Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 29, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CDNA | |
Entity Registrant Name | CareDx, Inc. | |
Entity Central Index Key | 1,217,234 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 13,960,762 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 23,752 | $ 29,888 |
Accounts receivable | 2,512 | 2,367 |
Inventory | 595 | 766 |
Prepaid and other assets | 807 | 1,341 |
Total current assets | 27,666 | 34,362 |
Property and equipment, net | 2,346 | 2,425 |
Intangible assets, net | 6,650 | 6,650 |
Goodwill | 12,005 | 12,005 |
Restricted cash | 147 | 147 |
Other noncurrent assets | 20 | 49 |
Total assets | 48,834 | 55,638 |
Current liabilities: | ||
Accounts payable | 2,536 | 1,644 |
Accrued payroll liabilities | 1,609 | 2,366 |
Accrued and other liabilities | 5,298 | 2,892 |
Accrued royalties | 232 | 242 |
Deferred revenue | 137 | 142 |
Current portion of long-term debt | 4,419 | 2,866 |
Total current liabilities | 14,231 | 10,152 |
Deferred rent, net of current portion | 1,347 | 1,426 |
Deferred revenue, net of current portion | 693 | 703 |
Long-term debt, net of current portion | 11,368 | 12,887 |
Contingent consideration | 735 | 948 |
Other liabilities | 28 | |
Total liabilities | $ 28,374 | $ 26,144 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Preferred stock: $0.001 par value; 10,000,000 shares authorized at March 31, 2016 and December 31, 2015; no shares issued and outstanding at March 31, 2016 and December 31, 2015 | $ 0 | $ 0 |
Common stock: $0.001 par value; 100,000,000 shares authorized at March 31, 2016 and December 31, 2015; 11,977,491 shares and 11,902,363 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 12 | 12 |
Additional paid-in capital | 203,284 | 202,564 |
Accumulated deficit | (182,836) | (173,082) |
Total stockholders’ equity | 20,460 | 29,494 |
Total liabilities and stockholders’ equity | $ 48,834 | $ 55,638 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 11,977,491 | 11,902,363 |
Common stock, shares outstanding | 11,977,491 | 11,902,363 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Testing revenue | $ 6,452 | $ 7,096 |
Collaboration, license and other revenue | 110 | 120 |
Total revenue | 6,562 | 7,216 |
Operating expenses: | ||
Cost of testing | 2,772 | 2,711 |
Research and development | 3,159 | 1,421 |
Sales and marketing | 1,737 | 2,023 |
General and administrative | 5,676 | 2,705 |
Change in estimated fair value of contingent consideration | (213) | (253) |
Total operating expenses | 13,131 | 8,607 |
Loss from operations | (6,569) | (1,391) |
Interest expense | (266) | (827) |
Other (expense) income, net | (2,917) | (54) |
Net loss | $ (9,752) | $ (2,272) |
Net loss per share (Note 3): | ||
Basic and diluted | $ (0.81) | $ (0.19) |
Weighted average shares used to compute net loss per share: | ||
Basic and diluted | 11,969,714 | 11,814,467 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities: | ||
Net loss | $ (9,752) | $ (2,272) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 261 | 165 |
Stock-based compensation | 446 | 280 |
Amortization of deferred revenue | (16) | (29) |
Amortization of debt discount and noncash interest expense | 41 | 407 |
Change in estimated fair value of contingent consideration | (213) | (253) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (145) | 893 |
Inventory | 171 | (88) |
Prepaid and other assets | 563 | (180) |
Accounts payable | 820 | 242 |
Accrued payroll liabilities | (758) | (389) |
Accrued royalties | (10) | 14 |
Accrued and other liabilities | 2,400 | 196 |
Net cash used in operating activities | (6,192) | (1,014) |
Investing activities: | ||
Purchase of property and equipment | (109) | (364) |
Net cash used in investing activities | (109) | (364) |
Financing activities: | ||
Proceeds from debt, net of issuance costs | 15,625 | |
Proceeds from issuances of common stock under employee stock purchase plan | 175 | |
Principal payments on debt and capital lease obligations | (16) | (11,704) |
Proceeds from exercise of stock options | 6 | 11 |
Net cash provided by financing activities | 165 | 3,932 |
Net (decrease) increase in cash and cash equivalents | (6,136) | 2,554 |
Cash and cash equivalents at beginning of period | 29,888 | 36,431 |
Cash and cash equivalents at end of period | $ 23,752 | $ 38,985 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS CareDx, Inc., (“CareDx” or the “Company”) is a molecular diagnostics company focused on discovery, development and commercialization of clinically differentiated, high-value diagnostic surveillance solutions for transplant patients. The Company’s first commercialized testing solution, the AlloMap heart transplant molecular test (“AlloMap”), an FDA-cleared test, is a gene expression test that helps clinicians monitor and identify heart transplant recipients with stable graft function who have a low probability of moderate/severe acute cellular rejection. The Company is pursuing the development of additional products for transplant monitoring using a variety of technologies, including AlloSure, its next-generation sequencing-based test to detect donor-derived cell-free DNA, or dd-cfDNA, after transplantation. The Company was incorporated in Delaware in December 1998, as Hippocratic Engineering, Inc. In April 1999, the Company changed its name to BioCardia, Inc., in June 2002 to Expression Diagnostics, Inc., in July 2007 to XDx, Inc. and in March 2014 to CareDx, Inc. The Company’s operations are based in Brisbane, California and it operates in one segment. Liquidity and Going Concern The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $182.8 million at March 31, 2016. As of March 31, 2016, the Company had cash and cash equivalents of $23.8 million, and $15.9 million On April 14, 2016, the Company acquired 98.3% of the outstanding common stock of Allenex AB (“Allenex”). Allenex is a transplant diagnostic company based in Stockholm, Sweden that develops, manufactures, and sells products that help match donor organs with potential recipients prior to transplantation. Allenex has 58 employees. Under the terms of the Conditional Share Purchase Agreements entered into on December 16, 2015, as amended and the tender offer prospectus dated March 7, 2016, and as a result of the tender offer, the purchase consideration is expected to total approximately $35.0 million, consisting of $27.8 million of cash, of which approximately $6.2 million is deferred purchase consideration and payable to Midroc Invest AB, FastPartner AB and Xenella Holding AB (collectively, the “Majority Shareholders”) no later than March 31, 2017, and the issuance of 1,375,029 shares of the Company’s common stock valued at $7.2 million. Additionally, $8.0 million of cash purchase consideration payable to the Majority Shareholders of Allenex is being held in escrow by the Company and relates to a commitment by the Majority Shareholders of Allenex to purchase the Company’s equity securities in a future financing (“Subsequent Financing”). The equity securities are expected to be sold no later than 30 days following the receipt of certain Company stockholder approvals required pursuant to the rules of the NASDAQ Stock Market (the “Requisite Stockholder Approval”), which is expected to occur on June 16, 2016, on terms, including price, substantially equivalent to the terms of a Private Placement described below. The Company intends to initiate compulsory acquisition proceedings under Swedish law to purchase the remaining shares of Allenex. See Note 11 for more detail about the Allenex acquisition. On April 14, 2016, the Company completed the sale of 591,860 units (“Units”) to certain accredited investors (the “Private Placement”) at a purchase price of $23.94 per Unit. On closing on April 14, 2016, the aggregate gross proceeds to the Company from the Private Placement were approximately $14.1 million. Concurrently, the Company also entered into commitment letters (the “Commitment Letters”) pursuant to which the Majority Shareholders of Allenex agreed to purchase the Company’s equity securities in a Subsequent Financing, as described above. If the Subsequent Financing is not completed within 30 days of the Requisite Stockholder Approval, and provided that the Loan Agreement (as defined in Note 9) is still in place, the Lender (as defined in Note 9) has the right to require that the Company complete the Subsequent Financing and issue securities to the Majority Shareholders in exchange for the $8.0 million of cash held in escrow. If neither the Company nor the Lender exercise their rights by September 30, 2016, the $8.0 million held in escrow will be released to the Majority Shareholders without any further obligation on the part of the Majority Shareholders of Allenex. The Company made payments of approximately $1.1 million and $97,000 in placement fees and other offering expenses, respectively, to placement agents in connection with the sale of the 591,860 Units in the Private Placement. Following the closing of the Private Placement, the Company agreed to a number of requirements such as submitting the Private Placement to the Company’s stockholders for approval, which is expected to be approved after the receipt of the Requisite Stockholder Approval expected on June 16, 2016, granting certain registration rights, including the registration of shares sold in the Private Placement on a registration statement on Form S-3 within 45 days of closing. Additionally, if the Company fails to file an effective registration statement on Form S-3 within 45 days of closing the Private Placement, the Company shall be obligated to pay an aggregate penalty amount equal to approximately $0.3 million for each month that the Company has not filed the required registration statement, up to a maximum of $1.4 million. See Note 11 for more detail about the Private Placement. The Company will require additional financing and/or refinancing to fund working capital, repay debt and to pay its obligations. A potential working capital benefit of refinancing the Company’s existing debt obligations is deferral of debt payments otherwise due in 2016. The Company may pursue financing and refinancing opportunities in both the private and public debt and equity markets through sales of debt or equity securities. Absent the receipt of additional funding or refinancing, the Company will exhaust its cash and cash equivalents in December The accompanying financial statements have been prepared assuming that the Company will continue as a going concern through December 31, 2016 , which |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The condensed balance sheet as of December 31, 2015 has been derived from audited financial statements as of that date but does not include all of the financial information required by U.S. GAAP for complete financial statements. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The accompanying unaudited condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed on March 29, 2016 with the SEC. Use of Estimates The preparation of unaudited condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in the unaudited condensed financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to (i) revenue recognition, (ii) the differences between amounts billed and estimated receipts from payers, (iii) the determination of the accruals for clinical studies, (iv) the determination of refunds to be requested by third-party payers, (v) the fair value of assets and liabilities, (vi) the valuation of warrants to purchase common stock, (vii) the fair value of contingent consideration in a business acquisition, (viii) the fair value of embedded derivatives, (ix) measurement of stock-based compensation expense, (x) the determination of the valuation allowance and estimated tax benefit associated with deferred tax assets and net deferred tax liability, (xi) any impairment of long-lived assets including in-process technology and goodwill and (xii) legal contingencies. Actual results could differ from those estimates. Concentrations of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable. The Company’s policy is to invest its cash and cash equivalents in money market funds, obligations of U.S. government agencies and government-sponsored entities, commercial paper, and various bank deposit accounts. These financial instruments were held in Company accounts at two financial institutions. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company is exposed to credit risk in the event of default by the financial institutions to the extent of amounts recorded on the balance sheets which may be in excess of insured limits. The Company is also subject to credit risk from its accounts receivable which are derived from revenue earned from AlloMap tests provided for patients located in the U.S. and billed to various third-party payers. The Company has not experienced any significant credit losses and does not generally require collateral on receivables. Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. Purchased Intangible Assets Acquired intangible assets with indefinite useful lives are related to in-process research and development or IPR&D, projects and are measured at their respective fair values as of the acquisition date. The Company does not amortize intangible assets with indefinite useful lives. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts. If and when development is complete, which generally occurs if and when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. The Company tests IPR&D for impairment on an annual basis and in between annual tests if it becomes aware of events or changes that would indicate that it is more likely than not that the fair value of the assets is below their carrying amounts. The IPR&D annual impairment test is performed as of December 1 of each fiscal year. If the fair value exceeds the carrying value, then there is no impairment. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of the asset to its carrying value, without consideration of any recoverability test. The Company has not identified any such impairment losses to date. Impairment of Long-lived Assets The Company evaluates its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company then compares the carrying amounts of the assets with the future net undiscounted cash flows expected to be generated by such asset. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. The Company has not identified any such impairment losses to date. Goodwill Goodwill represents the excess of the cost of an acquisition over the sum of the amounts assigned to tangible and identifiable intangible assets acquired, less liabilities assumed. Goodwill is not subject to amortization, but is tested for impairment on an annual basis and whenever events or changes in circumstances indicate the carrying amount of these assets may not be recoverable. The Company has determined that it operates in a single segment and has a single reporting unit associated with the development and commercialization of diagnostic products. In the event that the Company determines that it is more likely than not that the carrying value of the reporting unit is higher than its fair value, quantitative testing is performed comparing recorded values to estimated fair values. If impairment is present, it is measured as the excess of recorded goodwill over its implied fair value. The Company performs its annual evaluation of goodwill on December 1 of each fiscal year. There have been no impairments recorded to date. Fair Value of Financial Instruments Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and it takes into consideration the assumptions that market participants would use when pricing the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement of an asset or liability requires management to make judgments and to consider specific characteristics of that asset or liability. The carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. Testing Revenue The Company recognizes revenues for tests delivered when the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery has occurred or services rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. The first criterion is satisfied when a third-party payer makes a coverage decision or enters into a contractual arrangement with the Company for the test. The second criterion is satisfied when the Company performs the test and delivers the test result to the ordering physician. The third criterion is satisfied if the third-party payer’s coverage decision or reimbursement contract specifies a price for the test. The fourth criterion is satisfied based on management’s judgments regarding the collectability of the fees charged under the arrangement. Such judgments include review of past payment history. AlloMap testing may be considered investigational by some payers and not covered under their reimbursement policies. Others may cover the test, but not pay a set or determinable amount. As a result, in the absence of a reimbursement agreement or sufficient payment history, collectability cannot reasonably be assured so revenue is not recognized at the time the test is delivered. If all criteria set forth above are met, revenue is recognized. When the first, third or fourth criteria are not met but third-party payers make a payment to the Company for tests performed, the Company recognizes revenue on the cash basis in the period in which the payment is received. Revenue is recognized on the accrual basis net of adjustments for differences between amounts billed and the estimated receipts from payers. The amount the Company expects to collect may be lower than the agreed upon amount due to several factors, such as the amount of patient co-payments, the existence of secondary payers and claim denials. Estimated receipts are based upon historical payment practices of payers. Differences between estimated and actual cash receipts are recorded as an adjustment to revenue, which have been immaterial to date. During the three months ended March 31, 2016, the Company changed its revenue recognized from one of its payers from the cash basis to the accrual basis based on its consistent history of obtaining timely reimbursement from this payer. The impact of this change in accounting estimate was insignificant to revenues and loss per share for the three months ended March 31, 2016. During the three months ended March 31, 2015, the Company changed its revenue recognized from two of its payers from the cash basis to the accrual basis based on the Company’s consistent history of obtaining timely reimbursement from these two payers. The impact of this change in accounting estimate was to increase revenues by $0.1 million and to change loss per share from $0.20 to $0.19 for the three months ended March 31, 2015. Collaboration, License and Other Revenue The Company generates revenue from collaboration and license agreements. Collaboration and license agreements may include non-refundable upfront payments, partial or complete reimbursement of research and development costs, contingent payments based on the occurrence of specified events under the agreements, license fees and royalties on sales of products or product candidates if they are successfully commercialized. The Company’s performance obligations under the collaborations may include the transfer of intellectual property rights in the form of licenses, obligations to provide research and development services and obligations to participate on certain development committees with the collaboration partners. The Company makes judgments that affect the periods over which it recognizes revenue. The Company periodically reviews its estimated periods of performance based on the progress under each arrangement and accounts for the impact of any change in estimated periods of performance on a prospective basis. The Company recognizes contingent consideration received from the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved, which the Company believes is consistent with the substance of its performance under its various license and collaboration agreements. The Company did not recognize any milestones during the three months ended March 31, 2016 and 2015. Cost of Testing Cost of testing reflects the aggregate costs incurred in delivering the Company’s AlloMap test results to clinicians. The components of cost of testing are materials and service costs, direct labor costs, including stock-based compensation, equipment and infrastructure expenses associated with testing samples, shipping, logistics and specimen processing charges to collect and transport samples and allocated overhead including rent, information technology, equipment depreciation and utilities and royalties. Costs associated with performing tests (except royalties) are recorded as the test is processed regardless of whether and when revenue is recognized with respect to that test. As a result, our cost of testing as a percentage of revenue may vary significantly from period to period because we do not recognize all revenue in the period in which the associated costs are incurred. Royalties for licensed technology, calculated as a percentage of test revenues, are recorded as license fees in cost of testing at the time the test revenues are recognized. Business Combinations The Company determines and allocates the purchase price of an acquired business to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, royalty rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. In those circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under ASC 480, Distinguishing Liabilities from Equity Transaction costs associated with these acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition. Stock-based Compensation The Company uses the Black-Scholes Model, which requires the use of estimates such as stock price volatility and expected option lives, to value employee stock options. The Company estimates the expected option lives using historical data, volatility using its own historical stock prices and stock prices of peer companies in the diagnostics industry, risk-free rates based on the implied yield currently available in the U.S. Treasury zero-coupon issues with a remaining term equal to the expected option lives, and dividend yield based on the Company’s expectations and historical data. The Company uses the straight-line attribution method for recognizing compensation expense. Compensation expense is recognized on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on the Company’s historical experience. Compensation expense for stock options issued to nonemployees is calculated using the Black-Scholes Model and is recorded over the service performance period. Options subject to vesting are required to be periodically remeasured over their service performance period, which is generally the same as the vesting period. Warrants The Company had freestanding warrants enabling counterparties to purchase shares of its convertible preferred stock as of December 31, 2013, which were converted to purchase common stock on the Company’s IPO date. Freestanding warrants for convertible preferred stock that were contingently redeemable were classified as liabilities on the balance sheet and recorded at their estimated fair value. These warrants were remeasured at each balance sheet date and any change in estimated fair value was recognized in other expense on the condensed statements of operations. Upon the completion of the Company’s IPO in July 2014, preferred stock warrants were converted into warrants to purchase common stock, and accordingly, the liability was reclassified to equity and became no longer subject to remeasurement. Comprehensive Loss Net loss and comprehensive loss are the same for all periods presented. Recent Accounting Pronouncements In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements―Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal Use Software (Subtopic 350-40) In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, In February 2016, the FASB issued ASU 2016-02, Leases In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606), |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 3. NET LOSS PER SHARE Basic and diluted net loss per share have been computed by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of common share equivalents as their effect would have been antidilutive. The following tables set forth the computation of the Company’s basic and diluted net loss per share (in thousands, except shares and per share data): Three Months Ended March 31, 2016 2015 Numerator: Net loss $ (9,752 ) $ (2,272 ) Denominator: Weighted-average shares used to compute basic and diluted net loss per share 11,969,714 11,814,467 Net loss per share: Basic and diluted $ (0.81 ) $ (0.19 ) The following potentially dilutive securities have been excluded from diluted net loss per share, because their effect would be antidilutive: Three Months Ended March 31, 2016 2015 Shares of common stock subject to outstanding options 1,860,420 1,436,429 Shares of common stock subject to outstanding common stock warrants 301,069 576,096 Restricted stock units 178,975 — Total common stock equivalents 2,340,464 2,012,525 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. FAIR VALUE MEASUREMENTS The Company records its financial assets and liabilities at fair value except for its debt, which is recorded at amortized cost. The carrying amounts of certain financial instruments of the Company, including cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: · Level 1: Inputs which include quoted prices in active markets for identical assets and liabilities. · Level 2: Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands): March 31, 2016 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Money market funds $ 21,564 $ — $ — $ 21,564 Liabilities Contingent consideration $ — $ — $ 735 $ 735 December 31, 2015 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Money market funds $ 28,774 $ — $ — $ 28,774 Liabilities Contingent consideration $ — $ — $ 948 $ 948 The following table presents the issuances, changes in fair value and reclassifications of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands): (Level 3) Contingent Consideration Liability Balance as of December 31, 2014 $ 1,074 Change in estimated fair value (126 ) Balance as of December 31, 2015 948 Change in estimated fair value (213 ) Balance as of March 31, 2016 $ 735 The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers between Level 1, Level 2 and Level 3 categories during the periods presented. In determining fair value, the Company uses various valuation approaches within the fair value measurement framework. The valuation methodologies used for the Company’s instruments measured at fair value and their classification in the valuation hierarchy are summarized below: · Money market funds - Investments in money market funds are classified within Level 1. At March 31, 2016 and December 31, 2015, money market funds were included on the balance sheets in cash and cash equivalents. · Contingent consideration - As of March 31, 2016 and December 31, 2015, the Company had a contingent obligation to issue 227,845 shares of its common stock to the former owners of ImmuMetrix, Inc. (“IMX”) in conjunction with its acquisition of IMX in June 2014. The issuance will occur if the Company completes 2,500 commercial tests involving the measurement of dd-cfDNA in organ transplant recipients in the United States by June 10, 2020. The Company recorded its estimate of the fair value of the contingent consideration based on its evaluation of the probability of the achievement of the contractual conditions that would result in the payment of the contingent consideration. The fair value of the contingent consideration was estimated using the fair value of the shares to be paid if the contingency is met multiplied by management’s 65% estimate at March 31, 2016 and December 31, 2015 of the probability of success. The significant input in the Level 3 measurement not supported by market activity is the Company’s probability assessment of the milestone being met. The value of the liability is subsequently remeasured to fair value each reporting date, and the change in estimated fair value is recorded to a component of operating expenses item captioned “change in estimated fair value of contingent consideration” until the milestone contingency is paid, expires or is no longer achievable. Increases (decreases) in the estimation of the probability percentage result in a directionally similar impact to the fair value measurement of the contingent consideration liability. The carrying amount of the contingent consideration liability represents its fair value. The Company’s liabilities classified as Level 3 were valued based on unobservable inputs and management’s judgment due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of the financial instruments. The carrying values of the Company’s debt approximate their fair values at March 31, 2016 and December 31, 2015 as the market rates currently available to the Company and other assumptions have not changed significantly since the debt was issued. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. INVENTORIES The following table summarizes the Company’s inventories (in thousands): March 31, 2016 December 31, 2015 Finished goods $ 247 $ 237 Raw materials 348 529 Total inventory $ 595 $ 766 |
Accrued and Other Liabilities
Accrued and Other Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Payables And Accruals [Abstract] | |
Accrued and Other Liabilities | 6. ACCRUED AND OTHER LIABILITIES The following table represents the components of accrued and other liabilities (in thousands): March 31, 2016 December 31, 2015 Debt financing fees $ 1,687 $ — Transaction related fees 674 589 Tax, audit and compliance related fees 286 89 Test sample processing fees 451 426 Accrued overpayments and refunds 212 163 Clinical studies 999 756 Deferred rent – current portion 272 258 Capital leases – current portion 63 71 Other accrued expenses 654 540 Total accrued and other liabilities $ 5,298 $ 2,892 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. COMMITMENTS AND CONTINGENCIES Royalty Commitments In November 2004, the Company entered into a license agreement with Roche Molecular Systems, Inc., or Roche, that grants the Company the right to use certain Roche technology relating to polymerase chain reaction, or PCR, and quantitative real-time PCR, in clinical laboratory services, including in connection with AlloMap. This is a non-exclusive license agreement in the United States covering claims in multiple Roche patents. The Company had disputed the combination services percentage Roche sought to apply under the agreement. The combination service percentage is a multiplier used to calculate royalties where licensed services are sold in combination with other services. From July 2011 through September 2014, the Company withheld payment of such royalties pending resolution of the matter. On February 11, 2014, Roche filed a demand for arbitration with the American Arbitration Association seeking a declaration that the Company had materially breached the Roche license agreement by failing to report and pay royalties owing to Roche in respect of licensed services performed by the Company after July 1, 2011. Since July 1, 2011, the Company fully accrued the unpaid royalties on the balance sheets, and the amount of the unpaid royalties had been reflected as an expense in the Company’s statements of operations in the periods revenue was recorded to which the royalties relate. In September 2014, the Company entered into a settlement and mutual release agreement with Roche whereby: (i) for the period beginning July 1, 2011 through June 30, 2014, the Company agreed to pay the amount of $2,827,220 in settlement of past royalties due; (ii) for the period beginning July 1, 2014 through September 30, 2014, the Company agreed to pay royalties based on the same combination services percentage used to determine the past royalties due; (iii) for the period beginning October 1, 2014 through September 30, 2017, Roche and the Company agreed to a downward adjustment of the combination services percentage used to determine the portion of the AlloMap testing revenue that is royalty bearing under the terms of the license; (iv) the Company agreed to report and pay quarterly royalties within 45 days of the end of each calendar quarter; (v) Roche agreed that, subject to the Company’s timely payment of all applicable royalties through such date, no further royalties will be payable by the Company for periods after September 30, 2017; (vi) the Company and Roche agreed to mutually release all claims under the license agreement through the settlement date; and (vii) Roche agreed to dismiss the arbitration claims. For all time periods, the contractual royalty rate in the license agreement was or will be applied to the applicable combination services percentage to determine the royalties payable for the AlloMap service. Under the license agreement, the Company incurs royalty expenses as a percentage of combination services revenue and classifies those expenses as a component of cost of testing in the statements of operations. For the three months ended March 31, 2016 and 2015, royalty expenses in connection with the Roche agreement were $0.2 million and $0.3 million, respectively. Contingencies The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, or results of operations. |
Collaboration and Licensing Agr
Collaboration and Licensing Agreements | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaboration and Licensing Agreements | 8. COLLABORATION AND LICENSING AGREEMENTS Diaxonhit (“DHT”) In June 2013, the Company entered into an exclusive Distribution and Licensing Agreement with DHT, a French public company, whereby DHT will have the AlloMap test performed in a European laboratory and commercialize the test in the European Economic Area (“EEA”). The agreement will expire at the later of the last-to-expire patent in the EEA or ten years from the first commercial sale of the test in the EEA, which occurred in 2014. Consideration under the agreement includes an upfront cash payment of approximately €387,500 ($503,000) that is designated to offset royalties earned by the Company in the first three years following the first commercial sale. The Company is entitled to receive royalties from DHT as a percent of net sales, as defined in the agreement, of AlloMap tests in the mid to high teens. Approximately €250,000 ($344,000) of the upfront payments is refundable under certain circumstances. Upon confirmation that the CE mark was in place, the Company also received an equity payment of DHT common stock with a value of €387,500 ($503,000). The CE mark is a mandatory conformity marking for certain products sold within the EEA. These shares were promptly sold by the Company in July 2013 for total consideration of $467,000. Other consideration that may be earned by the Company includes agreed-upon per unit pricing for the supply of AlloMap products, and additional royalties that are payable upon the achievement of various sales milestones by DHT. In this arrangement, there is one combined unit of accounting. Commercial sales began in the EEA in June 2014. Total revenues recognized from this arrangement for the three months ended March 31, 2016 and 2015 were $15,000 and $27,000, respectively. CardioDx, Inc. (“CDX”) In 2005, the Company entered into a services agreement with what at the time was a related party, CDX, whereby the Company provided CDX with biological samples and related data and performed laboratory services on behalf of CDX. Each company granted the other a worldwide license under certain of its intellectual property rights. Pursuant to this agreement, CDX pays royalties to the Company of a low single-digit percentage of the cash collected from sales of CDX licensed products. In 2009, CDX terminated the services portion of this agreement, however, the royalty obligation from CDX continues until the tenth anniversary of the first commercial sale of a CDX licensed product. The first commercial sale of such product by CDX occurred in 2009, therefore the royalty obligation to the Company continues until 2019. Royalty revenues were recognized when earned. Starting the fourth quarter of 2015, royalty revenues are recognized when payments are received as it was assessed that collection was not reasonably assured prior to receipt of payment. Royalty revenues were $96,000 and $90,000 for the three months ended March 31, 2016 and 2015, respectively, and are included in collaboration and license revenue on the condensed statements of operations. The Company had no receivable balance from CDX at March 31, 2016, and a receivable balance of $90,000 at March 31, 2015. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2016 | |
Transfers And Servicing [Abstract] | |
Debt | 9. DEBT On January 30, 2015, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with East West Bank (“the Lender”) that provides a secured term loan facility in an aggregate principal amount of up to $20.0 million. The Company borrowed the first and only advance of $16.0 million (“Draw A”) on January 30, 2015. Draw A was used to pay-off the Company’s existing term debt of $11.3 million. A loss on extinguishment of debt of $0.6 million related to costs from the pay-off of the previously existing term loan was recognized as interest expense during the three months ended March 31, 2015. Draw A bears interest at a daily floating rate equal to 2.00%, plus the greater of (i) 3.25% or (ii) the prime rate published by the lender. The maturity date of the loan is December 1, 2018. The principal pay-down of the loan begins on July 1, 2016 with the loan being payable in 30 equal monthly installments. A fully non-refundable commitment fee of $160,000 was paid on January 30, 2015 when Draw A for $16.0 million was received. The loan has no prepayment penalty. Commitment fees are included in debt issuance costs which are netted against the debt outstanding and are amortized to interest expense using the effective interest method over the term of the loan. Debt discount and issuance costs, current, as of March 31, 2016 and December 31, 2015 were $0.1 million and $0.2 million, respectively. Debt discount and issuance costs, non-current, as of both March 31, 2016 and December 31, 2015 were $0.1 million. In connection with the Loan Agreement, the Company agreed to issue to the Lender warrants to purchase shares of the Company’s common stock upon the drawdown of each advance in an amount equal to 1.5% of the amount drawn, divided by the exercise price per share for that tranche. The fair value of the warrant is reflected as a discount to the debt. As a result of Draw A, the Company issued to the lender a warrant to purchase an aggregate of 34,483 shares of the Company’s common stock, at an exercise price of $6.96 per share. The fair value of the warrant was estimated to be $90,000 on January 30, 2015, using the Black-Scholes Model with the following assumptions: expected volatility of 39.83%, a contractual term of 5 years, risk-free interest rate of 1.18%, underlying common stock price of $7.06, and dividend yield of 0%. The warrant is included in stockholders’ equity with the offset to debt discount that is amortized over the term of the loan using the effective interest method. The warrant is not subject to remeasurement. The Loan Agreement requires collateral by a security interest in all of the Company’s assets except intellectual property and contains customary affirmative and negative covenants including financial maintenance covenants, and also includes standard events of default, including payment defaults. Upon the occurrence of an event of default, a default interest rate of an additional 5% may be applied to the outstanding loan balances, and the lender may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. As of February 29, 2016, the Company was in violation of one of its financial covenants under the Loan Agreement. This violation was waived in principal by virtue of a contemporaneous verbal amendment to the Loan Agreement received from the Lender, which was subsequently memorialized in a written amendment to the Loan Agreement dated May 12, 2016. As of March 31, 2016, the Company was in compliance with its debt covenants. In April 2016, the Lender consented to the acquisition of Allenex by the Company, which occurred on April 14, 2016, The consent was contingent upon the closing of a Private Placement for aggregate cash proceeds of at least $12.0 million and separately depositing into escrow cash of $8.0 million that relates to a commitment by the Majority Shareholders of Allenex to purchase the Company’s equity securities in a Subsequent Financing, all of which occurred on April 14, 2016. The Lender also requires the Company to subsequently raise another $20.0 million through equity financing by March 31, 2017, prior to paying the $6.2 million of deferred purchase price consideration to the Majority Shareholders of Allenex. |
Stock Incentive Plans
Stock Incentive Plans | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Incentive Plans | 10. STOCK INCENTIVE PLANS Stock Option Plans Prior to its IPO, the Company had one active stock option plan, the 2008 Equity Incentive Plan (“2008 Plan”), one assumed stock option plan (“the ImmuMetrix 2013 Equity Incentive Plan”), and one terminated stock option plan, the 1998 Stock Plan. Upon its IPO, the Company reserved 838,695 shares of common stock for issuance under a new 2014 Equity Incentive Plan (“2014 Plan”). The shares reserved for issuance under the 2014 Plan also include shares returned to the 2008 Plan as the result of expiration or termination of options, provided that the maximum number of shares that may be added to the 2014 Plan thereby is limited to a maximum of 865,252 shares. The number of shares available for issuance under the 2014 Plan also includes an annual increase on the first day of each year equal to the lesser of: · 357,075 shares · 4.0% of the outstanding shares of common stock as of the last day of the immediately preceding year; or · such other number of shares as the Company’s board of directors may determine. The following table summarizes option activity and related information: Shares Available for Grant Shares Underlying Stock Options Outstanding Weighted- Average Exercise Price Balance—December 31, 2015 510,892 1,577,317 $ 6.87 Additional options authorized 357,075 — — Granted (371,970 ) 371,970 5.14 Exercised — (1,823 ) 3.11 Forfeited 86,888 (86,888 ) 6.08 Expired 156 (156 ) 5.00 Balance—March 31, 2016 583,041 1,860,420 6.56 Options outstanding that have vested or are expected to vest as of March 31, 2016 are as follows: Number of Shares Issued Weighted Average Exercise Price Weighted Average Contractual Life (Years) Aggregate Intrinsic Value (In thousands) Vested 844,288 $ 6.03 6.79 $ 1,219 Expected to vest 1,016,132 7.00 9.06 141 Total 1,860,420 6.56 8.03 $ 1,360 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock at March 31, 2016 for stock options that were in-the-money. The fair market value of the Company’s common stock as of March 31, 2016 was $4.96 per share. The weighted-average grant-date fair value of options granted during the three months ended March 31, 2016 and 2015 using the Black-Scholes Model was $2.07 per share and $2.76 per share, respectively. As of March 31, 2016, there was approximately $2.6 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested stock options that will be recognized on a straight-line basis over the remaining average vesting period of 2.72 years. 2014 Employee Stock Purchase Plan The Company’s board of directors adopted its 2014 Employee Stock Purchase Plan (“the ESPP”) in March 2014 and its stockholders approved the ESPP in July 2014. However, the Company’s ESPP was not made available to its employees until January 1, 2015. The first offering period in 2016 began on January 1, 2016 and will end on June 30, 2016. There have not been any ESPP shares purchased under this offering period at March 31, 2016. Under the second offering period in 2015 that ended on December 31, 2015, 32,232 shares were purchased for aggregate proceeds of $0.2 million from the issuance of shares, which occurred on January 4, 2016. The option price per share of common stock to be paid by a participant’s option on the applicable exercise date for an offering period shall be equal to 85% of the lesser of the fair market value of a share of common stock on (a) the applicable grant date or (b) the applicable exercise date. Valuation Assumptions The estimated fair values of employee stock options and ESPP shares were estimated using the Black-Scholes option-pricing model based on the following weighted-average assumptions: Three Months Ended March 31, 2016 2015 Employee stock options Expected term (in years) 6.0 6.0 Expected volatility 39.60 – 41.04 % Risk-free interest rate 1.54 – 1.91 % Expected dividend yield — % — % Employee stock purchase plan Expected term (in years) 0.5 0.5 Expected volatility 64.21 % 34.08 % Risk-free interest rate 0.49 % 0.11 % Expected dividend yield — % — % Restricted Stock Units The Company’s 2014 Plan allows restricted stock units (“RSUs”) to be granted in addition to stock options. The RSUs vest annually over four years in equal increments. The Company began granting RSUs starting March 2015. Unvested RSU activity for the three months ended March 31, 2016 is summarized below: Number of Shares Weighted- Average Grant Date Fair Value Unvested balance—December 31, 2015 106,200 $ 6.49 Granted 111,900 5.12 Vested (26,550 ) 6.49 Forfeited (12,575 ) 5.42 Unvested balance—March 31, 2016 178,975 5.71 As of March 31, 2016, there was approximately $0.9 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested RSUs that will be recognized on a straight-line basis over the remaining average vesting period of 3.33 years. Stock-based Compensation Expense The following table summarizes stock-based compensation expense relating to employee and nonemployee stock options, RSUs, and ESPP shares for the three months ended March 31, 2016 and 2015, included in the statements of operations as follows (in thousands): Three Months Ended March 31, 2016 2015 Cost of testing $ 28 $ 14 Research and development 113 49 Sales and marketing 28 18 General and administrative 277 199 Total $ 446 $ 280 No tax benefit was recognized related to share-based compensation expense since the Company has never reported taxable income and has established a full valuation allowance to offset all of the potential tax benefits associated with its deferred tax assets. In addition, no amounts of stock-based compensation were capitalized for the periods presented. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. SUBSEQUENT EVENTS Completion of Allenex Acquisition On April 14, 2016, the Company acquired 98.3% of the outstanding common stock of Allenex. Allenex is a transplant diagnostic company based in Stockholm, Sweden that develops, manufactures, and sells products that help match donor organs with potential recipients prior to transplantation. Allenex has 58 employees. Under the terms of the Conditional Share Purchase Agreements entered into on December 16, 2015, as amended and the tender offer prospectus dated March 7, 2016, and as a result of the tender offer, the purchase consideration is expected to total approximately $35.0 million, consisting of $27.8 million of cash, of which approximately $6.2 million is deferred purchase consideration payable to the Majority Shareholders no later than March 31, 2017, and the issuance of 1,375,029 shares of the Company’s common stock valued at $7.2 million. Additionally, $8.0 million of cash purchase consideration payable to the Majority Shareholders of Allenex is being held in escrow by the Company and relates to a commitment by the Majority Shareholders of Allenex to purchase the Company’s equity securities in a Subsequent Financing. The equity securities are expected to be sold no later than 30 days following the receipt of the Requisite Stockholder Approval, which is expected to occur on June 16, 2016, on terms, including price, substantially equivalent to the terms of a Private Placement described below. The Company intends to initiate compulsory acquisition proceedings under Swedish law to purchase the remaining shares of Allenex. In connection therewith, the Company subsequently intends to initiate a delisting of Allenex from Nasdaq Stockholm. As of April 11, 2016, the Company reassessed the probability of the completion of a six-month bridge loan of $18.0 million with Oberland Capital SA Davos LLC and determined that it was not probable that the bridge loan would be consummated. The Company is currently disputing the fees associated with the bridge loan with Oberland Capital SA Davos LLC, but in the interim the Company has recorded a charge of $2.9 million in the three months ended March 31, 2016 to expense financing costs associated with this bridge loan. These costs have been included as a component of other (expense) income, net on the Company’s condensed statements of operations. The cash portion of the acquisition purchase price was paid from the Company’s general working capital. The acquisition required and the Company obtained a consent from the Lender. The consent was contingent upon the Company closing a Private Placement for aggregate proceeds of at least $12.0 million and separately depositing into escrow cash of $8.0 million that relates to a commitment by the Majority Shareholders of Allenex to purchase the Company’s equity securities in a Subsequent Financing as described above, all of which occurred on April 14, 2016. The Lender also requires the Company to subsequently raise another $20.0 million through equity financing by March 31, 2017, prior to paying the $6.2 million of deferred purchase price consideration to the Majority Shareholders of Allenex. As of February 29, 2016, the Company was in violation of one of its financial covenants under the Loan Agreement. This violation was waived in principal by virtue of a contemporaneous verbal amendment to the Loan Agreement received from the Lender, which was subsequently memorialized in a written amendment to the Loan Agreement dated May 12, 2016. As of March 31, 2016, the Company was in compliance with its debt covenants. The acquisition of Allenex will be accounted for and reported as a business combination during the second quarter of 2016. The Company is in the process of determining the total purchase price and allocation thereof, however, it is impracticable to make any other disclosures related to this acquisition at this time. Private Placement On April 14, 2016, the Company completed a Private Placement transaction for the offering of 591,860 Units. Each Unit is comprised of: (i) one share of Common Stock, (ii) five shares of Series A Mandatorily Convertible Preferred Stock (“Series A Preferred”), and (iii) three warrants, each to purchase one share of Common Stock. The purchase price was $23.94 per Unit (the equivalent of $3.99 per share of Common Stock, assuming conversion of the Series A Preferred). The closing of the Private Placement was conditioned upon the closing of the Allenex acquisition, the consent of East West Bank to the Allenex acquisition, and certain other customary closing conditions, all of which occurred on April 14, 2016. The aggregate proceeds to the Company from the Private Placement were approximately $14.1 million, of which $1.4 million was paid for payment of placement agents, escrow agents and legal fees. On April 13, 2016, the Company filed a Certificate of Designation that established the rights and preferences of the Series A Preferred. Each share of Series A Preferred is mandatorily convertible into Common Stock upon the Company’s receipt of the Requisite Stockholder Approval. Subject to obtaining the Requisite Stockholder Approval, each share of Series A Preferred is initially convertible into one share of Common Stock, subject to certain adjustments. The Series A Preferred are not entitled to receive dividends and are not redeemable at the election of the Company. Series A Preferred could be required to be redeemed upon a deemed liquidation event, as defined, at $3.99 per share, Each warrant is exercisable for a period of seven years to purchase one share of Common Stock at an initial exercise price of $4.98 per share, subject to certain adjustments. The Company also issued warrants to purchase an aggregate of 200,000 shares of Common Stock to certain of its placement agents (“Placement Agent Warrants”). Each Placement Agent Warrant is exercisable for a period of five years to purchase one share of Common Stock at an initial exercise price of $3.99 per share, subject to certain adjustments. Pursuant to the terms of the warrants, the holder of the warrant cannot exercise the warrant until the Company has obtained the Requisite Stockholder Approval. The warrants are expected to be recorded as a liability and be subject to ongoing remeasurement. Concurrently, the Company also entered into Commitment Letters pursuant to which the Majority Shareholders of Allenex agreed to purchase the Company’s equity securities in a Subsequent Financing as described above. If the Subsequent Financing is not completed within 30 days of the Requisite Stockholder Approval, and provided that the Loan Agreement is still in place, the Lender has the right to require that the Company complete the Subsequent Financing and issue securities to the Majority Shareholders in exchange for the $8.0 million of cash held in escrow. If neither the Company nor the Lender exercise their rights by September 30, 2016, the $8.0 million held in escrow will be released to the Majority Shareholders without any further obligation on the part of the Majority Shareholders of Allenex. The Company expects to issue an additional 334,169 Units, which consist of (i) a total of 334,169 shares of Common Stock, (ii) a total of 1,670,845 shares of Series A Preferred that are all convertible to Common Stock, and (iii) 1,002,507 warrants in the Subsequent Financing. Following the closing of the Private Placement, the Company agreed to a number of requirements such as submitting the Private Placement to the Company’s stockholders for approval, which is expected to be approved after the receipt of the Requisite Stockholder Approval expected on June 16, 2016, granting certain registration rights, including the registration of shares sold in the Private Placement on a registration statement on Form S-3 within 45 days of closing. Additionally, if the Company fails to file an effective registration statement on Form S-3 within 45 days of closing the Private Placement, the Company shall be obligated to pay an aggregate penalty amount equal to approximately $0.3 million for each month that the Company has not filed the required registration statement, up to a maximum of $1.4 million. The Company engaged M.M. Dillon & Co. Group (“M.M. Dillon”), an investment banking firm, to act as one of its financial advisors and placement agents in connection with a private equity placement of Common Stock and the execution of any such Private Placement that the Company may choose to pursue. A member of the Company’s board of directors is a managing director of M.M. Dillon, and as such, M.M. Dillon is considered a related party to the Company. As a result of the Private Placement and Subsequent Financing, the Company paid approximately $1.1 million in placement fees to its placement agents, of which $0.2 million pertained to fees paid to M.M. Dillon. Additionally, M.M. Dillon also received Placement Agent Warrants to purchase 100,000 shares of the Company’s Common Stock. The Company expects to use the proceeds from the Private Placement and the Subsequent Financing for additional working capital, acquisitions and general corporate purposes. The Company is soliciting the Requisite Stockholder Approval, which requires the support a majority of the Company’s stockholders, at its annual general meeting on June 16, 2016, and filed a definitive proxy statement on May 5, 2016. The Company and certain stockholders representing a majority of the Company’s outstanding Common Stock entered into voting agreements on April 14, 2016, pursuant to which each stockholder agreed to vote certain of its shares of Common Stock in favor of granting the Company the Requisite Stockholder Approval. |
Organization and Description 17
Organization and Description of Business (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Liquidity And Going Concern | Liquidity and Going Concern The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $182.8 million at March 31, 2016. As of March 31, 2016, the Company had cash and cash equivalents of $23.8 million, and $15.9 million On April 14, 2016, the Company acquired 98.3% of the outstanding common stock of Allenex AB (“Allenex”). Allenex is a transplant diagnostic company based in Stockholm, Sweden that develops, manufactures, and sells products that help match donor organs with potential recipients prior to transplantation. Allenex has 58 employees. Under the terms of the Conditional Share Purchase Agreements entered into on December 16, 2015, as amended and the tender offer prospectus dated March 7, 2016, and as a result of the tender offer, the purchase consideration is expected to total approximately $35.0 million, consisting of $27.8 million of cash, of which approximately $6.2 million is deferred purchase consideration and payable to Midroc Invest AB, FastPartner AB and Xenella Holding AB (collectively, the “Majority Shareholders”) no later than March 31, 2017, and the issuance of 1,375,029 shares of the Company’s common stock valued at $7.2 million. Additionally, $8.0 million of cash purchase consideration payable to the Majority Shareholders of Allenex is being held in escrow by the Company and relates to a commitment by the Majority Shareholders of Allenex to purchase the Company’s equity securities in a future financing (“Subsequent Financing”). The equity securities are expected to be sold no later than 30 days following the receipt of certain Company stockholder approvals required pursuant to the rules of the NASDAQ Stock Market (the “Requisite Stockholder Approval”), which is expected to occur on June 16, 2016, on terms, including price, substantially equivalent to the terms of a Private Placement described below. The Company intends to initiate compulsory acquisition proceedings under Swedish law to purchase the remaining shares of Allenex. See Note 11 for more detail about the Allenex acquisition. On April 14, 2016, the Company completed the sale of 591,860 units (“Units”) to certain accredited investors (the “Private Placement”) at a purchase price of $23.94 per Unit. On closing on April 14, 2016, the aggregate gross proceeds to the Company from the Private Placement were approximately $14.1 million. Concurrently, the Company also entered into commitment letters (the “Commitment Letters”) pursuant to which the Majority Shareholders of Allenex agreed to purchase the Company’s equity securities in a Subsequent Financing, as described above. If the Subsequent Financing is not completed within 30 days of the Requisite Stockholder Approval, and provided that the Loan Agreement (as defined in Note 9) is still in place, the Lender (as defined in Note 9) has the right to require that the Company complete the Subsequent Financing and issue securities to the Majority Shareholders in exchange for the $8.0 million of cash held in escrow. If neither the Company nor the Lender exercise their rights by September 30, 2016, the $8.0 million held in escrow will be released to the Majority Shareholders without any further obligation on the part of the Majority Shareholders of Allenex. The Company made payments of approximately $1.1 million and $97,000 in placement fees and other offering expenses, respectively, to placement agents in connection with the sale of the 591,860 Units in the Private Placement. Following the closing of the Private Placement, the Company agreed to a number of requirements such as submitting the Private Placement to the Company’s stockholders for approval, which is expected to be approved after the receipt of the Requisite Stockholder Approval expected on June 16, 2016, granting certain registration rights, including the registration of shares sold in the Private Placement on a registration statement on Form S-3 within 45 days of closing. Additionally, if the Company fails to file an effective registration statement on Form S-3 within 45 days of closing the Private Placement, the Company shall be obligated to pay an aggregate penalty amount equal to approximately $0.3 million for each month that the Company has not filed the required registration statement, up to a maximum of $1.4 million. See Note 11 for more detail about the Private Placement. The Company will require additional financing and/or refinancing to fund working capital, repay debt and to pay its obligations. A potential working capital benefit of refinancing the Company’s existing debt obligations is deferral of debt payments otherwise due in 2016. The Company may pursue financing and refinancing opportunities in both the private and public debt and equity markets through sales of debt or equity securities. Absent the receipt of additional funding or refinancing, the Company will exhaust its cash and cash equivalents in December |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The condensed balance sheet as of December 31, 2015 has been derived from audited financial statements as of that date but does not include all of the financial information required by U.S. GAAP for complete financial statements. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The accompanying unaudited condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed on March 29, 2016 with the SEC. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in the unaudited condensed financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to (i) revenue recognition, (ii) the differences between amounts billed and estimated receipts from payers, (iii) the determination of the accruals for clinical studies, (iv) the determination of refunds to be requested by third-party payers, (v) the fair value of assets and liabilities, (vi) the valuation of warrants to purchase common stock, (vii) the fair value of contingent consideration in a business acquisition, (viii) the fair value of embedded derivatives, (ix) measurement of stock-based compensation expense, (x) the determination of the valuation allowance and estimated tax benefit associated with deferred tax assets and net deferred tax liability, (xi) any impairment of long-lived assets including in-process technology and goodwill and (xii) legal contingencies. Actual results could differ from those estimates. |
Concentrations of Credit Risk and Other Risks and Uncertainties | Concentrations of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable. The Company’s policy is to invest its cash and cash equivalents in money market funds, obligations of U.S. government agencies and government-sponsored entities, commercial paper, and various bank deposit accounts. These financial instruments were held in Company accounts at two financial institutions. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company is exposed to credit risk in the event of default by the financial institutions to the extent of amounts recorded on the balance sheets which may be in excess of insured limits. The Company is also subject to credit risk from its accounts receivable which are derived from revenue earned from AlloMap tests provided for patients located in the U.S. and billed to various third-party payers. The Company has not experienced any significant credit losses and does not generally require collateral on receivables. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. |
Purchased Intangible Assets | Purchased Intangible Assets Acquired intangible assets with indefinite useful lives are related to in-process research and development or IPR&D, projects and are measured at their respective fair values as of the acquisition date. The Company does not amortize intangible assets with indefinite useful lives. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts. If and when development is complete, which generally occurs if and when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. The Company tests IPR&D for impairment on an annual basis and in between annual tests if it becomes aware of events or changes that would indicate that it is more likely than not that the fair value of the assets is below their carrying amounts. The IPR&D annual impairment test is performed as of December 1 of each fiscal year. If the fair value exceeds the carrying value, then there is no impairment. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of the asset to its carrying value, without consideration of any recoverability test. The Company has not identified any such impairment losses to date. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company evaluates its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company then compares the carrying amounts of the assets with the future net undiscounted cash flows expected to be generated by such asset. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. The Company has not identified any such impairment losses to date. |
Goodwill | Goodwill Goodwill represents the excess of the cost of an acquisition over the sum of the amounts assigned to tangible and identifiable intangible assets acquired, less liabilities assumed. Goodwill is not subject to amortization, but is tested for impairment on an annual basis and whenever events or changes in circumstances indicate the carrying amount of these assets may not be recoverable. The Company has determined that it operates in a single segment and has a single reporting unit associated with the development and commercialization of diagnostic products. In the event that the Company determines that it is more likely than not that the carrying value of the reporting unit is higher than its fair value, quantitative testing is performed comparing recorded values to estimated fair values. If impairment is present, it is measured as the excess of recorded goodwill over its implied fair value. The Company performs its annual evaluation of goodwill on December 1 of each fiscal year. There have been no impairments recorded to date. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and it takes into consideration the assumptions that market participants would use when pricing the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement of an asset or liability requires management to make judgments and to consider specific characteristics of that asset or liability. The carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. |
Testing Revenue | Testing Revenue The Company recognizes revenues for tests delivered when the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery has occurred or services rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. The first criterion is satisfied when a third-party payer makes a coverage decision or enters into a contractual arrangement with the Company for the test. The second criterion is satisfied when the Company performs the test and delivers the test result to the ordering physician. The third criterion is satisfied if the third-party payer’s coverage decision or reimbursement contract specifies a price for the test. The fourth criterion is satisfied based on management’s judgments regarding the collectability of the fees charged under the arrangement. Such judgments include review of past payment history. AlloMap testing may be considered investigational by some payers and not covered under their reimbursement policies. Others may cover the test, but not pay a set or determinable amount. As a result, in the absence of a reimbursement agreement or sufficient payment history, collectability cannot reasonably be assured so revenue is not recognized at the time the test is delivered. If all criteria set forth above are met, revenue is recognized. When the first, third or fourth criteria are not met but third-party payers make a payment to the Company for tests performed, the Company recognizes revenue on the cash basis in the period in which the payment is received. Revenue is recognized on the accrual basis net of adjustments for differences between amounts billed and the estimated receipts from payers. The amount the Company expects to collect may be lower than the agreed upon amount due to several factors, such as the amount of patient co-payments, the existence of secondary payers and claim denials. Estimated receipts are based upon historical payment practices of payers. Differences between estimated and actual cash receipts are recorded as an adjustment to revenue, which have been immaterial to date. During the three months ended March 31, 2016, the Company changed its revenue recognized from one of its payers from the cash basis to the accrual basis based on its consistent history of obtaining timely reimbursement from this payer. The impact of this change in accounting estimate was insignificant to revenues and loss per share for the three months ended March 31, 2016. During the three months ended March 31, 2015, the Company changed its revenue recognized from two of its payers from the cash basis to the accrual basis based on the Company’s consistent history of obtaining timely reimbursement from these two payers. The impact of this change in accounting estimate was to increase revenues by $0.1 million and to change loss per share from $0.20 to $0.19 for the three months ended March 31, 2015. |
Collaboration and License Revenue | Collaboration, License and Other Revenue The Company generates revenue from collaboration and license agreements. Collaboration and license agreements may include non-refundable upfront payments, partial or complete reimbursement of research and development costs, contingent payments based on the occurrence of specified events under the agreements, license fees and royalties on sales of products or product candidates if they are successfully commercialized. The Company’s performance obligations under the collaborations may include the transfer of intellectual property rights in the form of licenses, obligations to provide research and development services and obligations to participate on certain development committees with the collaboration partners. The Company makes judgments that affect the periods over which it recognizes revenue. The Company periodically reviews its estimated periods of performance based on the progress under each arrangement and accounts for the impact of any change in estimated periods of performance on a prospective basis. The Company recognizes contingent consideration received from the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved, which the Company believes is consistent with the substance of its performance under its various license and collaboration agreements. The Company did not recognize any milestones during the three months ended March 31, 2016 and 2015. |
Cost of Testing | Cost of Testing Cost of testing reflects the aggregate costs incurred in delivering the Company’s AlloMap test results to clinicians. The components of cost of testing are materials and service costs, direct labor costs, including stock-based compensation, equipment and infrastructure expenses associated with testing samples, shipping, logistics and specimen processing charges to collect and transport samples and allocated overhead including rent, information technology, equipment depreciation and utilities and royalties. Costs associated with performing tests (except royalties) are recorded as the test is processed regardless of whether and when revenue is recognized with respect to that test. As a result, our cost of testing as a percentage of revenue may vary significantly from period to period because we do not recognize all revenue in the period in which the associated costs are incurred. Royalties for licensed technology, calculated as a percentage of test revenues, are recorded as license fees in cost of testing at the time the test revenues are recognized. |
Business Combinations | Business Combinations The Company determines and allocates the purchase price of an acquired business to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, royalty rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. In those circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under ASC 480, Distinguishing Liabilities from Equity Transaction costs associated with these acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition. |
Stock-based Compensation | Stock-based Compensation The Company uses the Black-Scholes Model, which requires the use of estimates such as stock price volatility and expected option lives, to value employee stock options. The Company estimates the expected option lives using historical data, volatility using its own historical stock prices and stock prices of peer companies in the diagnostics industry, risk-free rates based on the implied yield currently available in the U.S. Treasury zero-coupon issues with a remaining term equal to the expected option lives, and dividend yield based on the Company’s expectations and historical data. The Company uses the straight-line attribution method for recognizing compensation expense. Compensation expense is recognized on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on the Company’s historical experience. Compensation expense for stock options issued to nonemployees is calculated using the Black-Scholes Model and is recorded over the service performance period. Options subject to vesting are required to be periodically remeasured over their service performance period, which is generally the same as the vesting period. |
Warrants | Warrants The Company had freestanding warrants enabling counterparties to purchase shares of its convertible preferred stock as of December 31, 2013, which were converted to purchase common stock on the Company’s IPO date. Freestanding warrants for convertible preferred stock that were contingently redeemable were classified as liabilities on the balance sheet and recorded at their estimated fair value. These warrants were remeasured at each balance sheet date and any change in estimated fair value was recognized in other expense on the condensed statements of operations. Upon the completion of the Company’s IPO in July 2014, preferred stock warrants were converted into warrants to purchase common stock, and accordingly, the liability was reclassified to equity and became no longer subject to remeasurement. |
Comprehensive Loss | Comprehensive Loss Net loss and comprehensive loss are the same for all periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements―Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, the FASB issued ASU 2015-05, Intangibles—Goodwill and Other—Internal Use Software (Subtopic 350-40) In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, In February 2016, the FASB issued ASU 2016-02, Leases In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606), |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share | The following tables set forth the computation of the Company’s basic and diluted net loss per share (in thousands, except shares and per share data): Three Months Ended March 31, 2016 2015 Numerator: Net loss $ (9,752 ) $ (2,272 ) Denominator: Weighted-average shares used to compute basic and diluted net loss per share 11,969,714 11,814,467 Net loss per share: Basic and diluted $ (0.81 ) $ (0.19 ) |
Potentially Dilutive Securities Excluded from Diluted Net Loss Per Share | The following potentially dilutive securities have been excluded from diluted net loss per share, because their effect would be antidilutive: Three Months Ended March 31, 2016 2015 Shares of common stock subject to outstanding options 1,860,420 1,436,429 Shares of common stock subject to outstanding common stock warrants 301,069 576,096 Restricted stock units 178,975 — Total common stock equivalents 2,340,464 2,012,525 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands): March 31, 2016 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Money market funds $ 21,564 $ — $ — $ 21,564 Liabilities Contingent consideration $ — $ — $ 735 $ 735 December 31, 2015 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Money market funds $ 28,774 $ — $ — $ 28,774 Liabilities Contingent consideration $ — $ — $ 948 $ 948 |
Summary of Issuances, Changes in Fair Value and Reclassifications of Level 3 Financial Instruments | The following table presents the issuances, changes in fair value and reclassifications of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands): (Level 3) Contingent Consideration Liability Balance as of December 31, 2014 $ 1,074 Change in estimated fair value (126 ) Balance as of December 31, 2015 948 Change in estimated fair value (213 ) Balance as of March 31, 2016 $ 735 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | The following table summarizes the Company’s inventories (in thousands): March 31, 2016 December 31, 2015 Finished goods $ 247 $ 237 Raw materials 348 529 Total inventory $ 595 $ 766 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables And Accruals [Abstract] | |
Components of Accrued and Other Liabilities | The following table represents the components of accrued and other liabilities (in thousands): March 31, 2016 December 31, 2015 Debt financing fees $ 1,687 $ — Transaction related fees 674 589 Tax, audit and compliance related fees 286 89 Test sample processing fees 451 426 Accrued overpayments and refunds 212 163 Clinical studies 999 756 Deferred rent – current portion 272 258 Capital leases – current portion 63 71 Other accrued expenses 654 540 Total accrued and other liabilities $ 5,298 $ 2,892 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Option Activity and Related Information | The following table summarizes option activity and related information: Shares Available for Grant Shares Underlying Stock Options Outstanding Weighted- Average Exercise Price Balance—December 31, 2015 510,892 1,577,317 $ 6.87 Additional options authorized 357,075 — — Granted (371,970 ) 371,970 5.14 Exercised — (1,823 ) 3.11 Forfeited 86,888 (86,888 ) 6.08 Expired 156 (156 ) 5.00 Balance—March 31, 2016 583,041 1,860,420 6.56 |
Summary of Options Outstanding and Exercisable Vested or Expected to Vest | Options outstanding that have vested or are expected to vest as of March 31, 2016 are as follows: Number of Shares Issued Weighted Average Exercise Price Weighted Average Contractual Life (Years) Aggregate Intrinsic Value (In thousands) Vested 844,288 $ 6.03 6.79 $ 1,219 Expected to vest 1,016,132 7.00 9.06 141 Total 1,860,420 6.56 8.03 $ 1,360 |
Weighted-Average Assumptions Used to Estimated Fair Value of Share-Based Awards | The estimated fair values of employee stock options and ESPP shares were estimated using the Black-Scholes option-pricing model based on the following weighted-average assumptions: Three Months Ended March 31, 2016 2015 Employee stock options Expected term (in years) 6.0 6.0 Expected volatility 39.60 – 41.04 % Risk-free interest rate 1.54 – 1.91 % Expected dividend yield — % — % Employee stock purchase plan Expected term (in years) 0.5 0.5 Expected volatility 64.21 % 34.08 % Risk-free interest rate 0.49 % 0.11 % Expected dividend yield — % — % |
Summary of Unvested RSU Activity | Unvested RSU activity for the three months ended March 31, 2016 is summarized below: Number of Shares Weighted- Average Grant Date Fair Value Unvested balance—December 31, 2015 106,200 $ 6.49 Granted 111,900 5.12 Vested (26,550 ) 6.49 Forfeited (12,575 ) 5.42 Unvested balance—March 31, 2016 178,975 5.71 |
Summary of Expense Relating to Employee and Nonemployee Stock-Based Payment Awards from Stock Options and RSUs | Stock-based Compensation Expense The following table summarizes stock-based compensation expense relating to employee and nonemployee stock options, RSUs, and ESPP shares for the three months ended March 31, 2016 and 2015, included in the statements of operations as follows (in thousands): Three Months Ended March 31, 2016 2015 Cost of testing $ 28 $ 14 Research and development 113 49 Sales and marketing 28 18 General and administrative 277 199 Total $ 446 $ 280 |
Organization and Description 23
Organization and Description of Business - Additional Information (Detail) | Apr. 14, 2016USD ($)Employee$ / sharesshares | Mar. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Schedule of Capitalization, Equity [Line Items] | |||||
Number of operating segment | Segment | 1 | ||||
Cash and cash equivalents | $ 23,752,000 | $ 29,888,000 | $ 38,985,000 | $ 36,431,000 | |
Debt outstanding under debt and capital lease obligations | 15,900,000 | ||||
Accumulated deficit | $ 182,836,000 | $ 173,082,000 | |||
Maximum [Member] | Allenex [Member] | |||||
Schedule of Capitalization, Equity [Line Items] | |||||
Business Acquisition Deferred Payment Date | Mar. 31, 2017 | ||||
Subsequent Event [Member] | Private Placement [Member] | |||||
Schedule of Capitalization, Equity [Line Items] | |||||
Common stock shares issued under private placement offer | shares | 591,860 | ||||
Private placement offer price per share | $ / shares | $ 23.94 | ||||
Proceeds from issuance of private placement offer | $ 14,100,000 | ||||
Placement fees | 1,100,000 | ||||
Other offering expenses | 97,000 | ||||
Monthly payment of potential penalty | 300,000 | ||||
Maximum limit of penalty | $ 1,400,000 | ||||
Subsequent Event [Member] | Allenex [Member] | |||||
Schedule of Capitalization, Equity [Line Items] | |||||
Percentage of share acquired | 98.30% | ||||
Number of employees | Employee | 58 | ||||
Total purchase price combination of cash and common stock | $ 35,000,000 | ||||
Cash distribution to acquire business, gross | $ 27,800,000 | ||||
Common stock, shares issue | shares | 1,375,029 | ||||
Common stock value | $ 7,200,000 | ||||
Business acquisition deferred payment consideration | 6,200,000 | ||||
Subsequent Event [Member] | Allenex [Member] | Majority Shareholder [Member] | |||||
Schedule of Capitalization, Equity [Line Items] | |||||
Escrow deposit | $ 8,000,000 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Additional Information - Concentration of Credit Risk (Detail) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Services Revenue [Member] | Customer Concentration Risk [Member] | Minimum | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | 10.00% |
Services Revenue [Member] | Customer Concentration Risk [Member] | Medicare [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 47.00% | 52.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Minimum | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | 10.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Medicare [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 30.00% | 35.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Aetna [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 21.00% | 21.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Humana [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.00% |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Cash equivalents maturity, description | Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. | |
Impairment of Long-lived Assets | $ 0 | |
Impairment of goodwill | 0 | |
Impact on revenue, change in accounting estimate | $ 6,562,000 | $ 7,216,000 |
Impact on loss per share, change in accounting estimate | $ (0.81) | $ (0.19) |
Revenue recognition under milestone method | $ 0 | $ 0 |
Change in Accounting Method Accounted for as Change in Estimate [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Impact on revenue, change in accounting estimate | $ 100,000 | |
Impact of change in accounting estimate | the Company changed its revenue recognized from two of its payers from the cash basis to the accrual basis based on the Company’s consistent history of obtaining timely reimbursement from these two payers. The impact of this change in accounting estimate was to increase revenues by $0.1 million and to change loss per share from $0.20 to $0.19 for the three months ended March 31, 2015. | |
Change in Accounting Method Accounted for as Change in Estimate [Member] | Previously Reported [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Impact on loss per share, change in accounting estimate | $ (0.20) |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net loss | $ (9,752) | $ (2,272) |
Denominator: | ||
Basic and diluted | 11,969,714 | 11,814,467 |
Net loss per share: | ||
Basic and diluted | $ (0.81) | $ (0.19) |
Net Loss Per Share - Potentiall
Net Loss Per Share - Potentially Dilutive Securities Excluded from Diluted Net Loss Per Share (Detail) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities excluded from diluted net loss per share attributable to common stockholders, Total | 2,340,464 | 2,012,525 |
Shares of common stock subject to outstanding options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities excluded from diluted net loss per share attributable to common stockholders, Total | 1,860,420 | 1,436,429 |
Shares of common stock subject to outstanding common stock warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities excluded from diluted net loss per share attributable to common stockholders, Total | 301,069 | 576,096 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities excluded from diluted net loss per share attributable to common stockholders, Total | 178,975 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Money market funds | $ 21,564 | $ 28,774 |
Liabilities | ||
Contingent consideration | 735 | 948 |
Fair Value Measured Using - (Level 1) [Member] | ||
Assets | ||
Money market funds | 21,564 | 28,774 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Fair Value Measured Using - (Level 2) [Member] | ||
Assets | ||
Money market funds | 0 | 0 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Fair Value Measured Using - (Level 3) [Member] | ||
Assets | ||
Money market funds | 0 | 0 |
Liabilities | ||
Contingent consideration | $ 735 | $ 948 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Issuances, Changes in Fair Value and Reclassifications of Level 3 Financial Instruments (Detail) - Significant Unobservable Inputs (Level 3), Contingent Consideration Liability [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Significant Unobservable Inputs (Level 3) [Line Items] | ||
Beginning Balance | $ 948 | $ 1,074 |
Change in estimated fair value | (213) | (126) |
Ending Balance | $ 735 | $ 948 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016USD ($)CommercialTestshares | Dec. 31, 2015shares | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Transfers between Level 1, Level 2 and Level 3 categories during the periods | $ | $ 0 | |
ImmuMetrix, Inc. [Member] | Contingent consideration [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent obligation to issue common stock | shares | 227,845 | 227,845 |
Milestone description | The issuance will occur if the Company completes 2,500 commercial tests involving the measurement of dd-cfDNA in organ transplant recipients in the United States by June 10, 2020. | |
Number of commercial tests involving the measurement of cfDNA to be completed | CommercialTest | 2,500 | |
Probability of the achievement | 65.00% |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 247 | $ 237 |
Raw materials | 348 | 529 |
Total inventory | $ 595 | $ 766 |
Accrued and Other Liabilities -
Accrued and Other Liabilities - Components of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Payables And Accruals [Abstract] | ||
Debt financing fees | $ 1,687 | |
Transaction related fees | 674 | $ 589 |
Tax, audit and compliance related fees | 286 | 89 |
Test sample processing fees | 451 | 426 |
Accrued overpayments and refunds | 212 | 163 |
Clinical studies | 999 | 756 |
Deferred rent – current portion | 272 | 258 |
Capital leases – current portion | 63 | 71 |
Other accrued expenses | 654 | 540 |
Total accrued and other liabilities | $ 5,298 | $ 2,892 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - Unpaid Royalties [Member] - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2014 | |
Loss Contingencies [Line Items] | |||
Settlement and mutual release agreement, counterparty name | Roche | ||
Settlement and mutual release agreement, date | September 2,014 | ||
Past due royalties | $ 2,827,220 | ||
Maximum number of days from end of calendar quarter for royalty payment | 45 days | ||
Settlement and mutual release agreement, terms of agreement | In September 2014, the Company entered into a settlement and mutual release agreement with Roche whereby: (i) for the period beginning July 1, 2011 through June 30, 2014, the Company agreed to pay the amount of $2,827,220 in settlement of past royalties due; (ii) for the period beginning July 1, 2014 through September 30, 2014, the Company agreed to pay royalties based on the same combination services percentage used to determine the past royalties due; (iii) for the period beginning October 1, 2014 through September 30, 2017, Roche and the Company agreed to a downward adjustment of the combination services percentage used to determine the portion of the AlloMap testing revenue that is royalty bearing under the terms of the license; (iv) the Company agreed to report and pay quarterly royalties within 45 days of the end of each calendar quarter; (v) Roche agreed that, subject to the Company’s timely payment of all applicable royalties through such date, no further royalties will be payable by the Company for periods after September 30, 2017. | ||
Royalty expenses | $ 200,000 | $ 300,000 |
Collaboration and Licensing A34
Collaboration and Licensing Agreements - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | |||||
Jul. 31, 2013USD ($) | Jun. 30, 2013USD ($) | Jun. 30, 2013EUR (€) | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2013EUR (€) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Description of agreement expire term | The agreement will expire at the later of the last-to-expire patent in the EEA or ten years from the first commercial sale of the test in the EEA, which occurred in 2014. | ||||||
Common stock value | $ 12,000 | $ 12,000 | |||||
Refundable upfront payments | $ 344,000 | € 250,000 | |||||
Upfront cash payment | 503,000 | € 387,500 | |||||
Shares sold for consideration | $ 467,000 | ||||||
Revenues recognized from the arrangement | 15,000 | $ 27,000 | |||||
Royalty revenues | 96,000 | 90,000 | |||||
Royalty revenues receivable balance | $ 0 | $ 90,000 | |||||
Diaxonhit (DHT) [Member] | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Common stock value | $ 503,000 | € 387,500 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Mar. 31, 2017 | Jan. 30, 2015 | Mar. 31, 2016 | Apr. 14, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 20,000,000 | ||||
Interest rate, description | Draw A bears interest at a daily floating rate equal to 2.00%, plus the greater of (i) 3.25% or (ii) the prime rate published by the lender. | ||||
Interest rate basis spread | 2.00% | ||||
Loan agreement initiation date | Jan. 30, 2015 | ||||
Maturity date of term loan facility | Dec. 1, 2018 | ||||
Debt discount and issuance liability component, current | $ 100,000 | $ 200,000 | |||
Debt discount and issuance liability component, non-current | $ 100,000 | $ 100,000 | |||
Prepayment penalty on loan | 0.00% | ||||
Loan agreement description | The Company agreed to issue to the Lender warrants to purchase shares of the Company’s common stock upon the drawdown of each advance in an amount equal to 1.5% of the amount drawn, divided by the exercise price per share for that tranche. | ||||
Estimated fair value of warrants | $ 90,000 | ||||
Default interest rate description | Upon the occurrence of an event of default, a default interest rate of an additional 5% may be applied to the outstanding loan balances, and the lender may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. | ||||
Default interest rate percentage | 5.00% | ||||
Scenario Forecast [Member] | Majority Shareholder [Member] | Allenex [Member] | |||||
Debt Instrument [Line Items] | |||||
Proceeds from majority shareholders in exchange of equity securities | $ 20,000,000 | ||||
Business acquisition deferred purchase price consideration | $ 6,200,000 | ||||
Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Minimum lender required proceeds from issuance of private placement offer | $ 12,000,000 | ||||
Subsequent Event [Member] | Majority Shareholder [Member] | Allenex [Member] | |||||
Debt Instrument [Line Items] | |||||
Escrow deposit | $ 8,000,000 | ||||
Common Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Warrant to purchase stock, shares | 34,483 | ||||
Warrant to purchase of stock, per share | $ 6.96 | ||||
Warrants To Purchase Common Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Expected volatility rate | 39.83% | ||||
Contractual term of years | 5 years | ||||
Risk-free interest rate | 1.18% | ||||
Underlying common stock price | $ 7.06 | ||||
Dividend yield | 0.00% | ||||
Interest Expense [Member] | |||||
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ 600,000 | ||||
Draw A [Member] | |||||
Debt Instrument [Line Items] | |||||
Loan agreement, amount borrowed | $ 16,000,000 | ||||
Pay-off of term debt | 11,300,000 | ||||
Non-refundable commitment fee | $ 160,000 | ||||
Secured Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Principal pay-down of loan begins date | Jul. 1, 2016 | ||||
Deferred principal amortization description | The principal pay-down of the loan begins on July 1, 2016 with the loan being payable in 30 equal monthly installments. |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Detail) - USD ($) | Jan. 04, 2016 | Jan. 02, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Jan. 01, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair market value of Company's common stock | $ 4.96 | |||||
Weighted average fair value of options to purchase common stock granted | $ 2.07 | $ 2.76 | ||||
Total unrecognized stock-based compensation expense related to stock options and RSUs | $ 2,600,000 | |||||
Non-vested stock options and RSUs weighted average remaining period of recognition | 2 years 8 months 19 days | |||||
Share-based compensation expense, tax benefit recognized | $ 0 | |||||
Share-based compensation costs, capitalized | 0 | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized stock-based compensation expense related to stock options and RSUs | $ 900,000 | |||||
Non-vested stock options and RSUs weighted average remaining period of recognition | 3 years 3 months 29 days | |||||
2014 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for issuance of common stock | 838,695 | 357,075 | ||||
Outstanding shares of common stock, in percentage | 4.00% | |||||
2014 Equity Incentive Plan [Member] | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum number of shares may be added to the plan hereunder | 865,252 | |||||
2014 Employee Stock Purchase Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate proceeds from the issuance of shares | $ 200,000 | |||||
Shares issued under ESPP | 32,232 | |||||
Applicable exercise date an offering period shall be equal to percentage of the lesser of fair market value of common stock | 85.00% |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Option Activity and Related Information (Detail) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Shares Available for Grant, Beginning Balance | 510,892 |
Shares Available for Grant, Additional options authorized | 357,075 |
Shares Available for Grant, Granted | (371,970) |
Shares Available for Grant, Forfeited | 86,888 |
Shares Available for Grant, Expired | 156 |
Shares Available for Grant, Ending Balance | 583,041 |
Shares Underlying Stock Options Outstanding, Beginning Balance | 1,577,317 |
Shares Underlying Stock Options Outstanding, Additional options authorized | 0 |
Shares Underlying Stock Options Outstanding, Granted | 371,970 |
Shares Underlying Stock Options Outstanding, Exercised | (1,823) |
Shares Underlying Stock Options Outstanding, Forfeited | (86,888) |
Shares Underlying Stock Options Outstanding, Expired | (156) |
Shares Underlying Stock Options Outstanding, Ending Balance | 1,860,420 |
Weighted-average Exercise Price, Beginning Balance | $ / shares | $ 6.87 |
Weighted-average Exercise Price, Additional options authorized | $ / shares | 0 |
Weighted-average Exercise Price, Granted | $ / shares | 5.14 |
Weighted-average Exercise Price, Exercised | $ / shares | 3.11 |
Weighted-average Exercise Price, Forfeited | $ / shares | 6.08 |
Weighted-average Exercise Price, Expired | $ / shares | 5 |
Weighted-average Exercise Price, Ending Balance | $ / shares | $ 6.56 |
Stock Incentive Plans - Summa38
Stock Incentive Plans - Summary of Options Outstanding Vested and Expected to Vest (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Number of Shares Issued, Vested | shares | 844,288 |
Number of Shares Issued, Expected to vest | shares | 1,016,132 |
Number of Shares Issued, Total | shares | 1,860,420 |
Weighted-average Exercise Price, Vested | $ / shares | $ 6.03 |
Weighted-average Exercise Price, Expected to vest | $ / shares | 7 |
Weighted-average Exercise Price, Total | $ / shares | $ 6.56 |
Weighted-average Contractual Life (Years), Vested | 6 years 9 months 15 days |
Weighted-average Contractual Life (Years), Expected to vest | 9 years 22 days |
Weighted-average Contractual Life (Years), Total | 8 years 11 days |
Aggregate Intrinsic Value, Vested | $ | $ 1,219 |
Aggregate Intrinsic Value, Expected to vest | $ | 141 |
Aggregate Intrinsic Value, Total | $ | $ 1,360 |
Stock Incentive Plans - Weighte
Stock Incentive Plans - Weighted-Average Assumptions Used to Estimated Fair Value of Share-Based Awards (Detail) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Shares of common stock subject to outstanding options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years | 6 years |
Expected volatility | 41.04% | |
Expected volatility, minimum | 39.60% | |
Expected volatility, maximum | 39.69% | |
Risk-free interest rate | 1.91% | |
Risk-free interest rate, minimum | 1.54% | |
Risk-free interest rate, maximum | 1.65% | |
Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 months | 6 months |
Expected volatility | 64.21% | 34.08% |
Risk-free interest rate | 0.49% | 0.11% |
Expected dividend yield | 0.00% | 0.00% |
Stock Incentive Plans - Summa40
Stock Incentive Plans - Summary of Unvested RSU Activity (Detail) - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Unvested beginning balance | shares | 106,200 |
Number of Shares, Granted | shares | 111,900 |
Number of Shares, Vested | shares | (26,550) |
Number of Shares, Forfeited | shares | (12,575) |
Number of Shares, Unvested ending balance | shares | 178,975 |
Weighted Average Grant- Date Fair Value, Unvested beginning balance | $ / shares | $ 6.49 |
Weighted Average Grant- Date Fair Value, Granted | $ / shares | 5.12 |
Weighted Average Grant- Date Fair Value, Vested | $ / shares | 6.49 |
Weighted Average Grant- Date Fair Value, Forfeited | $ / shares | 5.42 |
Weighted Average Grant- Date Fair Value, Unvested ending balance | $ / shares | $ 5.71 |
Stock Incentive Plans - Summa41
Stock Incentive Plans - Summary of Expense Relating to Employee and Nonemployee Stock-Based Payment Awards from Stock Options and RSUs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | $ 446 | $ 280 |
Cost of testing [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | 28 | 14 |
Research and Development Expense [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | 113 | 49 |
Sales and marketing [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | 28 | 18 |
General and administrative [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | $ 277 | $ 199 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | Mar. 31, 2017USD ($) | Apr. 14, 2016USD ($)Employee$ / sharesshares | Mar. 31, 2016USD ($)$ / sharesshares | Apr. 13, 2016$ / shares | Apr. 11, 2016USD ($) |
Subsequent Event [Line Items] | |||||
Bridge loan, financing cost | $ 2,900,000 | ||||
Class of warrant exercisable period | 7 years | ||||
Initial exercise price of warrants | $ / shares | $ 4.98 | ||||
Additional issued units | shares | 334,169 | ||||
Common stock and warrants issued to purchase of common stock | shares | 2,005,014 | ||||
Series A Preferred Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Preferred shares convertible to common stock | shares | 1,670,845 | ||||
Private Placement [Member] | |||||
Subsequent Event [Line Items] | |||||
Securities purchase agreement private placement units description | On April 14, 2016, the Company completed a Private Placement transaction for the offering of 591,860 Units. Each Unit is comprised of: (i) one share of Common Stock, (ii) five shares of Series A Mandatorily Convertible Preferred Stock (“Series A Preferred”), and (iii) three warrants, each to purchase one share of Common Stock. The purchase price was $23.94 per Unit (the equivalent of $3.99 per share of Common Stock, assuming conversion of the Series A Preferred). | ||||
Private Placement [Member] | Warrants To Purchase Common Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Warrant to purchase stock, shares | shares | 200,000 | ||||
Warrant to purchase of stock, per share | $ / shares | $ 3.99 | ||||
Maximum [Member] | Allenex [Member] | |||||
Subsequent Event [Line Items] | |||||
Business Acquisition Deferred Payment Date | Mar. 31, 2017 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Bridge Loan | $ 18,000,000 | ||||
Minimum lender required proceeds from issuance of private placement offer | $ 12,000,000 | ||||
Subsequent Event [Member] | M.M. Dillon & Co. Group [Member] | |||||
Subsequent Event [Line Items] | |||||
Warrant to purchase stock, shares | shares | 100,000 | ||||
Placement fees | $ 200,000 | ||||
Subsequent Event [Member] | Private Placement [Member] | |||||
Subsequent Event [Line Items] | |||||
Common stock shares issued under private placement offer | shares | 591,860 | ||||
Private placement offer price per share | $ / shares | $ 23.94 | ||||
Common stock purchase price | $ / shares | $ 3.99 | ||||
Proceeds from issuance of private placement offer | $ 14,100,000 | ||||
Aggregate payment of Placement agent, escrow agents and legal fees | 1,400,000 | ||||
Monthly payment of potential penalty | 300,000 | ||||
Maximum limit of penalty | 1,400,000 | ||||
Placement fees | $ 1,100,000 | ||||
Subsequent Event [Member] | Private Placement [Member] | Series A Preferred Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Preferred stock redeemed liquidation preference per share | $ / shares | $ 3.99 | ||||
Subsequent Event [Member] | Allenex [Member] | |||||
Subsequent Event [Line Items] | |||||
Percentage of share acquired | 98.30% | ||||
Number of employees | Employee | 58 | ||||
Total purchase price combination of cash and common stock | $ 35,000,000 | ||||
Cash distribution to acquire business, gross | $ 27,800,000 | ||||
Common stock, shares issue | shares | 1,375,029 | ||||
Common stock value | $ 7,200,000 | ||||
Business acquisition deferred payment consideration | 6,200,000 | ||||
Majority Shareholder [Member] | Allenex [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of common stock purchased | shares | 1,002,507 | ||||
Majority Shareholder [Member] | Allenex [Member] | Scenario Forecast [Member] | |||||
Subsequent Event [Line Items] | |||||
Business acquisition deferred payment consideration | $ 6,200,000 | ||||
Proceeds from majority shareholders in exchange of equity securities | $ 20,000,000 | ||||
Majority Shareholder [Member] | Subsequent Event [Member] | Allenex [Member] | |||||
Subsequent Event [Line Items] | |||||
Escrow deposit | $ 8,000,000 |