Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 08, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
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 | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 28,595,396 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 5,976 | $ 17,258 |
Accounts receivable | 3,270 | 2,768 |
Inventory | 6,170 | 5,461 |
Prepaid and other assets | 1,530 | 1,186 |
Total current assets | 16,946 | 26,673 |
Property and equipment, net | 2,281 | 2,931 |
Intangible assets, net | 34,307 | 33,124 |
Goodwill | 12,005 | 13,839 |
Restricted cash | 9,554 | 143 |
Other assets | 0 | 20 |
Total assets | 75,093 | 76,730 |
Current liabilities: | ||
Accounts payable | 3,396 | 3,065 |
Accrued payroll liabilities | 4,453 | 3,851 |
Accrued and other liabilities | 3,895 | 5,320 |
Accrued royalties | 294 | 263 |
Deferred revenue | 39 | 42 |
Deferred purchase consideration | 2,514 | 5,445 |
Derivative liability | 1,370 | 0 |
Current debt | 15,000 | 22,846 |
Total current liabilities | 30,961 | 40,832 |
Deferred rent, net of current portion | 1,018 | 1,301 |
Deferred revenue, net of current portion | 740 | 759 |
Deferred tax liability | 5,950 | 6,057 |
Deferred purchase consideration, net of current portion | 2,880 | 0 |
Long-term debt, net of current portion | 21,174 | 1,098 |
Contingent consideration | 801 | 492 |
Common stock warrant liability | 10,431 | 5,208 |
Other liabilities | 1,313 | 1,222 |
Total liabilities | 75,268 | 56,969 |
Commitments and contingencies (Note 9) | 0 | 0 |
Stockholders’ equity: | ||
Preferred stock: $0.001 par value; 10,000,000 shares authorized at September 30, 2017 and December 31, 2016; no shares issued and outstanding at September 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock: $0.001 par value; 100,000,000 shares authorized at September 30, 2017 and December 31, 2016; 22,563,799 shares and 21,278,373 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 23 | 21 |
Additional paid-in capital | 238,215 | 235,673 |
Accumulated other comprehensive loss | (2,198) | (3,659) |
Accumulated deficit | (236,351) | (212,553) |
Total CareDx, Inc. stockholders' equity (deficit) | (311) | 19,482 |
Noncontrolling interest | 136 | 279 |
Total stockholders’ equity (deficit) | (175) | 19,761 |
Total liabilities and stockholders’ equity | $ 75,093 | $ 76,730 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
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 | 22,563,799 | 21,278,373 |
Common stock, shares outstanding | 22,563,799 | 21,278,373 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Testing revenue | $ 8,163 | $ 8,613 | $ 24,485 | $ 22,317 |
Product revenue | 3,872 | 3,754 | 10,916 | 7,228 |
Collaboration, license and other revenue | 156 | 108 | 420 | 226 |
Total revenue | 12,191 | 12,475 | 35,821 | 29,771 |
Operating expenses: | ||||
Cost of testing | 3,156 | 2,604 | 9,224 | 8,228 |
Cost of product | 2,053 | 3,355 | 6,558 | 6,411 |
Research and development | 2,959 | 2,930 | 9,360 | 9,231 |
Sales and marketing | 3,255 | 3,451 | 9,747 | 8,544 |
General and administrative | 4,038 | 5,180 | 14,672 | 16,250 |
Goodwill impairment | 0 | 0 | 1,958 | 0 |
Change in estimated fair value of contingent consideration | 594 | (112) | 309 | (422) |
Total operating expenses | 16,055 | 17,408 | 51,828 | 48,242 |
Loss from operations | (3,864) | (4,933) | (16,007) | (18,471) |
Interest expense | (1,685) | (568) | (4,166) | (1,351) |
Other expense, net | (317) | (133) | (1,191) | (3,334) |
Change in estimated fair value of common stock warrant liability and derivative liability | (8,599) | 1,386 | (3,404) | (1,779) |
Loss before income taxes | (14,465) | (4,248) | (24,768) | (24,935) |
Income tax benefit | 178 | 449 | 837 | 888 |
Net loss | (14,287) | (3,799) | (23,931) | (24,047) |
Net loss attributable to noncontrolling interest | (19) | (35) | (133) | (58) |
Net loss attributable to CareDx, Inc. | $ (14,268) | $ (3,764) | $ (23,798) | $ (23,989) |
Net loss per share attributable to CareDx, Inc. (Note 3): | ||||
Basic | $ (0.63) | $ (0.20) | $ (1.09) | $ (1.61) |
Diluted | $ (0.63) | $ (0.26) | $ (1.09) | $ (1.61) |
Weighted average shares used to compute net loss per share attributable to CareDx, Inc.: | ||||
Basic | 22,526,615 | 19,098,626 | 21,765,292 | 14,894,218 |
Diluted | 22,526,615 | 19,481,424 | 21,765,292 | 14,894,218 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (14,287) | $ (3,799) | $ (23,931) | $ (24,047) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | 527 | (423) | 1,461 | (1,831) |
Net comprehensive loss | (13,760) | (4,222) | (22,470) | (25,878) |
Comprehensive loss attributable to noncontrolling interest | (19) | (35) | (143) | (58) |
Comprehensive loss attributable to CareDx, Inc. | $ (13,741) | $ (4,187) | $ (22,327) | $ (25,820) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Operating activities: | ||
Net loss | $ (23,931) | $ (24,047) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,740 | 2,195 |
Amortization of inventory fair market value adjustment | 329 | 2,738 |
Stock-based compensation | 1,316 | 1,511 |
Amortization of deferred revenue | (22) | (43) |
Amortization of debt discount and noncash interest expense | 2,772 | 354 |
Revaluation of contingent consideration to estimated fair value | 309 | (422) |
Revaluation of common stock warrant liability and derivative liability to estimated fair value | 3,404 | 1,779 |
Non-cash goodwill impairment | 1,958 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (316) | (690) |
Inventory | 462 | 325 |
Prepaid and other assets | (231) | 1,290 |
Accounts payable | 200 | (990) |
Accrued payroll liabilities | 392 | 824 |
Accrued royalties | 31 | 68 |
Accrued and other liabilities | (890) | 2,593 |
Change in deferred taxes | (682) | (947) |
Net cash used in operating activities | (12,159) | (13,462) |
Investing activities: | ||
Purchase of property and equipment | (100) | (627) |
Restricted cash collateral on lease | (34) | 0 |
Net cash used in investing activities | (1,103) | (21,194) |
Financing activities: | ||
Proceeds from debt, net of issuance costs | 24,002 | 0 |
Restricted cash collateral on debt | (9,375) | 0 |
Proceeds from private placement and subsequent financing, net of issuance costs | 20,625 | |
Proceeds from issuance of common stock under employee stock purchase plan | 93 | 304 |
Proceeds from issuance of common stock, net of issuance costs | 8,293 | |
Principal payments on debt and capital lease obligations | (13,252) | (2,170) |
Change in bank overdraft obligation | 581 | 0 |
Proceeds from exercise of warrants | 35 | |
Proceeds from exercise of stock options | 9 | |
Net cash provided by financing activities | 2,084 | 27,061 |
Effect of exchange rate changes on cash and cash equivalents | (104) | (28) |
Net decrease in cash and cash equivalents | (11,282) | (7,623) |
Cash and cash equivalents at beginning of period | 17,258 | 29,888 |
Cash and cash equivalents at end of period | 5,976 | 22,265 |
Supplemental disclosure of cash flow information: | ||
Shares issued in lieu of cash payment | 1,145 | |
Deferred purchase consideration | 1,064 | 5,700 |
Accrued interest capitalized to debt principal | 984 | |
Debt assumed as part of acquisition | 13,421 | |
Conversion of convertible private placement and subsequent financing preferred stock to common stock | 13,064 | |
Common shares issued as part of acquisition | 7,205 | |
Common stock issuance costs accrued, not paid | 461 | |
Allenex [Member] | ||
Investing activities: | ||
Acquisition of business, net of cash acquired | (502) | $ (20,567) |
Conexio [Member] | ||
Investing activities: | ||
Acquisition of business, net of cash acquired | $ (467) |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
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”) together with its subsidiaries, is a global transplant diagnostics company with product offerings along the pre- and post-transplant continuum. The Company focuses on discovery, development and commercialization of clinically differentiated, high-value diagnostic surveillance solutions for transplant patients. In post-transplant diagnostics, the Company offers AlloMap®, which is a heart transplant molecular test and in October 2017 launched AlloSure®, which is a donor-derived cell free DNA (“dd-cfDNA”) test initially used for kidney transplant patients. In pre-transplant diagnostics, the Company offers high quality products that increase the chance of successful transplants by facilitating a better match between a donor and a recipient of stem cells and organs. AlloMap 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 to severe acute cellular rejection. Since 2008, the Company has sought to expand the adoption and utilization of its AlloMap solution through ongoing studies to substantiate the clinical utility and actionability of AlloMap, secure positive reimbursement decisions for AlloMap from large private and public payers, develop and enhance its relationships with key members of the transplant community, including opinion leaders at major transplant centers, and explore opportunities and technologies for the development of additional solutions for post-transplant surveillance. The Company believes the use of AlloMap, in conjunction with other clinical indicators, can help healthcare providers and their patients better manage long-term care following a heart transplant. In particular, the Company believes AlloMap can improve patient care by helping healthcare providers avoid the use of unnecessary, invasive surveillance biopsies and determine the appropriate dosage levels of immunosuppressants. AlloMap has received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) for marketing and sale as a test to aid in the identification of recipients with a low probability of moderate or severe acute cellular rejection. A 510(k) submission is a premarketing submission made to the FDA. Clearance may be granted by the FDA if it finds the device or test provides satisfactory evidence pertaining to the claimed intended uses and indications for the device or test. The Company is also pursuing the development of additional products for transplant surveillance using a variety of technologies, including AlloSure, a proprietary next-generation sequencing-based test to measure dd-cfDNA after organ transplantation. The Company believes the use of AlloSure, in conjunction with other clinical indicators, can help healthcare providers and their patients better manage long-term care following a kidney transplant. In particular, the Company believes AlloSure can improve patient care by helping healthcare providers to reduce the use of invasive biopsies and determine the appropriate dosage levels of immunosuppressants. With the acquisition of CareDx International AB, formerly Allenex AB (“Allenex” or “Olerup”), on April 14, 2016, the Company develops, manufactures, markets and sells high quality products that increase the chance of successful transplants by facilitating a better match between a donor and a recipient of stem cells and organs. Olerup SSP® is used to type Human Leukocyte Antigen (“HLA”) alleles based on the sequence specific primer (“SSP”) technology and has a market in Europe and selected other markets for pre-transplant solutions. The Company also offers Olerup XM-ONE®, a standardized test that identifies a patient’s antigens against HLA Class I or Class II, as well as antibodies against a donor’s endothelium. This cross-match test has primarily been used prior to kidney transplants. With the acquisition of the business assets of Conexio Genomics Pty Ltd (“Conexio”) on January 20, 2017, the Company offers a complete product range for sequence-based typing (“SBT”) of HLA alleles. Olerup SBT Resolver TM TM The Company’s headquarters are in Brisbane, California; primary operations are in Brisbane and Stockholm, Sweden; and the Company operates in two reportable segments. Liquidity and Going Concern The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) effective December 31, 2016, which requires the Company to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within one year from the date of the issuance of these financial statements. The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $236.4 million at September 30, 2017. As of September 30, 2017, the Company had cash and cash of debt outstanding under its debt obligations, net of debt discount, of which $15.0 million is current. In March 2017, the Company received net proceeds of $24.0 million in connection with the issuance of a convertible debt obligation to JGB Collateral LLC and certain of its affiliates (“JGB”), of which $11.2 million was used to repay the Company’s outstanding debt obligations to East West Bank. In addition, the convertible debt obligation requires the Company to maintain a minimum of $9.4 million of restricted cash at a named financial institution. These funds are restricted as to withdrawal and are not available to the Company to fund its operations or repay indebtedness. In accordance with A quarterly debt covenant in the Company’s Term Loan Facility Agreement (the “Term Loan Facility”) with Danske Bank A/S (“Danske”) was violated on June 30, 2016 and September 30, 2016. The Company obtained waivers for these violations. The Company was in compliance with all debt covenants at December 31, 2016. In connection with the acquisition of Allenex, the Company entered into Conditional Share Purchase Agreements with each of Midroc Invest AB, FastPartner AB (“FastPartner”) and Xenella Holding AB, the former majority shareholders of Allenex (collectively, the “Former Majority Shareholders”), on December 16, 2015, as amended (the “Conditional Share Purchase Agreements”). Pursuant to the Conditional Share Purchase Agreements, as of June 30, 2017, the Company owed deferred purchase consideration to the Former Majority Shareholders of approximately $6.3 million, including accrued interest, which was due on July 1, 2017. On July 1, 2017, the Company entered into amendments to the Conditional Share Purchase Agreements with the In addition, promissory notes issued by Allenex to FastPartner and Mohammed Al Amoudi in an aggregate amount of approximately $4.1 million, including accrued interest (the “Allenex Notes”), were due on July 1, 2017. Mohammed Al Amoudi, The Company has incurred losses and negative cash flows from operations since 2015. As of September 30, 2017, the Company had cash and cash equivalents of $6.0 million and an accumulated deficit of $236.4 million. The Company previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2016 and in its Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2017 that it believed its cash balance would not be sufficient to fund operations for a period of one year from the date of the issuance of those financial statements and that the Company would require additional financing and/or refinancing of its current debt obligations to fund working capital, repay debt and pay its obligations. On October 10, 2017, the Company sold an aggregate of 4,992,840 shares of its common stock at a public offering price of $4.00 per share for net proceeds of approximately $18.3 million. After giving consideration to the proceeds from the 2017 Public Offering and the restructuring of the deferred purchase consideration and Allenex Notes on July 1, 2017, the Company believes its existing cash and cash equivalents, and expected revenues, will be sufficient to meet its anticipated cash requirements for at least the next 12 months. The Company may req uire future additional financing to fund working capital, repay or restructure debt and pay its obligations as they come due. Additional financing might include one or more offerings and one or more of a combination of equity securities, debt arrangements or collaborations. However, there can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its operations or on terms favorable to the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and follow the requirements of the 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 consolidated balance sheet as of December 31, 2016 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 and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions have been eliminated. Since the Company owns less than 100% of the shares of Allenex, the Company records net loss attributable to noncontrolling interest in its condensed consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Use of Estimates The preparation of unaudited condensed consolidated 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 consolidated 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, including from acquisitions, (vi) inventory valuation, (vii) the valuation of warrants, Series A Preferred, and common stock issued in the Private Placement and Subsequent Financing (as described in Note 12), (viii) the fair value of contingent consideration in a business acquisition, (ix) the fair value of embedded derivatives, (x) measurement of stock-based compensation expense, (xi) the determination of the valuation allowance and estimated tax benefit associated with deferred tax assets and net deferred tax liability, (xii) any impairment of long-lived assets, including in-process technology and goodwill, and (xiii) 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. 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, and sales of Olerup products to distributors, strategic partners and end customers in Europe, Middle East and Africa, the U.S., Latin America and other geographic regions. The Company has not experienced any significant credit losses and does not generally require collateral on receivables. For the three months ended September 30, 2017 and 2016, approximately 26% and 27%, respectively, of total revenue was derived from Medicare. 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. Restricted Cash Under lease agreements for certain facilities and an agreement with the State of Florida Medicaid, the Company must maintain letters of credit, minimum collateral requirements and a surety bond. These agreements are collateralized by cash. The cash used to support these arrangements is classified as long-term restricted cash on the accompanying balance sheets. Under the Company’s convertible debt financing agreements with JGB, the Company is required to maintain restricted cash of $9.4 million, which is restricted as to withdrawal and is not available to the Company to fund its operations or repay indebtedness. The restricted cash used to support the convertible debt facility Inventory Inventory is finished goods, work in progress and raw materials and consist of reagent plates, testing devices, laboratory supplies, reagents, and finished goods kits. Inventories are used in connection with tests performed and may also be used for research and product development efforts. Laboratory supplies subsequently designated for research and product development use are expensed. Obsolete or damaged inventories are written off and excluded from the physical inventory. Inventories at the Company’s Stockholm, Sweden and Fremantle, Australia locations are stated at the lower of purchased cost, determined on an average cost basis, or net realizable value. Inventories at the Company’s other locations are stated at the lower of purchased cost, determined on a first-in, first-out basis or net realizable value. Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, generally three years for laboratory, computer and office equipment, and generally seven years for furniture and fixtures. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining lease term. Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair market value of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. The Company capitalizes certain costs incurred for software developed or obtained for internal use. These costs include software licenses, consulting services, and direct materials, as well as employee payroll and payroll-related costs. Capitalized internal-use software costs are depreciated over three years. Purchased Intangible Assets Amortizable intangible assets include customer relationships, developed technology, trademarks, contracts and in-process research and development (“IPR&D”) identified intangible assets acquired as part of a business combination. Intangible assets subject to amortization are amortized over their estimated useful lives. Acquired intangible assets with indefinite useful lives are related to 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 research and development 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 an 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 two reportable segments associated with the delivery of diagnostic tests and the development and commercialization of diagnostic products. The reporting unit’s carrying value is compared to its fair value and an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The estimated fair values of the reporting units are determined using either the market approach, income approach or a combination of the market and income approach. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its estimated fair value. The income approach uses expected future operating results and failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit. The Company conducted a goodwill impairment test as of March 31, 2017 and identified an impairment of $2.0 million related to the goodwill recorded in the Olerup reportable segment. See Note 6 for additional discussion regarding the impairment charge recorded. 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. The carrying amounts of the common stock warrant liability, derivative liability and contingent consideration liability also represents their fair values. Common Stock On April 14, 2016 and June 15, 2016, the Company completed the Private Placement and Subsequent Financing, respectively (as described in Note 12), which included the issuance of free standing warrants to certain accredited investors and placement agents to purchase shares of the Company’s common stock. The exercisability of the warrants was contingent upon the receipt of approval of the Private Placement by the Company’s stockholders pursuant to the rules of The NASDAQ Stock Market LLC (the “Requisite Stockholder Approval”), which occurred on June 16, 2016. The free standing warrants issued pursuant to the Private Placement and Subsequent Financing are contingently redeemable and are classified as liabilities on the consolidated balance sheet and recorded at their estimated fair value. The warrants are remeasured at each balance sheet date with changes recorded in change in estimated fair value of common stock warrant liability and derivative liability on the consolidated statements of operations. On March 15, 2017, the Company entered into a Securities Purchase Agreement with JGB, pursuant to which the Company issued Senior Secured Debentures (the “JGB Debt”) and warrants (as described in Note 11). The Company determined that the debentures and the warrants were free standing instruments. The terms of the warrants include price-based anti-dilution adjustment provisions, which precludes the Company from classifying the warrants in equity. As such, the warrants are classified as liabilities on the consolidated balance sheet. The full fair value of the warrants was allocated on day one to the warrant liability and the residual value, after allocation of the fair value of the derivative liability discussed below, was ascribed to the debentures. The warrants will be re-measured at each reporting period with changes recorded in change in estimated fair value of common stock warrant liability and derivative liability on the consolidated statements of operations. The Debentures are classified as liabilities on the consolidated balance sheet and include certain embedded derivatives that required bifurcation, including settlement and penalty provisions. The compound embedded derivative will be re-measured at each reporting period with changes recorded in change in estimated fair value of common stock warrant liability and derivative liability on the consolidated statements of operations. 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. For testing revenue, 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 on an accrual basis when the test is performed. 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 for tests performed 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. Taxes assessed by governmental authorities on revenue, including sales and value added taxes are excluded from revenue in the statements of operations. Product Revenue Product revenue is recognized from the sale of products to end-users, distributors and strategic partners when persuasive evidence of an arrangement exists, the product is complete and tested and has been shipped or delivered, as required to transfer title and risk of loss, the sales price is fixed and determinable, collection of the resulting receivable is reasonably assured, there are no material contingencies and the Company does not have significant obligations for future performance. When collectability is not reasonably assured, the Company defers the revenue until the cash is received. Provisions for estimated future product returns and allowances are recorded in the period of the sale based on the historical and anticipated future rate of returns. Revenue is recorded net of any discounts given to the buyer. 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 revenue connected with milestones during the three and nine months ended September 30, 2017 or 2016. 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, 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, utilities and royalties. Costs associated with performing tests (except royalties) are recorded as the test is processed regardless of whether and when the testing revenue is recognized with respect to that test. As a result, the Company’s cost of testing as a percentage of revenue may vary significantly from period to period because the Company does 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. Cost of Product Cost of product reflects the aggregate costs incurred in delivering the Company’s products to customers. The components of cost of product are materials costs, manufacturing and kit assembly costs, direct labor costs, equipment and infrastructure expenses associated with preparing kitted products for shipment, shipping, and allocated overhead including rent, information technology, equipment depreciation and utilities. Cost of product also includes amortization of acquired developed technology and adjustments to inventory values, including write-down of impaired, slow moving or obsolete inventory. 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 FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity Transaction costs associated with 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. Research and Development Expenses Research and development expenses represent costs incurred to develop new surveillance solutions as well as continued development of the Company’s AlloMap and AlloSure tests. These expenses include payroll and related expenses, consulting expenses, laboratory supplies, and certain allocated expenses as well as amounts incurred under certain collaboration and license agreements. Research and development costs are expensed as incurred. The Company records accruals for estimated study costs comprised of work performed by contract research organizations under contract terms. Advertising Expenses All advertising costs are expensed as incurred. Advertising expenses were insignificant during all of the periods presented. 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 using 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 using the Company’s expectations and historical data. The fair value of each restricted stock unit is calculated based upon the closing price of the Company’s common stock on the date of the grant. 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. Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. The Company’s assessment of an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit may change as new information becomes available. Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for each entity, including the Swedish Krona, Australian dollar and the Euro. The revenue and expenses of such subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting cumulative translation adjustments are reported in other comprehensive loss. Foreign currency transaction gains and losses are recognized in current operations. Comprehensive (Loss) Income Comprehensive (loss) income consists of net (loss) income and other gains and losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income or loss. For the Company, such items consist of foreign currency translation losses. Recent Accounting Pronouncements In March 2016, the FASB issued ASU No 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), In April 2016, the FASB issued ASU No. 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), , In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . consolidated financial statements In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The Company adopted ASU 2017-01 on January 1, 2017 on a prospective basis and the adoption of ASU 2017-01 did not have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . In February 2017, the FASB issued ASU No. 2017-05, Other Income —Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets . In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net loss attributable to CareDx, Inc. used to compute basic net loss per share $ (14,268 ) $ (3,764 ) $ (23,798 ) $ (23,989 ) Less: Gain on private placement warrants — (1,386 ) — — Net loss attributable to CareDx, Inc. used to compute diluted net loss per share $ (14,268 ) $ (5,150 ) $ (23,798 ) $ (23,989 ) Denominator: Weighted-average shares used to compute basic net loss per share attributable to CareDx, Inc. 22,526,615 19,098,626 21,765,292 14,894,218 Add: Private placement warrant shares — 382,798 — — Weighted-average shares used to compute diluted net loss per share attributable to CareDx, Inc. 22,526,615 19,481,424 21,765,292 14,894,218 Net loss per share attributable to CareDx, Inc.: Basic $ (0.63 ) $ (0.20 ) $ (1.09 ) $ (1.61 ) Diluted $ (0.63 ) $ (0.26 ) $ (1.09 ) $ (1.61 ) The Company issued 4,630,145 shares of preferred stock pursuant to the Private Placement and Subsequent Financing (as described in Note 12), which were completed on April 14, 2016 and June 15, 2016, respectively. All of the preferred stock was converted to common stock upon receipt of the Requisite Stockholder Approval on June 16, 2016. As of September 30, 2017, there was no preferred stock outstanding. On September 26, 2016, the Company completed an underwritten public offering pursuant to which the Company issued and sold an aggregate of 2,250,000 shares of common stock. The following potentially dilutive securities have been excluded from diluted net loss per share, because their effect would be antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Shares of common stock subject to outstanding options 1,992,559 1,851,232 1,992,559 1,851,232 Shares of common stock subject to outstanding common stock warrants 4,506,478 283,415 4,506,478 3,261,502 Shares of common stock subject to convertible notes 6,313,636 — 6,313,636 — Restricted stock units 340,650 314,115 340,650 314,115 Total common stock equivalents 13,153,323 2,448,762 13,153,323 5,426,849 The above table does not include the 1,791,763 shares of common stock related to the Amendments to the Conditional Share Purchase Agreements, which issuance of shares is subject to shareholder approval by December 31, 2017. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
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 1 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, as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Money market funds $ 2,743 $ — $ — $ 2,743 Liabilities Contingent consideration $ — $ — $ 801 $ 801 Common stock warrant liability — — 10,431 10,431 Derivative liability — — 1,370 1,370 Total liabilities $ — $ — $ 12,602 $ 12,602 December 31, 2016 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Money market funds $ 14,497 $ — $ — $ 14,497 Liabilities Contingent consideration $ — $ — $ 492 $ 492 Common stock warrant liability — — 5,208 5,208 Total liabilities $ — $ — $ 5,700 $ 5,700 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 Common Derivative Liability Total Balance as of December 31, 2016 $ 492 $ 5,208 $ — $ 5,700 Issuance of JGB Debt and warrants — 900 2,290 3,190 Change in estimated fair value 309 4,323 (920 ) 3,712 Balance as of September 30, 2017 $ 801 $ 10,431 $ 1,370 $ 12,602 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 September 30, 2017 and December 31, 2016, money market funds were included on the balance sheets in cash and cash equivalents. • Contingent consideration - As of September 30, 2017 and December 31, 2016, the Company had a contingent obligation to issue 227,845 shares of its common stock to the former owners of ImmuMetrix, Inc . in conjunction with its acquisition of ImmuMetrix, Inc. 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 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 estimate at September 30, 2017 and December 31, 2016 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 at 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 fair value of the contingent consideration increased by $0.6 million and $0.3 million in the three and nine months ended September 30, 2017, respectively, as a result of the increase in the Company’s common stock price during the period, and management’s estimate of the probability of meeting the milestone increasing to 95% at September 30, 2017 from 85% at June 30, 2017 and from 80% at December 31, 2016. • Common stock warrant liability – As of September 30, 2017, the Company had warrants to purchase 2,927,960 shares of common stock outstanding that it issued to certain accredited investors and its placement agents following the closing of the Private Placement on April 14, 2016 and Subsequent Financing on June 15, 2016 (as described in Note 12). In addition, as of September 30, 2017 the Company had warrants to purchase 1,296,679 shares of common stock outstanding that it issued to JGB related to the convertible debt agreement on March 15, 2017 (as described in Note 11). The common stock warrants are classified as liabilities within Level 3. The Company utilizes a binomial-lattice pricing model (the Monte Carlo simulation model) that involves a market condition to estimate the fair value of the warrants. The application of the Monte Carlo simulation model requires the use of a number of complex assumptions including the Company’s stock price, expected life of the warrants, stock price volatility determined from the Company’s historical stock prices and stock prices of peer companies in the diagnostics industry, and 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 life of the warrants. The estimated fair value of the warrants was subsequently remeasured at September 30, 2017, and the change in estimated fair value of common stock warrant liability was recorded on the Company’s condensed consolidated statements of operations. • Derivative liability – The JGB Debt (as described in Note 11) includes certain embedded derivatives that require bifurcation, including settlement and penalty provisions. The Company utilizes the Monte Carlo simulation model to estimate the fair value of the compound derivative liability for the measurement at issuance and subsequent remeasurement at September 30, 2017. The application of the Monte Carlo simulation model requires the use of a number of complex assumptions, which included the probability and size of additional financing rounds. Common Stock Warrant Liability and Derivative Liability Assumptions September 30, 2017 December 31, 2016 Private Placement Common Stock Warrant Liability Stock Price $ 3.70 $ 2.70 Exercise Price $ 1.12 $ 4.00 Remaining term (in years) 5.54 6.29 Volatility 62.00 % 51.40 % Risk-free interest rate 1.98 % 2.14 % Subsequent Financing Common Stock Warrant Liability Stock Price $ 3.70 $ 2.70 Exercise Price $ 4.00 $ 4.00 Remaining term (in years) 5.71 6.29 Volatility 62.00 % 51.40 % Risk-free interest rate 1.99 % 2.14 % Placement Agent Common Stock Warrant Liability Stock Price $ 3.70 $ 2.70 Exercise Price $ 1.12 $ 3.99 Remaining term (in years) 3.54 4.29 Volatility 76.00 % 56.10 % Risk-free interest rate 1.69 % 1.77 % September 30, 2017 March 15, 2017 JGB Common Stock Warrant Liability Stock Price $ 3.70 $ 2.15 Exercise Price $ 4.82 $ 5.00 Remaining term (in years) 4.96 5.50 Volatility 65.00 % 54.00 % Risk-free interest rate 1.90 % 2.06 % Derivative Liability Stock Price $ 3.70 $ 2.15 Remaining term (in years) 2.41 2.96 Volatility 65.00 % 54.00 % Risk-free interest rate 1.90 % 1.72 % 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 Company has determined that debt at similar interest rates and terms to its current debt is not currently available to the Company and therefore the Company is unable to calculate the fair value of its debt at September 30, 2017. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combination | 5. BUSINESS COMBINATION Allenex 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. The acquisition of Allenex created an international transplant diagnostics company with product offerings along the pre- and post-transplant continuum. The combined company has a presence and direct distribution channels in the United States and Europe, with additional third party distributors in Europe and other markets around the world. 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 aggregate purchase consideration paid by the Company was approximately $34.1 million and consisted of (i) $26.9 million of cash, of which $5.7 million (which represents SEK 50,620,000 as of the acquisition date) was deferred purchase consideration originally payable to the Former Majority Shareholders by no later than March 31, 2017, subject to certain contingencies being met, and (ii) the issuance of 1,375,029 shares of the Company’s common stock valued at $7.2 million. Of the total cash consideration, $8.0 million of cash payable to the Former Majority Shareholders was deposited into an escrow account by the Company and subsequently invested in the Company by the Former Majority Shareholders through a purchase of the Company’s equity securities in the Subsequent Financing (as described in Note 12). Upon the completion of the Subsequent Financing, certain contingencies in the Conditional Share Purchase Agreements were waived. The Company intends to complete compulsory acquisition proceedings under Swedish law to purchase the remaining shares of Allenex. On June 8, 2016, the Company delisted Allenex’s common stock from Nasdaq Stockholm. The cash portion of the acquisition purchase price was paid from the Company’s general working capital. The date by which the deferred purchase consideration was due to the Former Majority Shareholders was subsequently extended to July 1, 2017. In addition, interest began accruing on the Company’s obligations to the Former Majority Shareholders at a rate of 10.0% per year commencing on January 1, 2017. On July 1, 2017, the deferred purchase consideration including accrued interest totaled $6.3 million (the “Deferred Obligation”). On July 1, 2017, the Conditional Share Purchase Agreements were amended The fair value of the remaining 1.7% of noncontrolling interest in Allenex was estimated to be approximately SEK 5,100,000, or approximately $0.6 million, as of April 14, 2016. The fair value of the noncontrolling interest was determined based on the number of outstanding shares comprising the noncontrolling interest and Allenex’s stock price of SEK 2.48 per share as of the acquisition date. The noncontrolling interest is presented as a component of stockholders’ equity on the Company’s condensed consolidated balance sheets. Total Noncontrolling interest at December 31, 2016 $ 279 Foreign currency effect (10 ) Net loss attributable to noncontrolling interest (133 ) Noncontrolling interest at September 30, 2017 $ 136 Acquisition of assets of Conexio Genomics Pty. Ltd On January 20, 2017, the Company completed a transaction to acquire Conexio business assets that the Company required in order to continue selling the SBT product line. The Company was the exclusive distributor of the Conexio SBT TM The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands): Total Inventory $ 1,040 Property, plant and equipment 97 Intangible assets 155 Goodwill 85 Assumed liabilities (82 ) Total acquisition consideration $ 1,295 The following table presents details of the identified intangible assets acquired at the acquisition date (in thousands): Estimated Fair Estimated Life (Years) Completed technology $ 127 9 Customer relationships 28 9 Total $ 155 Goodwill recorded from the acquisition of the Conexio business assets is primarily related to expected synergies. The goodwill resulting from the acquisition is not deductible for tax purposes. The post-acquisition results of operations of the Conexio business assets for the period from January 20, 2017 through September 30, 2017 are included in the Company’s consolidated statements of operations. Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below summarizes the combined results for the Company and Allenex as if the companies were combined as of January 1, 2016. The unaudited pro forma results of operations have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or of the results that may occur in the future. Furthermore, the pro forma financial information does not reflect the impact of any reorganization or operating efficiencies resulting from combining the two companies (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2016 2016 Revenue: Testing revenue $ 8,613 $ 22,310 Product revenue 3,754 11,642 Other revenue 108 396 Total revenue $ 12,475 $ 34,348 Net loss $ (2,491 ) $ (17,597 ) Weighted-average shares used to compute basic net loss per common share 11,890,057 11,846,921 Net loss per common share- basic and diluted $ (0.21 ) $ (1.49 ) The unaudited pro forma financial information for the three and nine months ended September 30, 2016 was prepared using the acquisition method of accounting and has been adjusted to give effect to the pro forma events that are: (i) directly attributable to the acquisitions, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined results. The pro forma adjustments directly attributable to the acquisition of Allenex exclude acquisition-related expenses of $4.3 million and debt financing costs of $2.9 million relating to a proposed six-month bridge loan with Oberland Capital SA Davos LLC (“Oberland”) that did not materialize, together with the consequential tax effects. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired. The following table presents details of the Company’s goodwill by reporting unit as of September 30, 2017 (in thousands): CareDx Olerup Total Balance as of January 1, 2017 Goodwill $ 12,005 $ 14,855 $ 26,860 Accumulated impairment losses — (13,021 ) (13,021 ) 12,005 1,834 13,839 Goodwill acquired — 85 85 Impairment losses — (1,958 ) (1,958 ) Foreign currency translation adjustments — 39 39 Balance as of September 30, 2017 Goodwill 12,005 14,979 26,984 Accumulated impairment losses — (14,979 ) (14,979 ) $ 12,005 $ — $ 12,005 The gross carrying amount of goodwill may change due to the effects of foreign currency fluctuations as a result of acquiring an entity with a functional currency other than the U.S. dollar. Goodwill is tested annually for impairment at the reporting unit level during the fourth quarter and earlier upon the occurrence of certain events or substantive changes in circumstances. A reporting unit is either the "operating segment level" or one level below, which is referred to as a "component." The level at which the impairment test is performed requires judgment as to whether the operations below the operating segment constitute a self-sustaining business or whether the operations are similar such that they should be aggregated for purposes of the impairment test. The Company has concluded that it has two reporting units: CareDx (associated with the delivery of diagnostic tests) and Olerup (the development and commercialization of diagnostic products). On January 1, 2017, the Company adopted ASU 2017-04, which eliminated the Step 2 requirement of the goodwill impairment test. Instead, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. The new standard simplifies how an entity is required to test goodwill for impairment and reduces the cost and complexity of evaluating goodwill for impairment. The Company determined that the decrease in its market capitalization constituted an indicator of impairment and therefore a goodwill impairment test was completed as of March 31, 2017. The goodwill impairment test determined that the fair value of the Olerup reporting unit was $3.5 million, which was lower than its carrying value. Accordingly, the Company recorded a goodwill impairment charge of $2.0 million as of March 31, 2017, which represented the remaining goodwill balance in the Olerup reporting unit. The significant assumptions utilized in the March 31, 2017 discounted cash flow analysis for the Olerup reporting unit were a discount rate of 16.6%, a terminal growth rate of 3.2% and a capitalization multiple of 7.48. There were no further indicators of impairment in the three months ended September 30, 2017 and therefore an impairment analysis was not completed at September 30, 2017. Intangible Assets The following tables present details of the Company’s intangible assets as of September 30, 2017 (in thousands): September 30, 2017 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Amount Weighted Average Remaining Useful (In Intangible assets with finite lives: Customer relationships: Allenex $ 12,650 $ (1,184 ) $ (77 ) $ 11,389 13.3 Customer relationships: Conexio 28 (2 ) 1 27 8.3 Customer relationships 12,678 (1,186 ) (76 ) 11,416 Developed technology: SSP 11,650 (1,652 ) (106 ) 9,892 8.3 Acquired technology: QTYPE 4,510 (298 ) (20 ) 4,192 13.3 Acquired technology: SBT 127 (10 ) 5 122 8.3 Acquired technology: dd-cfDNA (a) 6,650 — — 6,650 13.1 Trademarks 2,260 (273 ) 48 2,035 13.3 Total intangible assets with finite lives $ 37,875 $ (3,419 ) $ (149 ) $ 34,307 (a) The dd-cfDNA balance was initially classified as acquired in-process technology upon the acquisition of IMX in 2014, but was reclassified as an intangible asset with a finite life on September 30, 2017 based on confirmation of the Medicare reimbursement rate for Allosure, the Company’s dd-cfDNA solution, which was commercially launched on October 9, 2017. The net carrying amount of intangible assets and the related amortization expense of intangible assets may change due to the effects of foreign currency fluctuations as a result of acquiring an entity with a functional currency other than the U.S. dollar. Amortization expense was $0.6 million and $0.6 million for the three months ended September 30, 2017 and 2016, respectively. For the three months ended September 30, 2017, expenses of $0.4 million and $0.2 million were amortized to cost of product and sales and marketing, respectively. For the three months ended September 30, 2016, expenses of $0.4 million and $0.2 million were amortized to cost of product and sales and marketing, respectively. Amortization expense was $1.8 million and $1.1 million for the nine months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017, expenses of $1.1 million and $0.7 million were amortized to cost of product and sales and marketing, respectively. For the nine months ended September 30, 2016, expenses of $0.6 million and $0.5 million were amortized to cost of product and sales and marketing, respectively. The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of September 30, 2017 (in thousands): Years Ending December 31, Cost of Product Sales and Marketing Total Remainder of 2017 $ 511 $ 254 $ 765 2018 2,042 1,016 3,058 2019 2,042 1,016 3,058 2020 2,042 1,016 3,058 2021 2,042 1,016 3,058 2022 2,042 1,016 3,058 Thereafter 10,137 8,115 18,252 Total future amortization expense $ 20,858 $ 13,449 $ 34,307 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | 7. INVENTORY Inventory consisted of the following (in thousands): September 30, 2017 December 2016 Finished goods $ 2,892 $ 4,199 Work in progress 1,977 159 Raw materials 1,301 1,103 Total inventory $ 6,170 $ 5,461 |
Accrued and Other Liabilities
Accrued and Other Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Payables And Accruals [Abstract] | |
Accrued and Other Liabilities | 8. ACCRUED AND OTHER LIABILITIES Accrued and other liabilities consisted of the following (in thousands): September 30, 2017 December 2016 Clinical studies $ 1,332 $ 1,375 Test sample processing fees 620 524 Professional fees 425 345 Deferred rent – current portion 403 374 Tax, audit and compliance related fees 254 275 Customer overpayment and refund reserve 226 281 Software implementation costs 89 176 Accrued interest payable on debt 47 862 Capital leases – current portion 30 68 Debt financing fees - 600 Other accrued expenses 469 440 Total accrued and other liabilities $ 3,895 $ 5,320 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Leases The Company leases its operating and office facilities for various terms under long-term, non-cancelable operating lease agreements in California; Pennsylvania; Fremantle, Australia; and Stockholm, Sweden. The lease for the Company’s facility in Vienna, Austria is on a month-to-month basis. The leases expire at various dates through 2020. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. Rent expense under the non-cancelable operating leases was $0.4 million and $0.3 million for the three months ended September 30, 2017 and 2016, respectively. Rent expense under the non-cancelable operating leases was $1.3 million and $1.0 million for the nine months ended September 30, 2017 and 2016, respectively. Future minimum lease commitments under these operating and capital leases at September 30, 2017, are as follows (in thousands): Years Ending December 31, Capital Leases Operating Leases Remainder of 2017 $ 11 $ 566 2018 25 2,158 2019 5 2,094 2020 — 2,049 Total future minimum lease payments $ 41 $ 6,867 The current portion of obligations under capital leases is included in accrued and other liabilities on the balance sheets. The long-term portion is included in other liabilities on the balance sheets. Royalty Commitments In November 2004, the Company entered into a license agreement with Roche Molecular Systems, Inc. (“Roche”) pursuant to which Roche granted the Company the right to use certain Roche technology relating to polymerase chain reaction (“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 has been reflected as an expense in the Company’s income statements in the periods 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 to Roche in connection with 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 condensed consolidated statements of operations. Royalty expenses in connection with the Roche agreement were $0.3 million for each of the three months ended September 30, 2017 and 2016 and are recorded as a component of cost of testing in the statements of operations. Royalty expenses were $0.9 million and $0.8 million for the nine months ended September 30, 2017 and 2016, respectively. Litigation On April 25, 2016, Oberland filed a breach of contract claim against the Company in the Supreme Court of the State of New York, County of New York (the “Complaint”). Oberland alleged, among other things, that the Company breached certain provisions of the amended and restated commitment letter and the restated fee letter that it entered into with Oberland on February 8, 2016. Pursuant to the Complaint, Oberland sought damages against the Company in the amount of at least $1.4 million, plus costs and expenses, including the fees and expenses of Oberland’s attorneys. As a result, the Company previously accrued the amount being claimed by Oberland of $1.4 million. On July 15, 2016, the Company filed an answer and made counterclaims against Oberland (the “Answer”), generally denying the claims asserted by Oberland in the Complaint and asserting fraudulent inducement and breach of contract counterclaims against Oberland. Pursuant to the Answer, the Company sought dismissal of the Complaint in its entirety, rescission of all agreements with Oberland and damages of not less than $1.3 million, together with interest and punitive damages, if deemed appropriate under applicable law, and costs and disbursements of the action, including reasonable attorneys’ fees. Effective as of March 2, 2017, the Company and Oberland settled the matters covered by the Complaint and the Answer (the “Settlement”). Pursuant to the Settlement, the Company paid Oberland $0.6 million in March 2017 and each party agreed to release all claims asserted in the Complaint and the Answer. 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, would have a material adverse effect on the Company’s business, financial condition, or results of operations. On June 15, 2016, the Company received a letter from Nasdaq OMX Stockholm AB, or Nasdaq Stockholm, regarding the Company’s compliance with the requirements of the Nasdaq Stockholm Takeover Rules, or the Takeover Rules, and good practice in the securities market in Sweden in connection with the Company’s recently completed acquisition of Allenex. Nasdaq Stockholm concluded that the Company violated certain technical provisions of the Takeover Rules and acted contrary to good practice in the securities market in Sweden. On December 21, 2016, the Disciplinary Committee informed the Company that it decided to impose a SEK 1.0 million (approximately $0.1 million) fine and this amount was paid by the Company in February 2017. |
Collaboration and Licensing Agr
Collaboration and Licensing Agreements | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaboration and Licensing Agreements | 10. COLLABORATION AND LICENSING AGREEMENTS Diaxonhit In June 2013, the Company entered into an exclusive Distribution and Licensing Agreement with Diaxonhit, a French public company, whereby Diaxonhit agreed to 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 included an upfront cash payment of approximately €387,500 ($414,000) 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 Diaxonhit as a percentage of net sales, as defined in the agreement, of AlloMap tests in the mid to high teens. Approximately €250,000 ($295,000) 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 Diaxonhit common stock with a value of €387,500 ($414,000). The CE mark is a mandatory conformity marking for certain products sold within the EEA. The Company sold the shares of common stock 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 Diaxonhit. In this arrangement, there is one combined unit of accounting. Commercial sales of the AlloMap test began in the EEA in June 2014. Total revenues and royalties recognized from this arrangement for the three months ended September 30, 2017 and 2016 were $10,000 and $2,000, respectively. Total revenues and royalties recognized from this arrangement for the nine months ended September 30, 2017 and 2016 were $29,000 and $12,000, respectively. CardioDx, Inc. In 2005, the Company entered into a services agreement with what at the time was a related party, CardioDx, Inc. (“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 to certain of its intellectual property rights. Pursuant to this agreement, CDX pays royalties to the Company in an amount equal to 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. Initially, the Company recognized royalty revenues when earned. The Company recognizes royalty revenues when payments are received as it was assessed that collection was not reasonably assured prior to receipt of payment. Royalty revenues for each of the three months ended September 30, 2017 and 2016 were $0.1 million and $0.1 million, respectively. Royalty revenues for the nine months ended September 30, 2017 and 2016 were $0.4 million and $0.2 million, respectively. Royalty revenues are included in collaboration and license revenue on the condensed consolidated statements of operations. The Company had no receivable balance from CDX at September 30, 2017 and December 31, 2016. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Transfers And Servicing [Abstract] | |
Debt | 11. DEBT Debt consisted of the following (in thousands): September 30, 2017 December JGB Debt $ 5,240 $ — East West Bank Loan — 12,614 Danske Bank Credit Facility 8,527 7,376 FastPartner Subordinated Promissory Notes — 1,692 Al Amoudi Subordinated Promissory Notes — 1,164 SSP Primers Loan 1,233 — Current portion of long-term debt $ 15,000 $ 22,846 JGB Debt $ 16,940 $ — FastPartner Subordinated Promissory Notes 2,437 — Al Amoudi Subordinated Promissory Notes 1,797 — SSP Primers Loan — 1,098 Long-term debt, net of current portion $ 21,174 $ 1,098 Total interest accrued on debt as of September 30, 2017 and December 31, 2016 was $0.2 million and $0.9 million, respectively. The current and long-term accrued interest balances at September 30, 2017 were $0.1 million and $0.1 million, respectively, and were recorded in accrued and other liabilities and in other liabilities, respectively, in the condensed consolidated balance sheets. The December 31, 2016 accrued interest balance was recorded in accrued and other liabilities in the condensed consolidated balance sheets. As of September 30, 2017, future debt maturities were as follows (in thousands): Years Ending December 31, Amount Remainder of 2017 $ 1,621 2018 17,515 2019 15,484 2020 7,155 Total debt maturities 41,775 Less: debt discount and issuance costs (5,601 ) Total debt maturities, net of debt discount and issuance costs 36,174 Less: current portion of long-term debt (15,000 ) Long-term debt, net carrying value $ 21,174 JGB Collateral LLC (“JGB”) On March 15, 2017, the Company entered into a Securities Purchase Agreement (the “SPA”) with JGB pursuant to which the Company issued Senior Secured Debentures with an aggregate principal amount of $27.8 million (the “Debentures”) and warrants (the “JGB Warrants”) to purchase up to an aggregate of 1,250,000 shares of the Company’s common stock for net proceeds of $24.0 million (the “Financing”). The Company used $11.2 million of the net proceeds from the Financing to repay its existing indebtedness under the Loan Agreement with East West Bank and is required to maintain restricted cash of $9.4 million. The Debentures mature on February 28, 2020, accrue interest at 9.5% per year and are convertible into an aggregate of approximately 6,092,105 shares of the Company’s common stock at a price of $4.56 per share (the “Conversion Price”), which is subject to adjustment for accrued and unpaid interest and upon the occurrence of certain transactions, at the holder’s option. Additionally, after September 1, 2017, upon the satisfaction of certain conditions, including the volume weighted average price of the Company’s common stock exceeding 250% of the Conversion Price for twenty consecutive trading days, the Company can require that the Debentures be converted into shares of the Company’s common stock, subject to certain limitations. Commencing on March 1, 2018, each of the holders of the Debentures shall have the right, at its option, to require the Company to redeem up to $937,500 of the outstanding principal amount of its Debenture per month. The Company will be required to promptly, but in any event no more than one trading day after the holder delivers a redemption notice to the Company, pay the applicable redemption amount in cash or, at the Company’s election and subject to certain conditions, in shares of the Company’s common stock. If the Company elects to pay the redemption amount in shares of the Company’s common stock, then the shares will be delivered based on a price equal to the lowest of (a) 88% of the average of the three lowest volume weighted average prices of the Company’s common stock over the prior 20 trading days, (b) 88% of the prior trading day’s volume weighted average price, or (c) the Conversion Price. After either a change of control transaction, as defined in the Debentures, or February 28, 2018, subject to the satisfaction of certain conditions, the Company may redeem all of the then outstanding principal amount of the Debentures for cash by paying the outstanding principal balance, accrued and unpaid interest, and a payment premium. The payment premium will be calculated by multiplying the outstanding balance and the following percentage: (i) 15% if the Debentures are prepaid on or prior to March 1, 2018, (ii) 8% if the Debentures are prepaid after March 1, 2018 but prior to March 1, 2019, and (iii) 5% if the Debentures are prepaid on or after March 1, 2019. The Company’s obligations under the Debentures can be accelerated upon the occurrence of certain events of default as specified in the agreement. In the event of default and acceleration of the Company’s obligations, the Company would be required to pay (i) 115% of all amounts of principal and interest then outstanding under the Debentures in cash if the Debenture is accelerated prior to March 1, 2018, (ii) 108% of all amounts of principal and interest then outstanding under the Debentures in cash if the Debenture is accelerated after March 1, 2018, but prior to March 1, 2019, and (iii) 105% of all amounts of principal and interest then outstanding under the Debentures in cash if the Debenture is accelerated after March 1, 2019. The Company’s obligations under the Debentures are secured under a Security Agreement by a senior lien on all of the Company’s assets, other than its interest in CareDx International AB (formerly known as Allenex AB), which is subject to a negative pledge prohibiting the incurrence of additional or replacement debt. The Debentures contain customary affirmative and restrictive covenants and representations and warranties, including financial reporting obligations, a restriction on the Company’s ability to pay cash dividends on its common stock and limitations on indebtedness, liens, investments, distributions, transfers, corporate changes, deposit accounts and subsidiaries. The Company must also maintain a minimum cash amount at all times, achieve commercialization of AlloSure by a certain date and achieve certain gross profit targets for sales of its AlloMap product. In connection with the Financing, on March 15, 2017, the Company and the Purchasers entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which, among other things, the Company agreed to prepare and file one or more registration statements with the Securities and Exchange Commission for the purpose of registering for resale any shares of Common Stock that may be issued by the Company upon the conversion or redemption of the Debentures or the exercise of the JGB Warrants. The Debentures include certain embedded derivatives that require bifurcation, including settlement and penalty provisions. The compound embedded derivative will be re-measured at each reporting period and the change in fair value will be recognized in the consolidated statements of operations. See also Note 4, “Fair Value Measurements”. The following table summarizes the Company’s carrying value of the JGB Debt (in thousands) on the March 15, 2017 issuance date: March 15, 2017 Debt principal $ 27,780 Less: Issuance cost (998 ) Original issue discount (2,780 ) Original warrant valuation (900 ) Embedded Derivative Liability (2,290 ) Total debt discount (6,968 ) Carrying Value $ 20,812 As a result of the issuance of 1,022,544 shares of the Company’s common stock issued at a price per share equal to $1.12 pursuant to the amendments to the Conditional Share Purchase Agreements, the number of shares issuable pursuant to the warrants increased from 1,250,000 shares to 1,296,679 shares, the exercise price of the warrants decreased from $5.00 to $4.82 per share, and the Conversion Price of the Debentures decreased from $4.56 per share to $4.40 per share, effective July 3, 2017, as described in Note 13. As a result of the 2017 Public Offering, effective October 5, 2017 (see Note 18), the aggregate number of shares of common stock issuable upon exercise of the JGB Warrants increased from 1,296,679 to 1,338,326 shares and the exercise price of the JGB warrants decreased from $4.82 to $4.67 per share and the Conversion Price of the Debentures decreased to $4.33 per share. Refer to Note 18 for additional details regarding the 2017 Public Offering. Loan Agreement with East West Bank On January 30, 2015, the Company entered into the Loan Agreement with East West Bank as the lender (“the Lender”), which provided the Company with a secured term loan facility in an aggregate principal amount of up to $20.0 million. The balance at September 30, 2017 and December 31, 2016 was zero and $12.6 million, respectively. In March 2017, the Company repaid the amounts outstanding under the loan agreement of $11.2 million. The loan had no prepayment penalty. Commitment fees were included in debt issuance costs, which were netted against the debt outstanding and are amortized to interest expense using the effective interest method over the term of the loan. Debt extinguishment charges of $0.2 million were recorded in other expense on the Company’s condensed consolidated statements of operations in the nine months ended September 30, 2017 upon the repayment of outstanding amounts in March 2017. Danske Bank Credit Facility On June 25, 2013, Allenex entered into the Term Loan Facility with Danske in an aggregate principal amount of up to SEK 71,000,000 (approximately $8.8 million). The Term Loan Facility is available for utilization in advances of a minimum of SEK 5,000,000 (approximately $0.6 million) and if more, integral multiples of SEK 1,000,000 (approximately $0.1 million). The interest rate applicable to each advance shall be the percentage rate per annum calculated as the aggregate of (i) Stockholm Interbank Offered Rate (“STIBOR”) (as defined in the Term Loan Facility) and (ii) the Margin (as described in the Term Loan Facility) at 3% conditional on the fulfillment of certain criteria. In March 2015, Allenex entered into a first amendment to the Term Loan Facility, pursuant to which additional loans were granted. In August 2015, Allenex entered into a second amendment to the Term Loan Facility, pursuant to which the term of the Term Loan Facility was extended. In December 2015, Allenex entered into a waiver and amendment agreement relating to the Term Loan Facility, pursuant to which the change of control provision was waived and amended. In March 2016, Allenex entered into another amendment to the Term Loan Facility, which modified the repayment schedule for advances under the Term Loan Facility. Under this Term Loan Facility, SEK 59,000,000 (approximately $7.3 million) was outstanding as of September 30, 2017, and this will be paid through a principal payment made on October 31, 2017 of SEK 6,000,000, or $0.7 million, and On June 18, 2015, Allenex also entered into a short term credit facility with Danske with total available credit of SEK 8,000,000 (approximately $1.0 million). As of August 4, 2016, the available credit under the short term credit facility with Danske was increased to SEK 10,000,000 (approximately $1.2 million). As of September 30, 2017, the total outstanding balance due to Danske under the short term credit facility was approximately SEK 10,000,000 (approximately $1.2 million), and pursuant to a quarterly roll-over provision is due on December 31, 2017. A quarterly debt covenant in the Term Loan Facility was violated on June 30, 2016 and September 30, 2016. The Company obtained waivers for these violations. The Company was in compliance with all debt covenants at December 31, 2016. FastPartner Subordinated Promissory Notes On June 28, 2013, Allenex issued a SEK 9,400,000 (approximately $1.1 million) subordinated promissory note to FastPartner AB (“FastPartner”), which provides for an annual interest rate of 10.00%. Principal payments of SEK 1,000,000 (approximately $0.1 million) and accrued interest are payable quarterly at September 30, December 31, March 31 and June 30 and subject to working capital requirements that had not been met in fiscal years 2016 and 2015. The full amount of the promissory note was outstanding as of June 30, 2017 and December 31, 2016 and was due July 1, 2017. However, pursuant to an intercreditor agreement among Allenex, Danske, FastPartner, Mohammed Al Amoudi and Olerup SSP AB, dated June 25, 2013 (the “Intercreditor Agreement”), until the Term Loan Facility with Danske is repaid, FastPartner may not demand or receive payment of its subordinated promissory note, or foreclose on any collateral securing Allenex’s obligations under the subordinated promissory note, without Danske’s prior written consent. Allenex’s obligations under the promissory note are secured by a pledge of Allenex shares to FastPartner. On December 29, 2015, Allenex issued a SEK 2,000,000 (approximately $0.2 million) subordinated promissory note to FastPartner, a related party, which had an initial maturity date of December 31, 2016 and has an annual interest rate of 10.00%. Principal and accrued interest are payable on the maturity date and subject to working capital requirements that had not been met in fiscal years 2016 and 2015. However, pursuant to the Intercreditor Agreement, until the Term Loan Facility with Danske is repaid, FastPartner may not demand or receive payment of its subordinated promissory note, or foreclose on any collateral securing Allenex’s obligations under the subordinated promissory note, without Danske’s prior written consent. Allenex’s obligations under the promissory note are secured by a pledge of Allenex shares to FastPartner. On March 7, 2016, Allenex issued a SEK 4,000,000 (approximately $0.5 million) subordinated promissory note to FastPartner, a related party, which had an initial maturity date of December 31, 2016 and has an annual interest rate of 10.00%. Principal and accrued interest are payable on the maturity date and subject to working capital requirements that had not been met during the year ended December 31, 2016. However, pursuant to the Intercreditor Agreement, until the Term Loan Facility with Danske is repaid, FastPartner may not demand or receive payment of its subordinated promissory note, or foreclose on any collateral securing Allenex’s obligations under the subordinated promissory note, without Danske’s prior written consent. Allenex’s obligations under the promissory note are secured by a pledge of Allenex shares to FastPartner. The full amount of the subordinated promissory note was outstanding as of December 31, 2016 and was due July 1, 2017. On July 1, 2017, the Company entered into a note agreement with FastPartner (the “FastPartner Note Agreement”) pursuant to which, among other things, Allenex and FastPartner agreed that all amounts owed under the above subordinated promissory notes would be governed by the FastPartner Note Agreement and to defer repayment of the principal outstanding amount of SEK 15,400,000 (approximately $1.9 million) plus accrued interest of $0.5 million until March 31, 2019. I nterest began accruing on such amount at a rate of 10% per annum, and in the event the Company makes any cash amortization repayments to JGB of the JGB Debt, or any replacement debt, Allenex will repay in cash a portion of the amount outstanding under the FastPartner Note Agreement equal to 8% of any such cash amortization repayment. Mohammed Al Amoudi Subordinated Promissory Note On June 28, 2013, Allenex issued a SEK 10,600,000 (approximately $1.3 million) subordinated promissory note to Mohammed Al Amoudi, which provides for an annual interest rate of 10.00%. Principal payments of SEK 1,000,000 (approximately $0.1 million) and accrued interest are payable quarterly at September 30, December 31, March 31 and June 30, subject to meeting certain requirements for working capital. The promissory note had an initial maturity date of June 28, 2016. On December 31, 2016, the maturity date was extended until July 1, 2017. However, pursuant to the Intercreditor Agreement, until the Term Loan Facility with Danske is repaid, Mohammed Al Amoudi may not demand or receive payment of his subordinated promissory note, or foreclose on any collateral securing Allenex’s obligations under the subordinated promissory note, without Danske’s prior written consent. The full amount of the promissory note was outstanding as of December 31, 2016. Allenex’s obligations under the promissory note are secured by a pledge of Allenex shares to Mohammed Al Amoudi. Mohammed Al Amoudi is also a stockholder of the Company and is considered a related party (See Note 17). On July 1, 2017, the Company entered into a note agreement with Mohammed Al Amoudi (the “Al Amoudi Note Agreement”) pursuant to which, among other things, Allenex and Mohammed Al Amoudi agreed to defer repayment of the principal outstanding amount of SEK 10,600,000 (approximately $1.3 million) plus accrued interest of $0.5 million until March 31, 2019. nterest began accruing on such amount at a rate of 10% per annum, and in the event the Company makes any cash amortization repayments to JGB of the JGB Debt, or any replacement debt, Allenex will repay in cash a portion of the amount outstanding under the Al Amoudi Note Agreement equal to 6% of any such cash amortization repayment. Loan Agreement with SSP Primers Aktieboulag On February 25, 2015, Allenex entered into a SEK 14,000,000 (approximately $1.7 million ) loan agreement with SSP Primers Aktieboulag, pursuant to which SEK 4,000,000 (approximately $0.5 million) was paid on March 7, 2016 and SEK 10,000,000 (approximately $1.2 million) is payable on February 28, 2018. The loan amount outstanding as of September 30, 2017 and December 31, 2016 is SEK 10,000,000 (approximately $1.2 million) and has an annual interest rate of 10% on SEK 5,000,000 and 3% on the remaining SEK 5,000,000. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 12. STOCKHOLDERS’ EQUITY On April 14, 2016, the Company completed a Private Placement transaction for the offering of 591,860 units (“Units”) to certain accredited investors (the “Private Placement”). Each Unit was comprised of: (i) one share of common stock, (ii) five shares of 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 gross proceeds to the Company from the Private Placement were approximately $14.2 million, of which $1.8 million was paid in satisfaction of placement agents, escrow agent, legal fees as well as other direct issuance costs. The Company and certain stockholders representing a majority of the Company’s outstanding shares of common stock entered into voting agreements on April 14, 2016, pursuant to which each stockholder agreed to vote certain of its shares of the Company’s common stock in favor of granting the Company the Requisite Stockholder Approval. The proceeds from the Private Placement were allocated between the common stock, preferred stock and warrants issued based on their relative fair values. The estimated fair values of the common stock, preferred stock and warrants were $1.9 million, $9.3 million and $3.0 million, respectively, as of the transaction date. The warrants were recorded as a liability and are subject to ongoing remeasurement. The shares of Series A Preferred were initially recorded as temporary equity upon the closing of the Private Placement and subsequently reclassified to common stock after their conversion to common stock on June 16, 2016. See Note 13 for a description of the accounting of for the warrants. Concurrent to the Private Placement, the Company also entered into Commitment Letters pursuant to which the Former Majority Shareholders agreed to purchase the Company’s equity securities in a subsequent financing, which was completed on June 15, 2016 (the “Subsequent Financing”). In the Subsequent Financing, the Company issued to the Former Majority Shareholders 334,169 Units, which consisted of (i) an aggregate of 334,169 shares of common stock, (ii) an aggregate of 1,670,845 shares of Series A Preferred that were all converted into shares of the Company’s common stock upon obtaining the Requisite Stockholder Approval on June 16, 2016, and (iii) 1,002,507 warrants, each of which is exercisable for one share of the Company’s common stock. The aggregate gross proceeds to the Company from the Subsequent Financing were $8.0 million. The proceeds from the Subsequent Financing were allocated between the common stock, preferred stock and warrants issued based on their relative fair values. The estimated fair values of the common stock, preferred stock and warrants were $1.0 million, $5.3 million and $1.7 million, respectively, as of the transaction date. The warrants were recorded as a liability and are subject to ongoing remeasurement. The shares of Series A Preferred were initially recorded as temporary equity upon the closing of the Subsequent Financing and subsequently reclassified to common stock after their conversion to common stock on June 16, 2016. Following the closing of the Private Placement, the Company agreed to a number of requirements, including submitting the Private Placement to the Company’s stockholders for approval, which was obtained on June 16, 2016, and granting certain registration rights, including the registration of shares sold in the Private Placement on a registration statement on Form S-3. On May 27, 2016, the Company filed a registration statement on Form S-3 with the SEC to register for resale the shares of common stock issued or issuable upon conversion of the Series A Preferred and upon exercise of the warrants sold in the Private Placement. The registration statement on Form S-3 was declared effective by the SEC on July 12, 2016. Upon obtaining the Requisite Stockholder Approval on June 16, 2016, each share of Series A Preferred was converted into one share of the Company’s common stock. In addition to the warrants issued to certain accredited investors in the Private Placement, on April 14, 2016, the Company issued warrants to purchase an aggregate of 200,000 shares of common stock to certain of its placement agents (the “Placement Agent Warrants”). All of the warrants issued in the Private Placement and the Placement Agent Warrants became exercisable once the Company obtained the Requisite Stockholder Approval on June 16, 2016. 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 the Private Placement and Subsequent Financing of the Company’s common stock and the consummation of any private placement of its securities 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, the Company considered M.M. Dillon to be a related party. 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. On September 26, 2016, the Company completed a public offering (the “2016 Public Offering”) pursuant to which the Company issued and sold an aggregate of 2,250,000 shares of common stock at a public offering price of $4.00 per share. The aggregate gross proceeds were $9.0 million, and $7.8 million net of issuance costs. In connection with the 2016 Public Offering, in accordance with the anti-dilution provisions in the warrants issued in connection with the Private Placement and the Subsequent Financing, the exercise price of the 1,775,580 and 1,002,507 Private Placement and Subsequent Financing warrants, respectively, was adjusted from $4.98 per share to $4.00 per share, which was the price paid by investors in the 2016 Public Offering. As a result of the issuance of 1,022,544 shares of the Company’s common stock issued at a price per share equal to $1.12 pursuant to the amendments to the Conditional Share Purchase Agreements, the exercise price of the warrants issued in connection with the Private Placement in April 2016, 1,775,580 Private Placement warrants and 200,000 Placement Agent Warrants, as described in Note 13, were adjusted from $4.00 and $3.99 per share, respectively, to $1.12 per share, effective July 3, 2017. On October 10, 2017, the Company sold in an underwritten public offering an aggregate of 4,992,840 shares of its common stock, including 651,240 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares to cover over-allotments, at a public offering price of $4.00 per share. Refer to Note 18 for details regarding the 2017 Public Offering. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Warrants [Abstract] | |
Warrants | 13. WARRANTS Private Placement, Placement Agent and Subsequent Financing Warrants The warrants issued in the Private Placement and the Placement Agent Warrants (as described in Note 12) are considered free standing instruments that are contingently redeemable and classified as liabilities on the Company’s condensed consolidated balance sheet as of December 31, 2016 and September 30, 2017. The warrants became exercisable to purchase common stock after the Company obtained the Requisite Stockholder Approval on June 16, 2016. Upon the closing of the Private Placement on April 14, 2016, the Company recorded an estimated fair value of $3.3 million relating to warrants to purchase 1,975,580 shares of common stock that were issued in the Private Placement. The warrants were comprised of warrants to purchase 1,775,580 shares of common stock that were issued to certain accredited investors measured at an estimated fair value of $3.0 million, and Placement Agent Warrants to purchase 200,000 shares of common stock measured at an estimated fair value of $0.3 million. The Placement Agent Warrants were issued for services performed by placement agents as part of the Private Placement and were treated as equity issuance costs and were recorded in stockholders’ equity on the Company’s condensed consolidated balance sheets to offset the Private Placement proceeds allocated to the Series A Preferred and common stock. Additional warrants were issued on June 15, 2016 to the Former Majority Shareholders upon the closing of the Subsequent Financing (as described in Note 12). The warrants issued in the Subsequent Financing were also considered free standing instruments being accounted for using the same methodology as described above. On June 15, 2016, the Company recorded an estimated fair value of $1.7 million for warrants to purchase an aggregate of 1,002,507 shares of common stock issued in the Subsequent Financing. The initial total estimated fair value of the warrant liability was $5.0 million following the closing of the Private Placement, the issuance of Placement Agent Warrants and the closing of the Subsequent Financing. As of December 31, 2016 the total estimated fair value of the warrant liability was $5.2 million and as of September 30, 2017, the total estimated fair value of the warrant liability was $7.9 million. The corresponding remeasurement expense for the three and nine months ended September 30, 2017 of $6.2 million and $2.7 million, respectively, was recorded in change in estimated fair value of common stock warrant and derivative liabilities on the Company’s condensed consolidated statements of operations. In connection with the issuance of shares to the Former Majority Shareholders, the exercise prices of the warrants issued in the Private Placement and Placement Agent Warrants were adjusted from $4.00 and $3.99 per share, respectively, to $1.12 per share. JGB Debt Warrants In connection with the issuance of the JGB Debt (as described in Note 11), the Company issued the JGB Warrants to purchase up to an aggregate of 1,250,000 shares of the Company’s common stock. The exercise price of the JGB Warrants is $5.00 per share, and the JGB Warrants are exercisable from September 16, 2017 through September 15, 2022. The initial estimated fair value of the warrant liability was $0.9 million. As of September 30, 2017, the estimated fair value of the warrant liability was $2.5 million. The corresponding remeasurement expense for the three and nine month periods ended September 30, 2017 was $2.1 million and $1.6 million, respectively, was recorded in change in estimated fair value of common stock warrant liability and derivative liability on the Company’s condensed consolidated statements of operations. The Company determined that the warrants and the debentures were free standing instruments for accounting purposes. The terms of the warrants include a down round protection, which precludes the Company from classifying the warrants in equity. As such, the warrants are classified as a liability and allocated their full fair value on day one and the residual value, after allocation of the fair value of the derivative is ascribed to the Debentures. In addition, the warrants will be re-measured at each reporting period and change in fair value will be recognized in the consolidated statements of operations. Pursuant to an agreement with the Former Majority Shareholders, the aggregate number of shares of common stock issuable upon exercise of the JGB Warrants increased from 1,250,000 shares to 1,296,679 shares and the exercise price of the JGB Warrants decreased from $5.00 to $4.82 per share, effective July 3, 2017. As a result of the 2017 Public Offering, effective October 5, 2017, the aggregate number of shares of common stock issuable upon exercise of the JGB Warrants increased from 1,296,679 shares to 1,332,620 shares and the exercise price of the JGB Warrants decreased from $4.82 to $4.69 per share. As a result of the sale of the 651,240 shares of common stock pursuant to the underwriters’ full exercises of their option to purchase additional shares to cover over-allotments in the 2017 Public Offering, effective October 10, 2017, the aggregate number of shares of common stock issuable upon exercise of the JGB Warrants increased from 1,332,620 shares to 1,338,326 shares and the exercise price of the JGB Warrants decreased from $4.69 to $4.67 per share. Refer to Note 18 for additional details regarding the 2017 Public Offering. Warrant Valuation The Company utilizes a Monte Carlo simulation model to estimate the fair value of its warrants. The Monte Carlo simulation model uses multiple input variables to estimate the probability that market conditions will be achieved. These variables include the Company’s stock price, the expected term of the warrants, the volatility of the Company’s and its peers’ stock prices over such expected term, and the risk-free interest rate for the expected term of the warrants. The variables used in this simulation model are reviewed on a quarterly basis and adjusted, as needed. If the Company issues common stock at a price lower than the exercise price or issues stock options or other securities (other than securities issued pursuant to the Company’s stock or option plans or employment agreements, securities issued or issuable upon exercise or exchange of convertible securities outstanding as of the date the warrants were issued or securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company) with an exercise price that is lower than the current exercise price of the warrants, the exercise price of the warrants shall be adjusted to be equal to such lower price. As of September 30, 2017, outstanding warrants to purchase Common Stock were: Original Term Exercise Price Number of Shares Underlying Warrants Original issue date: February 2008 10 years $ 35.10 22,792 August 2009 10 years $ 21.78 33,473 July 2010 9 years $ 21.78 6,694 December 2010 7 years $ 21.78 17,215 August 2012 7 years $ 21.78 167,182 January 2015 5 years $ 6.96 34,483 April 2016 (a) 7 years $ 1.12 1,725,453 April 2016 (b) 5 years $ 1.12 200,000 June 2016 (c) 7 years $ 4.00 1,002,507 March 2017 (d) 5 years $ 4.82 1,296,679 4,506,478 (a) Issued on April 14, 2016 in connection with the Private Placement to certain accredited investors. In accordance with the anti-dilution provisions, the exercise price of the warrants issued in connection with the Private Placement was adjusted from $4.98 to $4.00, which was the price paid by investors in the 2016 Public Offering, which closed on September 26, 2016. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the exercise price was adjusted from $4.00 to $1.12, effective July 3, 2017. (b) Issued on April 14, 2016 in connection with the Private Placement to placement agents. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the exercise price was adjusted from $3.99 to $1.12, effective July 3, 2017. (c) Issued on June 15, 2016 in connection with the Subsequent Financing. In accordance with the anti-dilution provisions, the exercise price of the warrants issued in connection with the Subsequent Financing was adjusted from $4.98 per share to $4.00 per share, which was the price paid by investors in the 2016 Public Offering, which closed on September 26, 2016. (d) Issued on March 15, 2017 in connection with the JGB Debt. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the number of shares issuable pursuant to the JGB Warrants increased from 1,250,000 to 1,296,679 and the exercise price of the JGB Warrants was adjusted from $5.00 to $4.82, effective July 3, 2017. Refer to Note 18 for an explanation of additional changes to the JGB warrants effective October 5, 2017 and October 10, 2017. |
Stock Incentive Plans
Stock Incentive Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Incentive Plans | 14. STOCK INCENTIVE PLANS 2014 Equity Incentive Plan Upon its initial public offering, the Company reserved 838,695 shares of common stock for issuance under its 2014 Equity Incentive Plan (“2014 Plan”). The shares reserved for issuance under the 2014 Plan also include shares returned to the Company’s 2008 Equity Incentive 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 has been and will be increased annually on the first day of each year beginning in 2014, equal to the least of: • 357,075 shares (subject to adjustment for stock splits, stock dividends, recapitalizations or similar transactions); • 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 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 under the 2014 Plan in March 2015. 2016 Inducement Plan On April 21, 2016, the Company’s board of directors, including its independent directors, adopted the Company’s 2016 Inducement Equity Incentive Plan (the “Inducement Plan”), pursuant to which the Company may grant stock awards of up to a total of 155,500 shares of common stock to new employees of the Company. The Inducement Plan was adopted to accommodate a reserve of additional shares of common stock for issuance to new employees hired by the Company from Allenex. The terms of the Inducement Plan are substantially similar to the 2014 Plan. The Inducement Plan allows RSUs to be granted in addition to stock options. The RSUs vest annually over four years in equal increments. The Company began granting RSUs under the Inducement Plan starting June 2016. Stock Options and Restricted Stock Units The following table summarizes option and unvested RSU activity under the plans and related information: Shares Available for Grant Stock Options Outstanding Weighted- Average Exercise Price Number of RSU Shares Weighted- Average Grant Date Fair Value Balance—December 31, 2016 365,074 1,792,286 $ 6.15 306,245 $ 5.69 Additional options authorized 357,075 Restricted stock grants (89,684 ) RSUs granted (207,500 ) 207,500 2.17 RSUs forfeited 78,667 (78,667 ) 4.19 RSUs vested — (94,428 ) 5.60 Options granted (575,200 ) 575,200 2.05 Options exercised — Options forfeited 228,961 (228,961 ) 4.89 Options expired 145,965 (145,965 ) 4.96 Balance—September 30, 2017 303,358 1,992,560 $ 5.16 340,650 $ 3.92 The total intrinsic value of options exercised was zero in the nine months ended September 30, 2017. As of September 30, 2017, the total intrinsic value of outstanding RSUs was approximately $0.4 million and there were $1.0 million of unrecognized compensation costs related to RSUs, which are expected to be recognized over a weighted-average period of 2.51 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. During the offering period in 2016 that ended on June 30, 2016, 35,024 shares were purchased for aggregate proceeds of $0.1 million from the issuance of shares, which occurred on July 8, 2016. During the offering period in 2017 that ended on June 30, 2017, 52,612 shares were purchased for aggregate proceeds of $0.1 million from the issuance of shares, which occurred on July 5, 2017. The option price per share of common stock to be paid by a participant 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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Employee stock options Expected term (in years) 5.7 5.5 5.9 5.9 Expected volatility 57.80-60.60% 45.81%-46.44% 53.07%-60.60% 39.60%-46.44% Risk-free interest rate 1.85%-1.98% 1.18%-1.29% 1.85%-2.12% 1.13%-1.65% Expected dividend yield — % — % — % — % Employee stock purchase plan Expected term (in years) 0.5 0.5 0.5 0.5 Expected volatility 98.58 % 77.05 % 77.42 % 85.97 % Risk-free interest rate 1.13 % 0.49 % 0.85 % 0.45 % Expected dividend yield — % — % — % — % 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 and nine months ended September 30, 2017 and 2016, included in the statements of operations as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Cost of testing $ 38 $ 38 $ 157 $ 105 Research and development 104 109 279 321 Sales and marketing 32 47 127 118 General and administrative 256 336 753 967 Total $ 430 $ 530 $ 1,316 $ 1,511 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. Non-Employee Director Equity-based Compensation For the nine months ended September 30, 2017 and 2016, the Company paid a portion of its non-employee directors’ compensation through the award of common shares. The stock awards are classified as equity, and compensation expense was recognized upon the issuance of the shares. Since the Company’s inception, a total of 194,625 shares have been issued to non-employee directors, for a total fair value of $0.7 million. Expense associated with awards of shares of common stock to non-employee directors was $0.1 million and $0.1 million for each of the three months ended September 30, 2017 and 2016, respectively, which was included in general and administrative expense in the condensed consolidated statements of operations. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. INCOME TAXES The Company’s effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses and other permanent differences between income before income taxes and taxable income. For the three and nine months ended September 30, 2017, the Company recorded an income tax benefit of $0.2 million and $0.8 million, respectively, compared to $0.4 million and $0.9 million for the three and nine months ended September 30, 2016, respectively. The income tax benefit of $0.2 million and $0.8 million for the three and nine months ended September 30, 2017, respectively, is primarily attributable to the recognition of deferred tax assets from foreign losses. In conjunction with the acquisition of Allenex on April 14, 2016, a deferred tax liability was recorded at the acquisition date for the difference between the financial reporting and tax basis of the intangible assets. The Company assesses the realizability of its net deferred tax assets by evaluating all available evidence, both positive and negative, including (i) cumulative results of operations in recent years, (ii) sources of recent losses, (iii) estimates of future taxable income and (iv) the length of net operating loss carryforward periods. The Company believes that based on the history of its U.S. losses and other factors, the weight of available evidence indicates that it is more likely than not that it will not be able to realize its U.S. net deferred tax assets. Accordingly, the U.S. net deferred tax assets have been offset by a full valuation allowance. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | 16. SEGMENT REPORTING Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision making group, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its chief executive officer as the CODM. In determining its reportable segments, the Company considered the markets and types of customers served and the products or services provided in those markets. Prior to the acquisition of Allenex, the Company operated as a single reportable segment. Subsequent to the acquisition of Allenex, the Company has identified the following two reportable segments, which are the same as its operating segments: • CareDx: This segment focuses on discovery, development and commercialization of clinically differentiated, high-value diagnostic solutions for transplant patients. Its first commercialized testing solution, AlloMap, 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. On October 9, 2017, AlloSure became commercially available with Medicare reimbursement. AlloSure is the first and only non-invasive test that assesses organ health by directly measuring allograft injury. AlloSure can accurately determine active rejection, enabling better management of kidney transplant patients. • Olerup: This segment develops, manufactures, markets and sells high quality products that increase the chance of successful transplants by facilitating a better match between a donor and a recipient of stem cells and organs. The Olerup product lines include Olerup SSP, Olerup SBT, Olerup QTYPE, Olerup SBT Resolver and Olerup XM-ONE. There were no intersegment sales for the three and nine months ended September 30, 2017. The following table summarizes the operating results of the Company’s reportable segments (in thousands): Three Nine Months Ended September 30, 2017 2016 2017 2016 Total segments Revenues $ 12,191 $ 12,475 $ 35,821 $ 29,771 Operating loss (3,864 ) (4,933 ) (16,007 ) (18,471 ) Depreciation and amortization 919 1,068 2,740 2,195 CareDx Revenues $ 8,319 $ 8,721 $ 24,905 $ 22,543 Operating loss (2,876 ) (2,910 ) (10,996 ) (14,724 ) Depreciation and amortization 223 301 721 861 Olerup Revenues $ 3,872 $ 3,754 $ 10,916 $ 7,228 Operating loss (988 ) (2,023 ) (5,011 ) (3,747 ) Depreciation and amortization 696 767 2,019 1,334 September 30, December Assets: CareDx $ 38,440 $ 41,169 Olerup 36,653 35,561 Total assets $ 75,093 $ 76,730 Revenues by geographic regions are based upon the customers’ ship-to address or headquarters location. The following table summarizes reportable revenues by geographic regions (in thousands): Three September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Revenues: North America $ 9,393 $ 10,131 $ 27,964 $ 26,461 Europe, Middle East and Africa 2,569 2,313 7,136 3,168 Latin America 104 31 356 142 Australia 125 — 365 — Total $ 12,191 $ 12,475 $ 35,821 $ 29,771 The following table summarizes long-lived assets, consisting of property and equipment, net, by geographic regions (in thousands): September 30, 2017 December Long-lived assets: North America $ 1,372 $ 2,052 Europe, Middle East and Africa 798 879 Australia 111 — Total $ 2,281 $ 2,931 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 17. RELATED PARTY TRANSACTIONS The Company has loans outstanding with both FastPartner AB and Mr. Mohammed Al Amoudi as of September 30, 2017 (as described in Note 11). A member of the Company’s board of directors is a managing director of M.M. Dillon, and as such, the Company considered M.M. Dillon to be a related party. M.M. Dillon acted as one of the Company’s financial advisors and placement agents in connection with the Private Placement and Subsequent Financing (as described in Note 12). |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. SUBSEQUENT EVENTS 2017 Public Offering On October 4, 2017, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC, as sole book-running manager and representative of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “2017 Public Offering”) of 4,341,600 shares of its common stock at a public offering price of $4.00 per share. Under the terms of the Underwriting Agreement, the Company also granted to the Underwriters an option, exercisable in whole or in part at any time for a period of 30 days from the date of the closing of the Offering, to purchase up to an additional 651,240 shares of common stock. On October 10, 2017, pursuant to the Underwriting Agreement, the Company sold an aggregate of 4,992,840 shares of its common stock, including 651,240 shares sold pursuant to the Underwriters’ full exercise of their option to purchase additional shares to cover over-allotments, at a public offering price of $4.00 per share. Net proceeds from the 2017 Public Offering are expected to be approximately $18.3 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. As a result of the announcement of the Company’s entry into the Underwriting Agreement in accordance with the anti-dilution provisions in the JGB Warrants and the Debentures, effective October 5, 2017, the number of shares issuable pursuant to the JGB Warrants increased from 1,296,679 shares to 1,332,620 shares, the exercise price of the JGB Warrants decreased from $4.82 to $4.69 per share, and the Conversion Price of the Debentures decreased from $4.40 per share to $4.34 per share. As a result of the sale of the 651,240 shares of common stock pursuant to the Underwriters’ full exercise of their option to purchase additional shares in accordance with the anti-dilution provisions in the JGB Warrants and the Debentures, effective October 10, 2017, the number of shares issuable pursuant to the JGB Warrants increased from 1,332,620 shares to 1,338,326 shares, the exercise price of the JGB Warrants decreased from $4.69 to $4.67 per share, and the Conversion Price of the Debentures was decreased from $4.34 per share to $4.33 per share. Voluntary Employee Stock Option Exchange Offer On October 12, 2017, the Company announced a voluntary stock option exchange offer (the “Exchange Offer”) in which eligible employees had the opportunity to exchange certain options that had an exercise price of $12.00 per share or more for a grant of new options upon expiration of the Exchange Offer on November 9, 2017 of the Exchange Offer. There were approximately 301,136 shares of common stock subject to stock options eligible for exchange under the Exchange Offer, of which options to purchase an aggregate of 285,315 shares of common stock were tendered by a total of 26 employees and exchanged for options to purchase an aggregate of 174,330 shares of common stock that have an exercise price of $5.49 per share, the closing price of the common stock on November 9, the grant of date. |
Organization and Description 25
Organization and Description of Business (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Liquidity And Going Concern | Liquidity and Going Concern The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) effective December 31, 2016, which requires the Company to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within one year from the date of the issuance of these financial statements. The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $236.4 million at September 30, 2017. As of September 30, 2017, the Company had cash and cash of debt outstanding under its debt obligations, net of debt discount, of which $15.0 million is current. In March 2017, the Company received net proceeds of $24.0 million in connection with the issuance of a convertible debt obligation to JGB Collateral LLC and certain of its affiliates (“JGB”), of which $11.2 million was used to repay the Company’s outstanding debt obligations to East West Bank. In addition, the convertible debt obligation requires the Company to maintain a minimum of $9.4 million of restricted cash at a named financial institution. These funds are restricted as to withdrawal and are not available to the Company to fund its operations or repay indebtedness. In accordance with A quarterly debt covenant in the Company’s Term Loan Facility Agreement (the “Term Loan Facility”) with Danske Bank A/S (“Danske”) was violated on June 30, 2016 and September 30, 2016. The Company obtained waivers for these violations. The Company was in compliance with all debt covenants at December 31, 2016. In connection with the acquisition of Allenex, the Company entered into Conditional Share Purchase Agreements with each of Midroc Invest AB, FastPartner AB (“FastPartner”) and Xenella Holding AB, the former majority shareholders of Allenex (collectively, the “Former Majority Shareholders”), on December 16, 2015, as amended (the “Conditional Share Purchase Agreements”). Pursuant to the Conditional Share Purchase Agreements, as of June 30, 2017, the Company owed deferred purchase consideration to the Former Majority Shareholders of approximately $6.3 million, including accrued interest, which was due on July 1, 2017. On July 1, 2017, the Company entered into amendments to the Conditional Share Purchase Agreements with the In addition, promissory notes issued by Allenex to FastPartner and Mohammed Al Amoudi in an aggregate amount of approximately $4.1 million, including accrued interest (the “Allenex Notes”), were due on July 1, 2017. Mohammed Al Amoudi, The Company has incurred losses and negative cash flows from operations since 2015. As of September 30, 2017, the Company had cash and cash equivalents of $6.0 million and an accumulated deficit of $236.4 million. The Company previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2016 and in its Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2017 that it believed its cash balance would not be sufficient to fund operations for a period of one year from the date of the issuance of those financial statements and that the Company would require additional financing and/or refinancing of its current debt obligations to fund working capital, repay debt and pay its obligations. On October 10, 2017, the Company sold an aggregate of 4,992,840 shares of its common stock at a public offering price of $4.00 per share for net proceeds of approximately $18.3 million. After giving consideration to the proceeds from the 2017 Public Offering and the restructuring of the deferred purchase consideration and Allenex Notes on July 1, 2017, the Company believes its existing cash and cash equivalents, and expected revenues, will be sufficient to meet its anticipated cash requirements for at least the next 12 months. The Company may req uire future additional financing to fund working capital, repay or restructure debt and pay its obligations as they come due. Additional financing might include one or more offerings and one or more of a combination of equity securities, debt arrangements or collaborations. However, there can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its operations or on terms favorable to the Company. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and follow the requirements of the 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 consolidated balance sheet as of December 31, 2016 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 and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions have been eliminated. Since the Company owns less than 100% of the shares of Allenex, the Company records net loss attributable to noncontrolling interest in its condensed consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated 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 consolidated 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, including from acquisitions, (vi) inventory valuation, (vii) the valuation of warrants, Series A Preferred, and common stock issued in the Private Placement and Subsequent Financing (as described in Note 12), (viii) the fair value of contingent consideration in a business acquisition, (ix) the fair value of embedded derivatives, (x) measurement of stock-based compensation expense, (xi) the determination of the valuation allowance and estimated tax benefit associated with deferred tax assets and net deferred tax liability, (xii) any impairment of long-lived assets, including in-process technology and goodwill, and (xiii) 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. 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, and sales of Olerup products to distributors, strategic partners and end customers in Europe, Middle East and Africa, the U.S., Latin America and other geographic regions. The Company has not experienced any significant credit losses and does not generally require collateral on receivables. For the three months ended September 30, 2017 and 2016, approximately 26% and 27%, respectively, of total revenue was derived from Medicare. |
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. |
Restricted Cash | Restricted Cash Under lease agreements for certain facilities and an agreement with the State of Florida Medicaid, the Company must maintain letters of credit, minimum collateral requirements and a surety bond. These agreements are collateralized by cash. The cash used to support these arrangements is classified as long-term restricted cash on the accompanying balance sheets. Under the Company’s convertible debt financing agreements with JGB, the Company is required to maintain restricted cash of $9.4 million, which is restricted as to withdrawal and is not available to the Company to fund its operations or repay indebtedness. The restricted cash used to support the convertible debt facility |
Inventory | Inventory Inventory is finished goods, work in progress and raw materials and consist of reagent plates, testing devices, laboratory supplies, reagents, and finished goods kits. Inventories are used in connection with tests performed and may also be used for research and product development efforts. Laboratory supplies subsequently designated for research and product development use are expensed. Obsolete or damaged inventories are written off and excluded from the physical inventory. Inventories at the Company’s Stockholm, Sweden and Fremantle, Australia locations are stated at the lower of purchased cost, determined on an average cost basis, or net realizable value. Inventories at the Company’s other locations are stated at the lower of purchased cost, determined on a first-in, first-out basis or net realizable value. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, generally three years for laboratory, computer and office equipment, and generally seven years for furniture and fixtures. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining lease term. Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair market value of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. The Company capitalizes certain costs incurred for software developed or obtained for internal use. These costs include software licenses, consulting services, and direct materials, as well as employee payroll and payroll-related costs. Capitalized internal-use software costs are depreciated over three years. |
Purchased Intangible Assets | Purchased Intangible Assets Amortizable intangible assets include customer relationships, developed technology, trademarks, contracts and in-process research and development (“IPR&D”) identified intangible assets acquired as part of a business combination. Intangible assets subject to amortization are amortized over their estimated useful lives. Acquired intangible assets with indefinite useful lives are related to 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 research and development 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 an 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 two reportable segments associated with the delivery of diagnostic tests and the development and commercialization of diagnostic products. The reporting unit’s carrying value is compared to its fair value and an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The estimated fair values of the reporting units are determined using either the market approach, income approach or a combination of the market and income approach. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its estimated fair value. The income approach uses expected future operating results and failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit. The Company conducted a goodwill impairment test as of March 31, 2017 and identified an impairment of $2.0 million related to the goodwill recorded in the Olerup reportable segment. See Note 6 for additional discussion regarding the impairment charge recorded. |
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. The carrying amounts of the common stock warrant liability, derivative liability and contingent consideration liability also represents their fair values. |
Common Stock Warrant Liability and Derivative Liability | Common Stock On April 14, 2016 and June 15, 2016, the Company completed the Private Placement and Subsequent Financing, respectively (as described in Note 12), which included the issuance of free standing warrants to certain accredited investors and placement agents to purchase shares of the Company’s common stock. The exercisability of the warrants was contingent upon the receipt of approval of the Private Placement by the Company’s stockholders pursuant to the rules of The NASDAQ Stock Market LLC (the “Requisite Stockholder Approval”), which occurred on June 16, 2016. The free standing warrants issued pursuant to the Private Placement and Subsequent Financing are contingently redeemable and are classified as liabilities on the consolidated balance sheet and recorded at their estimated fair value. The warrants are remeasured at each balance sheet date with changes recorded in change in estimated fair value of common stock warrant liability and derivative liability on the consolidated statements of operations. On March 15, 2017, the Company entered into a Securities Purchase Agreement with JGB, pursuant to which the Company issued Senior Secured Debentures (the “JGB Debt”) and warrants (as described in Note 11). The Company determined that the debentures and the warrants were free standing instruments. The terms of the warrants include price-based anti-dilution adjustment provisions, which precludes the Company from classifying the warrants in equity. As such, the warrants are classified as liabilities on the consolidated balance sheet. The full fair value of the warrants was allocated on day one to the warrant liability and the residual value, after allocation of the fair value of the derivative liability discussed below, was ascribed to the debentures. The warrants will be re-measured at each reporting period with changes recorded in change in estimated fair value of common stock warrant liability and derivative liability on the consolidated statements of operations. The Debentures are classified as liabilities on the consolidated balance sheet and include certain embedded derivatives that required bifurcation, including settlement and penalty provisions. The compound embedded derivative will be re-measured at each reporting period with changes recorded in change in estimated fair value of common stock warrant liability and derivative liability on the consolidated statements of operations. |
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. For testing revenue, 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 on an accrual basis when the test is performed. 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 for tests performed 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. Taxes assessed by governmental authorities on revenue, including sales and value added taxes are excluded from revenue in the statements of operations. |
Product Revenue | Product Revenue Product revenue is recognized from the sale of products to end-users, distributors and strategic partners when persuasive evidence of an arrangement exists, the product is complete and tested and has been shipped or delivered, as required to transfer title and risk of loss, the sales price is fixed and determinable, collection of the resulting receivable is reasonably assured, there are no material contingencies and the Company does not have significant obligations for future performance. When collectability is not reasonably assured, the Company defers the revenue until the cash is received. Provisions for estimated future product returns and allowances are recorded in the period of the sale based on the historical and anticipated future rate of returns. Revenue is recorded net of any discounts given to the buyer. |
Collaboration, License and Other 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 revenue connected with milestones during the three and nine months ended September 30, 2017 or 2016. |
Cost of Testing and Product | 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, 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, utilities and royalties. Costs associated with performing tests (except royalties) are recorded as the test is processed regardless of whether and when the testing revenue is recognized with respect to that test. As a result, the Company’s cost of testing as a percentage of revenue may vary significantly from period to period because the Company does 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. Cost of Product Cost of product reflects the aggregate costs incurred in delivering the Company’s products to customers. The components of cost of product are materials costs, manufacturing and kit assembly costs, direct labor costs, equipment and infrastructure expenses associated with preparing kitted products for shipment, shipping, and allocated overhead including rent, information technology, equipment depreciation and utilities. Cost of product also includes amortization of acquired developed technology and adjustments to inventory values, including write-down of impaired, slow moving or obsolete inventory. |
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 FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity Transaction costs associated with 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. |
Research and Development Expenses | Research and Development Expenses Research and development expenses represent costs incurred to develop new surveillance solutions as well as continued development of the Company’s AlloMap and AlloSure tests. These expenses include payroll and related expenses, consulting expenses, laboratory supplies, and certain allocated expenses as well as amounts incurred under certain collaboration and license agreements. Research and development costs are expensed as incurred. The Company records accruals for estimated study costs comprised of work performed by contract research organizations under contract terms. |
Advertising Expenses | Advertising Expenses All advertising costs are expensed as incurred. Advertising expenses were insignificant during all of the periods presented. |
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 using 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 using the Company’s expectations and historical data. The fair value of each restricted stock unit is calculated based upon the closing price of the Company’s common stock on the date of the grant. 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. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. The Company’s assessment of an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit may change as new information becomes available. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for each entity, including the Swedish Krona, Australian dollar and the Euro. The revenue and expenses of such subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting cumulative translation adjustments are reported in other comprehensive loss. Foreign currency transaction gains and losses are recognized in current operations. |
Comprehensive (Loss) Income | Comprehensive (Loss) Income Comprehensive (loss) income consists of net (loss) income and other gains and losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income or loss. For the Company, such items consist of foreign currency translation losses. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the FASB issued ASU No 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), In April 2016, the FASB issued ASU No. 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), , In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) . consolidated financial statements In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The Company adopted ASU 2017-01 on January 1, 2017 on a prospective basis and the adoption of ASU 2017-01 did not have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . In February 2017, the FASB issued ASU No. 2017-05, Other Income —Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets . In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net loss attributable to CareDx, Inc. used to compute basic net loss per share $ (14,268 ) $ (3,764 ) $ (23,798 ) $ (23,989 ) Less: Gain on private placement warrants — (1,386 ) — — Net loss attributable to CareDx, Inc. used to compute diluted net loss per share $ (14,268 ) $ (5,150 ) $ (23,798 ) $ (23,989 ) Denominator: Weighted-average shares used to compute basic net loss per share attributable to CareDx, Inc. 22,526,615 19,098,626 21,765,292 14,894,218 Add: Private placement warrant shares — 382,798 — — Weighted-average shares used to compute diluted net loss per share attributable to CareDx, Inc. 22,526,615 19,481,424 21,765,292 14,894,218 Net loss per share attributable to CareDx, Inc.: Basic $ (0.63 ) $ (0.20 ) $ (1.09 ) $ (1.61 ) Diluted $ (0.63 ) $ (0.26 ) $ (1.09 ) $ (1.61 ) |
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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Shares of common stock subject to outstanding options 1,992,559 1,851,232 1,992,559 1,851,232 Shares of common stock subject to outstanding common stock warrants 4,506,478 283,415 4,506,478 3,261,502 Shares of common stock subject to convertible notes 6,313,636 — 6,313,636 — Restricted stock units 340,650 314,115 340,650 314,115 Total common stock equivalents 13,153,323 2,448,762 13,153,323 5,426,849 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Money market funds $ 2,743 $ — $ — $ 2,743 Liabilities Contingent consideration $ — $ — $ 801 $ 801 Common stock warrant liability — — 10,431 10,431 Derivative liability — — 1,370 1,370 Total liabilities $ — $ — $ 12,602 $ 12,602 December 31, 2016 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Money market funds $ 14,497 $ — $ — $ 14,497 Liabilities Contingent consideration $ — $ — $ 492 $ 492 Common stock warrant liability — — 5,208 5,208 Total liabilities $ — $ — $ 5,700 $ 5,700 |
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 Common Derivative Liability Total Balance as of December 31, 2016 $ 492 $ 5,208 $ — $ 5,700 Issuance of JGB Debt and warrants — 900 2,290 3,190 Change in estimated fair value 309 4,323 (920 ) 3,712 Balance as of September 30, 2017 $ 801 $ 10,431 $ 1,370 $ 12,602 |
Summary of Common Stock Warrant Liability and Derivative Liability Assumptions | Common Stock Warrant Liability and Derivative Liability Assumptions September 30, 2017 December 31, 2016 Private Placement Common Stock Warrant Liability Stock Price $ 3.70 $ 2.70 Exercise Price $ 1.12 $ 4.00 Remaining term (in years) 5.54 6.29 Volatility 62.00 % 51.40 % Risk-free interest rate 1.98 % 2.14 % Subsequent Financing Common Stock Warrant Liability Stock Price $ 3.70 $ 2.70 Exercise Price $ 4.00 $ 4.00 Remaining term (in years) 5.71 6.29 Volatility 62.00 % 51.40 % Risk-free interest rate 1.99 % 2.14 % Placement Agent Common Stock Warrant Liability Stock Price $ 3.70 $ 2.70 Exercise Price $ 1.12 $ 3.99 Remaining term (in years) 3.54 4.29 Volatility 76.00 % 56.10 % Risk-free interest rate 1.69 % 1.77 % September 30, 2017 March 15, 2017 JGB Common Stock Warrant Liability Stock Price $ 3.70 $ 2.15 Exercise Price $ 4.82 $ 5.00 Remaining term (in years) 4.96 5.50 Volatility 65.00 % 54.00 % Risk-free interest rate 1.90 % 2.06 % Derivative Liability Stock Price $ 3.70 $ 2.15 Remaining term (in years) 2.41 2.96 Volatility 65.00 % 54.00 % Risk-free interest rate 1.90 % 1.72 % |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Allenex [Member] | |
Schedule of Noncontrolling Interests | Total Noncontrolling interest at December 31, 2016 $ 279 Foreign currency effect (10 ) Net loss attributable to noncontrolling interest (133 ) Noncontrolling interest at September 30, 2017 $ 136 |
Conexio [Member] | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed as of Acquisition Date | The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands): Total Inventory $ 1,040 Property, plant and equipment 97 Intangible assets 155 Goodwill 85 Assumed liabilities (82 ) Total acquisition consideration $ 1,295 |
Summary of Identified Intangible Assets Acquired at Acquisition Date | The following table presents details of the identified intangible assets acquired at the acquisition date (in thousands): Estimated Fair Estimated Life (Years) Completed technology $ 127 9 Customer relationships 28 9 Total $ 155 |
Allenex and Conexio [Member] | |
Schedule of Pro Forma Results of Operations | The unaudited pro forma financial information in the table below summarizes the combined results for the Company and Allenex as if the companies were combined as of January 1, 2016. The unaudited pro forma results of operations have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or of the results that may occur in the future. Furthermore, the pro forma financial information does not reflect the impact of any reorganization or operating efficiencies resulting from combining the two companies (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2016 2016 Revenue: Testing revenue $ 8,613 $ 22,310 Product revenue 3,754 11,642 Other revenue 108 396 Total revenue $ 12,475 $ 34,348 Net loss $ (2,491 ) $ (17,597 ) Weighted-average shares used to compute basic net loss per common share 11,890,057 11,846,921 Net loss per common share- basic and diluted $ (0.21 ) $ (1.49 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill by Reporting Unit | The following table presents details of the Company’s goodwill by reporting unit as of September 30, 2017 (in thousands): CareDx Olerup Total Balance as of January 1, 2017 Goodwill $ 12,005 $ 14,855 $ 26,860 Accumulated impairment losses — (13,021 ) (13,021 ) 12,005 1,834 13,839 Goodwill acquired — 85 85 Impairment losses — (1,958 ) (1,958 ) Foreign currency translation adjustments — 39 39 Balance as of September 30, 2017 Goodwill 12,005 14,979 26,984 Accumulated impairment losses — (14,979 ) (14,979 ) $ 12,005 $ — $ 12,005 |
Summary of Intangible Assets | The following tables present details of the Company’s intangible assets as of September 30, 2017 (in thousands): September 30, 2017 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Amount Weighted Average Remaining Useful (In Intangible assets with finite lives: Customer relationships: Allenex $ 12,650 $ (1,184 ) $ (77 ) $ 11,389 13.3 Customer relationships: Conexio 28 (2 ) 1 27 8.3 Customer relationships 12,678 (1,186 ) (76 ) 11,416 Developed technology: SSP 11,650 (1,652 ) (106 ) 9,892 8.3 Acquired technology: QTYPE 4,510 (298 ) (20 ) 4,192 13.3 Acquired technology: SBT 127 (10 ) 5 122 8.3 Acquired technology: dd-cfDNA (a) 6,650 — — 6,650 13.1 Trademarks 2,260 (273 ) 48 2,035 13.3 Total intangible assets with finite lives $ 37,875 $ (3,419 ) $ (149 ) $ 34,307 (a) The dd-cfDNA balance was initially classified as acquired in-process technology upon the acquisition of IMX in 2014, but was reclassified as an intangible asset with a finite life on September 30, 2017 based on confirmation of the Medicare reimbursement rate for Allosure, the Company’s dd-cfDNA solution, which was commercially launched on October 9, 2017. |
Summary of Estimated Future Amortization Expense of Intangible Assets | The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of September 30, 2017 (in thousands): Years Ending December 31, Cost of Product Sales and Marketing Total Remainder of 2017 $ 511 $ 254 $ 765 2018 2,042 1,016 3,058 2019 2,042 1,016 3,058 2020 2,042 1,016 3,058 2021 2,042 1,016 3,058 2022 2,042 1,016 3,058 Thereafter 10,137 8,115 18,252 Total future amortization expense $ 20,858 $ 13,449 $ 34,307 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventory consisted of the following (in thousands): September 30, 2017 December 2016 Finished goods $ 2,892 $ 4,199 Work in progress 1,977 159 Raw materials 1,301 1,103 Total inventory $ 6,170 $ 5,461 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables And Accruals [Abstract] | |
Components of Accrued and Other Liabilities | Accrued and other liabilities consisted of the following (in thousands): September 30, 2017 December 2016 Clinical studies $ 1,332 $ 1,375 Test sample processing fees 620 524 Professional fees 425 345 Deferred rent – current portion 403 374 Tax, audit and compliance related fees 254 275 Customer overpayment and refund reserve 226 281 Software implementation costs 89 176 Accrued interest payable on debt 47 862 Capital leases – current portion 30 68 Debt financing fees - 600 Other accrued expenses 469 440 Total accrued and other liabilities $ 3,895 $ 5,320 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Lease Commitments under Operating and Capital Leases | Future minimum lease commitments under these operating and capital leases at September 30, 2017, are as follows (in thousands): Years Ending December 31, Capital Leases Operating Leases Remainder of 2017 $ 11 $ 566 2018 25 2,158 2019 5 2,094 2020 — 2,049 Total future minimum lease payments $ 41 $ 6,867 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Transfers And Servicing [Abstract] | |
Schedule of Debt | Debt consisted of the following (in thousands): September 30, 2017 December JGB Debt $ 5,240 $ — East West Bank Loan — 12,614 Danske Bank Credit Facility 8,527 7,376 FastPartner Subordinated Promissory Notes — 1,692 Al Amoudi Subordinated Promissory Notes — 1,164 SSP Primers Loan 1,233 — Current portion of long-term debt $ 15,000 $ 22,846 JGB Debt $ 16,940 $ — FastPartner Subordinated Promissory Notes 2,437 — Al Amoudi Subordinated Promissory Notes 1,797 — SSP Primers Loan — 1,098 Long-term debt, net of current portion $ 21,174 $ 1,098 |
Schedule of Maturities of Debt | As of September 30, 2017, future debt maturities were as follows (in thousands): Years Ending December 31, Amount Remainder of 2017 $ 1,621 2018 17,515 2019 15,484 2020 7,155 Total debt maturities 41,775 Less: debt discount and issuance costs (5,601 ) Total debt maturities, net of debt discount and issuance costs 36,174 Less: current portion of long-term debt (15,000 ) Long-term debt, net carrying value $ 21,174 |
Schedule of Carrying Values of Debt | The following table summarizes the Company’s carrying value of the JGB Debt (in thousands) on the March 15, 2017 issuance date: March 15, 2017 Debt principal $ 27,780 Less: Issuance cost (998 ) Original issue discount (2,780 ) Original warrant valuation (900 ) Embedded Derivative Liability (2,290 ) Total debt discount (6,968 ) Carrying Value $ 20,812 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Common Stock [Member] | |
Class Of Warrant Or Right [Line Items] | |
Components of Warrants Outstanding | As of September 30, 2017, outstanding warrants to purchase Common Stock were: Original Term Exercise Price Number of Shares Underlying Warrants Original issue date: February 2008 10 years $ 35.10 22,792 August 2009 10 years $ 21.78 33,473 July 2010 9 years $ 21.78 6,694 December 2010 7 years $ 21.78 17,215 August 2012 7 years $ 21.78 167,182 January 2015 5 years $ 6.96 34,483 April 2016 (a) 7 years $ 1.12 1,725,453 April 2016 (b) 5 years $ 1.12 200,000 June 2016 (c) 7 years $ 4.00 1,002,507 March 2017 (d) 5 years $ 4.82 1,296,679 4,506,478 (a) Issued on April 14, 2016 in connection with the Private Placement to certain accredited investors. In accordance with the anti-dilution provisions, the exercise price of the warrants issued in connection with the Private Placement was adjusted from $4.98 to $4.00, which was the price paid by investors in the 2016 Public Offering, which closed on September 26, 2016. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the exercise price was adjusted from $4.00 to $1.12, effective July 3, 2017. (b) Issued on April 14, 2016 in connection with the Private Placement to placement agents. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the exercise price was adjusted from $3.99 to $1.12, effective July 3, 2017. (c) Issued on June 15, 2016 in connection with the Subsequent Financing. In accordance with the anti-dilution provisions, the exercise price of the warrants issued in connection with the Subsequent Financing was adjusted from $4.98 per share to $4.00 per share, which was the price paid by investors in the 2016 Public Offering, which closed on September 26, 2016. (d) Issued on March 15, 2017 in connection with the JGB Debt. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the number of shares issuable pursuant to the JGB Warrants increased from 1,250,000 to 1,296,679 and the exercise price of the JGB Warrants was adjusted from $5.00 to $4.82, effective July 3, 2017. Refer to Note 18 for an explanation of additional changes to the JGB warrants effective October 5, 2017 and October 10, 2017. |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Option, Unvested RSU Activity and Related Information | The following table summarizes option and unvested RSU activity under the plans and related information: Shares Available for Grant Stock Options Outstanding Weighted- Average Exercise Price Number of RSU Shares Weighted- Average Grant Date Fair Value Balance—December 31, 2016 365,074 1,792,286 $ 6.15 306,245 $ 5.69 Additional options authorized 357,075 Restricted stock grants (89,684 ) RSUs granted (207,500 ) 207,500 2.17 RSUs forfeited 78,667 (78,667 ) 4.19 RSUs vested — (94,428 ) 5.60 Options granted (575,200 ) 575,200 2.05 Options exercised — Options forfeited 228,961 (228,961 ) 4.89 Options expired 145,965 (145,965 ) 4.96 Balance—September 30, 2017 303,358 1,992,560 $ 5.16 340,650 $ 3.92 |
Weighted-Average Assumptions Used to Estimate 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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Employee stock options Expected term (in years) 5.7 5.5 5.9 5.9 Expected volatility 57.80-60.60% 45.81%-46.44% 53.07%-60.60% 39.60%-46.44% Risk-free interest rate 1.85%-1.98% 1.18%-1.29% 1.85%-2.12% 1.13%-1.65% Expected dividend yield — % — % — % — % Employee stock purchase plan Expected term (in years) 0.5 0.5 0.5 0.5 Expected volatility 98.58 % 77.05 % 77.42 % 85.97 % Risk-free interest rate 1.13 % 0.49 % 0.85 % 0.45 % Expected dividend yield — % — % — % — % |
Summary of Expense Relating to Employee and Nonemployee Stock-Based Payment Awards from Stock Options and RSUs | The following table summarizes stock-based compensation expense relating to employee and nonemployee stock options, RSUs and ESPP shares for the three and nine months ended September 30, 2017 and 2016, included in the statements of operations as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Cost of testing $ 38 $ 38 $ 157 $ 105 Research and development 104 109 279 321 Sales and marketing 32 47 127 118 General and administrative 256 336 753 967 Total $ 430 $ 530 $ 1,316 $ 1,511 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Operating Results of Reportable Segments | The following table summarizes the operating results of the Company’s reportable segments (in thousands): Three Nine Months Ended September 30, 2017 2016 2017 2016 Total segments Revenues $ 12,191 $ 12,475 $ 35,821 $ 29,771 Operating loss (3,864 ) (4,933 ) (16,007 ) (18,471 ) Depreciation and amortization 919 1,068 2,740 2,195 CareDx Revenues $ 8,319 $ 8,721 $ 24,905 $ 22,543 Operating loss (2,876 ) (2,910 ) (10,996 ) (14,724 ) Depreciation and amortization 223 301 721 861 Olerup Revenues $ 3,872 $ 3,754 $ 10,916 $ 7,228 Operating loss (988 ) (2,023 ) (5,011 ) (3,747 ) Depreciation and amortization 696 767 2,019 1,334 September 30, December Assets: CareDx $ 38,440 $ 41,169 Olerup 36,653 35,561 Total assets $ 75,093 $ 76,730 |
Reportable Revenues by Geographic Regions | Revenues by geographic regions are based upon the customers’ ship-to address or headquarters location. The following table summarizes reportable revenues by geographic regions (in thousands): Three September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Revenues: North America $ 9,393 $ 10,131 $ 27,964 $ 26,461 Europe, Middle East and Africa 2,569 2,313 7,136 3,168 Latin America 104 31 356 142 Australia 125 — 365 — Total $ 12,191 $ 12,475 $ 35,821 $ 29,771 |
Long-Lived Assets Consisting of Property and Equipment, Net by Geographic Regions | The following table summarizes long-lived assets, consisting of property and equipment, net, by geographic regions (in thousands): September 30, 2017 December Long-lived assets: North America $ 1,372 $ 2,052 Europe, Middle East and Africa 798 879 Australia 111 — Total $ 2,281 $ 2,931 |
Organization and Description 37
Organization and Description of Business - Additional Information (Detail) $ / shares in Units, $ in Thousands | Dec. 31, 2017USD ($)shares | Oct. 10, 2017USD ($)$ / sharesshares | Oct. 04, 2017$ / sharesshares | Jul. 01, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Mar. 15, 2017USD ($) | Apr. 14, 2016USD ($) | Apr. 14, 2016SEK | Oct. 31, 2017USD ($) | Oct. 31, 2017SEK | Sep. 30, 2017USD ($)Segmentshares | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($)shares | Sep. 30, 2017USD ($)Segmentshares | Sep. 30, 2016USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Schedule of Capitalization, Equity [Line Items] | |||||||||||||||||
Number of reportable segments | Segment | 2 | 2 | |||||||||||||||
Accumulated deficit | $ 236,351 | $ 236,351 | $ 212,553 | ||||||||||||||
Cash and cash equivalents | 5,976 | $ 22,265 | 5,976 | $ 22,265 | 17,258 | $ 29,888 | |||||||||||
Debt outstanding under debt and capital lease obligations | 36,200 | 36,200 | |||||||||||||||
Current debt | $ 15,000 | 15,000 | 22,846 | ||||||||||||||
Proceeds from debt, net of issuance costs | 24,002 | 0 | |||||||||||||||
Pay-off of term debt | $ 11,200 | ||||||||||||||||
Deferred purchase consideration | $ 1,064 | $ 5,700 | |||||||||||||||
Shares issued upon conversion subject to approval from Company's shareholders | shares | 13,153,323 | 2,448,762 | 13,153,323 | 5,426,849 | |||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 8,293 | ||||||||||||||||
FastPartner AB and Al Amoudi Subordinated Promissory Notes [Member] | |||||||||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||||||||
Aggregate amount of notes due | $ 4,100 | ||||||||||||||||
Allenex [Member] | |||||||||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||||||||
Deferred purchase consideration | $ 6,300 | $ 5,700 | SEK 50,620,000 | ||||||||||||||
Business acquisition deferred payment date | Jul. 1, 2017 | ||||||||||||||||
Conversion of deferred obligation into shares | $ 1,100 | ||||||||||||||||
Shares issued upon conversion | shares | 1,022,544 | ||||||||||||||||
Conversion into common stock per share price | $ / shares | $ 1.12 | ||||||||||||||||
Business acquisition portion of obligation | $ 2,900 | ||||||||||||||||
Business acquisition deferred payment extended date | Mar. 31, 2019 | Jul. 1, 2017 | |||||||||||||||
Business acquisition date of deferred purchase consideration unless earlier conversion into common stock | Dec. 31, 2017 | ||||||||||||||||
Business acquisition deferred obligation | $ 6,300 | ||||||||||||||||
Allenex [Member] | Scenario Forecast [Member] | |||||||||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||||||||
Shares issued upon conversion subject to approval from Company's shareholders | shares | 1,791,763 | ||||||||||||||||
Business acquisition deferred obligation | $ 2,100 | ||||||||||||||||
Subsequent Event [Member] | 2017 Public Offering [Member] | |||||||||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||||||||
Common stock shares issued | shares | 4,992,840 | 4,341,600 | |||||||||||||||
Common stock offer price per share | $ / shares | $ 4 | $ 4 | |||||||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 18,300 | ||||||||||||||||
Danske Bank A S [Member] | Subsequent Event [Member] | Term Loan Facility [Member] | |||||||||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||||||||
Conditional principal repayment amount | $ 700 | SEK 6,000,000 | |||||||||||||||
Majority Shareholder [Member] | Allenex [Member] | |||||||||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||||||||
Deferred purchase consideration | $ 500 | ||||||||||||||||
JGB Debt [Member] | |||||||||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||||||||
Current debt | $ 5,240 | $ 5,240 | $ 0 | ||||||||||||||
Proceeds from debt, net of issuance costs | $ 24,000 | ||||||||||||||||
Pay-off of term debt | 11,200 | ||||||||||||||||
Minimum cash requirement | $ 9,400 | $ 9,400 | $ 9,400 | ||||||||||||||
Shares issued upon conversion | shares | 1,022,544 | ||||||||||||||||
Conversion into common stock per share price | $ / shares | $ 1.12 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($)Segment | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Segment | Sep. 30, 2016USD ($) | Mar. 15, 2017USD ($) | |
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 | |||||
Number of reportable segments | Segment | 2 | 2 | ||||
Goodwill impairment | $ 0 | $ 0 | $ 1,958,000 | $ 0 | ||
Revenue recognition under milestone method | 0 | $ 0 | ||||
Olerup [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Goodwill impairment | $ 2,000,000 | $ 1,958,000 | ||||
Laboratory, Computer, and Office Equipment [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of assets | 3 years | |||||
Furniture and Fixtures [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of assets | 7 years | |||||
Capitalized Internal-use Software Costs [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of assets | 3 years | |||||
JGB Debt [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Minimum cash requirement | $ 9,400,000 | $ 9,400,000 | $ 9,400,000 | |||
Maximum [Member] | Olerup [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Goodwill impairment | $ 2,000,000 | |||||
Allenex [Member] | Maximum [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Company ownership percentage | 100.00% | 100.00% |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Additional Information - Concentration of Credit Risk (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Services Revenue [Member] | Customer Concentration Risk [Member] | Minimum [Member] | |||||
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 | 26.00% | 27.00% | 27.00% | 45.00% | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Minimum [Member] | |||||
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 | 23.00% | 27.00% |
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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net loss attributable to CareDx, Inc. used to compute basic net loss per share | $ (14,268) | $ (3,764) | $ (23,798) | $ (23,989) |
Less: Gain on private placement warrants | 0 | (1,386) | 0 | 0 |
Net loss attributable to CareDx, Inc. used to compute diluted net loss per share | $ (14,268) | $ (5,150) | $ (23,798) | $ (23,989) |
Denominator: | ||||
Weighted-average shares used to compute basic net loss per share attributable to CareDx, Inc. | 22,526,615 | 19,098,626 | 21,765,292 | 14,894,218 |
Add: Private placement warrant shares | 0 | 382,798 | 0 | 0 |
Weighted-average shares used to compute diluted net loss per share attributable to CareDx, Inc. | 22,526,615 | 19,481,424 | 21,765,292 | 14,894,218 |
Net loss per share attributable to CareDx, Inc.: | ||||
Basic | $ (0.63) | $ (0.20) | $ (1.09) | $ (1.61) |
Diluted | $ (0.63) | $ (0.26) | $ (1.09) | $ (1.61) |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Detail) - shares | Sep. 26, 2016 | Jun. 15, 2016 | Apr. 14, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Schedule of Net Income (Loss) Per Share [Line Items] | ||||||||
Preferred stock issued pursuant to Private Placement | 4,630,145 | |||||||
Preferred stock issued pursuant to Subsequent Financing | 4,630,145 | |||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||
Potential dilutive securities excluded from diluted net loss per share | 13,153,323 | 2,448,762 | 13,153,323 | 5,426,849 | ||||
Common Stock [Member] | ||||||||
Schedule of Net Income (Loss) Per Share [Line Items] | ||||||||
Potential dilutive securities excluded from diluted net loss per share | 1,791,763 | |||||||
Public Offering [Member] | ||||||||
Schedule of Net Income (Loss) Per Share [Line Items] | ||||||||
Common stock shares issued | 2,250,000 |
Net Loss Per Share - Potentiall
Net Loss Per Share - Potentially Dilutive Securities Excluded from Diluted Net Loss Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
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 | 13,153,323 | 2,448,762 | 13,153,323 | 5,426,849 |
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 | 1,992,559 | 1,851,232 | 1,992,559 | 1,851,232 |
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 | 4,506,478 | 283,415 | 4,506,478 | 3,261,502 |
Shares of common stock subject to convertible notes [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 | 6,313,636 | 0 | 6,313,636 | 0 |
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 | 340,650 | 314,115 | 340,650 | 314,115 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Money market funds | $ 2,743 | $ 14,497 |
Liabilities | ||
Contingent consideration | 801 | 492 |
Common stock warrant liability | 10,431 | 5,208 |
Derivative liability | 1,370 | |
Total liabilities | 12,602 | 5,700 |
Fair Value Measured Using - (Level 1) [Member] | ||
Assets | ||
Money market funds | 2,743 | 14,497 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Common stock warrant liability | 0 | 0 |
Derivative liability | 0 | |
Total liabilities | 0 | 0 |
Fair Value Measured Using - (Level 2) [Member] | ||
Assets | ||
Money market funds | 0 | 0 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Common stock warrant liability | 0 | 0 |
Derivative liability | 0 | |
Total liabilities | 0 | 0 |
Fair Value Measured Using - (Level 3) [Member] | ||
Assets | ||
Money market funds | 0 | 0 |
Liabilities | ||
Contingent consideration | 801 | 492 |
Common stock warrant liability | 10,431 | 5,208 |
Derivative liability | 1,370 | |
Total liabilities | $ 12,602 | $ 5,700 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Issuances, Changes in Fair Value and Reclassifications of Level 3 Financial Instruments (Detail) - Fair Value Measured Using - (Level 3) [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Significant Unobservable Inputs (Level 3) [Line Items] | ||
Beginning Balance | $ 5,700 | |
Issuance of JGB Debt and warrants | 3,190 | |
Change in estimated fair value | 3,712 | |
Ending Balance | $ 12,602 | 12,602 |
Common Stock Warrant Liability [Member] | ||
Significant Unobservable Inputs (Level 3) [Line Items] | ||
Beginning Balance | 5,208 | |
Issuance of JGB Debt and warrants | 900 | |
Change in estimated fair value | 4,323 | |
Ending Balance | 10,431 | 10,431 |
Contingent Consideration Liability [Member] | ||
Significant Unobservable Inputs (Level 3) [Line Items] | ||
Beginning Balance | 492 | |
Issuance of JGB Debt and warrants | 0 | |
Change in estimated fair value | 600 | 309 |
Ending Balance | 801 | 801 |
Derivative Liability [Member] | ||
Significant Unobservable Inputs (Level 3) [Line Items] | ||
Beginning Balance | 0 | |
Issuance of JGB Debt and warrants | 2,290 | |
Change in estimated fair value | (920) | |
Ending Balance | $ 1,370 | $ 1,370 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($)shares | Jun. 30, 2017 | Sep. 30, 2017USD ($)CommercialTestshares | Dec. 31, 2016USD ($)shares | Mar. 15, 2017shares | Jun. 15, 2016shares | |
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 | $ 0 | ||||
Warrants outstanding | 1,002,507 | |||||
JGB Debt [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Warrant to purchase stock, shares | 1,296,679 | 1,296,679 | 1,250,000 | |||
Fair Value Measured Using - (Level 3) [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Increase in fair value of contingent consideration | $ | $ 3,712,000 | |||||
Warrants outstanding | 2,927,960 | 2,927,960 | ||||
Fair Value Measured Using - (Level 3) [Member] | Contingent Consideration Liability [Member] | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Increase in fair value of contingent consideration | $ | $ 600,000 | $ 309,000 | ||||
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 | 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 | 85.00% | 95.00% | 80.00% |
Fair Value Measurements - Sum46
Fair Value Measurements - Summary of Common Stock Warrant Liability and Derivative Liability Assumptions (Detail) - $ / shares | Mar. 15, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Private Placement Common Stock Warrant Liability [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Stock Price | $ 3.70 | $ 2.70 | |
Exercise Price | $ 1.12 | $ 4 | |
Remaining term (in years) | 5 years 6 months 14 days | 6 years 3 months 15 days | |
Volatility | 62.00% | 51.40% | |
Risk-free interest rate | 1.98% | 2.14% | |
Placement Agent Common Stock Warrant Liability [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Stock Price | $ 3.70 | $ 2.70 | |
Exercise Price | $ 1.12 | $ 3.99 | |
Remaining term (in years) | 3 years 6 months 15 days | 4 years 3 months 15 days | |
Volatility | 76.00% | 56.10% | |
Risk-free interest rate | 1.69% | 1.77% | |
JGB Common Stock Warrant Liability [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Stock Price | $ 2.15 | $ 3.70 | |
Exercise Price | $ 5 | $ 4.82 | |
Remaining term (in years) | 5 years 6 months | 4 years 11 months 16 days | |
Volatility | 54.00% | 65.00% | |
Risk-free interest rate | 2.06% | 1.90% | |
Majority Shareholder Common Stock Warrant Liability [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Stock Price | $ 3.70 | $ 2.70 | |
Exercise Price | $ 4 | $ 4 | |
Remaining term (in years) | 5 years 8 months 16 days | 6 years 3 months 15 days | |
Volatility | 62.00% | 51.40% | |
Risk-free interest rate | 1.99% | 2.14% | |
Derivative Liability [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Stock Price | $ 2.15 | $ 3.70 | |
Remaining term (in years) | 2 years 11 months 15 days | 2 years 4 months 28 days | |
Volatility | 54.00% | 65.00% | |
Risk-free interest rate | 1.72% | 1.90% |
Business Combination - Addition
Business Combination - Additional Information (Detail) | Jul. 01, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Jan. 20, 2017USD ($) | Jan. 01, 2017 | Apr. 14, 2016USD ($)shares | Apr. 14, 2016SEKshares | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jul. 05, 2017USD ($) | Dec. 31, 2016USD ($) | Apr. 14, 2016SEKSEK / shares |
Business Acquisition [Line Items] | ||||||||||||
Business acquisition deferred payment consideration | $ 1,064,000 | $ 5,700,000 | ||||||||||
Noncontrolling interest | $ 136,000 | $ 136,000 | $ 279,000 | |||||||||
Allenex [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Percentage of share acquired | 98.30% | 98.30% | ||||||||||
Total purchase price combination of cash and common stock | $ 34,100,000 | |||||||||||
Cash distribution to acquire business, gross | $ 26,900,000 | |||||||||||
Common stock, shares issue | shares | 1,375,029 | 1,375,029 | ||||||||||
Common stock value | $ 7,200,000 | |||||||||||
Business acquisition deferred payment consideration | $ 6,300,000 | $ 5,700,000 | SEK 50,620,000 | |||||||||
Business acquisition deferred payment date | Jul. 1, 2017 | |||||||||||
Escrow Deposit | $ 8,000,000 | |||||||||||
Deferred purchase consideration including accrued interest | $ 6,300,000 | |||||||||||
Business acquisition deferred payment extended date | Mar. 31, 2019 | Jul. 1, 2017 | ||||||||||
Conversion of deferred obligation into shares | $ 1,100,000 | |||||||||||
Shares issued upon conversion | shares | 1,022,544 | |||||||||||
Conversion into common stock per share price | $ / shares | $ 1.12 | |||||||||||
Portion of deferred obligation considered for extended maturity date | $ 2,900,000 | |||||||||||
Additional repayment amount of deferred obligation | $ 2,100,000 | |||||||||||
Payable date of deferred obligation additional repayment amount | Dec. 31, 2017 | |||||||||||
Percentage of accruing interest | 10.00% | |||||||||||
Percentage of non controlling interest | 1.70% | 1.70% | ||||||||||
Noncontrolling interest | $ 600,000 | 136,000 | $ 136,000 | $ 279,000 | SEK 5,100,000 | |||||||
Price per share of Allenex used to determine fair value of non controlling interest | SEK / shares | SEK 2.48 | |||||||||||
Allenex [Member] | Pro Forma [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Business acquisition of related cost expenses | 4,300,000 | |||||||||||
Allenex [Member] | Six-Month Bridge Loan [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Business acquisition of debt financing cost | $ 2,900,000 | |||||||||||
Allenex [Member] | Majority Shareholder [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Business acquisition deferred payment consideration | $ 500,000 | |||||||||||
Percentage of accruing interest | 10.00% | |||||||||||
Reduction in deferred obligation | $ 500,000 | |||||||||||
Allenex [Member] | Former Majority Shareholders [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
JGB debt to deferred obligation payment ratio | 4.84% | |||||||||||
Allenex [Member] | Maximum [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Business acquisition deferred payment date | Mar. 31, 2017 | Mar. 31, 2017 | ||||||||||
Business acquisition deferred payment extended date | Mar. 31, 2019 | |||||||||||
Conexio [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Consideration paid for finished and unfinished goods acquired | 400,000 | |||||||||||
Acquisition related quarterly payments, percentage on gross revenue | 20.00% | |||||||||||
Periodic quarterly payments on gross revenue for the quarters march and june | $ 100,000 | |||||||||||
Conexio [Member] | Maximum [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Acquisition related quarterly payments on gross revenue | $ 700,000 | |||||||||||
Obligations and liabilities assumed for product warranty claims | $ 35,000 |
Business Combination - Summary
Business Combination - Summary of Noncontrolling Interest (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Noncontrolling interest at December 31, 2016 | $ 279 | |||
Net loss attributable to noncontrolling interest | $ (19) | $ (35) | (133) | $ (58) |
Noncontrolling interest at September 30, 2017 | 136 | 136 | ||
Allenex [Member] | ||||
Business Acquisition [Line Items] | ||||
Noncontrolling interest at December 31, 2016 | 279 | |||
Foreign currency effect | (10) | |||
Net loss attributable to noncontrolling interest | (133) | |||
Noncontrolling interest at September 30, 2017 | $ 136 | $ 136 |
Business Combination - Summar49
Business Combination - Summary of Fair Values of Assets Acquired and Liabilities Assumed as of Acquisition Date (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jan. 20, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 12,005 | $ 13,839 | |
Conexio [Member] | |||
Business Acquisition [Line Items] | |||
Inventory | $ 1,040 | ||
Property, plant and equipment | 97 | ||
Intangible assets | 155 | ||
Goodwill | 85 | ||
Assumed liabilities | (82) | ||
Total acquisition consideration | $ 1,295 |
Business Combination - Summar50
Business Combination - Summary of Identified Intangible Assets Acquired at Acquisition Date (Detail) - Conexio [Member] $ in Thousands | Jan. 20, 2017USD ($) |
Business Acquisition [Line Items] | |
Estimated fair value of identified intangible assets | $ 155 |
Completed Technology [Member] | |
Business Acquisition [Line Items] | |
Estimated fair value of identified intangible assets | $ 127 |
Estimated useful life of identified intangible asset | 9 years |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Estimated fair value of identified intangible assets | $ 28 |
Estimated useful life of identified intangible asset | 9 years |
Business Combination - Schedule
Business Combination - Schedule of Pro Forma Results of Operations (Detail) - Allenex and Conexio [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Revenue: | ||
Testing revenue | $ 8,613 | $ 22,310 |
Product revenue | 3,754 | 11,642 |
Other revenue | 108 | 396 |
Total revenue | 12,475 | 34,348 |
Net loss | $ (2,491) | $ (17,597) |
Weighted-average shares used to compute basic net loss per common share | 11,890,057 | 11,846,921 |
Net loss per common share- basic and diluted | $ (0.21) | $ (1.49) |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Summary of Goodwill by Reporting Unit (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Goodwill, Beginning balance | $ 26,860 | $ 26,860 | |||
Accumulated impairment losses, Beginning balance | (13,021) | (13,021) | |||
Goodwill net, Beginning balance | 13,839 | 13,839 | |||
Goodwill acquired | 85 | ||||
Impairment losses | $ 0 | $ 0 | (1,958) | $ 0 | |
Foreign currency translation adjustments | 39 | ||||
Goodwill, Ending balance | 26,984 | 26,984 | |||
Accumulated impairment losses, Ending balance | (14,979) | (14,979) | |||
Goodwill net, Ending balance | 12,005 | 12,005 | |||
CareDx [Member] | |||||
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Goodwill, Beginning balance | 12,005 | 12,005 | |||
Accumulated impairment losses, Beginning balance | 0 | 0 | |||
Goodwill net, Beginning balance | 12,005 | 12,005 | |||
Goodwill acquired | 0 | ||||
Impairment losses | 0 | ||||
Foreign currency translation adjustments | 0 | ||||
Goodwill, Ending balance | 12,005 | 12,005 | |||
Accumulated impairment losses, Ending balance | 0 | 0 | |||
Goodwill net, Ending balance | 12,005 | 12,005 | |||
Olerup [Member] | |||||
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Goodwill, Beginning balance | 14,855 | 14,855 | |||
Accumulated impairment losses, Beginning balance | (13,021) | (13,021) | |||
Goodwill net, Beginning balance | 1,834 | 1,834 | |||
Goodwill acquired | 85 | ||||
Impairment losses | $ (2,000) | (1,958) | |||
Foreign currency translation adjustments | 39 | ||||
Goodwill, Ending balance | 14,979 | 14,979 | |||
Accumulated impairment losses, Ending balance | (14,979) | (14,979) | |||
Goodwill net, Ending balance | $ 0 | $ 0 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)ReportingUnit | Sep. 30, 2016USD ($) | |
Goodwill And Intangible Assets [Line Items] | |||||
Number of reporting units | ReportingUnit | 2 | ||||
Description of annual goodwill impairment test | On January 1, 2017, the Company adopted ASU 2017-04, which eliminated the Step 2 requirement of the goodwill impairment test. Instead, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. The new standard simplifies how an entity is required to test goodwill for impairment and reduces the cost and complexity of evaluating goodwill for impairment. The Company determined that the decrease in its market capitalization constituted an indicator of impairment and therefore a goodwill impairment test was completed as of March 31, 2017. | ||||
Goodwill impairment | $ 0 | $ 0 | $ 1,958,000 | $ 0 | |
Amortization expense of intangible assets | 600,000 | 600,000 | 1,800,000 | 1,100,000 | |
Cost of Product [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Amortization expense of intangible assets | 400,000 | 400,000 | 1,100,000 | 600,000 | |
Sales and marketing [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Amortization expense of intangible assets | 200,000 | $ 200,000 | $ 700,000 | $ 500,000 | |
Olerup [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Description of goodwill impairment method for fair value determination | determined that the fair value of the Olerup reporting unit was $3.5 million, which was lower than its carrying value. | ||||
Fair value of reporting unit | $ 3,500,000 | $ 3,500,000 | |||
Goodwill impairment | $ 2,000,000 | $ 1,958,000 | |||
Reporting unit, discount rate | 16.60% | ||||
Reporting unit, terminal growth rate | 3.20% | ||||
Reporting unit, capitalization multiple | $ 7.48 | ||||
Olerup [Member] | Maximum [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill impairment | $ 2,000,000 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets - Summary of Intangible Assets (Detail) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($) | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 37,875 | |
Accumulated Amortization | (3,419) | |
Foreign Currency Translation | (149) | |
Net Carrying Amount | 34,307 | |
Customer Relationships [Member] | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | 12,678 | |
Accumulated Amortization | (1,186) | |
Foreign Currency Translation | (76) | |
Net Carrying Amount | 11,416 | |
Customer Relationships [Member] | Allenex [Member] | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | 12,650 | |
Accumulated Amortization | (1,184) | |
Foreign Currency Translation | (77) | |
Net Carrying Amount | $ 11,389 | |
Estimated useful life of identified intangible asset | 13 years 3 months 18 days | |
Customer Relationships [Member] | Conexio [Member] | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 28 | |
Accumulated Amortization | (2) | |
Foreign Currency Translation | 1 | |
Net Carrying Amount | $ 27 | |
Estimated useful life of identified intangible asset | 8 years 3 months 19 days | |
Trademarks [Member] | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 2,260 | |
Accumulated Amortization | (273) | |
Foreign Currency Translation | 48 | |
Net Carrying Amount | $ 2,035 | |
Estimated useful life of identified intangible asset | 13 years 3 months 18 days | |
Developed Technology [Member] | SSP [Member] | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 11,650 | |
Accumulated Amortization | (1,652) | |
Foreign Currency Translation | (106) | |
Net Carrying Amount | $ 9,892 | |
Estimated useful life of identified intangible asset | 8 years 3 months 19 days | |
Acquired Technology - QTYPE | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 4,510 | |
Accumulated Amortization | (298) | |
Foreign Currency Translation | (20) | |
Net Carrying Amount | $ 4,192 | |
Estimated useful life of identified intangible asset | 13 years 3 months 18 days | |
Acquired Technology SBT [Member] | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 127 | |
Accumulated Amortization | (10) | |
Foreign Currency Translation | 5 | |
Net Carrying Amount | $ 122 | |
Estimated useful life of identified intangible asset | 8 years 3 months 19 days | |
Acquired Technology dd-cfDNA [Member] | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 6,650 | [1] |
Accumulated Amortization | 0 | [1] |
Foreign Currency Translation | 0 | [1] |
Net Carrying Amount | $ 6,650 | [1] |
Estimated useful life of identified intangible asset | 13 years 1 month 6 days | [1] |
[1] | The dd-cfDNA balance was initially classified as acquired in-process technology upon the acquisition of IMX in 2014, but was reclassified as an intangible asset with a finite life on September 30, 2017 based on confirmation of the Medicare reimbursement rate for Allosure, the Company’s dd-cfDNA solution, which was commercially launched on October 9, 2017. |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets - Summary of Estimated Future Amortization Expense of Intangible Assets (Detail) $ in Thousands | Sep. 30, 2017USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2017 | $ 765 |
2,018 | 3,058 |
2,019 | 3,058 |
2,020 | 3,058 |
2,021 | 3,058 |
2,022 | 3,058 |
Thereafter | 18,252 |
Net Carrying Amount | 34,307 |
Cost of Product [Member] | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2017 | 511 |
2,018 | 2,042 |
2,019 | 2,042 |
2,020 | 2,042 |
2,021 | 2,042 |
2,022 | 2,042 |
Thereafter | 10,137 |
Net Carrying Amount | 20,858 |
Sales and marketing [Member] | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2017 | 254 |
2,018 | 1,016 |
2,019 | 1,016 |
2,020 | 1,016 |
2,021 | 1,016 |
2,022 | 1,016 |
Thereafter | 8,115 |
Net Carrying Amount | $ 13,449 |
Inventory - Summary of Inventor
Inventory - Summary of Inventory (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 2,892 | $ 4,199 |
Work in progress | 1,977 | 159 |
Raw materials | 1,301 | 1,103 |
Total inventory | $ 6,170 | $ 5,461 |
Accrued and Other Liabilities -
Accrued and Other Liabilities - Components of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Clinical studies | $ 1,332 | $ 1,375 |
Test sample processing fees | 620 | 524 |
Professional fees | 425 | 345 |
Deferred rent – current portion | 403 | 374 |
Tax, audit and compliance related fees | 254 | 275 |
Customer overpayment and refund reserve | 226 | 281 |
Software implementation costs | 89 | 176 |
Accrued interest payable on debt | 47 | 862 |
Capital leases – current portion | 30 | 68 |
Debt financing fees | 0 | 600 |
Other accrued expenses | 469 | 440 |
Total accrued and other liabilities | $ 3,895 | $ 5,320 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Mar. 02, 2017USD ($) | Feb. 28, 2017USD ($) | Feb. 28, 2017SEK | Dec. 21, 2016USD ($) | Dec. 21, 2016SEK | Jul. 15, 2016USD ($) | Apr. 25, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2014USD ($) |
Loss Contingencies [Line Items] | ||||||||||||
Leases expiration period | 2,020 | |||||||||||
Rent expense under non-cancelable operating leases | $ 400,000 | $ 300,000 | $ 1,300,000 | $ 1,000,000 | ||||||||
Damages sought | $ 1,300,000 | |||||||||||
Fine by disciplinary committee | $ 100,000 | SEK 1,000,000 | ||||||||||
Fine by disciplinary committee paid | $ 100,000 | SEK 1,000,000 | ||||||||||
Oberland Complaint [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Damages sought | $ 1,400,000 | |||||||||||
Amount accrued for claim | $ 1,400,000 | |||||||||||
Settlement amount | $ (600,000) | |||||||||||
Unpaid Royalties [Member] | ||||||||||||
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 | $ 300,000 | $ 300,000 | $ 900,000 | $ 800,000 |
Commitments and Contingencies59
Commitments and Contingencies - Future Minimum Lease Commitments under Operating and Capital Leases (Detail) $ in Thousands | Sep. 30, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Capital Leases, Remainder of 2017 | $ 11 |
Capital Leases, 2018 | 25 |
Capital Leases, 2019 | 5 |
Capital Leases, 2020 | 0 |
Total minimum lease payments under capital leases | 41 |
Operating Leases, Remainder of 2017 | 566 |
Operating Leases, 2018 | 2,158 |
Operating Leases, 2019 | 2,094 |
Operating Leases, 2020 | 2,049 |
Total minimum lease payments under operating leases | $ 6,867 |
Collaboration and Licensing A60
Collaboration and Licensing Agreements - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Jul. 31, 2013USD ($) | Jun. 30, 2013USD ($) | Jun. 30, 2013EUR (€) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | 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 | $ 23,000 | $ 23,000 | $ 21,000 | ||||||
Refundable upfront payments | $ 295,000 | € 250,000 | |||||||
Upfront cash payment | 414,000 | € 387,500 | |||||||
Revenues and royalties recognized | 10,000 | $ 2,000 | 29,000 | $ 12,000 | |||||
Royalty revenues | 100,000 | $ 100,000 | 400,000 | $ 200,000 | |||||
Royalty revenues receivable balance | $ 0 | $ 0 | $ 0 | ||||||
Diaxonhit [Member] | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Common stock value | $ 414,000 | € 387,500 | |||||||
Shares sold for consideration | $ 467,000 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ 15,000 | $ 22,846 |
Long-term debt, net of current portion | 21,174 | 1,098 |
JGB Debt [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 5,240 | 0 |
Long-term debt, net of current portion | 16,940 | 0 |
Danske Bank Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 8,527 | 7,376 |
East West Bank Loan [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 0 | 12,614 |
FastPartner Subordinated Promissory Notes [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 0 | 1,692 |
Long-term debt, net of current portion | 2,437 | 0 |
Al Amoudi Subordinated Promissory Notes [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 0 | 1,164 |
Long-term debt, net of current portion | 1,797 | 0 |
SSP Primers Loan [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt | 1,233 | 0 |
Long-term debt, net of current portion | $ 0 | $ 1,098 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Jul. 01, 2017USD ($)$ / sharesshares | Jul. 01, 2017SEKshares | Mar. 15, 2017USD ($)$ / sharesshares | Mar. 07, 2016USD ($) | Dec. 29, 2015USD ($) | Jun. 18, 2015USD ($) | Feb. 25, 2015USD ($) | Feb. 25, 2015SEK | Jun. 28, 2013USD ($) | Jun. 28, 2013SEK | Jun. 25, 2013USD ($) | Oct. 31, 2017USD ($) | Oct. 31, 2017SEK | Mar. 31, 2017USD ($) | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2017SEK | Sep. 30, 2016USD ($) | Oct. 10, 2017$ / sharesshares | Oct. 05, 2017$ / sharesshares | Sep. 30, 2017SEKshares | Jul. 03, 2017$ / sharesshares | Jul. 02, 2017$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2016SEK | Aug. 04, 2016USD ($) | Aug. 04, 2016SEK | Jun. 15, 2016shares | Mar. 07, 2016SEK | Dec. 29, 2015SEK | Jun. 18, 2015SEK | Feb. 25, 2015SEK | Jan. 30, 2015USD ($) | Jun. 28, 2013SEK | Jun. 25, 2013SEK |
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Total accrued interest on debt | $ 200,000 | $ 900,000 | ||||||||||||||||||||||||||||||||
Current portion of accrued interest | 47,000 | 862,000 | ||||||||||||||||||||||||||||||||
Proceeds from debt, net of issuance costs | 24,002,000 | $ 0 | ||||||||||||||||||||||||||||||||
Pay-off of term debt | $ 11,200,000 | |||||||||||||||||||||||||||||||||
Warrants outstanding | shares | 1,002,507 | |||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 20,000,000 | |||||||||||||||||||||||||||||||||
Current debt | 15,000,000 | 22,846,000 | ||||||||||||||||||||||||||||||||
Debt extinguishment charges | $ 200,000 | |||||||||||||||||||||||||||||||||
Prepayment penalty on loan | 0.00% | 0.00% | ||||||||||||||||||||||||||||||||
Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Shares issued upon conversion | shares | 1,022,544 | 1,022,544 | ||||||||||||||||||||||||||||||||
Conversion into common stock per share price | $ / shares | $ 1.12 | |||||||||||||||||||||||||||||||||
S S P Primers Aktieboulag [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Loan agreement initiation date | Feb. 25, 2015 | Feb. 25, 2015 | ||||||||||||||||||||||||||||||||
Term loan facility amount outstanding | $ 1,200,000 | SEK 10,000,000 | 1,200,000 | SEK 10,000,000 | ||||||||||||||||||||||||||||||
Principle amount of loan agreement | $ 1,700,000 | SEK 14,000,000 | ||||||||||||||||||||||||||||||||
Term Loan Facility [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Term loan facility amount outstanding | 7,300,000 | 59,000,000 | ||||||||||||||||||||||||||||||||
Term loan credit facility amount payable | $ 5,800,000 | SEK 47,000,000 | ||||||||||||||||||||||||||||||||
Term Loan Facility [Member] | Danske Bank A S [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 8,800,000 | SEK 71,000,000 | ||||||||||||||||||||||||||||||||
Loan agreement initiation date | Jun. 25, 2013 | |||||||||||||||||||||||||||||||||
Term loan facility available for utilization advances | $ 600,000 | 5,000,000 | ||||||||||||||||||||||||||||||||
Term loan facility integral multiples | $ 100,000 | SEK 1,000,000 | ||||||||||||||||||||||||||||||||
Interest rate basis spread | 3.00% | |||||||||||||||||||||||||||||||||
Interest rate, description | 0 | 0 | ||||||||||||||||||||||||||||||||
Principal Payment Made on October 31, 2017 [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Term loan credit facility amount payable | $ 700,000 | SEK 6,000,000 | ||||||||||||||||||||||||||||||||
Quarterly Payments in December of 2017 and March 2018 [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Term loan credit facility amount payable | 400,000 | SEK 3,000,000 | ||||||||||||||||||||||||||||||||
Short Term Credit Facility [Member] | Danske Bank A S [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 1,000,000 | $ 1,200,000 | SEK 10,000,000 | SEK 8,000,000 | ||||||||||||||||||||||||||||||
Loan agreement initiation date | Jun. 18, 2015 | |||||||||||||||||||||||||||||||||
Short term credit facility | 1,200,000 | SEK 10,000,000 | ||||||||||||||||||||||||||||||||
East West Bank Loan [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Current debt | $ 0 | 12,614,000 | ||||||||||||||||||||||||||||||||
3% Interest Rate [Member] | S S P Primers Aktieboulag [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Interest rate | 3.00% | 3.00% | ||||||||||||||||||||||||||||||||
Term loan facility amount outstanding | SEK | SEK 5,000,000 | |||||||||||||||||||||||||||||||||
10% Interest Rate [Member] | S S P Primers Aktieboulag [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||
Term loan facility amount outstanding | SEK | SEK 5,000,000 | |||||||||||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Warrants outstanding | shares | 4,506,478 | 4,506,478 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Term Loan Facility [Member] | Danske Bank A S [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Conditional principal repayment amount | $ 700,000 | SEK 6,000,000 | ||||||||||||||||||||||||||||||||
Payable on February 25, 2016 [Member] | S S P Primers Aktieboulag [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Loan agreement, periodic payment | $ 500,000 | SEK 4,000,000 | ||||||||||||||||||||||||||||||||
Date of loan agreement payable | Mar. 7, 2016 | Mar. 7, 2016 | ||||||||||||||||||||||||||||||||
Payable on February 28, 2018 [Member] | S S P Primers Aktieboulag [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Loan agreement, periodic payment | $ 1,200,000 | SEK 10,000,000 | ||||||||||||||||||||||||||||||||
Date of loan agreement payable | Feb. 28, 2018 | Feb. 28, 2018 | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 27,780,000 | |||||||||||||||||||||||||||||||||
Warrant to purchase stock, shares | shares | 1,250,000 | 1,296,679 | 1,296,679 | |||||||||||||||||||||||||||||||
Proceeds from debt, net of issuance costs | $ 24,000,000 | |||||||||||||||||||||||||||||||||
Pay-off of term debt | 11,200,000 | |||||||||||||||||||||||||||||||||
Minimum cash requirement | $ 9,400,000 | $ 9,400,000 | ||||||||||||||||||||||||||||||||
Debt instrument maturity date | Feb. 28, 2020 | |||||||||||||||||||||||||||||||||
Interest rate | 9.50% | |||||||||||||||||||||||||||||||||
Debentures convertible into common stock | shares | 6,092,105 | |||||||||||||||||||||||||||||||||
Conversion price per share | $ / shares | $ 4.56 | $ 4.40 | $ 4.56 | |||||||||||||||||||||||||||||||
Debt conversion description | Additionally, after September 1, 2017, upon the satisfaction of certain conditions, including the volume weighted average price of the Company’s common stock exceeding 250% of the Conversion Price for twenty consecutive trading days, the Company can require that the Debentures be converted into shares of the Company’s common stock, subject to certain limitations. | |||||||||||||||||||||||||||||||||
Debt, possible redemption amount after March 1, 2018 | $ 937,500 | |||||||||||||||||||||||||||||||||
Debt redemption description | Commencing on March 1, 2018, each of the holders of the Debentures shall have the right, at its option, to require the Company to redeem up to $937,500 of the outstanding principal amount of its Debenture per month. The Company will be required to promptly, but in any event no more than one trading day after the holder delivers a redemption notice to the Company, pay the applicable redemption amount in cash or, at the Company’s election and subject to certain conditions, in shares of the Company’s common stock. If the Company elects to pay the redemption amount in shares of the Company’s common stock, then the shares will be delivered based on a price equal to the lowest of (a) 88% of the average of the three lowest volume weighted average prices of the Company’s common stock over the prior 20 trading days, (b) 88% of the prior trading day’s volume weighted average price, or (c) the Conversion Price. | |||||||||||||||||||||||||||||||||
Percentage of average three lowest volume weighted average prices of common stock if elected to pay in shares | 88.00% | |||||||||||||||||||||||||||||||||
Percentage of prior trading day's volume weighted average price if elected to pay in shares | 88.00% | |||||||||||||||||||||||||||||||||
Shares issued upon conversion | shares | 1,022,544 | 1,022,544 | ||||||||||||||||||||||||||||||||
Conversion into common stock per share price | $ / shares | $ 1.12 | |||||||||||||||||||||||||||||||||
Exercise Price | $ / shares | $ 5 | |||||||||||||||||||||||||||||||||
Current debt | $ 5,240,000 | 0 | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | FastPartner AB [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | 8.00% | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | Mohammed Al Amoudi [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 6.00% | 6.00% | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Warrants outstanding | shares | 1,296,679 | 1,250,000 | ||||||||||||||||||||||||||||||||
Exercise Price | $ / shares | $ 4.82 | $ 5 | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | 2017 Public Offering [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Conversion price per share | $ / shares | $ 4.40 | |||||||||||||||||||||||||||||||||
JGB Debt [Member] | 2017 Public Offering [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Warrants outstanding | shares | 1,296,679 | 1,296,679 | ||||||||||||||||||||||||||||||||
Exercise Price | $ / shares | $ 4.82 | |||||||||||||||||||||||||||||||||
JGB Debt [Member] | Subsequent Event [Member] | 2017 Public Offering [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Conversion price per share | $ / shares | $ 4.33 | $ 4.34 | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | Subsequent Event [Member] | 2017 Public Offering [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Warrants outstanding | shares | 1,338,326 | 1,332,620 | ||||||||||||||||||||||||||||||||
Exercise Price | $ / shares | $ 4.67 | $ 4.69 | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | If Debentures are Prepaid on or Prior to March 1, 2018 [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Prepayment premium percentage on principal amount | 15.00% | 15.00% | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | If the Debentures are Prepaid After March 1, 2018 but Prior to March 1, 2019 [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Prepayment premium percentage on principal amount | 8.00% | 8.00% | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | If the Debentures are Prepaid on or After March 1, 2019 [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Prepayment premium percentage on principal amount | 5.00% | 5.00% | ||||||||||||||||||||||||||||||||
JGB Debt [Member] | If Debenture is accelerated prior to March 1, 2018 [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Percentage of debt principal and interest outstanding repayment | 115.00% | |||||||||||||||||||||||||||||||||
JGB Debt [Member] | If Debenture is accelerated after March 1, 2018 but prior to March 1, 2019 [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Percentage of debt principal and interest outstanding repayment | 108.00% | |||||||||||||||||||||||||||||||||
JGB Debt [Member] | If Debenture is accelerated after March 1, 2019 [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Percentage of debt principal and interest outstanding repayment | 105.00% | |||||||||||||||||||||||||||||||||
Subordinated Promissory Note [Member] | FastPartner AB [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 500,000 | $ 200,000 | $ 1,100,000 | SEK 4,000,000 | SEK 2,000,000 | SEK 9,400,000 | ||||||||||||||||||||||||||||
Debt instrument maturity date | Mar. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2016 | Dec. 31, 2016 | Jul. 1, 2017 | Jul. 1, 2017 | ||||||||||||||||||||||||||||
Interest rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ||||||||||||||||||||||||||||
Issuance date | Mar. 7, 2016 | Dec. 29, 2015 | Jun. 28, 2013 | Jun. 28, 2013 | ||||||||||||||||||||||||||||||
Principal payment | $ 1,900,000 | SEK 15,400,000 | $ 100,000 | SEK 1,000,000 | ||||||||||||||||||||||||||||||
Debt instrument accrued interest | $ 500,000 | |||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||
Subordinated Promissory Note [Member] | Mohammed Al Amoudi [Member] | Allenex [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ 1,300,000 | SEK 10,600,000 | ||||||||||||||||||||||||||||||||
Debt instrument maturity date | Mar. 31, 2019 | Mar. 31, 2019 | Jun. 28, 2016 | Jun. 28, 2016 | ||||||||||||||||||||||||||||||
Interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||
Issuance date | Jun. 28, 2013 | Jun. 28, 2013 | ||||||||||||||||||||||||||||||||
Principal payment | $ 1,300,000 | SEK 10,600,000 | $ 100,000 | SEK 1,000,000 | ||||||||||||||||||||||||||||||
Debt instrument accrued interest | $ 500,000 | |||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||
Debt instrument extended maturity date | Jul. 1, 2017 | Jul. 1, 2017 | ||||||||||||||||||||||||||||||||
Accrued and Other Liabilities [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Current portion of accrued interest | $ 100,000 | 0 | ||||||||||||||||||||||||||||||||
Other Liabilities [Member] | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Long-term portion of accrued interest | $ 100,000 | $ 0 |
Debt - Schedule of Future Debt
Debt - Schedule of Future Debt Maturities (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Equity Method Investments And Cost Method Investments [Abstract] | ||
Remainder of 2017 | $ 1,621 | |
2,018 | 17,515 | |
2,019 | 15,484 | |
2,020 | 7,155 | |
Total debt maturities | 41,775 | |
Less: debt discount and issuance costs | (5,601) | |
Total debt maturities, net of debt discount and issuance costs | 36,174 | |
Less: current portion of long-term debt | (15,000) | $ (22,846) |
Long-term debt, net of current portion | $ 21,174 | $ 1,098 |
Debt - Carrying Value of Debt o
Debt - Carrying Value of Debt on Issuance Date (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 15, 2017 |
Debt Instrument [Line Items] | ||
Total debt discount | $ (5,601) | |
JGB Debt [Member] | ||
Debt Instrument [Line Items] | ||
Debt principal | $ 27,780 | |
Less: Issuance cost | (998) | |
Original issue discount | (2,780) | |
Original warrant valuation | (900) | |
Embedded Derivative Liability | (2,290) | |
Total debt discount | (6,968) | |
Carrying Value | $ 20,812 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Oct. 10, 2017 | Oct. 04, 2017 | Jul. 01, 2017 | Sep. 26, 2016 | Jun. 15, 2016 | Apr. 14, 2016 | Sep. 30, 2017 | Jul. 03, 2017 | Jul. 02, 2017 | Sep. 25, 2016 |
Class Of Stock [Line Items] | ||||||||||
Common stock purchase price | $ 3.99 | |||||||||
Aggregate payment of Placement agent, escrow agents and legal fees | $ 1.8 | |||||||||
Additional issued units | 334,169 | |||||||||
Warrants outstanding | 1,002,507 | |||||||||
M.M. Dillon & Co. Group [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Placement fees | $ 0.2 | |||||||||
Warrant to purchase stock, shares | 100,000 | |||||||||
Allenex [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Shares issued upon conversion | 1,022,544 | |||||||||
Conversion into common stock per share price | $ 1.12 | |||||||||
Majority Shareholder [Member] | Allenex [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of common stock purchased | 1,002,507 | |||||||||
Shares of common stock subject to outstanding common stock warrants [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Proceeds from issuance of private placement offer | $ 3 | $ 1.7 | ||||||||
Common Stock [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Proceeds from issuance of private placement offer | 1.9 | $ 1 | ||||||||
Warrants outstanding | 4,506,478 | |||||||||
Series A Preferred Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Proceeds from issuance of private placement offer | $ 9.3 | $ 5.3 | ||||||||
Preferred shares convertible to common stock | 1,670,845 | |||||||||
Private Placement [Member] | ||||||||||
Class Of Stock [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 (“Units”) to certain accredited investors (the “Private Placement”). Each Unit was comprised of: (i) one share of common stock, (ii) five shares of 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). | |||||||||
Common stock shares issued | 591,860 | |||||||||
Common stock offer price per share | $ 23.94 | |||||||||
Proceeds from issuance of private placement offer | $ 8 | $ 14.2 | ||||||||
Warrants outstanding | 1,775,580 | 1,975,580 | ||||||||
Placement fees | $ 1.1 | |||||||||
Exercise Price | $ 4 | $ 4.98 | ||||||||
Private Placement [Member] | Placement Agents [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrants outstanding | 200,000 | |||||||||
Exercise Price | $ 3.99 | $ 1.12 | ||||||||
Private Placement [Member] | Accredited Investors [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrants outstanding | 1,775,580 | |||||||||
Exercise Price | $ 4 | 1.12 | ||||||||
Private Placement [Member] | Common Stock [Member] | Accredited Investors [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Exercise Price | $ 4 | 4.98 | ||||||||
2016 Public Offering [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock shares issued | 2,250,000 | |||||||||
Common stock offer price per share | $ 4 | |||||||||
Gross proceeds from common stock shares issued at public offering | $ 9 | |||||||||
Net proceeds from common stock shares issued at public offering | $ 7.8 | |||||||||
Subsequent Financing [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrants outstanding | 1,002,507 | |||||||||
Exercise Price | $ 4 | 4.98 | ||||||||
Subsequent Financing [Member] | Common Stock [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Exercise Price | $ 4 | $ 4.98 | ||||||||
Conditional Share Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Shares issued upon conversion | 1,022,544 | |||||||||
Conversion into common stock per share price | $ 1.12 | |||||||||
Conditional Share Purchase Agreement [Member] | Common Stock [Member] | Placement Agents [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Exercise Price | 1.12 | $ 3.99 | ||||||||
Shares issued upon conversion | 1,022,544 | |||||||||
Conditional Share Purchase Agreement [Member] | Common Stock [Member] | Accredited Investors [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Exercise Price | $ 1.12 | $ 4 | ||||||||
Shares issued upon conversion | 1,022,544 | |||||||||
2017 Public Offering [Member] | Subsequent Event [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock shares issued | 4,992,840 | 4,341,600 | ||||||||
Common stock offer price per share | $ 4 | $ 4 | ||||||||
Net proceeds from common stock shares issued at public offering | $ 18.3 | |||||||||
2017 Public Offering [Member] | Subsequent Event [Member] | Underwriting Agreement [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock shares issued | 4,992,840 | |||||||||
Common stock offer price per share | $ 4 | |||||||||
Over-allotments [Member] | Subsequent Event [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock shares issued | 651,240 | |||||||||
Over-allotments [Member] | Subsequent Event [Member] | Underwriting Agreement [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock shares issued | 651,240 |
Warrants - Additional Informati
Warrants - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Oct. 10, 2017 | Oct. 04, 2017 | Apr. 14, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Oct. 09, 2017 | Oct. 05, 2017 | Jul. 03, 2017 | Jul. 02, 2017 | Mar. 15, 2017 | Dec. 31, 2016 | Sep. 26, 2016 | Sep. 25, 2016 | Jun. 15, 2016 | |||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Estimated fair value of warrants | $ 1,700 | ||||||||||||||||
Warrants issued | 1,002,507 | ||||||||||||||||
Common stock warrant liability | $ 10,431 | $ 10,431 | $ 5,208 | ||||||||||||||
Estimated fair value of warrant liability remeasurement expense | 6,200 | 2,700 | |||||||||||||||
JGB Debt [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Common stock warrant liability | 2,500 | 2,500 | $ 900 | ||||||||||||||
Estimated fair value of warrant liability remeasurement expense | $ 2,100 | $ 1,600 | |||||||||||||||
Exercise Price | $ 5 | $ 5 | |||||||||||||||
Maximum [Member] | JGB Debt [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants exercisable date | Sep. 15, 2022 | ||||||||||||||||
Minimum [Member] | JGB Debt [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants exercisable date | Sep. 16, 2017 | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | 4,506,478 | 4,506,478 | |||||||||||||||
Common Stock [Member] | JGB Debt [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | 1,296,679 | 1,250,000 | |||||||||||||||
Exercise Price | $ 4.82 | $ 5 | |||||||||||||||
Warrants exercisable date | Mar. 15, 2017 | ||||||||||||||||
Common Stock [Member] | Maximum [Member] | JGB Debt [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | 1,250,000 | 1,250,000 | |||||||||||||||
Former Majority Shareholders [Member] | Common Stock [Member] | JGB Debt [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | 1,296,679 | ||||||||||||||||
Exercise Price | $ 4.82 | ||||||||||||||||
Private Placement [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Estimated fair value of warrants | $ 3,300 | ||||||||||||||||
Warrants issued | 1,975,580 | 1,775,580 | |||||||||||||||
Exercise Price | $ 4 | $ 4.98 | |||||||||||||||
Common stock shares sold | 591,860 | ||||||||||||||||
Private Placement [Member] | Former Majority Shareholders [Member] | Common Stock [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Exercise Price | 1.12 | ||||||||||||||||
Private Placement [Member] | Accredited Investors [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Estimated fair value of warrants | $ 3,000 | ||||||||||||||||
Warrants issued | 1,775,580 | ||||||||||||||||
Exercise Price | $ 4 | 1.12 | |||||||||||||||
Private Placement [Member] | Accredited Investors [Member] | Common Stock [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Exercise Price | $ 4 | $ 4.98 | |||||||||||||||
Warrants exercisable date | Apr. 14, 2016 | ||||||||||||||||
Private Placement [Member] | Accredited Investors [Member] | Class Of Warrant Or Right Issued on April 2016 [Member] | Common Stock [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | [1] | 1,725,453 | 1,725,453 | ||||||||||||||
Exercise Price | $ 4 | $ 1.12 | [1] | $ 1.12 | [1] | ||||||||||||
Private Placement [Member] | Placement Agents [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Estimated fair value of warrants | $ 300 | ||||||||||||||||
Warrants issued | 200,000 | ||||||||||||||||
Exercise Price | $ 3.99 | $ 1.12 | |||||||||||||||
Private Placement [Member] | Placement Agents [Member] | Common Stock [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants exercisable date | Apr. 14, 2016 | ||||||||||||||||
Private Placement [Member] | Placement Agents [Member] | Class Of Warrant Or Right Issued on April 2016 [Member] | Common Stock [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | [2] | 200,000 | 200,000 | ||||||||||||||
Exercise Price | $ 3.99 | $ 1.12 | [2] | $ 1.12 | [2] | ||||||||||||
Private Placement and Subsequent Financing [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Common stock warrant liability | $ 5,000 | $ 7,900 | $ 7,900 | $ 5,200 | |||||||||||||
2017 Public Offering [Member] | Subsequent Event [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Common stock shares sold | 4,992,840 | 4,341,600 | |||||||||||||||
2017 Public Offering [Member] | Common Stock [Member] | JGB Debt [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | 1,296,679 | 1,296,679 | |||||||||||||||
Exercise Price | $ 4.82 | $ 4.82 | |||||||||||||||
2017 Public Offering [Member] | Common Stock [Member] | JGB Debt [Member] | Subsequent Event [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | 1,338,326 | 1,332,620 | |||||||||||||||
Exercise Price | $ 4.67 | $ 4.69 | |||||||||||||||
Over-allotments [Member] | Subsequent Event [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Common stock shares sold | 651,240 | ||||||||||||||||
Over-allotments [Member] | Common Stock [Member] | JGB Debt [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | 1,332,620 | 1,332,620 | |||||||||||||||
Exercise Price | $ 4.69 | $ 4.69 | |||||||||||||||
Over-allotments [Member] | Common Stock [Member] | JGB Debt [Member] | Subsequent Event [Member] | |||||||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||||||
Warrants issued | 1,338,326 | 1,332,620 | |||||||||||||||
Exercise Price | $ 4.67 | $ 4.69 | |||||||||||||||
Common stock shares sold | 651,240 | ||||||||||||||||
[1] | Issued on April 14, 2016 in connection with the Private Placement to certain accredited investors. In accordance with the anti-dilution provisions, the exercise price of the warrants issued in connection with the Private Placement was adjusted from $4.98 to $4.00, which was the price paid by investors in the 2016 Public Offering, which closed on September 26, 2016. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the exercise price was adjusted from $4.00 to $1.12, effective July 3, 2017. | ||||||||||||||||
[2] | Issued on April 14, 2016 in connection with the Private Placement to placement agents. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the exercise price was adjusted from $3.99 to $1.12, effective July 3, 2017. |
Warrants - Outstanding Warrants
Warrants - Outstanding Warrants To Purchase Common Stock Warrants (Detail) - $ / shares | 9 Months Ended | |||||||
Sep. 30, 2017 | Jul. 03, 2017 | Sep. 26, 2016 | Sep. 25, 2016 | Jun. 15, 2016 | Apr. 14, 2016 | |||
Class Of Warrant Or Right [Line Items] | ||||||||
Number of Shares Underlying Warrants | 1,002,507 | |||||||
Private Placement [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 4 | $ 4.98 | ||||||
Number of Shares Underlying Warrants | 1,775,580 | 1,975,580 | ||||||
Private Placement [Member] | Accredited Investors [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 1.12 | $ 4 | ||||||
Number of Shares Underlying Warrants | 1,775,580 | |||||||
Private Placement [Member] | Placement Agents [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 1.12 | $ 3.99 | ||||||
Number of Shares Underlying Warrants | 200,000 | |||||||
Subsequent Financing [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 4 | 4.98 | ||||||
Number of Shares Underlying Warrants | 1,002,507 | |||||||
Common Stock [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Number of Shares Underlying Warrants | 4,506,478 | |||||||
Common Stock [Member] | Class Of Warrant Or Right Issued on February 2008 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | 2008-02 | |||||||
Original Term | 10 years | |||||||
Exercise Price | $ 35.10 | |||||||
Number of Shares Underlying Warrants | 22,792 | |||||||
Common Stock [Member] | Class Of Warrant Or Right Issued on August 2009 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | 2009-08 | |||||||
Original Term | 10 years | |||||||
Exercise Price | $ 21.78 | |||||||
Number of Shares Underlying Warrants | 33,473 | |||||||
Common Stock [Member] | Class Of Warrant Or Right Issued on July 2010 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | 2010-07 | |||||||
Original Term | 9 years | |||||||
Exercise Price | $ 21.78 | |||||||
Number of Shares Underlying Warrants | 6,694 | |||||||
Common Stock [Member] | Class Of Warrant Or Right Issued on December 2010 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | 2010-12 | |||||||
Original Term | 7 years | |||||||
Exercise Price | $ 21.78 | |||||||
Number of Shares Underlying Warrants | 17,215 | |||||||
Common Stock [Member] | Class Of Warrant Or Right Issued on August 2012 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | 2012-08 | |||||||
Original Term | 7 years | |||||||
Exercise Price | $ 21.78 | |||||||
Number of Shares Underlying Warrants | 167,182 | |||||||
Common Stock [Member] | Class Of Warrant Or Right Issued on January 2015 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | 2015-01 | |||||||
Original Term | 5 years | |||||||
Exercise Price | $ 6.96 | |||||||
Number of Shares Underlying Warrants | 34,483 | |||||||
Common Stock [Member] | Class Of Warrant Or Right Issued on March 2017 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | [1] | 2017-03 | ||||||
Original Term | [1] | 5 years | ||||||
Exercise Price | [1] | $ 4.82 | ||||||
Number of Shares Underlying Warrants | [1] | 1,296,679 | ||||||
Common Stock [Member] | Private Placement [Member] | Accredited Investors [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 4 | 4.98 | ||||||
Common Stock [Member] | Private Placement [Member] | Accredited Investors [Member] | Class Of Warrant Or Right Issued on April 2016 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | [2] | 2016-04 | ||||||
Original Term | [2] | 7 years | ||||||
Exercise Price | $ 1.12 | [2] | $ 4 | |||||
Number of Shares Underlying Warrants | [2] | 1,725,453 | ||||||
Common Stock [Member] | Private Placement [Member] | Placement Agents [Member] | Class Of Warrant Or Right Issued on April 2016 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | [3] | 2016-04 | ||||||
Original Term | [3] | 5 years | ||||||
Exercise Price | $ 1.12 | [3] | $ 3.99 | |||||
Number of Shares Underlying Warrants | [3] | 200,000 | ||||||
Common Stock [Member] | Subsequent Financing [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 4 | $ 4.98 | ||||||
Common Stock [Member] | Subsequent Financing [Member] | Class Of Warrant Or Right Issued on June 2016 [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Issue Date | [4] | 2016-06 | ||||||
Original Term | [4] | 7 years | ||||||
Exercise Price | [4] | $ 4 | ||||||
Number of Shares Underlying Warrants | [4] | 1,002,507 | ||||||
[1] | Issued on March 15, 2017 in connection with the JGB Debt. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the number of shares issuable pursuant to the JGB Warrants increased from 1,250,000 to 1,296,679 and the exercise price of the JGB Warrants was adjusted from $5.00 to $4.82, effective July 3, 2017. | |||||||
[2] | Issued on April 14, 2016 in connection with the Private Placement to certain accredited investors. In accordance with the anti-dilution provisions, the exercise price of the warrants issued in connection with the Private Placement was adjusted from $4.98 to $4.00, which was the price paid by investors in the 2016 Public Offering, which closed on September 26, 2016. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the exercise price was adjusted from $4.00 to $1.12, effective July 3, 2017. | |||||||
[3] | Issued on April 14, 2016 in connection with the Private Placement to placement agents. As a result of the issuance of 1,022,544 shares of the Company’s common stock at $1.12 in connection with the amendments to the Conditional Share Purchase Agreement, the exercise price was adjusted from $3.99 to $1.12, effective July 3, 2017. | |||||||
[4] | Issued on June 15, 2016 in connection with the Subsequent Financing. In accordance with the anti-dilution provisions, the exercise price of the warrants issued in connection with the Subsequent Financing was adjusted from $4.98 per share to $4.00 per share, which was the price paid by investors in the 2016 Public Offering, which closed on September 26, 2016. |
Warrants - Outstanding Warran68
Warrants - Outstanding Warrants To Purchase Common Stock Warrants (Parenthetical) (Detail) - $ / shares | Jul. 01, 2017 | Sep. 30, 2017 | Jul. 03, 2017 | Jul. 02, 2017 | Sep. 26, 2016 | Sep. 25, 2016 | Jun. 15, 2016 | Apr. 14, 2016 |
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants issued | 1,002,507 | |||||||
JGB Debt [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 5 | |||||||
Shares issued upon conversion | 1,022,544 | |||||||
Private Placement [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 4 | $ 4.98 | ||||||
Warrants issued | 1,775,580 | 1,975,580 | ||||||
Private Placement [Member] | Accredited Investors [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 1.12 | $ 4 | ||||||
Warrants issued | 1,775,580 | |||||||
Private Placement [Member] | Placement Agents [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | 1.12 | $ 3.99 | ||||||
Warrants issued | 200,000 | |||||||
Subsequent Financing [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 4 | 4.98 | ||||||
Warrants issued | 1,002,507 | |||||||
Common Stock [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants issued | 4,506,478 | |||||||
Common Stock [Member] | JGB Debt [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants, issued date | Mar. 15, 2017 | |||||||
Exercise Price | $ 4.82 | $ 5 | ||||||
Warrants issued | 1,296,679 | 1,250,000 | ||||||
Common Stock [Member] | Former Majority Shareholders [Member] | JGB Debt [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 4.82 | |||||||
Warrants issued | 1,296,679 | |||||||
Common Stock [Member] | Private Placement [Member] | Accredited Investors [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants, issued date | Apr. 14, 2016 | |||||||
Exercise Price | $ 4 | 4.98 | ||||||
Common Stock [Member] | Private Placement [Member] | Placement Agents [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants, issued date | Apr. 14, 2016 | |||||||
Common Stock [Member] | Private Placement [Member] | Former Majority Shareholders [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 1.12 | |||||||
Common Stock [Member] | Subsequent Financing [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Warrants, issued date | Jun. 15, 2016 | |||||||
Exercise Price | $ 4 | $ 4.98 | ||||||
Common Stock [Member] | Conditional Share Purchase Agreement [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Shares issued upon conversion | 1,022,544 | |||||||
Common Stock [Member] | Conditional Share Purchase Agreement [Member] | JGB Debt [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 1.12 | $ 5 | ||||||
Shares issued upon conversion | 1,022,544 | |||||||
Warrants issued | 1,250,000 | |||||||
Common Stock [Member] | Conditional Share Purchase Agreement [Member] | Accredited Investors [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | 1.12 | $ 4 | ||||||
Shares issued upon conversion | 1,022,544 | |||||||
Common Stock [Member] | Conditional Share Purchase Agreement [Member] | Placement Agents [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | 1.12 | $ 3.99 | ||||||
Shares issued upon conversion | 1,022,544 | |||||||
Common Stock [Member] | Conditional Share Purchase Agreement [Member] | Former Majority Shareholders [Member] | JGB Debt [Member] | ||||||||
Class Of Warrant Or Right [Line Items] | ||||||||
Exercise Price | $ 4.82 | |||||||
Warrants issued | 1,296,679 |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Detail) - USD ($) | Jan. 02, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Apr. 21, 2016 | Jan. 01, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total intrinsic value of options exercised | $ 0 | ||||||||
Share-based compensation expense, tax benefit recognized | 0 | ||||||||
Share-based compensation costs, capitalized | 0 | ||||||||
Share based compensation, Total expensed | $ 430,000 | $ 530,000 | 1,316,000 | $ 1,511,000 | |||||
General and administrative [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share based compensation, Total expensed | 256,000 | 336,000 | $ 753,000 | $ 967,000 | |||||
Non Employee Director [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares issued | 194,625 | ||||||||
Fair value of shares issued | $ 700,000 | ||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Intrinsic value of outstanding RSUs | 400,000 | 400,000 | |||||||
Total unrecognized compensation costs related to stock options and RSUs | 1,000,000 | $ 1,000,000 | |||||||
Stock options and RSUs expected weighted average period | 2 years 6 months 4 days | ||||||||
Common Stock [Member] | Non Employee Director [Member] | General and administrative [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share based compensation, Total expensed | $ 100,000 | $ 100,000 | |||||||
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 | 838,695 | |||||||
Outstanding shares of common stock, in percentage | 4.00% | ||||||||
2014 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
2014 Equity Incentive Plan [Member] | Adjustment for stock splits stock dividends recapitalizations or similar transactions [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares reserved for issuance of common stock | 357,075 | ||||||||
2014 Equity Incentive Plan [Member] | Maximum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Maximum number of shares may be added to the plan hereunder | 865,252 | ||||||||
2016 Inducement Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Maximum number of common stock shares that might be granted | 155,500 | ||||||||
2016 Inducement Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
2014 Employee Stock Purchase Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Aggregate proceeds from the issuance of shares | $ 100,000 | $ 100,000 | |||||||
Shares issued under ESPP | 52,612 | 35,024 | |||||||
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, Unvested RSU Activity and Related Information (Detail) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Available for Grant, Beginning Balance | 365,074 |
Shares Available for Grant, Additional options authorized | 357,075 |
Shares Available for Grant, RSUs forfeited | 78,667 |
Shares Available for Grant, RSUs vested | 0 |
Shares Available for Grant, Options granted | (575,200) |
Shares Available for Grant, Options exercised | 0 |
Shares Available for Grant, Options forfeited | 228,961 |
Shares Available for Grant, Options expired | 145,965 |
Shares Available for Grant, Ending Balance | 303,358 |
Number of Shares, Beginning Balance | 1,792,286 |
Number of Shares, Additional options authorized | 0 |
Number of Shares, Options granted | 575,200 |
Number of Shares, Options forfeited | (228,961) |
Number of Shares, Options expired | (145,965) |
Number of Shares, Ending Balance | 1,992,560 |
Weighted-Average Exercise Price, Beginning Balance | $ / shares | $ 6.15 |
Weighted-Average Exercise Price, Additional options authorized | $ / shares | 0 |
Weighted-Average Exercise Price, Options granted | $ / shares | 2.05 |
Weighted-Average Exercise Price, Options exercised | $ / shares | 0 |
Weighted-Average Exercise Price, Options forfeited | $ / shares | 4.89 |
Weighted-Average Exercise Price, Options expired | $ / shares | 4.96 |
Weighted-Average Exercise Price, Ending Balance | $ / shares | $ 5.16 |
Number of RSU Shares, forfeited | (78,667) |
Number of RSU Shares, vested | 0 |
Restricted Stock Grants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Available for Grant | (89,684) |
Shares Available for Grant | 89,684 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Available for Grant | (207,500) |
Shares Available for Grant, RSUs forfeited | 78,667 |
Shares Available for Grant, RSUs vested | 94,428 |
Number of RSU Shares, Beginning Balance | 306,245 |
Shares Available for Grant | 207,500 |
Number of RSU Shares, forfeited | (78,667) |
Number of RSU Shares, vested | (94,428) |
Number of RSU Shares, Ending Balance | 340,650 |
Weighted Average Grant- Date Fair Value, Unvested beginning balance | $ / shares | $ 5.69 |
Weighted- Average Grant Date Fair Value, RSUs granted | $ / shares | 2.17 |
Weighted- Average Grant Date Fair Value, RSUs forfeited | $ / shares | 4.19 |
Weighted- Average Grant Date Fair Value, RSUs vested | $ / shares | 5.60 |
Weighted Average Grant- Date Fair Value, Unvested ending balance | $ / shares | $ 3.92 |
Stock Incentive Plans - Weighte
Stock Incentive Plans - Weighted-Average Assumptions Used to Estimated Fair Value of Share-Based Awards (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 6 months | 6 months | 6 months | 6 months |
Expected volatility | 98.58% | 77.05% | 77.42% | 85.97% |
Risk-free interest rate | 1.13% | 0.49% | 0.85% | 0.45% |
Expected dividend yield | 0.00% | 0.00% | 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) | 5 years 8 months 12 days | 5 years 6 months | 5 years 10 months 24 days | 5 years 10 months 24 days |
Risk-free interest rate, minimum | 1.85% | 1.18% | 1.85% | 1.13% |
Risk-free interest rate, maximum | 1.98% | 1.29% | 2.12% | 1.65% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum [Member] | Shares of common stock subject to outstanding options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 57.80% | 45.81% | 53.07% | 39.60% |
Maximum [Member] | Shares of common stock subject to outstanding options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 60.60% | 46.44% | 60.60% | 46.44% |
Stock Incentive Plans - Summa72
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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share based compensation, Total expensed | $ 430 | $ 530 | $ 1,316 | $ 1,511 |
Cost of testing [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share based compensation, Total expensed | 38 | 38 | 157 | 105 |
Research and Development Expense [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share based compensation, Total expensed | 104 | 109 | 279 | 321 |
Sales and marketing [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share based compensation, Total expensed | 32 | 47 | 127 | 118 |
General and administrative [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share based compensation, Total expensed | $ 256 | $ 336 | $ 753 | $ 967 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Benefit for income taxes | $ 178 | $ 449 | $ 837 | $ 888 |
Income tax benefit on amortization of acquired intangible assets | $ 200 | $ 800 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($)Segment | Sep. 30, 2017USD ($)Segment | |
Segment Reporting [Abstract] | ||
Number of reportable segments | Segment | 2 | 2 |
Intersegment sales | $ | $ 0 | $ 0 |
Segment Reporting - Operating R
Segment Reporting - Operating Results of Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 12,191 | $ 12,475 | $ 35,821 | $ 29,771 | |
Operating loss | (3,864) | (4,933) | (16,007) | (18,471) | |
Depreciation and amortization | 919 | 1,068 | 2,740 | 2,195 | |
Total assets | 75,093 | 75,093 | $ 76,730 | ||
CareDx [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 8,319 | 8,721 | 24,905 | 22,543 | |
Operating loss | (2,876) | (2,910) | (10,996) | (14,724) | |
Depreciation and amortization | 223 | 301 | 721 | 861 | |
Total assets | 38,440 | 38,440 | 41,169 | ||
Olerup [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 3,872 | 3,754 | 10,916 | 7,228 | |
Operating loss | (988) | (2,023) | (5,011) | (3,747) | |
Depreciation and amortization | 696 | $ 767 | 2,019 | $ 1,334 | |
Total assets | $ 36,653 | $ 36,653 | $ 35,561 |
Segment Reporting - Reportable
Segment Reporting - Reportable Revenues by Geographic Regions (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 12,191 | $ 12,475 | $ 35,821 | $ 29,771 |
North America [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 9,393 | 10,131 | 27,964 | 26,461 |
Europe, Middle East and Africa [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,569 | 2,313 | 7,136 | 3,168 |
Latin America [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 104 | 31 | 356 | 142 |
Australia [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 125 | $ 0 | $ 365 | $ 0 |
Segment Reporting - Long-Lived
Segment Reporting - Long-Lived Assets Consisting of Property and Equipment, Net by Geographic Regions (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 2,281 | $ 2,931 |
North America [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | 1,372 | 2,052 |
Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | 798 | 879 |
Australia [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 111 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ / shares in Units, $ in Millions | Nov. 09, 2017Employee$ / sharesshares | Oct. 10, 2017USD ($)$ / sharesshares | Oct. 04, 2017$ / sharesshares | Oct. 12, 2017$ / shares | Oct. 09, 2017$ / sharesshares | Oct. 05, 2017$ / sharesshares | Sep. 30, 2017$ / sharesshares | Jul. 03, 2017$ / sharesshares | Jul. 02, 2017$ / sharesshares | Mar. 15, 2017$ / shares | Dec. 31, 2016$ / shares | Jun. 15, 2016shares |
Subsequent Event [Line Items] | ||||||||||||
Warrants outstanding | shares | 1,002,507 | |||||||||||
Stock options exchange offer, exercise price | $ / shares | $ 5.16 | $ 6.15 | ||||||||||
JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Exercise Price | $ / shares | $ 5 | |||||||||||
Conversion price per share | $ / shares | $ 4.40 | $ 4.56 | $ 4.56 | |||||||||
Common Stock [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Warrants outstanding | shares | 4,506,478 | |||||||||||
Common Stock [Member] | JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Warrants outstanding | shares | 1,296,679 | 1,250,000 | ||||||||||
Exercise Price | $ / shares | $ 4.82 | $ 5 | ||||||||||
2017 Public Offering [Member] | JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Conversion price per share | $ / shares | $ 4.40 | |||||||||||
2017 Public Offering [Member] | Common Stock [Member] | JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Warrants outstanding | shares | 1,296,679 | |||||||||||
Exercise Price | $ / shares | $ 4.82 | |||||||||||
Over-allotments [Member] | Common Stock [Member] | JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Warrants outstanding | shares | 1,332,620 | |||||||||||
Exercise Price | $ / shares | $ 4.69 | |||||||||||
Subsequent Event [Member] | 2008 Equity Incentive Plan [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Stock options exchange offer, exercise price | $ / shares | $ 12 | |||||||||||
Subsequent Event [Member] | Voluntary Employee Stock Option Exchange Offer [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Stock options exchange offer, exercise price | $ / shares | $ 5.49 | |||||||||||
Shares of common stock subject to stock options eligible for exchange under exchage offer | shares | 301,136 | |||||||||||
Options tendered to purchase shares of common stock under exchange offer | shares | 285,315 | |||||||||||
Number of employees tendered options to purchase shares of common stock under exchange offer | Employee | 26 | |||||||||||
Options to purchase shars of common stock exchanged under exchange offer | shares | 174,330 | |||||||||||
Subsequent Event [Member] | 2017 Public Offering [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Common stock shares issued | shares | 4,992,840 | 4,341,600 | ||||||||||
Common stock offer price per share | $ / shares | $ 4 | $ 4 | ||||||||||
Exercisable period for option to purchase additional shares of common stock by the underwriters | 30 days | |||||||||||
Maximum additional shares granted to underwriters upon exercise of option | shares | 651,240 | |||||||||||
Net proceeds from common stock shares issued at public offering | $ | $ 18.3 | |||||||||||
Subsequent Event [Member] | 2017 Public Offering [Member] | JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Conversion price per share | $ / shares | $ 4.33 | $ 4.34 | ||||||||||
Subsequent Event [Member] | 2017 Public Offering [Member] | Common Stock [Member] | JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Warrants outstanding | shares | 1,338,326 | 1,332,620 | ||||||||||
Exercise Price | $ / shares | $ 4.67 | $ 4.69 | ||||||||||
Subsequent Event [Member] | Over-allotments [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Common stock shares issued | shares | 651,240 | |||||||||||
Subsequent Event [Member] | Over-allotments [Member] | JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Conversion price per share | $ / shares | $ 4.33 | $ 4.34 | ||||||||||
Subsequent Event [Member] | Over-allotments [Member] | Common Stock [Member] | JGB Debt [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Common stock shares issued | shares | 651,240 | |||||||||||
Warrants outstanding | shares | 1,338,326 | 1,332,620 | ||||||||||
Exercise Price | $ / shares | $ 4.67 | $ 4.69 |