deferrals of compensation to which he or she will become entitled in the future. The Company has also established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability. The investments of the rabbi trust consist of COLIs. The fair value of the Deferred Compensation Plan liability, included in other liabilities on the condensed consolidated balance sheets, was approximately $4.5 million and $3.7 million as of September 30, 2020 and December 31, 2019, respectively, and the cash surrender value of the COLIs, included in deposits and other assets on the condensed consolidated balance sheets, which reflects the underlying assets at fair value, was approximately $4.6 million and $3.5 million as of September 30, 2020 and December 31, 2019, respectively. Global Enterprise Systems Implementation In the first quarter of 2019, the Company began implementing new enterprise systems and other technology optimizations and facilities infrastructure globally. The Company’s new enterprise system went live in May 2020; therefore, software services costs along with any associated implementation costs after May 1, 2020 are being capitalized in accordance with the Company’s policy. As of September 30, 2020, the Company has firm purchase commitments related to software costs and these systems implementations of approximately |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Business Segment Information | |
Business Segment Information | Note 13. Business Segment Information The Company has one business activity: the development and commercialization of therapies designed to treat glaucoma, corneal disorders and retinal diseases, and operates as one operating segment. The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company’s revenues disaggregated by revenue and product category are included in Note 8, Revenue from Contracts with Customers |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Basis of presentation | Basis of presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited interim financial statements have been prepared on a basis consistent with the audited financial statements. As permitted under those rules, certain footnotes and other financial information that are normally required by GAAP have been condensed or omitted. In the opinion of management, the unaudited interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial information contained herein. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements at that date, but excludes disclosures required by GAAP for complete financial statements. These interim financial statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2019, which are contained in the Company’s Annual Report on Form 10-K filed with the United States (U.S.) Securities and Exchange Commission (SEC) on March 2, 2020. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates and assumptions. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these condensed consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. The most significant estimates in the accompanying condensed consolidated financial statements relate to revenue recognition, the fair value of the liability component of the Convertible Notes, the incremental borrowing rate related to the Company’s leased assets, stock-based compensation expense and the valuation of certain intangible assets related to the Company’s acquisition of Avedro. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, this process may result in actual results differing materially from those estimated amounts used in the preparation of the condensed consolidated financial statements. In |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that equate to the amount reported in the condensed consolidated statement of cash flows as of the beginning and end of the nine months ended September 30, 2020 (in thousands): September 30, December 31, 2020 2019 Cash and cash equivalents $ 80,994 $ 62,430 Restricted cash 9,326 9,326 Cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows $ 90,320 $ 71,756 |
Accounts Receivable | Accounts Receivable The Company sells its products directly to ambulatory surgery centers, hospitals, and physician private practices, with distributors being used in certain international locations where the Company does not have a direct commercial presence and the Company is exposed to credit losses primarily through sales of its products. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and periodic evaluation of customers’ receivables balances. Management estimates the adequacy of the allowance by using relevant available information, from internal and external sources, relating to past events, current conditions and forecasts. Historical credit loss experience provides the basis for estimation of expected credit losses and are adjusted as necessary using the relevant information available. The allowance for credit losses is measured on a collective basis when similar risk characteristic exists. The Company has identified one portfolio segment based on evaluation of the following risk characteristics: geographic regions, product lines, default rates and customer specific factors. Additionally, specific allowance amounts may be established to record the appropriate provision for customers that have a higher probability of non-payment. The Company charges off uncollectible receivables against the allowance when all attempts to collect the receivable have failed. The allowance for credit losses represents management’s best estimate of the amount of current expected credit losses and totaled approximately $1.4 million and $1.2 million as of September 30, 2020 and December 31, 2019, respectively, and there were immaterial bad-debt write offs charged during the nine months ended September 30, 2020. As of September 30, 2020, the Company evaluated the current and expected future economic and market conditions surrounding the COVID-19 pandemic as it relates to collectability of its accounts receivable and determined the estimate of expected credit losses was not materially impacted. The Company will continue to re-evaluate the estimate of credit losses related to COVID-19 in conjunction with its assessment of expected credit losses in subsequent quarters. Additionally, no customer accounted for more than 10% of net accounts receivable as of September 30, 2020 or December 31, 2019. |
Inventory | Inventory Except for inventory acquired in connection with the Avedro Merger, further described in Note 6, Business Combinations Management evaluates inventory for excess quantities and obsolescence and records an allowance to reduce the carrying value of inventory as determined necessary. During the nine months ended September 30, 2020, the Company recorded inventory write-off charges and COVID-19 related excess and obsolete reserves, a portion of which included the associated fair-value step up of acquired Avedro inventory, totaling a net $4.3 million. |
Convertible Senior Notes | Convertible Senior Notes The Company evaluates embedded conversion features within convertible debt under Accounting Standards Codification (ASC) 815, Derivatives and Hedging Debt with Conversion and Other Options The carrying amount of the liability component is calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option is determined by deducting the fair value of the liability component from the par value of the convertible notes. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (i.e., debt discount) will be amortized to interest expense over the term of the convertible notes. The Company may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of convertible debt. These costs may be paid in the form of cash or equity (such as warrants). These costs are allocated between debt and equity, with the portion allocated to debt amortized to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Income Taxes | Income Taxes Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates, along with net operating loss (NOL) and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. Management has considered estimated taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. Based upon the weight of available evidence, which includes the Company’s historical operating performance and limited potential to utilize tax credit carryforwards, the Company has determined that a portion of its deferred tax assets should be offset by a valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes increases or decreases, respectively, in the period such determination is made. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The Company also files income tax returns in the foreign countries in which its subsidiaries operate. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement, and classification in the condensed consolidated financial statements of tax positions taken or expected to be taken in a tax return. |
Stock Based Compensation | Stock-Based Compensation The Company recognizes compensation expense for all stock-based awards granted to employees and nonemployees, including members of its board of directors. The fair value of stock option awards is estimated at the grant date using the Black-Scholes option pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period using the straight-line method. The determination of the fair value-based measurement of stock options on the date of grant using an option pricing model is affected by the determination of the fair value of the underlying stock as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s stock price volatility over the expected term of the grants, and actual and projected stock option exercise behaviors. In the future, as additional empirical evidence regarding these estimates becomes available, the Company may change or refine its approach of deriving them, and these changes could impact the fair value-based measurement of stock options granted in the future. Changes in the fair value-based measurement of stock awards could materially impact the Company’s operating results. The fair value of restricted stock unit (RSU) awards made to employees and nonemployees is equal to the closing market price of the Company’s common stock on the grant date. |
Interest Expense | Interest Expense |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares that were outstanding for the period, without consideration for common stock equivalents. For periods when the Company realizes a net loss, no common stock equivalents are included in the calculation of weighted average number of dilutive common stock equivalents as the effect of applying the treasury stock method is considered anti-dilutive. For periods when the Company realizes net income, diluted net income per share is calculated by dividing the net income by the weighted average number of common shares plus the sum of the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury stock method. Common stock equivalents are comprised of stock options outstanding and unvested RSUs under the Company’s incentive compensation plans, and shares issuable under the Company’s Employee Stock Purchase Plan (ESPP). Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive were as follows (in common stock equivalent shares, in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Stock options outstanding 4,490 3,602 4,579 3,636 Unvested restricted stock units 519 232 499 364 Employee stock purchase plan 14 1 14 5 5,023 3,835 5,092 4,005 The Convertible Notes did not have an impact on the Company’s diluted share count as the average stock price of the Company’s common stock did not exceed $56.10 during the periods presented. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU0 No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments—Credit Losses Additionally, for available-for-sale debt securities with unrealized losses, ASU 2016-13 now requires allowances to be recorded instead of reducing the amortized cost of the investment. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. Given the composition of the Company’s available-for-sale securities, adoption of ASU 2016-13 did not have a material impact on the condensed consolidated financial statements as of September 30, 2020. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU No. 2018-15 , Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Note 12 Commitments and Contingencies In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606 In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06) , which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after December 15, 202 1 , including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company may adopt ASU 2020-06 effective January 1, 2021 and is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of cash and cash equivalents and restricted cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that equate to the amount reported in the condensed consolidated statement of cash flows as of the beginning and end of the nine months ended September 30, 2020 (in thousands): September 30, December 31, 2020 2019 Cash and cash equivalents $ 80,994 $ 62,430 Restricted cash 9,326 9,326 Cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows $ 90,320 $ 71,756 |
Schedule of potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders | Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive were as follows (in common stock equivalent shares, in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Stock options outstanding 4,490 3,602 4,579 3,636 Unvested restricted stock units 519 232 499 364 Employee stock purchase plan 14 1 14 5 5,023 3,835 5,092 4,005 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Balance Sheet Details | |
Schedule of short-term investments | Short-term investments consisted of the following (in thousands): At September 30, 2020 Maturity Amortized cost Unrealized Unrealized Estimated (in years) or cost gains losses fair value U.S. government agency bonds less than 3 206,294 137 (51) 206,380 Bank certificates of deposit less than 1 16,900 25 — 16,925 Commercial paper less than 1 2,997 3 — 3,000 Corporate notes less than 3 62,828 417 (1) 63,244 Asset-backed securities less than 5 17,627 265 — 17,892 Total $ 306,646 $ 847 $ (52) $ 307,441 At December 31, 2019 Maturity Amortized cost Unrealized Unrealized Estimated (in years) or cost gains losses fair value Bank certificates of deposit less than 1 12,999 7 — 13,006 Commercial paper less than 1 7,475 8 — 7,483 Corporate notes less than 3 65,354 295 (10) 65,639 Asset-backed securities less than 3 25,333 99 (7) 25,425 Total $ 111,161 $ 409 $ (17) $ 111,553 |
Schedule of accounts receivable, net | Accounts receivable consisted of the following (in thousands): September 30, December 31, 2020 2019 Accounts receivable $ 34,267 $ 39,657 Allowance for credit losses (1,382) (1,240) $ 32,885 $ 38,417 |
Schedule of inventory | Inventory, net consisted of the following (in thousands): September 30, December 31, 2020 2019 Finished goods $ 6,305 $ 32,108 Work in process 4,316 3,884 Raw material 9,269 6,586 $ 19,890 $ 42,578 |
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands): September 30, December 31, 2020 2019 Accrued bonuses $ 9,655 $ 13,525 Accrued vacation benefits 3,693 2,784 Accrued payroll taxes 3,406 1,133 Accrued interest 2,394 - Other accrued liabilities 20,771 34,477 $ 39,919 $ 51,919 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements | |
Schedule of the Company's financial assets and financial liabilities measured at fair value on a recurring basis | The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): At September 30, 2020 Quoted prices Significant in active other Significant markets for observable unobservable September 30, identical assets inputs inputs 2020 (Level 1) (Level 2) (Level 3) Assets Cash equivalents: Money market funds (i) $ 7,936 $ 7,936 $ - $ - Available for sale securities: U.S. government agency bonds (ii) 206,380 - 206,380 - Bank certificates of deposit (ii)(iii) 18,925 - 18,925 - Commercial paper (ii) 3,000 - 3,000 - Corporate notes (ii) 63,244 - 63,244 - Asset-backed securities (ii) 17,892 - 17,892 - Investments held for deferred compensation plans 4,608 4,608 Total Assets $ 321,985 $ 7,936 $ 314,049 $ - Liabilities Deferred compensation plans $ 4,530 $ - $ 4,530 $ - Total Liabilities $ 4,530 - $ 4,530 $ - At December 31, 2019 Quoted prices Significant in active other Significant markets for observable unobservable December 31, identical assets inputs inputs 2019 (Level 1) (Level 2) (Level 3) Assets Cash equivalents: Money market funds (i) $ 2,530 $ 2,530 $ - $ - Available for sale securities: Bank certificates of deposit (ii) (iii) 14,208 - 14,208 - Commercial paper (ii) 7,484 - 7,484 - Corporate notes (ii) 65,638 - 65,638 - Asset-backed securities (ii) 25,424 - 25,424 - Investments held for deferred compensation plans 3,511 3,511 Total Assets $ 118,795 $ 2,530 $ 116,265 $ - Liabilities Cash-settled stock options $ 6,685 - 6,685 - Deferred compensation plans 3,669 - 3,669 - Total Liabilities $ 10,354 $ - $ 10,354 $ - (i) Included in cash and cash equivalents with a maturity of three months or less from date of purchase on the condensed consolidated balance sheets. (ii) Included in short-term investments on the condensed consolidated balance sheets. (iii) As of September 30, 2020 and December 31, 2019, a bank certificate of deposit totaling $2,000 and $1,201 (in thousands), respectively, is included in cash and cash equivalents on the condensed consolidated balance sheets, as the investment has a maturity of three months or less from the date of purchase on the condensed consolidated balance sheets. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Schedule of maturity of lease liability | Maturity of Lease Liabilities Operating Finance (in thousands) Leases (a) Leases (b) Remainder of 2020 $ 577 $ — 2021 2,700 — 2022 3,245 — 2023 2,230 3,156 2024 2,023 5,184 2025 2,050 5,340 2026 2,110 5,500 Thereafter 18,521 107,522 Total lease payments $ 33,456 $ 126,702 Less: imputed interest 13,207 66,000 Total lease liabilities $ 20,249 $ 60,702 (a) Operating lease payments include $11.9 million related to options to extend lease terms that are reasonably certain of being exercised. (b) Finance lease payments include $75.8 million related to options to extend lease terms that are reasonably certain of being exercised. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations | |
Schedule of Merger Consideration | Avedro shares of common stock outstanding at closing 17,670,003 Exchange Ratio 0.365 Right to receive shares of Glaukos 6,449,551 Glaukos closing stock price on November 21, 2019 $ 63.07 Fair value of Glaukos common stock issued in the Avedro Merger, plus an immaterial amount of cash paid for fractional shares $ 406,776 Fair value of Glaukos common stock issued to replace certain vested Avedro warrants $ 189 Fair value of Replacement Awards attributable to pre-combination services $ 30,786 Total Merger Consideration $ 437,751 |
Schedule of business combination assets and liabilities | Assets Acquired: Cash $ 49,101 Accounts receivable 13,113 Inventory 33,339 Prepaid expenses and other current assets 2,522 Restricted cash 551 Property and equipment 1,489 Intangible assets 385,200 Goodwill 66,134 Liabilities Assumed: Accounts payable 7,056 Accrued liabilities 6,776 Deferred revenue 1,389 Debt 22,496 Deferred revenue, non-current 43 Deferred tax liability 75,938 Fair value of net assets acquired $ 437,751 |
Schedule of business combination intangible assets | The fair value and estimated useful lives of the Avedro intangible assets are as follows (in thousands, except where noted): Estimated Fair Useful Life Value (in years) Intangible assets subject to amortization: Developed technology $ 252,200 11.4 Customer relationships 14,100 5 Total $ 266,300 Intangible assets not subject to amortization: In-process research and development (IPR&D) $ 118,900 Indefinite Total intangible assets $ 385,200 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Assets and Goodwill | |
Schedule reflecting the composition of intangible assets and goodwill | The following table presents the composition of our intangible assets and goodwill (in thousands): Estimated As of September 30, 2020 As of December 31, 2019 Useful Gross Gross Life Carrying Accumulated Net Carrying Accumulated Net (in years) Amount Amortization Amount Amount Amortization Amount Developed technology 11.4 $ 252,200 (18,870) 233,330 252,200 (2,301) 249,899 Customer relationships 5.0 14,100 (2,409) 11,691 14,100 (294) 13,806 Intangible assets subject to amortization 266,300 (21,279) 245,021 266,300 (2,595) 263,705 In-process research and development Indefinite $ 118,900 — 118,900 118,900 — 118,900 Goodwill Indefinite $ 66,134 — 66,134 66,134 — 66,134 Total $ 451,334 $ (21,279) $ 430,055 $ 451,334 $ (2,595) $ 448,739 |
Schedule of expected amortization of finite-lived intangible assets | As of September 30, 2020, expected amortization expense for unamortized finite-lived intangible assets for the next five years and thereafter is as follows (in thousands): Amortization Expense Remainder of 2020 $ 6,228 2021 24,912 2022 24,912 2023 24,912 2024 24,619 Thereafter 139,438 Total amortization $ 245,021 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contracts with Customers | |
Schedule of disaggregation of revenue | The Company’s revenues disaggregated by product category, for the three and nine months ended September 30, 2020 and September 30, 2019 was as follows (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Glaucoma $ 51,926 $ 58,509 $ 121,007 $ 171,135 Corneal Health 12,905 — 30,718 — Total $ 64,831 $ 58,509 $ 151,725 $ 171,135 The following table presents the Company’s revenues disaggregated by geography for the three and nine months ended September 30, 2020 and September 30, 2019 (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 United States $ 50,599 $ 47,588 $ 116,152 $ 139,893 International 14,232 10,921 35,573 31,242 Total net sales $ 64,831 $ 58,509 $ 151,725 $ 171,135 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Senior Notes | |
Schedule of interest expense relating to the Convertible Notes | Interest expense relating to the Convertible Notes in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 are summarized as follows (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2020 Contractual interest expense $ 1,977 $ 2,394 Amortization of debt discount (i) 2,514 3,037 Amortization of debt issuance costs (ii) 163 197 Total interest expense $ 4,654 $ 5,628 (i) The effective interest rate on the liability component of the 2027 Notes was 9.5% for the three and nine months ended September 30, 2020. As of September 30, 2020, the unamortized debt discount was $94.7 million and will be amortized over 6.7 years. (ii) As of September 30, 2020, the unamortized debt issuance cost for the Convertible Notes was $6.1 million. |
Schedule of convertible senior notes | As of September 30, 2020, the convertible senior notes on the condensed consolidated balance sheets represented the carrying amount of the liability component of the Convertible Notes, net of unamortized debt discounts and debt issuance costs, which are summarized as follows (in thousands): Convertible Notes $ 287,500 Less: Unamortized debt discount and debt issuance costs (100,824) Carrying amount of Convertible Notes $ 186,676 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation. | |
Schedule summarizing the allocation of stock-based compensation | The following table summarizes the allocation of stock-based compensation related to stock options and RSUs and includes Replacement Awards, as well as cash-settled stock options in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Cost of sales $ 1,029 $ 259 $ 2,001 $ 752 Selling, general and administrative 6,814 6,727 25,460 18,555 Research and development 1,816 1,561 7,100 4,616 Total $ 9,659 $ 8,547 $ 34,561 $ 23,923 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Schedule of restructuring reserve | A reconciliation of the beginning and ending balance of the restructuring reserve, included in accrued liabilities on the condensed consolidated balance sheet, is as follows (in thousands): Nine months ended September 30, 2020 Balance at beginning of period $ 4,096 Total restructuring accrual charges 1,131 Employee separation payments (4,921) Balance at end of period $ 306 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - (Details) - USD ($) $ in Thousands | Jun. 11, 2020 | Nov. 21, 2019 | Sep. 30, 2020 |
Avedro | |||
Organization and basis of presentation information | |||
Exchange Ratio (as a percent) | 36.50% | ||
Total Merger Consideration | $ 437,751 | ||
Fair value of Glaukos common stock issued in the Avedro Merger, plus an immaterial amount of cash paid for fractional shares | 406,776 | ||
Fair value of Replacement Awards attributable to pre-combination services | 30,786 | ||
Fair value of Glaukos common stock issued to replace certain vested Avedro warrants | $ 189 | ||
2.75% Convertible Senior Notes due 2027 | |||
Organization and basis of presentation information | |||
Aggregate principle amount | $ 287,500 | $ 287,500 | |
Interest rate (as a percent) | 2.75% | ||
Net proceeds from the debt | $ 242,200 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Restricted cash | |||||
Cash and cash equivalents | $ 80,994 | $ 62,430 | |||
Restricted cash | 9,326 | 9,326 | |||
cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows | 90,320 | 71,756 | $ 48,415 | $ 38,596 | |
Accounts Receivable | |||||
Allowance for doubtful accounts receivable | 1,382 | 1,240 | |||
Inventory | |||||
Inventory write-down | 4,300 | ||||
Retained earnings | $ (299,410) | $ (189,710) | |||
Adjustment | ASU 2016-13 | |||||
Inventory | |||||
Retained earnings | $ 0 | ||||
Adjustment | ASU 2018-15 | |||||
Inventory | |||||
Costs capitalized relating to global enterprise systems | $ 1,600 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Antidilutive Securities (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share | 5,023 | 3,835 | 5,092 | 4,005 |
Maximum | ||||
Anti-dilutive securities | ||||
Average stock price | $ 56.10 | $ 56.10 | $ 56.10 | $ 56.10 |
Stock options | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share | 4,490 | 3,602 | 4,579 | 3,636 |
RSU | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share | 519 | 232 | 499 | 364 |
ESPP | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share | 14 | 1 | 14 | 5 |
Balance Sheet Details - Short-T
Balance Sheet Details - Short-Term Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Short-term investments | ||
Amortized cost | $ 306,646 | $ 111,161 |
Unrealized gains | 847 | 409 |
Unrealized losses | (52) | (17) |
Estimated fair value | 307,441 | 111,553 |
U.S. Government agency bonds | ||
Short-term investments | ||
Amortized cost | 206,294 | |
Unrealized gains | 137 | |
Unrealized losses | (51) | |
Estimated fair value | $ 206,380 | |
U.S. Government agency bonds | Maximum | ||
Short-term investments | ||
Maturity | 3 years | |
Bank certificates of deposit | ||
Short-term investments | ||
Amortized cost | $ 16,900 | 12,999 |
Unrealized gains | 25 | 7 |
Estimated fair value | $ 16,925 | $ 13,006 |
Bank certificates of deposit | Maximum | ||
Short-term investments | ||
Maturity | 1 year | 1 year |
Commercial paper | ||
Short-term investments | ||
Amortized cost | $ 2,997 | $ 7,475 |
Unrealized gains | 3 | 8 |
Estimated fair value | $ 3,000 | $ 7,483 |
Commercial paper | Maximum | ||
Short-term investments | ||
Maturity | 1 year | 1 year |
Corporate notes | ||
Short-term investments | ||
Amortized cost | $ 62,828 | $ 65,354 |
Unrealized gains | 417 | 295 |
Unrealized losses | (1) | (10) |
Estimated fair value | $ 63,244 | $ 65,639 |
Corporate notes | Maximum | ||
Short-term investments | ||
Maturity | 3 years | 3 years |
Asset-backed securities | ||
Short-term investments | ||
Amortized cost | $ 17,627 | $ 25,333 |
Unrealized gains | 265 | 99 |
Unrealized losses | (7) | |
Estimated fair value | $ 17,892 | $ 25,425 |
Asset-backed securities | Maximum | ||
Short-term investments | ||
Maturity | 5 years | 3 years |
Balance Sheet Details - Other (
Balance Sheet Details - Other (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts Receivable, Net | ||
Accounts receivable | $ 34,267 | $ 39,657 |
Allowance for credit losses | (1,382) | (1,240) |
Accounts receivable, net | 32,885 | 38,417 |
Inventory | ||
Finished goods | 6,305 | 32,108 |
Work in process | 4,316 | 3,884 |
Raw materials | 9,269 | 6,586 |
Total inventory | 19,890 | 42,578 |
Accrued Liabilities | ||
Accrued bonuses | 9,655 | 13,525 |
Accrued vacation benefits | 3,693 | 2,784 |
Accrued payroll taxes | 3,406 | 1,133 |
Accrued interest | 2,394 | |
Other accrued liabilities | 20,771 | 34,477 |
Total accrued liabilities | $ 39,919 | $ 51,919 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Total assets | $ 321,985 | $ 118,795 |
Liabilities | ||
Cash-settled stock options | 6,685 | |
Total liabilities | 4,530 | 10,354 |
Fair Value, Inputs, Level 1 | ||
Assets | ||
Total assets | 7,936 | 2,530 |
Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 314,049 | 116,265 |
Liabilities | ||
Cash-settled stock options | 6,685 | |
Total liabilities | 4,530 | 10,354 |
Money market funds | ||
Assets | ||
Total assets | 7,936 | 2,530 |
Money market funds | Fair Value, Inputs, Level 1 | ||
Assets | ||
Total assets | 7,936 | 2,530 |
U.S. Government agency bonds | ||
Assets | ||
Total assets | 206,380 | |
U.S. Government agency bonds | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 206,380 | |
Bank certificates of deposit | ||
Assets | ||
Cash equivalents | 2,000 | 1,201 |
Total assets | 18,925 | 14,208 |
Bank certificates of deposit | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 18,925 | 14,208 |
Commercial paper. | ||
Assets | ||
Total assets | 3,000 | 7,484 |
Commercial paper. | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 3,000 | 7,484 |
Corporate notes | ||
Assets | ||
Total assets | 63,244 | 65,638 |
Corporate notes | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 63,244 | 65,638 |
Asset-backed securities | ||
Assets | ||
Total assets | 17,892 | 25,424 |
Asset-backed securities | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 17,892 | 25,424 |
Investments held for deferred compensation plans | ||
Assets | ||
Total assets | 4,608 | 3,511 |
Liabilities | ||
Total liabilities | 4,530 | 3,669 |
Investments held for deferred compensation plans | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 4,608 | 3,511 |
Liabilities | ||
Total liabilities | $ 4,530 | $ 3,669 |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 11, 2020 | Sep. 30, 2019 |
Fair Value Measurements, Valuation | |||
Amount of transfers of assets and liabilities measured on a recurring basis between Levels 1, 2 and 3 of the fair value hierarchy | $ 0 | $ 0 | |
2.75% Convertible Senior Notes due 2027 | |||
Fair Value Measurements, Valuation | |||
Interest rate (as a percent) | 2.75% | ||
Fair value of convertible senior notes | $ 331,000 |
Leases - Terms (Details)
Leases - Terms (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Operating Lease Existence of Option to Extend | true |
Optional lease extension term | 10 years |
Operating Lease Existence of Option to Terminate | true |
Operating lease period for lease termination | 1 year |
Minimum | |
Leases | |
Operating lease remaining lease term | 1 year |
Maximum | |
Leases | |
Operating lease remaining lease term | 13 years |
Leases - Leases Details (Detail
Leases - Leases Details (Details) $ in Millions | Nov. 14, 2020USD ($)ft²item | Jul. 31, 2020USD ($)item | Sep. 30, 2020ft²item |
Operating Leases | |||
Optional lease extension term | 10 years | ||
Domestic Office Leases | |||
Operating Leases | |||
The number of adjacent facilities rented | 2 | 2 | |
Extended lease term | 5 years 5 months | ||
Number of lease renewal periods | 1 | ||
Optional lease extension term | 5 years | ||
Tenant improvement allowance and abatement | $ | $ 0.8 | ||
Foreign Subsidiaries Office Leases | Maximum | |||
Operating Leases | |||
Area of leased space | ft² | 14,000 | ||
Aliso Facility | |||
Operating Leases | |||
Number of properties leased | 1 | ||
Number of buildings leased | 3 | ||
Number of lease renewal periods | 2 | ||
Optional lease extension term | 5 years | ||
Area of leased space | ft² | 160,000 | ||
Tenant improvement allowance and abatement | $ | $ 12.6 | ||
Term of lease | 13 years | ||
Waltham Massachusetts Facility | |||
Operating Leases | |||
Area of leased space | ft² | 27,000 | ||
Burlington Massachusetts Facility | |||
Operating Leases | |||
Area of leased space | ft² | 19,000 |
Leases - Maturity (Details)
Leases - Maturity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Leases | |
Existence of option to extend | true |
Operating Leases | |
Remainder of 2020 | $ 577 |
2021 | 2,700 |
2022 | 3,245 |
2023 | 2,230 |
2024 | 2,023 |
2025 | 2,050 |
2025 | 2,110 |
Thereafter | 18,521 |
Total Operating lease payments | 33,456 |
Less: imputed interest | 13,207 |
Total Operating lease liabilities | 20,249 |
Amount of operating leases with option to extend commitment | 11,900 |
Finance Leases | |
2023 | 3,156 |
2024 | 5,184 |
2025 | 5,340 |
2026 | 5,500 |
Thereafter | 107,522 |
Total Finance lease payments | 126,702 |
Less: imputed interest | 66,000 |
Total Finance lease liabilities | 60,702 |
Amount of financing leases with option to extend commitment | $ 75,800 |
Business Combinations - Other (
Business Combinations - Other (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 21, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Business Combinations | |||
Common stock, shares outstanding | 44,827,000 | 43,502,000 | |
Avedro | |||
Business Combinations | |||
Exchange Ratio (as a percent) | 36.50% | ||
Right to receive shares of Glaukos | 6,449,551 | ||
Share Price | $ 63.07 | ||
Fair value of Glaukos common stock issued in the Avedro Merger, plus an immaterial amount of cash paid for fractional shares | $ 406,776 | ||
Fair value of Glaukos common stock issued to replace certain vested Avedro warrants | 189 | ||
Fair value of Replacement Awards attributable to pre-combination services | 30,786 | ||
Total Merger Consideration | $ 437,751 | ||
Avedro | Avedro | |||
Business Combinations | |||
Common stock, shares outstanding | 17,670,003 |
Business Combinations - Assets
Business Combinations - Assets and Liabilities Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Nov. 21, 2019 |
Assets Acquired | |||
Goodwill | $ 66,134 | $ 66,134 | |
Avedro | |||
Assets Acquired | |||
Cash | $ 49,101 | ||
Accounts receivable | 13,113 | ||
Inventory | 33,339 | ||
Prepaid expenses and other current assets | 2,522 | ||
Restricted cash | 551 | ||
Property and equipment | 1,489 | ||
Intangible assets | 385,200 | ||
Goodwill | $ 66,134 | $ 66,134 | 66,134 |
Liabilities Assumed | |||
Accounts payable | 7,056 | ||
Accrued liabilities | 6,776 | ||
Deferred revenue | 1,389 | ||
Debt | 22,496 | ||
Deferred revenue, non-current | 43 | ||
Deferred tax liability | 75,938 | ||
Fair value of net assts acquired | 437,751 | ||
Step-up fair value of inventory | $ 29,000 |
Business Combinations - Intangi
Business Combinations - Intangible Assets (Details) - USD ($) $ in Thousands | Nov. 21, 2019 | Sep. 30, 2020 |
Developed Technology | ||
Business Combinations | ||
Useful life/amortization period | 11 years 4 months 24 days | 11 years 4 months 24 days |
Customer Relationships | ||
Business Combinations | ||
Useful life/amortization period | 5 years | 5 years |
Avedro | ||
Business Combinations | ||
Intangible assets subject to amortization | $ 266,300 | |
Total intangible assets | 385,200 | |
Avedro | In-Process Research and Development (IPR&D) | ||
Business Combinations | ||
Intangible assets not subject to amortization | 118,900 | |
Avedro | Developed Technology | ||
Business Combinations | ||
Intangible assets subject to amortization | 252,200 | |
Useful life/amortization period | 11 years | |
Avedro | Customer Relationships | ||
Business Combinations | ||
Intangible assets subject to amortization | $ 14,100 | |
Useful life/amortization period | 5 years |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Other (Details) - USD ($) $ in Thousands | Nov. 21, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Intangible Assets and Goodwill | ||||||
Finite Lived - Gross Amount | $ 266,300 | $ 266,300 | $ 266,300 | |||
Finite Lived - Accumulated Amortization | (21,279) | (21,279) | (2,595) | |||
Finite Lived - Net Amount | 245,021 | 245,021 | 263,705 | |||
Goodwill | 66,134 | 66,134 | 66,134 | |||
Intangible Assets, Gross | 451,334 | 451,334 | 451,334 | |||
Intangible Assets, Net | 430,055 | 430,055 | 448,739 | |||
In-Process Research and Development (IPR&D) | ||||||
Intangible Assets and Goodwill | ||||||
Indefinite Lived assets | 118,900 | $ 118,900 | 118,900 | |||
Developed Technology | ||||||
Intangible Assets and Goodwill | ||||||
Useful life/amortization period | 11 years 4 months 24 days | 11 years 4 months 24 days | ||||
Finite Lived - Gross Amount | 252,200 | $ 252,200 | 252,200 | |||
Finite Lived - Accumulated Amortization | (18,870) | (18,870) | (2,301) | |||
Finite Lived - Net Amount | 233,330 | $ 233,330 | 249,899 | |||
Customer Relationships | ||||||
Intangible Assets and Goodwill | ||||||
Useful life/amortization period | 5 years | 5 years | ||||
Finite Lived - Gross Amount | 14,100 | $ 14,100 | 14,100 | |||
Finite Lived - Accumulated Amortization | (2,409) | (2,409) | (294) | |||
Finite Lived - Net Amount | 11,691 | 11,691 | 13,806 | |||
Avedro | ||||||
Intangible Assets and Goodwill | ||||||
Amortization expense | $ 0 | $ 0 | ||||
Goodwill | $ 66,134 | 66,134 | $ 66,134 | $ 66,134 | ||
Avedro | In-Process Research and Development (IPR&D) | ||||||
Intangible Assets and Goodwill | ||||||
Discount Rate (as a percent) | 11.00% | |||||
Avedro | Developed Technology | ||||||
Intangible Assets and Goodwill | ||||||
Discount Rate (as a percent) | 13.00% | |||||
Useful life/amortization period | 11 years | |||||
Avedro | Customer Relationships | ||||||
Intangible Assets and Goodwill | ||||||
Useful life/amortization period | 5 years | |||||
Avedro | Cost of sales | ||||||
Intangible Assets and Goodwill | ||||||
Amortization expense | 5,500 | $ 16,600 | ||||
Avedro | Selling, general and administrative | ||||||
Intangible Assets and Goodwill | ||||||
Amortization expense | $ 700 | $ 2,100 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Estimated amortization expense | ||
Remainder of 2020 | $ 6,228 | |
2021 | 24,912 | |
2022 | 24,912 | |
2023 | 24,912 | |
2024 | 24,619 | |
Thereafter | 139,438 | |
Finite Lived - Net Amount | $ 245,021 | $ 263,705 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | ||||
Total net sales | $ 64,831 | $ 58,509 | $ 151,725 | $ 171,135 |
United States | ||||
Revenues | ||||
Total net sales | 50,599 | 47,588 | 116,152 | 139,893 |
International | ||||
Revenues | ||||
Total net sales | 14,232 | 10,921 | 35,573 | 31,242 |
Glaucoma | ||||
Revenues | ||||
Total net sales | 51,926 | $ 58,509 | 121,007 | $ 171,135 |
Corneal Health | ||||
Revenues | ||||
Total net sales | $ 12,905 | $ 30,718 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Other (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contracts with Customers | |
Typical payment terms on invoiced amounts | 30 days |
Practical expedient financing component | true |
Practical expedient cost of obtaining contract | true |
Convertible Senior Notes - Gene
Convertible Senior Notes - General (Details) - 2.75% Convertible Senior Notes due 2027 | Jun. 11, 2020USD ($)D$ / shares | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($) |
Debt Instrument [Line Items] | |||
Aggregate principle amount | $ 287,500,000 | $ 287,500,000 | |
Interest rate (as a percent) | 2.75% | ||
Net proceeds from the debt | $ 242,200,000 | ||
Threshold trading days | D | 20 | ||
Threshold consecutive trading days | D | 30 | ||
Premium percentage on conversion price | 130.00% | ||
Number of business days | D | 5 | ||
Measurement period | 10 days | ||
Product of sale price and conversion rate (as a percent) | 98.00% | ||
Denomination for conversion of debt | $ 1,000 | ||
Conversion ratio | 17.8269 | ||
Initial conversion price | $ / shares | $ 56.10 | ||
Redemption price percentage on principal amount to be redeemed | 100.00% | ||
Principal amount of the convertible notes to be repurchased (as a percent) | 100.00% | ||
Carrying amount of liability component | $ 189,800,000 | ||
Discount rate (as a percent) | 9.50% | ||
Carrying amount of the equity component representing the conversion option | $ 97,700,000 | ||
Transaction cost on convertible notes | 9,600,000 | ||
Unamortized debt issuance costs | 6,300,000 | $ 6,100,000 | |
Transaction cost on convertible notes attributable to equity component | $ 3,300,000 |
Convertible Senior Notes - Inte
Convertible Senior Notes - Interest expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | |
Debt Instrument [Line Items] | |||
Amortization of Financing Costs and Discounts, Total | $ 3,234 | ||
2.75% Convertible Senior Notes due 2027 | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | $ 1,977 | 2,394 | |
Amortization of debt discount | 2,514 | 3,037 | |
Amortization of debt issuance costs | 163 | 197 | |
Amortization of Financing Costs and Discounts, Total | $ 4,654 | $ 5,628 | |
Interest rate at period end | 9.50% | 9.50% | |
Unamortized debt discount | $ 94,700 | $ 94,700 | |
Unamortized debt discount amortization period | 6 years 8 months 12 days | ||
Unamortized debt issuance costs | $ 6,100 | $ 6,100 | $ 6,300 |
Convertible Senior Notes - Carr
Convertible Senior Notes - Carrying Amount (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 11, 2020 |
Debt Instrument [Line Items] | ||
Carrying amount of Convertible Notes | $ 186,676 | |
2.75% Convertible Senior Notes due 2027 | ||
Debt Instrument [Line Items] | ||
Aggregate principle amount | 287,500 | $ 287,500 |
Less: Unamortized debt discount and debt issuance costs | (100,824) | |
Carrying amount of Convertible Notes | $ 186,676 |
Convertible Senior Notes - Capp
Convertible Senior Notes - Capped Call Transactions (Details) $ / shares in Units, $ in Thousands, shares in Millions | Jun. 08, 2020$ / instrument | Sep. 30, 2020USD ($)$ / sharesshares |
Debt Instrument [Line Items] | ||
Payment for capped call options | $ 35,679 | |
Capped Call Transactions | ||
Debt Instrument [Line Items] | ||
Payment for capped call options | $ 35,700 | |
Initial strike price (in dollars per share) | $ / shares | $ 56.10 | |
Number of shares of common stock initially underlying the Convertible Notes | shares | 5.1 | |
Reduction in additional paid-in capital | $ (35,700) | |
Capped Call Transactions | Common Stock | ||
Debt Instrument [Line Items] | ||
Cap price (in dollars per share) | $ / instrument | 86.30 | |
Percentage of premium on share price | 100.00% |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plan Information (Details) $ in Thousands | Nov. 21, 2019USD ($)shares | Sep. 30, 2020USD ($)item |
Stock-based compensation | ||
Number of stock plans | item | 4 | |
Expiration period | 10 years | |
Vesting percentage on first anniversary of grant date | 25.00% | |
Remaining vesting period | 3 years | |
Employee Stock Purchase Plan 2015 | ||
Stock-based compensation | ||
Maximum employee contributions as a percentage of earnings under the ESPP | 15.00% | |
Purchase price per share expressed as a percentage of the lower of the stock's fair market value on the offering date or purchase date under the ESPP | 85.00% | |
First anniversary | RSU | ||
Stock-based compensation | ||
Vesting (as a percent) | 25.00% | |
Second anniversary | RSU | ||
Stock-based compensation | ||
Vesting (as a percent) | 25.00% | |
Third anniversary | RSU | ||
Stock-based compensation | ||
Vesting (as a percent) | 25.00% | |
Fourth anniversary | RSU | ||
Stock-based compensation | ||
Vesting (as a percent) | 25.00% | |
Avedro | ||
Stock-based compensation | ||
Fair value of Replacement Awards attributable to pre-combination services | $ | $ 30,786 | |
Fair value of Replacement Awards attributable to post-combination services | $ | $ 26,000 | |
Accrued liability for cash-settled options transferred to APIC | $ | (2,200) | |
Avedro | RSU | ||
Stock-based compensation | ||
Shares issued in connection with Acquisition | 5,500 | |
Avedro | Cash-Settled Stock Option | ||
Stock-based compensation | ||
Shares issued in connection with Acquisition | 200,000 | |
Additional Paid in Capital | $ | $ 2,200 | |
Avedro | Stock options | ||
Stock-based compensation | ||
Shares issued in connection with Acquisition | 100,000 | |
Avedro | Time Vesting | RSU | ||
Stock-based compensation | ||
Shares issued in connection with Acquisition | 100,000 | |
Avedro | Time Vesting | Stock options | ||
Stock-based compensation | ||
Shares issued in connection with Acquisition | 700,000 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Stock-based compensation | |
Unamortized stock-based compensation expense not yet recognized | $ 54.8 |
RSU | |
Stock-based compensation | |
Unamortized stock-based compensation expense not yet recognized | $ 32 |
Options remaining vesting period | 4 years |
Weighted average period of recognition | 2 years 9 months 18 days |
Stock options | |
Stock-based compensation | |
Unamortized stock-based compensation expense not yet recognized | $ 22.8 |
Options remaining vesting period | 4 years |
Weighted average period of recognition | 2 years |
Stock-Based Compensation - Allo
Stock-Based Compensation - Allocation of Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Allocation of stock-based compensation | ||||
Stock-based compensation expense | $ 9,659 | $ 8,547 | $ 34,561 | $ 23,923 |
Cost of sales | ||||
Allocation of stock-based compensation | ||||
Stock-based compensation expense | 1,029 | 259 | 2,001 | 752 |
Selling, general and administrative | ||||
Allocation of stock-based compensation | ||||
Stock-based compensation expense | 6,814 | 6,727 | 25,460 | 18,555 |
Research and development | ||||
Allocation of stock-based compensation | ||||
Stock-based compensation expense | $ 1,816 | $ 1,561 | $ 7,100 | $ 4,616 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Income Taxes | |||||
Effective tax rate (as a percent) | 5.30% | 7.40% | |||
Provision for income taxes | $ (889) | $ 187 | $ (8,723) | $ 381 | |
Unrecognized tax benefits | 19,200 | $ 13,800 | 19,200 | $ 13,800 | |
CARES net operating losses carryback period | 5 years | ||||
Provision for income taxes from CARES | $ (400) | $ (400) |
Commitments and Contingencies -
Commitments and Contingencies - Other (Details) | Mar. 18, 2019item | Aug. 31, 2018item | Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Other commitments | |||||||
Letter of Credit outstanding | $ 8,800,000 | $ 8,800,000 | |||||
Restricted cash pledged for letter of credit | $ 8,800,000 | $ 8,800,000 | $ 8,800,000 | ||||
Number of Months from start of lease for adjustments to Letter of Credit | item | 37 | 37 | |||||
Frequency of adjustment to Letter of Credit | 12 months | ||||||
Adjustment rate of Letter of Credit (as a percent) | 20.00% | ||||||
Amount of Letter of Credit outstanding after adjustments | $ 2,000,000 | $ 2,000,000 | |||||
Number of other irrevocable letters of credit outstanding | item | 2 | 2 | |||||
Restricted cash pledged for office lease agreement | $ 400,000 | $ 400,000 | |||||
Restricted cash pledged for credit card program | 200,000 | 200,000 | |||||
Purchase commitment obligation | 3,800,000 | 3,800,000 | |||||
Deferred compensation plan liability | 4,500,000 | 4,500,000 | 3,700,000 | ||||
Deferred compensation plan assets | 4,600,000 | 4,600,000 | $ 3,500,000 | ||||
Agreement with the Regents | |||||||
Other commitments | |||||||
Minimum required annual payment of the commitment obligation, based on net sales of current and future products | 500,000 | 500,000 | |||||
Maximum | Buyout Agreement with GMP Vision Solutions, Inc. | |||||||
Other commitments | |||||||
Buyout amount upon sale of Company. | 2,000,000 | 2,000,000 | |||||
Cost of sales | Agreement with the Regents | |||||||
Other commitments | |||||||
Commitment obligation payments | 1,300,000 | $ 1,500,000 | $ 3,000,000 | $ 4,200,000 | |||
Patent Litigation | Pending Litigation | |||||||
Other commitments | |||||||
Number of patent infringements | item | 3 | ||||||
Number of new new petitions filed | item | 5 | ||||||
Number of claims on summary judgement granted | item | 1 | ||||||
Securities Litigation | Pending Litigation | |||||||
Other commitments | |||||||
Accrual for loss contingency | $ 0 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Restructuring (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)item | |
Restructuring and Related Cost, Expected Cost | |
Headcount reduction related to corporate restructuring | item | 40 |
Total restructuring costs expected to be incurred | $ 5,300 |
Restructuring Reserve | |
Balance at beginning of period | 4,096 |
Total restructuring accrual charges | 1,131 |
Employee separation payments | (4,921) |
Balance at end of period | $ 306 |
Business Segment Information (D
Business Segment Information (Details) | 9 Months Ended |
Sep. 30, 2020itemsegment | |
Business Segment Information | |
Number Of Business Activities | item | 1 |
Number of Operating Segments | segment | 1 |