Pacific Biosciences of California (PACB) 10-Q 5 Nov 15 2015 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 31, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Trading Symbol	PACB
Entity Registrant Name	PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Entity Central Index Key	1,299,130
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		77,041,008

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets
Cash and cash equivalents	$ 27,208	$ 36,449
Investments	31,701	64,899
Accounts receivable	4,164	3,406
Inventory	11,621	11,335
Prepaid expenses and other current assets	11,513	1,671
Total current assets	86,207	117,760
Property and equipment, net	7,855	6,601
Other long-term assets	5,715	162
Total assets	99,777	124,523
Current liabilities
Accounts payable	6,097	5,608
Accrued expenses	11,342	11,441
Deferred service revenue, current	6,303	6,121
Deferred contractual revenue, current	14,385	6,785
Other liabilities, current	627	1,534
Total current liabilities	38,754	31,489
Deferred service revenue, non-current	1,250	1,129
Deferred contractual revenue, non-current	1,347	19,735
Other liabilities, non-current	1,323	2,153
Notes payable	14,808	14,124
Financing derivative	925	944
Total liabilities	$ 58,407	$ 69,574
Commitments and contingencies
Stockholders' equity
Preferred Stock, $0.001 par value: Authorized 50,000 shares; No shares issued or outstanding
Common Stock, $0.001 par value: Authorized 1,000,000 shares; Issued and outstanding 75,705 shares at September 30, 2015 and 73,927 shares at December 31, 2014	$ 76	$ 74
Additional paid-in-capital	753,048	736,339
Accumulated other comprehensive income	6	9
Accumulated deficit	(711,760)	(681,473)
Total stockholders' equity	41,370	54,949
Total liabilities and stockholders' equity	$ 99,777	$ 124,523

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Condensed Consolidated Balance Sheets [Abstract]
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	50,000,000	50,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	1,000,000,000	1,000,000,000
Common Stock, shares issued	75,705,000	73,927,000
Common Stock, shares outstanding	75,705,000	73,927,000

Condensed Consolidated Statemen

Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue:
Product revenue	$ 7,570	$ 6,762	$ 27,703	$ 22,376
Service and other revenue	2,751	2,165	8,010	6,226
Contractual revenue	3,596	11,696	20,788	15,088
Total revenue	13,917	20,623	56,501	43,690
Cost of Revenue:
Cost of product revenue	5,119	5,608	23,289	19,048
Cost of service and other revenue	2,247	1,853	6,228	5,678
Total cost of revenue	7,366	7,461	29,517	24,726
Gross profit	6,551	13,162	26,984	18,964
Operating Expense:
Research and development	16,162	11,693	45,688	35,899
Sales, general and administrative	10,818	9,882	32,411	28,025
Gain on lease amendments	(23,043)		(23,043)
Total operating expense	3,937	21,575	55,056	63,924
Operating expense, net	2,614	(8,413)	(28,072)	(44,960)
Interest expense	(741)	(716)	(2,153)	(2,103)
Other expense, net	(52)	(34)	(62)	(122)
Net income (loss)	1,821	(9,163)	(30,287)	(47,185)
Other comprehensive income (loss):
Unrealized gain (loss) on investments	(6)	(19)	(3)	9
Comprehensive income (loss)	$ 1,815	$ (9,182)	$ (30,290)	$ (47,176)
Net income (loss) per share:
Basic	$ 0.02	$ (0.13)	$ (0.41)	$ (0.68)
Diluted	$ 0.02	$ (0.13)	$ (0.41)	$ (0.68)
Weighted average shares outstanding used in calculating net income (loss) per share
Basic	75,205	70,740	74,699	69,716
Diluted	80,479	70,740	74,699	69,716

Condensed Consolidated Stateme5

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities
Net income (loss)	$ (30,287)	$ (47,185)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation	2,694	3,311
Amortization of debt discount and financing costs	699	579
Stock-based compensation	9,813	6,944
Noncash portion of gain on lease amendments	(3,043)
Other items	21	242
Changes in assets and liabilities
Accounts receivable	(758)	376
Inventory	(1,990)	(1,348)
Prepaid expenses and other assets	(15,410)	85
Accounts payable	364	4,128
Accrued expenses	1,523	821
Deferred service revenue	303	1,661
Deferred contractual revenue	(10,788)	(5,088)
Other liabilities	(316)	(637)
Net cash used in operating activities	(47,175)	(36,111)
Cash flows from investing activities
Purchase of property and equipment	(2,131)	(1,132)
Disposal of property and equipment	12
Purchase of investments	(43,715)	(97,468)
Sales of investments	8,317
Maturities of investments	68,553	119,673
Net cash provided by investing activities	31,036	21,073
Cash flows from financing activities
Proceeds from issuance of common stock from equity plans	5,465	3,319
Proceeds from issuance of common stock from at-the-market equity offering, net of issuance costs	1,433	20,768
Net cash provided by financing activities	6,898	24,087
Net increase (decrease) in cash and cash equivalents	(9,241)	9,049
Cash and cash equivalents at beginning of period	36,449	26,362
Cash and cash equivalents at end of period	27,208	$ 35,411
Supplemental disclosure of non-cash investing and financing activities
Leased instruments that were transferred from inventory to property and equipment	$ 1,704

Overview

Overview	9 Months Ended
	Sep. 30, 2015
Overview [Abstract]
Overview	NOTE 1. OVERVIEW Pacific Biosciences of California, Inc. (“Pacific Biosciences”, the “Company”, “we”, “us”) has commercialized the PacBio RS II Sequencing System to help scientists solve genetically complex problems. Based on our novel Single Molecule, Real-Time (SMRT®) technology, our products enable: de novo genome assembly to finish genomes in order to more fully identify, annotate and decipher genomic structures; full-length transcript analysis to improve annotations in reference genomes, characterize alternatively spliced isoforms and find novel genes; targeted sequencing to more comprehensively characterize genetic variations; and DNA base modification identification to help characterize epigenetic regulation and DNA damage. Our technology combines very high consensus accuracy and long read lengths with the ability to detect real-time kinetic information. In September 2015, we announced that we had launched a new nucleic acid sequencing platform , the Sequel™ System , which provides higher throughput, more scalability, a reduced footprint and lower sequencing project costs compared to the PacBio® RS II System, while maintaining the existing benefits of the company’s SMRT Technology. The names “Pacific Biosciences,” “PacBio,” “SMRT,” “SMRTbell , ” “Sequel” and our logo are our trademarks.

Summary Of Significant Accounti

Summary Of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Summary Of Significant Accounting Policies [Abstract]
Summary Of Significant Accounting Policies	NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) of Pacific Biosciences of California, Inc. have been prepared on a consistent bas is with our December 31, 2014 audited Consolidated Financial Statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. Certain prior year amounts in the Financial Statements and notes thereto have been reclassified to conform to the current year presentation. The Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and, as permitted by such rules and regulations, omit certain information and footnote disclosures necessary to present the statements in accordance with U.S. generally accepted accounting principles (“GAAP”). These Financial Statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014 . The results of operations for the first nine- month period of 2015 are not necessarily indicative of the results to be expected for the entire year or any future periods. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements. Our estimates include, but are not limited to, the valuation of inventory, revenue valuation, the valuation of a financing derivative and long-term notes, the valuation and recognition of share-based compensation, the delivery period for collaboration agreements, the useful lives assigned to long-lived assets, and the computation provisions for income taxes. Actual results could differ materially from these estimates. During the first quarter of 2015, we revised the estimated period over which the delivery of elements pursuant to the Development, Commercialization and License Agreement (the “Roche Agreement”) with F. Hoffman-La Roche Ltd (“Roche”) is expected to occur, due to an increased level of certainty regarding the development period. As a result, we are, on a prospective basis, recognizing the remaining deferred contractual revenue associated with the upfront payment received under the Roche Agreement over the revised estimated remaining development period. For the three- and nine-month periods ended September 30, 2015, th is change in estimate increased contractual revenue by $1.9 million and $5.7 million, respectively , increased our basic net income per share for the three-month period ended September 30, 2015 by $0.03 per share , increased our diluted net income per share for the three-month period ended September 30, 2015 by $0.0 2 per share , and decreased our net loss per share for the nine-month period ended September 30, 2015 by $0.08 per share. Fair Value of Financial Instruments Assets and liabilities measured at fair value on a recurring basis The following table sets forth the fair value of our financial assets and liabilities measured on a recurring basis as of September 30 , 2015 and December 31, 2014: (in thousands) September 30, 2015 December 31, 2014 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Cash and money market funds $ $ — $ — $ $ $ — $ — $ Commercial paper — — — — Total cash and cash equivalents — — Investments: Commercial paper — — — — Corporate debt securities — — — — Asset backed securities — — — — Total investments — — — — Total assets measured at fair value $ $ $ — $ $ $ $ — $ Liabilities Financing derivative $ — $ — $ $ $ — $ — $ $ We classify our cash deposits and money market funds within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. We classify our investments as Level 2 instruments based on market pricing and other observable inputs. We did not classify any of our investments within Level 3 of the fair value hierarchy. During the nine- month period s ended September 30 , 2015 and 2014 , there were no impairments of our investments. The estimated fair value of the Financing Derivative l iability (as defined in Note 6. Notes Payable) was determined using Level 3 inputs, or significant unobservable inputs. Changes to the estimated fair value of the Financing Derivative are recorded in “Other income (expense), net” in the condensed consolidated statements of operations and comprehensive income ( loss ) . The following table provides the changes in the estimated fair value of the Financial Derivative during the nine -month period ended September 30 , 2015 (in thousands): Financial Derivative Amount Balance as of December 31, 2014 $ Gain on change in estimated fair value Balance as of September 30, 2015 $ During the nine -month period ended September 30 , 2015 there were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis and the valuation techniques used did not change compared to our established practice. Financial assets and liabilities not measured at fair value on a recurring basis The carrying amount of our accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other liabilities, current, approximate fair value due to their short maturities. The carrying value of our other liabilities, non-current , approximates fair value due to the time to maturity and prevailing market rates. We determined the estimated fair value of the Notes (as defined in Note 6 . Notes Payable) using Level 3 inputs, or significant unobservable inputs. The estimated fair value of the Notes was determined by comparing the difference between the estimated fair value of the Notes with and without the Financing Derivative by calculating the respective present values from future cash flows using a weighted average market yield of 18.3% and 19.5% at September 30, 2015 and December 31, 2014, respectively. The estimated fair value and carrying value of the Notes are as follows (in thousands): September 30, 2015 December 31, 2014 Fair Value Carrying Value Fair Value Carrying Value Notes payable $ $ $ $ Net Income (Loss) per Share Basic net income (loss) per share and diluted net income (loss) per share are presented in conformity with ASC 260 Earnings per Share , for all periods presented. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of shares of common stock outstanding and potential shares assuming the dilutive effect of outstanding stock options, warrants and common stock issuable pursuant to our employee stock purchase plan, or ESPP, using the treasury stock method. The following table presents the calculation of weighted average shares of common stock used in the computations of basic and diluted net income (loss) per share amounts presented in the accompanying condensed consolidated statements of operations and comprehensive income (loss) (in thousands, except per share amounts): Three-Month Periods Ended Nine-Month Periods Ended September 30, September 30, 2015 2014 2015 2014 Net income (loss) $ $ $ $ Basic Weighted average shares used in computing basic net income (loss) per share Basic net income (loss) per share $ $ $ $ Diluted Weighted average shares used in computing basic net income (loss) per share Add: weighted average stock options — — — Add: weighted average warrants — — — Weighted average shares used in computing diluted net income (loss) per share Diluted net income (loss) per share $ $ $ $ The following outstanding common stock options and warrants to purchase common stock were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Options to purchase common stock Warrants to purchase common stock — Recent Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2014-09, Revenue from Contracts with Customers , requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14 , Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. Accordingly, the updated standard is effective for us in the first quarter of 201 8 . We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which changes the presentation of debt issuance costs in financial statements. This ASU requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. This ASU is effective for the Company’s annual report ing periods beginning after December 15, 201 5 and is effective for us in the first quarter of 201 6 . Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. Early adoption is permitted for financial statements that have not been previously issued. ASU 2015-03 is not expected to have a material impact on our condensed consolidated financial statements and we will adopt it for the year ended December 31, 2015. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . ASU 2015-11 simplifies the subsequent measurement of inventory by replacing today’s lower of cost or market test with a lower of cost and net realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last-in first-out (LIFO) and the retail inventory method (RIM). Entities that use LIFO or RIM will continue to use existing impairment models (e.g., entities using LIFO would apply the lower of cost or market test). This ASU is effective for the Company’s annual report periods beginning after December 15, 2016 and is effective for us in the first quarter of 201 7 . Early adoption is permitted as of the beginning of an interim or annual reporting period. The new guidance must be applied prospectively after the date of adoption . We are currently in the process of evaluating the impact of adopting this ASU on our financial statements and related disclosures.

Contractual Revenue

Contractual Revenue	9 Months Ended
	Sep. 30, 2015
Contractual Revenue [Abstract]
Contractual Revenue	NOTE 3. CONTRACTUAL REVENUE During September 2013 , we entered into a Development, Commercialization and License Agreement (the “Roche Agreement”) with F. Hoffman-La Roche Ltd (“Roche”), pursuant to which we account for, and recognize as revenue, the up-front payment received thereunder using the proportional performance method over the periods in which the delivery of elements pursuant to the agreement occurs. We recognize revenue using a straight - line convention over the service periods of the deliverables as this method approximates our performance of services pursuant to the agreement . Out of the $35.0 million upfront cash payment received, quarterly amortization of $1.7 million has been recognized as contractual revenue from the fourth quarter of 2013 to the fourth quarter of 2014. Beginning in the three-m onth period ended March 31, 2015, we revised the estimated development period related to our contractual revenue amortization based on increasing certainty of the development time on a prospective approach. This change in estimate resulted in $1.9 million of additional contractual revenue being recognized per quarter and a total of $3.6 million as quarterly amortization . We recognized a total of $3.6 million and $10.8 million of amortization related to the Roche Agreement for the three- and nine -month period s ended September 30, 2015, respectively. The additional contractual revenue due to the revision had a 100% margin and increased our net income for the three-month period ended September 30, 2015 by $1.9 million and decreased our net loss for the nine-month period ended September 30, 2015 by $5.7 million, increased our basic net income per share for three-month period ended September 30, 2015 by $0.03 per share , increased our diluted net income per share for the three-month period ended September 30, 2015 by $0.0 2 per share , and decreased our net loss per share for nine-month period ended September 30, 2015 by $0.08 per share. At September 30, 2015, going forward, on a prospective basis, we will recognize the remaining deferred contractual revenue of $15.7 million associated with upfront payment received under the Roche Agreement over the revised estimated remaining de livery period. In addition to the deliverables above, the Roche Agreement provides for additional payments totaling up to $40.0 million upon the achievement of certain development milestones. Consideration from development milestones is recognized in the period in which a milestone is achieved only if the milestone is considered substantive in its entirety. During August 2014, we achieved the first such development milestone and we reco gnized the related $10.0 million as contractual revenue for the quarter ended September 30, 2014 . D uring April 2015, we achieved the second development milestone and we recognized the related $10.0 million as contractual revenue for the quarter ended June 30, 2015.

Cash, Cash Equivalents And Inve

Cash, Cash Equivalents And Investments	9 Months Ended
	Sep. 30, 2015
Cash, Cash Equivalents And Investments [Abstract]
Cash, Cash Equivalents And Investments	NOTE 4. CASH, CASH EQUIVALENTS AND INVESTMENTS The following table s summarize our cash, cash equivalents and investments as of September 30, 2015 and December 31, 201 4 (in thousands): September 30, 2015 Gross Gross Amortized unrealized unrealized Fair Cost gains losses Value Cash and cash equivalents: Cash and money market funds $ $ — $ — $ Commercial paper — Total cash and cash equivalents — Investments: Commercial paper — Corporate debt securities — Asset backed securities — Total investments Total cash, cash equivalents and investments $ $ $ $ December 31, 2014 Gross Gross Amortized unrealized unrealized Fair Cost gains losses Value Cash and cash equivalents: Cash and money market funds $ $ — $ — $ Commercial paper — Total cash and cash equivalents — Investments: Commercial paper — Corporate debt securities Asset backed securities Total investments Total cash, cash equivalents and investments $ $ $ $ The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of September 30, 2015: (in thousands) Fair Value Due in one year or less $ Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2015
Inventory [Abstract]
Inventory	NOTE 5 . INVENTORY Inventory As of September 30, 2015 and December 31, 2014, inventory consisted of the following components: September 30, December 31, (in thousands) 2015 2014 Purchased materials $ $ Work in process Finished goods Inventory $ $

Notes Payable

Notes Payable	9 Months Ended
	Sep. 30, 2015
Notes Payable [Abstract]
Notes Payable	NOTE 6 . NOTES PAYABLE Pursuant to a Facility Agreement (the “Facility Agreement”) we entered into with entities affiliated with Deerfield Management Company, L.P. (collectively, “Deerfield”) during February 2013, we issued promissory notes in the aggregate principal amount of $20.5 million (the “Notes”). The Notes bear simple interest at a rate of 8.75% per annum, payable quarterly in arrears commencing on April 1, 2013. In connection with the execution of the Facility Agreement, we issued warrants to purchase an aggregate of 5,500,000 shares of common stock immediately exercisable at an exercise price per share initially equal to $2.63 (the “Warrants”). In addition, the Facility Agreement require s us to maintain consolidated cash and cash equivalents on the last day of each calendar quarter of not less than $2.0 million. As security for our repayment of our obligations under the Facility Agreement, we granted to Deerfield a security interest in substantially all of our property . Financing Derivative A number of features embedded in the Notes to the Facility Agreement required accounting for as a derivative, including the indemnification of certain withholding taxes and the acceleration of debt upon (i) a qualified financing, (ii) an Event of Default, (iii) a Major Transaction, and (iv) the exercise of the warrant via offset to debt principal. These features represent a single derivative (the “Financing Derivative”) that was bifurcated from the debt instrument and accounted for as a liability at fair value, with changes in fair value between reporting periods recorded in other income (expense), net. The estimated fair value of the Financing Derivative was determined by comparing the difference between the fair value of the Notes with and without the Financing Derivative by calculating the respective present values from future cash flows using an 18.3% and 19.5% weighted average market yield at September 30, 2015 and December 31, 2014, respectively. The estimated fair value of the Financing Derivative as of both September 30, 2015 and December 31, 2014 was $0.9 million. Notes We initially recorded the Notes and Warrants at $14.1 million and $6.4 million, respectively, based upon the relative fair value allocation of the $20.5 million of proceeds. The carrying value of the Notes at the inception of the debt was $12.8 million, resulting in an original issue discount of $7.7 million. As of September 30 , 2015 and December 31, 2014 , debt discount of $5.7 million a nd $6.4 million, respectively, remain ed to be amortized through February 2020 , the maturity of the Notes.

Leases

Leases	9 Months Ended
	Sep. 30, 2015
Leases [Abstract]
Leases	NOTE 7. LEASES Lease Amendment Agreement On July 23, 2015, we entered into a Lease Amendment Agreement (the “Lease Amendment Agreement”) with Peninsula Innovation Partners, LLC (the “Existing Landlord”), which amends the terms and conditions of certain of our existing Menlo Park facility real property leases. The Lease Amendment Agreement provides for, among other things, amendments of the term for certain of the existing leases, the termination of all renewal, expansion and extension rights contained in any of the existing leases with the Existing Landlord (including our options to extend the terms for certain of the existing leases for two consecutive five-year periods), as well as rent abatement for a specified period of time. As consideration for our agreement to amend the existing leases pursuant to the Lease Amendment Agreement, and subject to the terms and conditions contained therein, we are eligible to receive up to four payments of $5.0 million each from the Existing Landlord over time (the “Landlord Payments”), and rent abatement for the remainder of the lease. In the event that we breach any of the leases and fail to cure such breach within the time permitted under the Lease Amendment Agreement , the Existing Landlord would have no obligation to make the last $5.0 million payment. If we did not obtain or waive receipt of an architectural approval and a change of use permit with respect to our proposed new premises at 1315 O’Brien Drive, Menlo Park, California (collectively, the “Use CUPs”) by September 30, 2015, (i) the Existing Landlord would have had no obligation to make the Landlord Payments, (ii) the amendments of the term for the existing leases would have been of no further force or effect, (iii) the period for our delivery of option notices with respect to extended terms in the applicable existing leases would have been extended until October 15, 2015, (iv) the rent abatement would have been terminated and repaid by us, and (v) certain related terms and conditions of the Lease Amendment Agreement would have been of no further force or effect. However, on September 1, 2015 , the permitting process related to the Use CUPs was completed and the related contingencies satisfied. As a result, our rent payments were reduced to zero for the remaining term of our existing Menlo Park facility real property leases, the aggregate of $20.0 million Landlord Payments became receivable, any associated financing obligation was revalued, and the accrual relating to the previously abated rent of $2.1 million was released. In connection with this, future rent expense associated with these leases was reduced to zero and we recorded $23.0 million in “Gain on lease amendments” in the condensed consolidated statements of operations and comprehensive income (loss) during the third quarter of 2015. Of the $20.0 million in Landlord Payments, the first $5.0 million Landlord Payment was received in September 2015, $10.0 million was recorded as a short term receivable in “Prepaid and Other Current Assets” and the final $5.0 million was recorded in “Other Long-term Assets” as of September 30, 2015. We do not believe that there are any remaining performance obligations relating to the remaining Landlord Payments. Due to the one-time gain on lease amendments, we recorded our first profitable quarter for our quarter ended September 30, 2015. We do not anticipate that we will otherwise achieve profitability in the near term. O’Brien Lease Agreement On July 22, 2015, we entered into a new lease agreement (the “O’Brien Lease”) with respect to 1315 O’Brien Drive, Menlo Park, California (the “ O’Brien Premises ”) . The term of the O’Brien Lease is one hundred thirty-two ( 132 ) months, commencing on the date that is the later of April 15, 2016 or the date on which the O’Brien Premises landlord has substantially completed certain shell improvements and tenant improvements. Base monthly rent shall be abated for the first six (6) months of the lease term and thereafter will be $540,000 per month during the first year of the lease term, with specified annual increases thereafter until reaching $711,000 per month during the last twelve (12) months of the lease term. We are required to pay $2,340,000 in prepaid rent which will be applied to the monthly rent installments due for the first to fourth months, and the operating expenses for the first month, after the rent abatement period. We were also required to establish a deposit of $4.5 million in the form of a letter of credit in October 2015. The landlord is obligated to construct certain shell improvements at the landlord’s cost and expense and provide us with improvement allowances in the amount of $12.6 million. Under the O’Brien Lease, we expect to pay approximately $80 million in rent and $24 million in operating expenses over the expected lease term. In addition to the lease payments, we are also required to reimburse the landlord for certain improvement costs in excess of the tenant improvement allowances provided. These improvement costs, along with the costs associated with the anticipated move to the O’Brien Premises, are expected to be substantial in nature.

Stockholders' Equity And Share-

Stockholders' Equity And Share-Based Compensation	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity And Share-Based Compensation [Abstract]
Stockholders' Equity And Share-Based Compensation	NOTE 8 . STOCK HOLDERS’ EQUITY AND SHARE-BASED COMPENSATION Equity Offering During the nine -month period ended September 30, 201 5 , we issued 240,843 shares of our common stock at an average price of $6.13 per share through our “at-the-market” offering program, resulting in net proceeds of $1.4 million. As of September 30, 2015, $28.5 million of common stock remained available for future sales; however, we are not obligated to make any such sales under this program. From October 1, 2015 through November 2, 2015, we issued 2.7 million shares of our common stock at an average price of $7.43 per share through our “at-the-market” offering, resulting in net proceeds of $19.5 million . Subject to certain exceptions set forth in our existing Facility A greement, holders of our Notes may elect to receive 25% of the net proceeds from financing activities that include an equity component as payment of the Notes. However, holders representing a majority of the aggregate principal amount of the outstanding Notes have waived such right in connection with the issuance and sale of shares of common stock under our current “at-the-market” offering. Warrants As of September 30, 2015, we had outstanding warrants to purchase an aggregate of 5,500,000 shares of our common stock, with an exercise price per share of $2.63 . Equity Plans As of September 30, 2015 , we had three active equity compensation plans : the 2010 Equity Incentive Plan, the 2010 Outside Director Equity Incentive Plan, and the 2010 Employee Stock Purchase Plan (“ ESPP ”) . The following table summarizes stock option activity for all our stock option plans for the nine-month period ended September 30, 2015 (in thousands, except per share amounts): Stock Options Outstanding Weighted Shares available Number average for grant of shares Exercise price exercise price Balances, December 31, 2014 $ 0.70 – 16.00 $ Additional shares reserved Options granted 4.55 – 7.59 Options exercised — 0.70 – 5.18 Options canceled 1.16 – 15.98 Balances, September 30, 2015 $ 0.70 – 16.00 $ Shares issued under our ESPP totaled 1,080,913 and 1,325,507 shares during the nine-month periods ended September 30, 2015 and 2014, respectively. As of September 30, 201 5 , 397,633 shares of our common stock remain available for issuance under our ESPP. Stock-based Compensation Total stock-based compensation expense consists of the following (in thousands): Three-Month Periods Ended September 30, Nine-Month Periods Ended September 30, 2015 2014 2015 2014 Cost of revenue $ $ $ $ Research and development Sales, general and administrative Total stock-based compensation expense $ $ $ $ W e estimated the fair value of employee stock options on the grant date using the Black-Scholes option pricing model. The estimated fair value of employee stock options is amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options was estimated using the following weighted average assumptions: Three-Month Periods Ended September 30, Nine-Month Periods Ended September 30, Stock Option 2015 2014 2015 2014 Expected term in years 6.1 6.1 6.1 6.1 Expected volatility 70% 70% 70% 70% Risk-free interest rate 1.8% 1.9% 1.6% 1.9% Dividend yield — — — — We estimate the value of employee stock purchase rights on the grant date using the Black-Scholes option pricing model. The fair value of shares to be purchased under our ESPP was estimated using the following assumptions: Three-Month Periods Ended September 30, Nine-Month Periods Ended September 30, ESPP 2015 2014 2015 2014 Expected term in years 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 70% 70% 70% 70% Risk-free interest rate 0.3% - 0.7% 0.1% - 0.5% 0.1% - 0.7% 0.1% - 0.5% Dividend yield — — — —

Summary Of Significant Accoun14

Summary Of Significant Accounting Policies (Policy)	9 Months Ended
	Sep. 30, 2015
Summary Of Significant Accounting Policies [Abstract]
Basis Of Presentation	Basis of Presentation In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) of Pacific Biosciences of California, Inc. have been prepared on a consistent bas is with our December 31, 2014 audited Consolidated Financial Statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. Certain prior year amounts in the Financial Statements and notes thereto have been reclassified to conform to the current year presentation. The Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and, as permitted by such rules and regulations, omit certain information and footnote disclosures necessary to present the statements in accordance with U.S. generally accepted accounting principles (“GAAP”). These Financial Statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014 . The results of operations for the first nine- month period of 2015 are not necessarily indicative of the results to be expected for the entire year or any future periods.
Use Of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements. Our estimates include, but are not limited to, the valuation of inventory, revenue valuation, the valuation of a financing derivative and long-term notes, the valuation and recognition of share-based compensation, the delivery period for collaboration agreements, the useful lives assigned to long-lived assets, and the computation provisions for income taxes. Actual results could differ materially from these estimates. During the first quarter of 2015, we revised the estimated period over which the delivery of elements pursuant to the Development, Commercialization and License Agreement (the “Roche Agreement”) with F. Hoffman-La Roche Ltd (“Roche”) is expected to occur, due to an increased level of certainty regarding the development period. As a result, we are, on a prospective basis, recognizing the remaining deferred contractual revenue associated with the upfront payment received under the Roche Agreement over the revised estimated remaining development period. For the three- and nine-month periods ended September 30, 2015, th is change in estimate increased contractual revenue by $1.9 million and $5.7 million, respectively , increased our basic net income per share for the three-month period ended September 30, 2015 by $0.03 per share , increased our diluted net income per share for the three-month period ended September 30, 2015 by $0.0 2 per share , and decreased our net loss per share for the nine-month period ended September 30, 2015 by $0.08 per share.
Fair Value Of Financial Instruments	Fair Value of Financial Instruments Assets and liabilities measured at fair value on a recurring basis The following table sets forth the fair value of our financial assets and liabilities measured on a recurring basis as of September 30 , 2015 and December 31, 2014: (in thousands) September 30, 2015 December 31, 2014 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Cash and money market funds $ $ — $ — $ $ $ — $ — $ Commercial paper — — — — Total cash and cash equivalents — — Investments: Commercial paper — — — — Corporate debt securities — — — — Asset backed securities — — — — Total investments — — — — Total assets measured at fair value $ $ $ — $ $ $ $ — $ Liabilities Financing derivative $ — $ — $ $ $ — $ — $ $ We classify our cash deposits and money market funds within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. We classify our investments as Level 2 instruments based on market pricing and other observable inputs. We did not classify any of our investments within Level 3 of the fair value hierarchy. During the nine- month period s ended September 30 , 2015 and 2014 , there were no impairments of our investments. The estimated fair value of the Financing Derivative l iability (as defined in Note 6. Notes Payable) was determined using Level 3 inputs, or significant unobservable inputs. Changes to the estimated fair value of the Financing Derivative are recorded in “Other income (expense), net” in the condensed consolidated statements of operations and comprehensive income ( loss ) . The following table provides the changes in the estimated fair value of the Financial Derivative during the nine -month period ended September 30 , 2015 (in thousands): Financial Derivative Amount Balance as of December 31, 2014 $ Gain on change in estimated fair value Balance as of September 30, 2015 $ During the nine -month period ended September 30 , 2015 there were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis and the valuation techniques used did not change compared to our established practice. Financial assets and liabilities not measured at fair value on a recurring basis The carrying amount of our accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other liabilities, current, approximate fair value due to their short maturities. The carrying value of our other liabilities, non-current , approximates fair value due to the time to maturity and prevailing market rates. We determined the estimated fair value of the Notes (as defined in Note 6 . Notes Payable) using Level 3 inputs, or significant unobservable inputs. The estimated fair value of the Notes was determined by comparing the difference between the estimated fair value of the Notes with and without the Financing Derivative by calculating the respective present values from future cash flows using a weighted average market yield of 18.3% and 19.5% at September 30, 2015 and December 31, 2014, respectively. The estimated fair value and carrying value of the Notes are as follows (in thousands): September 30, 2015 December 31, 2014 Fair Value Carrying Value Fair Value Carrying Value Notes payable $ $ $ $
Net Income (Loss) Per Share	Net Income (Loss) per Share Basic net income (loss) per share and diluted net income (loss) per share are presented in conformity with ASC 260 Earnings per Share , for all periods presented. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of shares of common stock outstanding and potential shares assuming the dilutive effect of outstanding stock options, warrants and common stock issuable pursuant to our employee stock purchase plan, or ESPP, using the treasury stock method. The following table presents the calculation of weighted average shares of common stock used in the computations of basic and diluted net income (loss) per share amounts presented in the accompanying condensed consolidated statements of operations and comprehensive income (loss) (in thousands, except per share amounts): Three-Month Periods Ended Nine-Month Periods Ended September 30, September 30, 2015 2014 2015 2014 Net income (loss) $ $ $ $ Basic Weighted average shares used in computing basic net income (loss) per share Basic net income (loss) per share $ $ $ $ Diluted Weighted average shares used in computing basic net income (loss) per share Add: weighted average stock options — — — Add: weighted average warrants — — — Weighted average shares used in computing diluted net income (loss) per share Diluted net income (loss) per share $ $ $ $ The following outstanding common stock options and warrants to purchase common stock were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Options to purchase common stock Warrants to purchase common stock —
Recent Accounting Pronouncements	Recent Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2014-09, Revenue from Contracts with Customers , requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14 , Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. Accordingly, the updated standard is effective for us in the first quarter of 201 8 . We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which changes the presentation of debt issuance costs in financial statements. This ASU requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. This ASU is effective for the Company’s annual report ing periods beginning after December 15, 201 5 and is effective for us in the first quarter of 201 6 . Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. Early adoption is permitted for financial statements that have not been previously issued. ASU 2015-03 is not expected to have a material impact on our condensed consolidated financial statements and we will adopt it for the year ended December 31, 2015. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . ASU 2015-11 simplifies the subsequent measurement of inventory by replacing today’s lower of cost or market test with a lower of cost and net realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last-in first-out (LIFO) and the retail inventory method (RIM). Entities that use LIFO or RIM will continue to use existing impairment models (e.g., entities using LIFO would apply the lower of cost or market test). This ASU is effective for the Company’s annual report periods beginning after December 15, 2016 and is effective for us in the first quarter of 201 7 . Early adoption is permitted as of the beginning of an interim or annual reporting period. The new guidance must be applied prospectively after the date of adoption . We are currently in the process of evaluating the impact of adopting this ASU on our financial statements and related disclosures.

Summary Of Significant Accoun15

Summary Of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2015
Summary Of Significant Accounting Policies [Abstract]
Summary Of Assets And Liabilities Measured At Fair Value Classified Based On Level Of Input	(in thousands) September 30, 2015 December 31, 2014 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Cash and money market funds $ $ — $ — $ $ $ — $ — $ Commercial paper — — — — Total cash and cash equivalents — — Investments: Commercial paper — — — — Corporate debt securities — — — — Asset backed securities — — — — Total investments — — — — Total assets measured at fair value $ $ $ — $ $ $ $ — $ Liabilities Financing derivative $ — $ — $ $ $ — $ — $ $
Changes In Fair Value Of Financial Derivative	Financial Derivative Amount Balance as of December 31, 2014 $ Gain on change in estimated fair value Balance as of September 30, 2015 $
Estimated Fair Value And Carrying Value of Notes	September 30, 2015 December 31, 2014 Fair Value Carrying Value Fair Value Carrying Value Notes payable $ $ $ $
Computation Of Basic And Diluted Net Loss Per Share	Three-Month Periods Ended Nine-Month Periods Ended September 30, September 30, 2015 2014 2015 2014 Net income (loss) $ $ $ $ Basic Weighted average shares used in computing basic net income (loss) per share Basic net income (loss) per share $ $ $ $ Diluted Weighted average shares used in computing basic net income (loss) per share Add: weighted average stock options — — — Add: weighted average warrants — — — Weighted average shares used in computing diluted net income (loss) per share Diluted net income (loss) per share $ $ $ $
Anti-dilutive Excluded From Computation Of Diluted Net Loss Per Share	Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Options to purchase common stock Warrants to purchase common stock —

Cash, Cash Equivalents And In16

Cash, Cash Equivalents And Investments (Tables)	9 Months Ended
	Sep. 30, 2015
Cash, Cash Equivalents And Investments [Abstract]
Summary Of Cash, Cash Equivalents And Investments	September 30, 2015 Gross Gross Amortized unrealized unrealized Fair Cost gains losses Value Cash and cash equivalents: Cash and money market funds $ $ — $ — $ Commercial paper — Total cash and cash equivalents — Investments: Commercial paper — Corporate debt securities — Asset backed securities — Total investments Total cash, cash equivalents and investments $ $ $ $ December 31, 2014 Gross Gross Amortized unrealized unrealized Fair Cost gains losses Value Cash and cash equivalents: Cash and money market funds $ $ — $ — $ Commercial paper — Total cash and cash equivalents — Investments: Commercial paper — Corporate debt securities Asset backed securities Total investments Total cash, cash equivalents and investments $ $ $ $
Summary Of Contractual Maturities Of Cash Equivalents And Available-For-Sale Investments	(in thousands) Fair Value Due in one year or less $

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory [Abstract]
Components Of Inventory	September 30, December 31, (in thousands) 2015 2014 Purchased materials $ $ Work in process Finished goods Inventory $ $

Stockholders' Equity And Shar18

Stockholders' Equity And Share-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity And Share-Based Compensation [Abstract]
Summary Of Stock Option Activity	Stock Options Outstanding Weighted Shares available Number average for grant of shares Exercise price exercise price Balances, December 31, 2014 $ 0.70 – 16.00 $ Additional shares reserved Options granted 4.55 – 7.59 Options exercised — 0.70 – 5.18 Options canceled 1.16 – 15.98 Balances, September 30, 2015 $ 0.70 – 16.00 $
Schedule Of Stock-Based Compensation Expense	Three-Month Periods Ended September 30, Nine-Month Periods Ended September 30, 2015 2014 2015 2014 Cost of revenue $ $ $ $ Research and development Sales, general and administrative Total stock-based compensation expense $ $ $ $
Schedule Of Fair Value Of Employee Stock Options	Three-Month Periods Ended September 30, Nine-Month Periods Ended September 30, Stock Option 2015 2014 2015 2014 Expected term in years 6.1 6.1 6.1 6.1 Expected volatility 70% 70% 70% 70% Risk-free interest rate 1.8% 1.9% 1.6% 1.9% Dividend yield — — — —
Schedule Of Fair Value Of Employee Stock Purchase Plan	Three-Month Periods Ended September 30, Nine-Month Periods Ended September 30, ESPP 2015 2014 2015 2014 Expected term in years 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 70% 70% 70% 70% Risk-free interest rate 0.3% - 0.7% 0.1% - 0.5% 0.1% - 0.7% 0.1% - 0.5% Dividend yield — — — —

Summary Of Significant Accoun19

Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Summary Of Significant Accounting Policies [Line Items]
Fair value assets liabilities transfer between levels			$ 0
Impairment charges on investments			$ 0	$ 0
Future cash flows weighted average market yield	18.30%		18.30%		19.50%
Roche Agreement [Member]
Summary Of Significant Accounting Policies [Line Items]
Additional contractual revenue being recognized in the period	$ 1,900	$ 1,900	$ (5,700)
Income (loss) per basic share	$ 0.03
Income (loss) per diluted share	$ 0.02		$ (0.08)

Summary Of Significant Accoun20

Summary Of Significant Accounting Policies (Summary Of Assets And Liabilities Measured At Fair Value Classified Based On Level Of Input) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets
Total assets measured at fair value	$ 58,909	$ 101,348
Financing Derivative [Member]
Liabilities
Total liabilities measured at fair value	925	944
Cash and cash equivalents [Member]
Assets
Total cash and cash equivalents	27,208	36,449
Cash and cash equivalents [Member] | Cash and money market funds [Member]
Assets
Total cash and cash equivalents	15,259	21,952
Cash and cash equivalents [Member] | Commercial paper [Member]
Assets
Total cash and cash equivalents	11,949	14,497
Investments [Member]
Assets
Total investments	31,701	64,899
Investments [Member] | Commercial paper [Member]
Assets
Total investments	14,234	43,653
Investments [Member] | Corporate debt securities [Member]
Assets
Total investments	7,457	8,173
Investments [Member] | Asset backed securities [Member]
Assets
Total investments	10,010	13,073
Level 1 [Member]
Assets
Total assets measured at fair value	15,259	21,952
Level 1 [Member] | Cash and cash equivalents [Member]
Assets
Total cash and cash equivalents	15,259	21,952
Level 1 [Member] | Cash and cash equivalents [Member] | Cash and money market funds [Member]
Assets
Total cash and cash equivalents	15,259	21,952
Level 2 [Member]
Assets
Total assets measured at fair value	43,650	79,396
Level 2 [Member] | Cash and cash equivalents [Member]
Assets
Total cash and cash equivalents	11,949	14,497
Level 2 [Member] | Cash and cash equivalents [Member] | Commercial paper [Member]
Assets
Total cash and cash equivalents	11,949	14,497
Level 2 [Member] | Investments [Member]
Assets
Total investments	31,701	64,899
Level 2 [Member] | Investments [Member] | Commercial paper [Member]
Assets
Total investments	14,234	43,653
Level 2 [Member] | Investments [Member] | Corporate debt securities [Member]
Assets
Total investments	7,457	8,173
Level 2 [Member] | Investments [Member] | Asset backed securities [Member]
Assets
Total investments	$ 10,010	$ 13,073
Level 3 [Member]
Assets
Total assets measured at fair value
Level 3 [Member] | Financing Derivative [Member]
Liabilities
Total liabilities measured at fair value	$ 925	$ 944
Level 3 [Member] | Cash and cash equivalents [Member]
Assets
Total cash and cash equivalents
Level 3 [Member] | Cash and cash equivalents [Member] | Cash and money market funds [Member]
Assets
Total cash and cash equivalents
Level 3 [Member] | Cash and cash equivalents [Member] | Commercial paper [Member]
Assets
Total cash and cash equivalents
Level 3 [Member] | Investments [Member]
Assets
Total investments
Level 3 [Member] | Investments [Member] | Commercial paper [Member]
Assets
Total investments
Level 3 [Member] | Investments [Member] | Corporate debt securities [Member]
Assets
Total investments
Level 3 [Member] | Investments [Member] | Asset backed securities [Member]
Assets
Total investments

Summary Of Significant Accoun21

Summary Of Significant Accounting Policies (Changes In Fair Value Of Financial Derivative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Summary Of Significant Accounting Policies [Abstract]
Balance as of December 31, 2014	$ 944
Gain on change in estimated fair value	(19)
Balance as of September 30, 2015	$ 925

Summary Of Significant Accoun22

Summary Of Significant Accounting Policies (Estimated Fair Value And Carrying Value Of Notes) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Estimated Fair Value [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Notes	$ 15,681	$ 14,817
Carrying Value [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Notes	$ 14,808	$ 14,124

Summary Of Significant Accoun23

Summary Of Significant Accounting Policies (Computation Of Basic And Diluted Net Loss Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Summary Of Significant Accounting Policies [Abstract]
Net income (loss)	$ 1,821	$ (9,163)	$ (30,287)	$ (47,185)
Weighted average shares used in computing basic net income (loss) per share	75,205	70,740	74,699	69,716
Basic net income (loss) per share	$ 0.02	$ (0.13)	$ (0.41)	$ (0.68)
Add: weighted average stock options	2,733
Add: weighted average warrants	2,541
Weighted average shares used in computing diluted net income (loss) per share	80,479	70,740	74,699	69,716
Diluted net income (loss) per share	$ 0.02	$ (0.13)	$ (0.41)	$ (0.68)

Summary Of Significant Accoun24

Summary Of Significant Accounting Policies (Anti-dilutive Excluded From Computation Of Diluted Net Loss Per Share) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Employee Stock Purchase Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock excluded from the computation of diluted net loss per share	11,959	16,651	18,469	16,651
Warrants to purchase common stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock excluded from the computation of diluted net loss per share		5,500	5,500	5,500

Contractual Revenue (Details)

Contractual Revenue (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended		3 Months Ended			9 Months Ended	15 Months Ended
	Aug. 31, 2014	Sep. 30, 2013	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amortization							$ 1.7
Roche Agreement [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Non-refundable upfront payment		$ 35
Amortization			$ 3.6		$ 3.6	$ 10.8
Additional contractual revenue being recognized in the period			$ 1.9		$ 1.9	$ (5.7)
Income (loss) per basic share			$ 0.03
Income (loss) per diluted share			$ 0.02			$ (0.08)
Deferred revenue			$ 15.7			$ 15.7
Maximum potential for additional payments to be recognized upon the achievement of certain development milestones		$ 40
Additional payment based upon achievements of milestones	$ 10
Deferred revenue, revenue recognized				$ 10

Cash, Cash Equivalents And In26

Cash, Cash Equivalents And Investments (Summary Of Cash And Cash Equivalents And Investments) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 58,903	$ 101,339
Gross unrealized gains	7	17
Gross unrealized losses	(1)	(8)
Fair Value	58,909	101,348
Cash and cash equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	27,207	36,448
Gross unrealized gains	1	1
Fair Value	27,208	36,449
Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	31,696	64,891
Gross unrealized gains	6	16
Gross unrealized losses	(1)	(8)
Fair Value	31,701	64,899
Cash and money market funds [Member] | Cash and cash equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	15,259	21,952
Fair Value	15,259	21,952
Commercial paper [Member] | Cash and cash equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	11,948	14,496
Gross unrealized gains	1	1
Fair Value	11,949	14,497
Commercial paper, not included with cash and cash equivalents [Member] | Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	14,231	43,648
Gross unrealized gains	3	5
Fair Value	14,234	43,653
Corporate debt securities [Member] | Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	7,454	8,170
Gross unrealized gains	3	7
Gross unrealized losses		(4)
Fair Value	7,457	8,173
Asset backed securities [Member] | Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	10,011	13,073
Gross unrealized gains		4
Gross unrealized losses	(1)	(4)
Fair Value	$ 10,010	$ 13,073

Cash, Cash Equivalents And In27

Cash, Cash Equivalents And Investments (Summary Of Contractual Maturities Of Cash Equivalents And Available-For-Sale Investments) (Details) $ in Thousands	Sep. 30, 2015USD ($)
Cash, Cash Equivalents And Investments [Abstract]
Due in one year or less	$ 43,650

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Inventory [Abstract]
Purchased materials	$ 3,003	$ 3,150
Work in process	4,477	6,115
Finished goods	4,141	2,070
Inventory	$ 11,621	$ 11,335

Notes Payable (Details)

Notes Payable (Details) - USD ($)	1 Months Ended	9 Months Ended
	Feb. 28, 2013	Sep. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Purchase shares of common stock	5,500,000	5,500,000
Common stock aggregate exercise price	$ 2.63	$ 2.63
Cash and cash equivalent minimum amount quarterly required	$ 2,000,000
Future cash flows weighted average market yield		18.30%	19.50%
Fair value of the financing derivative		$ 925,000	$ 944,000
Fair value of the warrants	6,400,000
Allocation of notes calculated on a relative fair value basis	20,500,000
Notes [Member]
Debt Instrument [Line Items]
Fair value of the notes	14,100,000
Carrying value of the notes	12,800,000
Original issue discount	7,700,000
Debt discount that has yet to be amortized		$ 5,700,000	$ 6,400,000
Maturity date		Feb. 1, 2020
Deerfield promissory notes [Member]
Debt Instrument [Line Items]
Principal amount of notes	$ 20,500,000
Debt instrument, stated interest rate	8.75%

Leases (Details)

Leases (Details)	Jul. 23, 2015USD ($)item	Jul. 22, 2015USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Operating Leased Assets [Line Items]
Increase (decrease) in accrued expenses					$ 1,523,000	$ 821,000
Gain on lease amendments				$ (23,043,000)	(23,043,000)
Prepaid expenses and other current assets			$ 11,513,000	11,513,000	11,513,000		$ 1,671,000
Other long-term assets			5,715,000	5,715,000	5,715,000		$ 162,000
Lease Amendment Agreement [Member]
Operating Leased Assets [Line Items]
Number of eligible payments from existing landlord | item	4
Eligible payments from existing landlord	$ 5,000,000
Future minimum rent payments			0	0	0
Aggregate Landlord payments receivable			20,000,000	20,000,000	20,000,000
Increase (decrease) in accrued expenses			(2,100,000)
Landlord periodic payment received			5,000,000
Prepaid expenses and other current assets			10,000,000	10,000,000	10,000,000
Other long-term assets			$ 5,000,000	$ 5,000,000	$ 5,000,000
O’Brien Lease Agreement [Member]
Operating Leased Assets [Line Items]
Lease term		132 months
Rent expense first twelve months		$ 540,000
Rent expense last twelve months		711,000
Prepaid rent		2,340,000
Security deposit		4,500,000
Expected improvement allowance		12,600,000
Expected rent payments		80,000,000
Expected operating costs		$ 24,000,000

Stockholders' Equity And Shar31

Stockholders' Equity And Share-Based Compensation (Narrative) (Details) $ / shares in Units, $ in Thousands	1 Months Ended	9 Months Ended
	Nov. 02, 2015USD ($)$ / sharesshares	Sep. 30, 2015USD ($)item$ / sharesshares	Sep. 30, 2014USD ($)shares	Feb. 28, 2013$ / sharesshares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Proceeds from issuance of common stock from equity plans | $		$ 5,465	$ 3,319
Holders may elect to receive net proceeds from financing activities, percentage		25.00%
Purchase shares of common stock		5,500,000		5,500,000
Common stock aggregate exercise price | $ / shares		$ 2.63		$ 2.63
Number of equity compensation plans | item		3
Employee Stock Purchase Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued		1,080,913	1,325,507
Common stock reserved for issuance		397,633
At the Market Offering [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued		240,843
Average common stock price per share | $ / shares		$ 6.13
Proceeds from issuance of common stock from equity plans | $		$ 1,400
Common stock available for future sales | $		$ 28,500
At the Market Offering [Member] | Subsequent Event [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued	2,700,000
Average common stock price per share | $ / shares	$ 7.43
Proceeds from issuance of common stock from equity plans | $	$ 19,500

Stockholders' Equity And Shar32

Stockholders' Equity And Share-Based Compensation (Summary Of Stock Option Activity) (Details) - Employee Stock Purchase Plan [Member] - $ / shares shares in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Additional shares reserved, Shares available for grant	4,435
$0.70 – 16.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Balances, December 31, 2014, Shares available for grant	4,874
Balances, September 30, 2015, Shares available for grant		4,874
Balances, December 31, 2014, Number of shares	16,491
Balances, September 30, 2015, Number of shares		16,491
Exercise price, lower range		$ 0.70
Exercise price, upper range		16
Balances, December 31, 2014, Weighted average exercise price per share	$ 5.10
Balances, September 30, 2015, Weighted average exercise price per share		$ 5.10
$5.43 – 7.59 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted, Shares available for grant	(3,028)
Options granted, Number of shares	3,028
Exercise price, lower range	$ 4.55
Exercise price, upper range	7.59
Options granted, Weighted average exercise price per share	$ 6.34
$0.70 – 5.18 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options exercised, Shares available for grant
Options exercised, Number of shares	(438)
Exercise price, lower range	$ 0.70
Exercise price, upper range	5.18
Options exercised, Weighted average exercise price per share	$ 2.26
$1.16 – 15.98 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options canceled, Shares available for grant	612
Options canceled, Number of shares	(612)
Exercise price, lower range	$ 1.16
Exercise price, upper range	15.98
Options canceled, Weighted average exercise price per share	$ 6.65
$0.70 – 16.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Balances, September 30, 2015, Shares available for grant	6,893
Balances, September 30, 2015, Number of shares	18,469
Exercise price, lower range	$ 0.70
Exercise price, upper range	16
Balances, September 30, 2015, Weighted average exercise price per share	$ 5.32

Stockholders' Equity And Shar33

Stockholders' Equity And Share-Based Compensation (Schedule Of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 3,238	$ 2,452	$ 9,813	$ 6,944
Cost of revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	337	218	926	480
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	1,245	893	3,735	2,601
Sales, general and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 1,656	$ 1,341	$ 5,152	$ 3,863

Stockholders' Equity And Shar34

Stockholders' Equity And Share-Based Compensation (Schedule Of Fair Value Of Employee Stock Options And Employee Stock Purchase Plan) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term in years	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days
Expected volatility	70.00%	70.00%	70.00%	70.00%
Risk-free interest rate	1.80%	1.90%	1.60%	1.90%
Risk-free interest rate, maximum	0.70%	0.50%	0.70%	0.50%
Dividend yield
Employee Stock Purchase Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected volatility	70.00%	70.00%	70.00%	70.00%
Risk-free interest rate, minimum	0.30%	0.10%	0.10%	0.10%
Dividend yield
Employee Stock Purchase Plan [Member] | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term in years	6 months	6 months	6 months	6 months
Employee Stock Purchase Plan [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term in years	2 years	2 years	2 years	2 years