Document And Entity Information
Document And Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 22, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 371,158 | ||
Entity Common Stock, Shares Outstanding | 130,693,552 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 16,507 | $ 16,765 |
Investments | 46,365 | 55,213 |
Accounts receivable | 13,433 | 11,421 |
Inventory | 23,065 | 15,634 |
Prepaid expenses and other current assets | 2,249 | 9,978 |
Total current assets | 101,619 | 109,011 |
Property and equipment, net | 37,920 | 14,560 |
Long-term restricted cash | 4,500 | 4,500 |
Other long-term assets | 45 | 9,813 |
Total assets | 144,084 | 137,884 |
Current liabilities | ||
Accounts payable | 9,093 | 8,359 |
Accrued expenses | 12,618 | 16,604 |
Deferred service revenue, current | 6,319 | 7,130 |
Other liabilities, current | 605 | 1,681 |
Total current liabilities | 28,635 | 33,774 |
Deferred service revenue, non-current | 1,075 | 1,297 |
Deferred rent, non-current | 14,453 | 19 |
Other liabilities, non-current | 1,664 | |
Notes payable, non-current | 13,635 | 16,106 |
Financing derivative | 183 | 356 |
Total liabilities | 57,981 | 53,216 |
Commitments and contingencies (Note 7) | ||
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 116,277 and 92,677 shares at December 31, 2017 and 2016, respectively | 116 | 93 |
Additional paid-in-capital | 965,752 | 872,114 |
Accumulated other comprehensive income (loss) | (32) | 5 |
Accumulated deficit | (879,733) | (787,544) |
Total stockholders' equity | 86,103 | 84,668 |
Total liabilities and stockholders' equity | $ 144,084 | $ 137,884 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
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 | 116,277,000 | 92,677,000 |
Common Stock, shares outstanding | 116,277,000 | 92,677,000 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Product revenue | $ 80,030 | $ 64,609 | $ 37,502 |
Service and other revenue | 13,438 | 13,971 | 10,896 |
Contractual revenue | 12,134 | 44,384 | |
Total revenue | 93,468 | 90,714 | 92,782 |
Cost of Revenue: | |||
Cost of product revenue | 42,900 | 34,512 | 30,704 |
Cost of service and other revenue | 15,909 | 12,042 | 8,628 |
Total cost of revenue | 58,809 | 46,554 | 39,332 |
Gross profit | 34,659 | 44,160 | 53,450 |
Operating expense: | |||
Research and development | 65,324 | 67,617 | 60,440 |
Sales, general and administrative | 59,119 | 47,787 | 45,187 |
Gain on lease amendments | (23,043) | ||
Total operating expense | 124,443 | 115,404 | 82,584 |
Operating loss | (89,784) | (71,244) | (29,134) |
Interest expense | (2,921) | (3,234) | (2,926) |
Other income (expense), net | 516 | 103 | 364 |
Net loss | (92,189) | (74,375) | (31,696) |
Other comprehensive loss: | |||
Unrealized gain (loss) on investments | (37) | 12 | (16) |
Comprehensive loss | $ (92,226) | $ (74,363) | $ (31,712) |
Net loss per share: | |||
Basic and diluted net loss per share | $ (0.87) | $ (0.83) | $ (0.42) |
Shares used in computing basic and diluted net loss per share | 105,682 | 89,148 | 75,614 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | At the Market Offering [Member]Common Stock [Member] | At the Market Offering [Member]Additional Paid-in Capital [Member] | At the Market Offering [Member] | Underwritten Public Equity Offering [Member]Common Stock [Member] | Underwritten Public Equity Offering [Member]Additional Paid-in Capital [Member] | Underwritten Public Equity Offering [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2014 | $ 74 | $ 736,339 | $ 9 | $ (681,473) | $ 54,949 | ||||||
Balance, shares at Dec. 31, 2014 | 73,927 | ||||||||||
Net loss | (31,696) | (31,696) | |||||||||
Other comprehensive loss | (16) | (16) | |||||||||
Issuance of common stock in conjunction with equity plans | $ 2 | 7,361 | 7,363 | ||||||||
Issuance of common stock in conjunction with equity plans, shares | 1,981 | ||||||||||
Issuance of common stock in conjunction with offering, net of issuance costs | $ 4 | $ 29,096 | $ 29,100 | ||||||||
Issuance of common stock in conjunction with offering, net of issuance costs, shares | 4,075 | ||||||||||
Stock-based compensation expense | 13,840 | 13,840 | |||||||||
Balance at Dec. 31, 2015 | $ 80 | 786,636 | (7) | (713,169) | 73,540 | ||||||
Balance, shares at Dec. 31, 2015 | 79,983 | ||||||||||
Net loss | (74,375) | (74,375) | |||||||||
Other comprehensive loss | 12 | 12 | |||||||||
Issuance of common stock in conjunction with equity plans | $ 2 | 7,727 | 7,729 | ||||||||
Issuance of common stock in conjunction with equity plans, shares | 2,004 | ||||||||||
Issuance of common stock in conjunction with offering, net of issuance costs | $ 7 | 58,193 | $ 58,200 | ||||||||
Issuance of common stock in conjunction with offering, net of issuance costs, shares | 6,526 | 6,500 | |||||||||
Issuance of common stock from exercise of warrant | $ 4 | (4) | |||||||||
Issuance of common stock from exercise of warrant, shares | 4,164 | ||||||||||
Stock-based compensation expense | 19,562 | 19,562 | |||||||||
Balance at Dec. 31, 2016 | $ 93 | 872,114 | 5 | (787,544) | $ 84,668 | ||||||
Balance, shares at Dec. 31, 2016 | 92,677 | 92,677 | |||||||||
Net loss | (92,189) | $ (92,189) | |||||||||
Other comprehensive loss | (37) | (37) | |||||||||
Issuance of common stock in conjunction with equity plans | $ 2 | 8,912 | 8,914 | ||||||||
Issuance of common stock in conjunction with equity plans, shares | 2,697 | ||||||||||
Issuance of common stock in conjunction with offering, net of issuance costs | $ 3 | $ 11,862 | $ 11,865 | $ 18 | $ 52,512 | $ 52,530 | |||||
Issuance of common stock in conjunction with offering, net of issuance costs, shares | 3,171 | 3,200 | 17,732 | ||||||||
Stock-based compensation expense | 20,352 | 20,352 | |||||||||
Balance at Dec. 31, 2017 | $ 116 | $ 965,752 | $ (32) | $ (879,733) | $ 86,103 | ||||||
Balance, shares at Dec. 31, 2017 | 116,277 | 116,277 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net loss | $ (92,189) | $ (74,375) | $ (31,696) |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Depreciation and amortization | 8,442 | 3,875 | 3,677 |
Amortization of debt discount and financing costs | 1,203 | 1,158 | 957 |
Stock-based compensation | 20,352 | 19,562 | 13,840 |
Non-cash portion of gain on lease amendments | (3,043) | ||
(Gain) Loss from derivative | 653 | (244) | (344) |
Other items | 47 | 97 | 114 |
Changes in assets and liabilities | |||
Accounts receivable | (2,012) | (6,176) | (1,738) |
Inventory | (8,442) | (6,151) | (2,466) |
Prepaid expenses and other assets | 7,803 | (202) | (17,889) |
Accounts payable | 764 | 3,402 | (716) |
Accrued expenses | (3,986) | 1,053 | 5,732 |
Deferred service revenue | (1,033) | 469 | 708 |
Deferred contractual revenue | (12,134) | (14,386) | |
Other liabilities | 880 | 1,737 | (639) |
Net cash used in operating activities | (67,518) | (67,929) | (47,889) |
Cash flows from investing activities | |||
Purchase of property and equipment | (10,433) | (8,207) | (3,009) |
Proceeds from disposal of property and equipment | 41 | 10 | 36 |
Long-term restricted cash | (4,500) | ||
Purchase of investments | (86,339) | (95,848) | (84,579) |
Sales of investments | 7,111 | 23,285 | 8,317 |
Maturities of investments | 88,071 | 65,896 | 92,341 |
Net cash provided by (used in) investing activities | (1,549) | (14,864) | 8,606 |
Cash flows from financing activities | |||
Proceeds from issuance of common stock from equity plans | 8,914 | 7,729 | 7,363 |
Notes payable principal payoff | (4,500) | ||
Net cash provided by financing activities | 68,809 | 65,929 | 36,463 |
Net decrease in cash and cash equivalents | (258) | (16,864) | (2,820) |
Cash and cash equivalents at beginning of period | 16,765 | 33,629 | 36,449 |
Cash and cash equivalents at end of period | 16,507 | 16,765 | 33,629 |
Supplemental disclosure of cash flow information | |||
Interest paid | 1,687 | 1,799 | 1,794 |
Supplemental disclosure of non-cash investing and financing activities | |||
Inventory transferred to property and equipment | 1,267 | 1,282 | 2,846 |
Property and equipment paid by landlord | 12,600 | ||
Changes in deposits for property and equipment paid in prior period | 9,694 | ||
Property and equipment returned to landlord | 1,854 | ||
At the Market Offering [Member] | |||
Cash flows from financing activities | |||
Proceeds from issuance of common stock from offering, net of issuance costs | 11,865 | $ 58,200 | $ 29,100 |
Underwritten Public Equity Offering [Member] | |||
Cash flows from financing activities | |||
Proceeds from issuance of common stock from offering, net of issuance costs | $ 52,530 |
Overview
Overview | 12 Months Ended |
Dec. 31, 2017 | |
Overview [Abstract] | |
Overview | NOTE 1. OVERVIEW We design, develop and manufacture sequencing systems to help scientists resolve genetically complex problems. Based on our novel Single Molecule, Real-Time (SMRT ® ) sequencing 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 in important gene families, and find novel genes; targeted sequencing to more comprehensively characterize genetic variations; and real-time kinetic information for epigenome characterization . Our technology provides high accuracy, ultra-long reads, uniform coverage and the ability to simultaneously detect epigenetic changes . PacBio ® sequencing systems, including consumables and software, provide a simple and fast end-to-end workflow for SMRT sequencing . Th e names “Pacific Biosciences,” “PacBio,” “SMRT,” “SMRTbell,” “Sequel” and our logo are our trademarks. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or U.S. GAAP, as set forth in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC. The consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. Translation adjustments resulting from translating foreign subsidiaries’ results of operations and assets and liabilities into U.S. dollars are immaterial for all periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. 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 2017, we recorded a charge to cost of service and other revenue of $1.6 million relating to leased RS II instruments primarily due to a change in the estimated useful life of these instruments. The charge of $1.6 million increased loss per share by $0.01 for the year ended December 31, 2017. Fair Value of Financial Instruments 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. The fair value hierarchy established under U.S. GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are as follows: • Level 1: quoted prices in active markets for identical assets or liabilities; • Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider an active market as one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, we view an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our non-performance risk, or that of our counterparty, is considered in determining the fair values of liabilities and assets, respectively. 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. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the entire fair value measurement requires management to make judg e ments and consider factors specific to the asset or liability. 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 that were measured on a recurring basis as of December 31, 2017 and December 31, 2016 respectively (in thousands): December 31, 2017 December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Cash and money market funds $ 14,858 $ — $ — $ 14,858 $ 14,516 $ — $ — $ 14,516 Commercial paper — 1,649 — 1,649 — 2,249 — 2,249 US government & agency securities — — — — — — — — Total cash and cash equivalents 14,858 1,649 — 16,507 14,516 2,249 — 16,765 Investments: Commercial paper — 20,394 — 20,394 — 23,583 — 23,583 Corporate debt securities — 9,034 — 9,034 — 10,739 — 10,739 US government & agency securities — 16,937 — 16,937 — 20,579 — 20,579 Asset backed securities — — — — — 312 — 312 Total investments — 46,365 — 46,365 — 55,213 — 55,213 Long-term restricted cash: Cash 4,500 — — 4,500 4,500 — — 4,500 Total assets measured at fair value $ 19,358 $ 48,014 $ — $ 67,372 $ 19,016 $ 57,462 $ — $ 76,478 Liabilities Financing derivative $ — $ — $ 183 $ 183 $ — $ — $ 356 $ 356 Total liabilities measured at fair value $ — $ — $ 183 $ 183 $ — $ — $ 356 $ 356 The estimated fair value of the Financing Derivative liability (as defined in “Note 6. Notes Payable’) was determined using Level 3 inputs, or significant unobservable inputs. Refer to “Note 6. Notes Payable” for a detailed description and valuation approach. Changes to the estimated fair value of the Financing Derivative are recorded in “Other income (expense), net” in the consolidated statements of operations and comprehensive loss. The following table provides the changes in the fair value of the Financial Derivative for the year ended December 31, 2017 and 2016 (in thousands), respectively: Financing Derivative Amount Balance as of December 31, 2015 $ 600 Gain on change in fair value of Financing Derivative (244) Balance as of December 31, 2016 356 Loss on change in fair value of Financing Derivative 653 Change in fair value due to partial exercise of derivative associated with $4.5 million principal payoff (826) Balance as of December 31, 2017 $ 183 For the year ended December 31, 2017, there were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis and our valuation techniques did not change compared to the prior year. 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 current liabilities approximate fair value due to their short maturities. We determined the fair value of the Notes (as defined in “Note 6. Notes Payable”) from the debt facility we entered into during the first quarter of 2013 using Level 3 inputs, or significant unobservable inputs. The value of the Notes 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 a 10.3% and 10.6% weighted average market yield at December 31, 2017 and December 31, 2016, respectively. Refer to “Note 6. Notes Payable” for additional details regarding the Notes. The estimated fair value and carrying value of the Notes are as follows (in thousands): December 31, 2017 December 31, 2016 Fair Value Carrying Value Fair Value Carrying Value Long-term notes payable $ 15,664 $ 13,635 $ 19,788 $ 16,106 Cash and Cash Equivalents We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Investments We have designated all investments as available-for-sale and therefore, such investments are reported at fair value, with unrealized gains and losses recognized in accumulated other comprehensive income (loss) (“OCI”) in stockholders’ equity. The cost of marketable securities is adjusted for the amortization of premiums and discounts to expected maturity. Premium and discount amortization is included in other income, net. Realized gains and losses, as well as interest income, on available-for-sale securities are also included in other income, net. The cost of securities sold is based on the specific identification method. We include all of our available-for-sale securities in current assets. All of our investments are subject to a periodic impairment review. We recognize an impairment charge when a decline in the fair value of our investments below the cost basis is judged to be other-than-temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which an investment’s fair value has been less than its cost basis, the financial condition and near-term prospects of the investee, extent of the loss related to credit of the issuer, the expected cash flows from the security, our intent to sell the security and whether or not we will be required to sell the security before the recovery of its amortized cost. During the years ended December 31, 2017, 2016 and 2015, we did not recognize any impairment charges on our investments as it is more likely than not that we will recover their amortized cost basis upon sale or maturity. Concentration and Other Risks The counterparties to the agreements relating to our investment securities consist of various major corporations, financial institutions, municipalities and government agencies of high credit standing. Our accounts receivable are derived from net revenue to customers and distributors located in the United States and other countries. We perform credit evaluations of our customers’ financial condition and, generally, require no collateral from our customers. We regularly review our accounts receivable including consideration of factors such as historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer’s ability to pay. We have not experienced any significant credit losses to date. Excluding contractual revenue from the Roche agreement, which has now been terminated, for the year ended December 31, 2017, one customer, Gene Company Limited, accounted for approximately 31% of our total revenue, for the years ended December 31, 2016 and 2015, no customer accounted for more than 10% of our total revenue. As of both December 31, 2017 and 2016, 84% of our accounts receivable were from domestic customers. As of December 31, 2017, one c ustomer, Gene Company Limited, represented approximately 20 % of our net accounts receivable. As of December 31, 2016, no customer represented more than 10% of our net accounts receivable. We currently purchase several key parts and components used in the manufacture of our products from a limited number of suppliers. Generally we have been able to obtain an adequate supply of such parts and components. However, an extended interruption in the supply of parts and components currently obtained from our suppliers could adversely affect our business and consolidated financial statements. Inventory We early adopted the Accounting Standards Update (“ASU”) No. 2015-11, Simplifying the Measurement of Inventory in the year ended December 31, 2016 effective January 1, 2016. The adoption did not result in any material impact to inventory . As a result, our inventories are stated at the lower of average cost or net realizable value. Cost is determined using the first-in, first-out (“FIFO”) method. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess or obsolete balances. Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation and any impairment charges. Depreciation is computed using the straight-line method over the estimated useful life of the asset, generally two to three years for computer equipment, three to five years for software, three to seven years for furniture and fixtures, three to five years for lab equipment and 30 years for buildings. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the related asset. Major improvements are capitalized, while maintenance and repairs are expensed as incurred. Long-term Restricted Cash As required under the lease agreement for our corporate offices (the “O’Brien lease”), we were required to establish a letter of credit for the benefits of the landlord and to submit $4.5 million as a deposit for the letter of credit in October 2015; and, as such, $4.5 million was recorded in “Long-term restricted cash” in the consolidated balance sheet as of such year and continued to be so recorded as of both December 31, 2017 and December 31, 2016. Impairment of Long-Lived Assets We periodically review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset is impaired or the estimated useful lives are no longer appropriate. Fair value is estimated based on discounted future cash flows. If indicators of impairment exist and the undiscounted projected cash flows associated with such assets are less than the carrying amount of the asset, an impairment loss is recorded to write the asset down to its estimated fair value. To date, we have not recorded any impairment charges. Revenue Recognition Our revenue is generated primarily from the sale of products and services, in addition to revenue from collaboration agreements. Product revenue consists of sales of our instruments and related consumables; Service and other revenue primarily consist of revenue earned from product maintenance agreements, instrument lease agreements and grant revenue. Contractual revenue relates to revenue recognized from the collaboration agreement under which we received an upfront fee and may receive contingent milestone payments. Our deliverables under the arrangement include licenses to intellectual property rights and research and development services. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. For instances where final acceptance of the product or system is required, revenue is deferred until all acceptance criteria have been met. Revenue for product sales is generally recognized upon customer acceptance. For certain qualified distributors revenue is recognized based upon shipment terms. Revenue for product maintenance agreements is recognized when earned, which is generally ratably over the service period. In order to assess whether the price is fixed or determinable, we evaluate whether refund rights exist. If refund rights exist or payment terms are based on future performance, we defer revenue recognition until the price becomes fixed or determinable. We assess collectability based on a number of factors, including customer creditworthiness. If we determine that collection of amounts due is not reasonably assured, revenue recognition is deferred until receipt of payment. We regularly enter into arrangements, comprised of one or more contracts, from which revenue is derived from multiple deliverables including a mix of products and or services. Revenue recognition for contracts with multiple deliverables is based on the individual units of accounting determined to exist in the contract. A delivered item is considered a separate unit of accounting when (i) the delivered item has value to the customer on a stand-alone basis; and (ii) if a general right of return exists, the delivery or performance of an undelivered item is considered probable and under our control. Items are considered to have stand-alone value when they are sold separately by any vendor or when the customer could resell the item on a stand-alone basis. Our revenue arrangements generally do not have a general right of return. When a deliverable does not meet the criteria to be considered a separate unit of accounting, we group it with other deliverables that, when combined, meet the criteria, and the appropriate allocation of arrangement consideration and revenue recognition is determined. Consideration is allocated at the inception of the contract to all deliverables based on their relative selling price. In order to determine the relative selling price of a deliverable, we apply, in order, vendor-specific objective evidence (“VSOE”); third-party evidence if VSOE is not available; and lastly our best estimate of selling price for the deliverable if neither VSOE nor third-party evidence is available. In order to establish VSOE, we must regularly sell the product or service on a standalone basis with a substantial majority of sales priced within a relatively narrow range. If an insufficient number of standalone sales exist and VSOE cannot be determined, we then consider whether third party evidence can be used to establish selling price. Due to the lack of similar products and services sold by other companies within our industry, we have not established selling price using third-party evidence. If neither VSOE nor third party evidence of selling price exists, we determine our best estimate of selling price using a combination of prices set by our pricing committee adjusted for applicable discounts and customer orders received to date. Deferred service revenue primarily represents product maintenance agreement revenue that is expected to be recognized over the related service period, generally one to three years. For instrument lease agreements we entered into with our customers, they are classified as operating-type leases and revenue from these leases is recognized on a straight-line basis over the respective lease term, once the lessee takes (or has the right to take) control/possession of the property under the lease. Effectively, this occurs once installation is complete and acceptance has been obtained. Cost of Revenue Cost of revenue reflects the direct cost of product components, third-party manufacturing services and our internal manufacturing overhead and customer service infrastructure costs incurred to produce, deliver, maintain and support our instruments, consumables, and services. There are no incremental costs associated with our contractual revenue; all product development costs are reflected in research and development expense. Manufacturing overhead is predominantly comprised of labor and facility costs. We determine and capitalize manufacturing overhead into inventory based on a standard cost model that approximates actual costs. Service costs include the direct costs of components used in support, repair and maintenance of customer instruments as well as the cost of personnel, materials, shipping and support infrastructure necessary to support the installed customer base. Research and Development Research and development expense consists primarily of expenses for personnel engaged in the development of our SMRT Sequencing technology, the design and development of our future products and current product enhancements. These expenses also include prototype-related expenditures, development equipment and supplies, facilities costs and other related overhead. We expense research and development costs during the period in which the costs are incurred. However, we defer and capitalize non-refundable advance payments made for research and development activities until the related goods are received or the related services are rendered. Leases We categorize leases at their inception as either operating or capital leases. On certain of our lease agreements, we may receive tenant improvement allowances, rent holidays and other incentives. Rent expense is recorded on a straight-line basis over the term of the lease. The difference between rent expense recognized and amounts paid under the lease agreement is recorded as deferred rent in the balance sheets. Leasehold improvements are capitalized at cost and depreciated over the shorter of their expected useful life or the life of the lease. Tenant improvements afforded to us by landlord incentives are recorded as leasehold improvement assets with corresponding deferred rent liabilities. For build-to-suit lease arrangements, we evaluate the extent of our financial and operational involvement in the tenant improvements to determine whether we are considered the owner of the construction project under U.S. GAAP. When we are considered the owner of a project, we record the shell of the facility at its fair value at the date construction commences with a corresponding facility financing obligation. Improvements to the facility during the construction project are capitalized and, to the extent funded by lessor afforded incentives, with corresponding increases to the facility financing obligation. Payments we make under leases in which we are considered the owner of the facility are allocated to land rental expense, based on the relative values of the land and building at the commencement of construction, reductions of the facility financing obligation and interest expense recognized on the outstanding obligation. To the extent gross future payments do not equal the recorded liability, the liability is settled upon return of the facility to the lessor. Any difference between the book value of the assets and remaining facility obligation are recorded in other expense, net. For existing arrangements, the differences are expected to be immaterial. Income Taxes We account for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax basis of our assets and liabilities and the amounts reported in the financial statements. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carryforwards. A full valuation allowance is provided against our net deferred tax assets as it is more likely than not that the deferred tax assets will not be fully realized. We review our positions taken relative to income taxes. To the extent our tax positions are more likely than not going to result in additional taxes, we would accrue the estimated amount of tax related to such uncertain positions. Stock-based Compensation Stock-based compensation expense for all stock-based compensation awards is based on the grant date fair value estimated using the Black-Scholes option pricing model. We have limited historical information available to support the underlying estimates of certain assumptions required to value stock options. The expected term of options is estimated based on the simplified method. We do not have sufficient trading history to solely rely on the volatility of our own common stock for establishing expected volatility. Therefore, we based our expected volatility on the historical stock volatilities of our common stock as well as several comparable publicly listed companies over a period equal to the expected term of the options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the stock option. We estimate our forfeiture rate based on an analysis of our actual forfeitures and will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior and other factors. The impact from a forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual number of future forfeitures differs from that which was estimated, we may be required to record adjustments to stock-based compensation expense in future periods. We recognize compensation expense on a straight-line basis over the requisite service period. We elected to use the simplified method to calculate the beginning pool of excess tax benefits. Other Comprehensive Income (loss) Other comprehensive income (loss) is comprised of unrealized gains (losses) on our investment securities. Recent Accounting Pronouncements Recently Adopted Accounting Standards In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which amends the current stock compensation guidance. The amendments simplify the accounting for the taxes related to stock-based compensation, including adjustments to how excess tax benefits and a company's payments for tax withholdings should be classified. Furthermore, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. We adopted this guidance as of January 1, 2017. Prior to adoption, the excluded windfall deductions for federal and state purposes were $6.0 million and $0.6 million, respectively. Upon adoption of ASU 2016-09, we recognized the excluded windfall deductions as a deferred tax asset with a corresponding increase to valuation allowance. Our total deferred tax assets were $321.5 million as of January 1, 2017, and were fully offset by a valuation allowance. Further, we did not elect an accounting policy change to record forfeitures as they occur and thus we continue to estimate forfeitures at each period. During August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, which requires management to evaluate whether there are conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern in the next 12 months from the filing date of the Annual Report on Form 10-K for the year ended December 31, 2017 and to provide disclosures when certain criteria are met. The guidance is effective for annual periods beginning after December 15, 2016 and interim reporting periods starting in the first quarter of 2017. We adopted this standard as of December 31, 2016. Cash, cash equivalents and investments at December 31, 2017 totaled $62.9 million, compared to $72.0 million at December 31, 2016. We believe that our existing cash, cash equivalents and investments will be sufficient to fund our projected operating requirements for at least the next 12 months; however, we may raise additional capital in the future. Our view regarding sufficiency of cash and liquidity is primarily based on our financial forecast for 2018, which includes various assumptions regarding demand for our products. Generally, we expect demand for our products to increase. Factors that may affect our capital needs include, but are not limited to, slower than expected adoption of our products resulting in lower sales of our products and services; future acquisitions; our ability to obtain new collaboration and customer arrangements; the progress of our research and development programs; initiation or expansion of research programs and collaborations; litigation costs, including the costs involved in preparing, filing, prosecuting, defending and enforcing intellectual property rights; the purchase of patent licenses; and other factors. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases. The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases . ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. In May 2014, the FASB issued ASU 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. 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 2018. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. While we are continuing to assess all potential impacts of the new standard on our consolidated financial statements, we plan to adopt the standard using the modified retrospective approach with the cumulative effect of adoption, if any, to be recognized as an adjustment to our accumulated deficit on January 1, 2018. The new revenue standard is principle-based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. We are still in the process of evaluating the effect of the new standard on our historical financial statements and disclosures. While we have not completed our evaluation, we currently believe that the impact of adopting the standard will not materially change the amount or timing of our recognition of revenue and related costs. Accordingly, we do not expect to recognize a material adjustment to our accumulated deficit upon adoption on January 1, 2018. As we complete our evaluation of this new standard, new information may arise that could change our current understanding of the impact to revenue and expense recognized. Additionally, we will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust our assessment and implementation plans accordingly. |
Contractual Revenue
Contractual Revenue | 12 Months Ended |
Dec. 31, 2017 | |
Contractual Revenue [Abstract] | |
Contractual Revenue | NOTE 3. CONTRACTUAL REVENUE In September 2013, we entered into a development, commercialization and license agreement with F. Hoffman-La Roche Ltd. (“Roche Agreement”), pursuant to which we accounted for, and recognized 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 Roche Agreement occurs. We recognized revenue under the Roche Agreement using a straight-line convention over the service periods of the deliverables as this method approximated our performance of services pursuant to the Roche Agreement. Out of the $35.0 million upfront cash payment received, quarterly amortization of $1.7 million was recognized as contractual revenue from the fourth quarter of 2013 to the fourth quarter of 2014. Beginning in the three-month 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 and quarterly amortization of $3.6 million was recognized as contractual revenue for each of the four quarters of 2015 and for each of the first three quarters of 2016. As of September 30, 2016, the total deferred contractual revenue balance was $1.3 million, relating to the amount allocated to the deliverable of our participation on the joint steering committee. In December 2016, we received notice from Roche that Roche had elected to terminate the Roche Agreement for convenience and the termination became effective in February 2017 . Upon such notice in December 2016, no further participation on the joint steering committee was deemed necessary; as such, we recognized the entire remaining unamortized deferred revenue of $1.3 million as contractual revenue in the fourth quarter of 2016. Further, the Roche Agreement provided for additional payments totaling $40.0 million upon the achievement of certain development milestones, all of which have previously been received and recognized as revenue. 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. We achieved the first development milestone under the Roche Agreement and recognized the related $10.0 million as contractual revenue during the year ended December 31, 2014. We achieved the second and the third (final) development milestones under the Roche Agreement and recognized the related $10.0 million and $20.0 million as contractual revenue during the three-month periods ended June 30, 2015 and December 31, 2015, respectively. There are no other milestones remaining to be achieved. |
Cash And Cash Equivalents And I
Cash And Cash Equivalents And Investments | 12 Months Ended |
Dec. 31, 2017 | |
Cash And Cash Equivalents And Investments [Abstract] | |
Cash And Cash Equivalents And Investments | NOTE 4. CASH AND CASH EQUIVALENTS AND INVESTMENTS The following table summarizes our cash, cash equivalents and investments as of December 31, 201 7 and December 31, 201 6 (in thousands): As of December 31, 2017 Gross Gross Amortized unrealized unrealized Fair Cost gains losses Value Cash and cash equivalents: Cash and money market funds $ 14,858 $ — $ — $ 14,858 Commercial paper 1,649 — — 1,649 Total cash and cash equivalents 16,507 — — 16,507 Investments: Commercial paper 20,408 — (14) 20,394 Corporate debt securities 9,043 — (9) 9,034 Asset backed securities — — — — US government & agency securities 16,946 — (9) 16,937 Total investments 46,397 — (32) 46,365 Total cash, cash equivalents and investments $ 62,904 $ — $ (32) $ 62,872 Long-term restricted cash: Cash $ 4,500 $ — $ — $ 4,500 As of December 31, 2016 Gross Gross Amortized unrealized unrealized Fair Cost gains losses Value Cash and cash equivalents: Cash and money market funds $ 14,516 $ — $ — $ 14,516 Commercial paper 2,249 — — 2,249 Total cash and cash equivalents 16,765 — — 16,765 Investments: Commercial paper 23,581 5 (3) 23,583 Corporate debt securities 10,741 1 (3) 10,739 Asset backed securities 312 — — 312 US government & agency securities 20,574 7 (2) 20,579 Total investments 55,208 13 (8) 55,213 Total cash, cash equivalents and investments $ 71,973 $ 13 $ (8) $ 71,978 Long-term restricted cash: Cash $ 4,500 $ — $ — $ 4,500 The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of December 31, 201 7 : (in thousands) Fair Value Due in one year or less $ 48,014 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | NOTE 5. BALANCE SHEET COMPONENTS Inventory As of December 31, 201 7 and 201 6 , our inventory consisted of the following components: December 31, (in thousands) 2017 2016 Purchased materials $ 8,884 $ 4,817 Work in process 9,994 7,287 Finished goods 4,187 3,530 Inventory $ 23,065 $ 15,634 Prepaid Expenses and Other Current Assets As of December 31, 2017 and 201 6 , our prepaid expenses and other current assets consisted of the following components: December 31, (in thousands) 2017 2016 Receivable from Prior Landlord $ — $ 5,000 Rent deposits for O'Brien building — 2,160 Prepaid expenses 1,318 2,342 Other current assets 931 476 Prepaid expenses and other current assets $ 2,249 $ 9,978 On July 23, 2015, we entered into a Lease Amendment Agreement (the “Lease Amendment Agreement”) with Peninsula Innovation Partners, LLC (the “Prior Landlord”), which amended the terms and conditions of certain of our then existing Menlo Park facility real property leases. 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 became eligible to receive up to $20.0 million from the Prior Landlord over time (the “Landlord Payments”), and rent abatement for the remainder of the lease. As of December 31, 2016, $5.0 million of the Landlord Payments were outstanding. In January 2017, we entered into a Third Lease Amendment Agreement with the Prior Landlord that increased the amount of the Landlord Payments by $65,000 . During the first quarter of 2017, we received Landlord Payments totaling $2,628,000 . In May 2017, we entered into a Fourth Lease Amendment Agreement with the Prior Landlord, based on which we turned over the 940 Hamilton and 1010 Hamilton buildings to the Prior Landlord. Accordingly, in June 2017 we received $1,682,000 in Landlord Payments. In September 2017, we entered into a Fifth Lease Amendment Agreement with the Prior Landlord, pursuant to which we extended the term and rent abatement period for the remaining two buildings: 960 Hamilton and 1180 Hamilton, from September 30, 2017 to December 31, 2017. As of December 31, 2017, we returned the remaining two buildings: 960 Hamilton and 1180 Hamilton to the Prior Landlord and received $755,000 in Landlord Payments in return. Other Long-term Assets As of December 31, 2017 and 2016 , our other long-term assets consisted of the following components: December 31, (in thousands) 2017 2016 Rent deposits and tenant improvements for O'Brien building $ — $ 9,641 Other 45 172 Other long-term assets $ 45 $ 9,813 Payments toward t enant improvements for our 1305 O’Brien building of $9.6 million were recorded in “Other long-term assets” in the consolidated balance sheets at December 31, 2016. In January 2017 we moved into the O’Brien building, and accordingly, the $9.6 million tenant improvements balance recorded in “Other Long-term Assets” at December 31, 2016 was transferred into leasehold improvements under “Property and Equipment” in the current year. Property and Equipment, Net As of December 31 , 2017 and 2016, our property and equipment , net, consisted of the following components: December 31, (in thousands) 2017 2016 Building $ — $ 1,160 Laboratory equipment and machinery 24,703 23,337 Leasehold improvements 29,728 8,138 Computer equipment 8,301 7,170 Software 4,615 5,189 Furniture and fixtures 2,382 823 Construction in progress 385 5,772 70,114 51,589 Less: Accumulated depreciation (32,194) (37,029) Property and equipment, net $ 37,920 $ 14,560 At December 31, 2016, out of the construction-in-progress balance of $5.8 million, approximately $5.2 million related to1305 O’Brien building purchases. By the end of the first quarter of 2017, improvements associated with our O’Brien premises were substantially completed. As a result, during the first quarter of 2017 we capitalized $28.8 million of tenant improvements. As the premises were completed in phases during 2017, tenant improvements were placed into service in phases once construction was substantially complete and the related asset was ready for its intended use. Refer to “Note 7. Commitments and Contingencies” for additional details In May 2017, we entered into a Fourth Lease Amendment Agreement with the Prior Landlord, based on which we turned over the 940 Hamilton and 1010 Hamilton buildings to the Prior Landlord. The 940 Hamilton building was a capital lease with a long-term facility financing obligation associated with this lease included in “Other liabilities, non-current” and the corresponding building and related leasehold improvements were included in “Property and equipment, net” in the consolidated balance sheets. Upon turning over the building to the Prior Landlord, the capital lease was terminated, resulting in the extinguishment of the facility financing obligation. Depreciation expense during the years ended December 31, 2 0 17, 2016 and 2015 was $8.4 million, $3.9 million and $3.7 million , respectively. Accrued Expenses As of December 31, 2017 and 2016, our accrued expenses consisted of the following components: December 31, (in thousands) 2017 2016 Salaries and benefits $ 7,570 $ 8,562 Accrued product development costs 2,034 5,411 Inventory accrual, professional services, accrued interest and other 3,014 2,631 Accrued expenses $ 12,618 $ 16,604 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable [Abstract] | |
Notes Payable | NOTE 6. NOTES PAYABLE Facility Agreement 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 5.5 million shares of common stock immediately exercisable at an exercise price per share initially equal to $2.63 (the “Warrants”). During the year ended December 31, 2016, warrants to purchase 5.5 million shares of common stock were net exercised, resulting in the issuance of approximately 4.2 million shares of common stock. The cashless net exercises of the warrants did not result in any additional funds being collected by us. As of December 31, 2017 and 2016, no warrants remained outstanding. In addition, the Facility Agreement requires 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. The Facility Agreement has a maximum term of seven years from inception. Subsequent to the date of the Facility Agreement, at the election of the holders of Notes representing a majority of the aggregate principal amount of the outstanding Notes, the Notes holders may elect to receive 25% of the net proceeds from any financing that includes an equity component, including without limitation, the sale or issuance of our common stock, options, warrants or other securities convertible or exchangeable for shares of our common stock, as payment of the Notes. This right is subject to certain exceptions set forth in the Facility Agreement. The Notes holders have the option to require us to repay the Notes if we complete a Major Transaction (as defined in the Facility Agreement), including a change of control or a sale of all or substantially all of our assets. Additionally, the principal balance of the Facility Agreement may become immediately due and payable upon an Event of Default (as defined in the Facility Agreement), in which case the Notes holders would have the right to require us to repay 100% of the principal amount of the loan, plus any accrued and unpaid interest thereon. The Facility Agreement does not provide for a prepayment of the Notes at our option. In June 2017, pursuant to a partial exercise by the Notes holders of this right, we paid $4.5 million of outstanding principal, together with accrued and unpaid interest, to one of the Notes holders with proceeds from our underwritten public equity offering. On November 30, 2017, we entered into an amendment to the facility agreement to remove the provisions related to an Applicable High Yield Discount Obligation (“AHYDO”) catch-up provision. As a result of this amendment, we are no longer required to make such payments. Financing Derivative A number of features embedded in the Notes 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 a 10.3% and 10.6% weighted average market yield at December 31, 2017 and December 31, 2016, respectively. The estimated fair value of the Financing Derivative as of December 31, 2017 and December 31, 2016 was $0.2 million and $0.4 million, respectively. 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 December 31, 2017 and December 31, 2016, we had an outstanding principal amount $16.0 million and $20.5 million aggregate principal amount of Notes, respectively, net of a debt discount of $2.4 million and $4.4 million, respectively, resulting in a net $13.6 million and $16.1 million recorded as “Notes payable, non-current” on the consolidated balance sheets as of December 31, 2017 and 2016, respectively, with the principal payment due in 2020 . As of December 31, 201 7 , payments due under the Facility Agreement, which include interest and principal, are as follows: Amount Years ending December 31, (in thousands) 2018 $ 1,400 2019 1,400 2020 16,491 Total remaining payments 19,291 Less: interest and discounts (5,656) Notes payable $ 13,635 |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | NOTE 7. COMMITMENTS AND CONTINGENCIES Leases In December 2009, we entered into a lease agreement for a manufacturing and office facility in Menlo Park. As a result of the lease amendment agreement described below, future rent expense associated with our prior Menlo Park facility leases was reduced to zero . The remaining long-term facility financing obligations associated with these leases, presented as “Other liabilities, non-current” on the consolidated balance sheets at December 31, 2017 and December 31, 2016, were $0 and $1.7 million, respectively. Lease Amendment Agreement On July 23, 2015, we entered into a Lease Amendment Agreement (the “Lease Amendment Agreement”) with Peninsula Innovation Partners, LLC (the “Prior Landlord”), which amends the terms and conditions of certain of our prior Menlo Park facility real property leases. The Lease Amendment Agreement provides for, among other things, amendments of the term for certain of the leases with the Prior Landlord, the termination of all renewal, expansion and extension rights contained in any of the existing leases with the Prior 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 became eligible to receive up to four payments of $5.0 million each from the Prior 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, the Prior Landlord would have no obligation to make the final $5.0 million payment. On September 1, 2015, the permit process related to an architectural approval and a change of use permit with respect to our new premises at 1305 O’Brien Drive (formerly 1315 O’Brien Drive), Menlo Park, California (the “O’Brien Premises”) was completed, which satisfied the contingencies under the Lease Amendment Agreement. As a result, we recorded $23.0 million in “Gain on lease amendments” in the consolidated statements of operations and comprehensive loss for the three-month period ended September 30, 2015, reflecting that our rent payments were reduced to zero for the remaining term of our existing Menlo Park facility real property leases, and the aggregate of $20.0 million in Landlord Payments became receivable and any associated financing obligation was revalued. Of the $20.0 million remaining Landlord Payments, the first $5.0 million Landlord Payment was received in September 2015, the second $5.0 million Landlord Payment was received in February 2016 and the third $5.0 million Landlord Payment was received in August 2016. In June 2016, we entered into a Second Lease Amendment Agreement with the Prior Landlord that modified the payment schedule for the final $5.0 million. At December 31, 2016, the final $5.0 million of Landlord Payments were recorded in “Prepaid Expenses and Other Current Assets” in the consolidated balance sheets. In January 2017, we entered into a Third Lease Amendment Agreement with the Prior Landlord that increased the amount of the final $5.0 million Landlord Payments by $65,000 . During the first quarter of 2017, we received Landlord Payments totaling $2,628,000 . In May 2017, we entered into a Fourth Lease Amendment Agreement with the Prior Landlord, based on which we turned over the 940 Hamilton and 1010 Hamilton buildings to the Prior Landlord. Accordingly, in June 2017 we received $1,682,000 in Landlord Payments. The 940 Hamilton building was a capital lease with a long-term facility financing obligation associated with this lease included in “Other liabilities, non-current” and the corresponding building and related leasehold improvements were included in “Property and equipment, net” of the consolidated balance sheets. Upon turning over the building to the Prior Landlord, the capital lease was terminated, resulting in the extinguishment of the facility financing obligation. There was no material gain or loss associated with this transaction. In September 2017, we entered into a Fifth Lease Amendment Agreement with the Prior Landlord, pursuant to which we extended the term and rent abatement period for the remaining two buildings: 960 Hamilton and 1180 Hamilton, from September 30, 2017 to December 31, 2017. As of December 31, 2017, we returned the remaining two buildings: 960 Hamilton and 1180 Hamilton to the Prior Landlord and received $755,000 in Landlord Payments in return. O’Brien Lease Agreement On July 22, 2015, we entered into a new lease agreement (the “O’Brien Lease”) with respect to 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. In December 2016, we entered into an amendment to the O’Brien Lease which defined the commencement date of the lease to be October 25, 2016, notwithstanding that such substantial completion did not occur until the first quarter of 2017. Base monthly rent was abated for the first six (6) months of the lease term and thereafter is $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 were required to pay $2.2 million in prepaid rent which was applied to the monthly rent installments due for the first to fourth months after the rent abatement period; and, as such, $2.2 million was recorded in “Prepaid expense and other current assets” in the consolidated balance sheet as of December 31, 2016. As of December 31, 2017, a balance of $0 was recorded in “Prepaid expense and other current assets” in the consolidated balance sheet. We were required to establish a letter of credit for the benefits of the landlord and to submit $4.5 million as a deposit for the letter of credit in October 2015; and, as such, $4.5 million was recorded at such time and continued to be recorded in “Long-term restricted cash” in the consolidated balance sheet as of both December 31, 2017 and December 31, 2016. The landlord was obligated to construct certain warm shell improvements at the landlord’s cost and expense and provide us with a tenant improvement allowance in the amount of $12.6 million. Construction was completed in phases and we began moving into the O’Brien Premises during January 2017. By the end of the first quarter of 2017, improvements associated with the entire O’Brien Premises were substantially completed. As a result, during the first quarter of 2017 we capitalized $28.8 million of tenant improvements, of which $12.6 million was paid by the landlord as a tenant improvement allowance. As the $12.6 million tenant improvement allowance is accounted for as a lease incentive, we recorded the $12.6 million to “Deferred rent, non-current”, which will be amortized over the lease term of approximately 11 years. In addition, as the premises were completed in phases in 2017, tenant improvements were placed into service in phases once construction was substantially complete and the related asset was ready for its intended use. As of December 31, 2017, the future annual minimum lease payments under all noncancelable operating leases with remaining term in excess of one year are as follows: Amount Years ending December 31, (in thousands) 2018 $ 6,822 2019 6,930 2020 7,056 2021 7,272 2022 7,488 Thereafter 39,222 Total minimum lease payments $ 74,790 Rent expense for the years ended December 31, 2017, 2016 and 2015 was $6.3 million, $0.2 million and $1.1 million, respectively. Rent expense was lower in 2016 due to rent abatement with respect to that period. We are also required to pay our share of operating expenses with respect to the facilities in which we operate. In addition, we had other purchase commitments of an estimated amount of approximately $16.2 million as of December 31, 2017, consisting of open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers for which we have not received the goods or services, and acquisition and licensing of intellectual property. A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule and adjust our requirements based on our business needs prior to the delivery of goods or performance of services. Contingencies We become subject to claims and assessments from time to time in the ordinary course of business. We accrue liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Legal Proceedings USITC Proceedings On November 2, 2016, we filed a complaint against Oxford Nanopore Technologies Ltd., Oxford Nanopore Technologies, Inc. (“ONT Inc.”) and Metrichor, Ltd. (“Metrichor” and, together with ONT Inc., “ONT”) with the U.S. International Trade Commission (“USITC”) for patent infringement. On December 5, 2016, the USITC provided notice that an investigation had been instituted based on the complaint. We sought exclusionary relief with respect to several ONT products, including ONT’s MinION and PromethION devices. The complaint was based on our U.S. Patent No. 9,404,146, entitled “Compositions and methods for nucleic acid sequencing” which covers novel methods for sequencing single nucleic acid molecules using linked double-stranded nucleic acid templates, providing improved sequencing accuracy. On March 1, 2017, we filed an amended complaint to add a second patent in the same patent family, U.S. Patent No. 9,542,527, which was granted on January 10, 2017, to the investigation. We sought, among other things, an exclusion order permanently barring entry of infringing ONT products into the United States, and a cease and desist order preventing ONT from advertising and selling infringing products in the United States. On May 23, 2017, the Administrative Law Judge (“ALJ”) assigned to the matter issued an order construing certain claim terms of the asserted patents. On June 8, 2017, ONT filed a summary determination motion to terminate the proceedings based on the ALJ’s claim construction decision, and we did not oppose the motion. The ALJ granted the motion on July 19, 2017, and, on July 31, 2017, we filed a petition to review with the USITC to correct what we believe was an incorrect construction of the claims. On September 5, 2017, the USITC issued a notice granting our petition to review the ALJ’s claim construction decision. On February 7, 2018, the USITC issued a notice indicating that it had determined to adopt the ALJ’s claim construction and terminating the investigation. On February 13, 2018, we filed a petition to appeal the USITC’s ruling to the U.S. Court of Appeals for the Federal Circuit. U.S. District Court Proceedings On March 15, 2017, we filed a complaint in the U.S. District Court for the District of Delaware against ONT Inc. for patent infringement. The complaint is based on our U.S. Patent No. 9,546,400, entitled “Nanopore sequencing using n-mers” which covers novel methods for nanopore sequencing of nucleic acid molecules using the signals from multiple monomeric units. This patent was granted on January 17, 2017. We are seeking remedies including injunctive relief, damages and costs. On May 8, 2017, the defendants filed a motion to dismiss the complaint, alleging that the asserted patent claims recite patent ineligible subject matter. On November 9, 2017, the judge denied ONT’s motion to dismiss. On September 25, 2017, we filed a second complaint in the U.S. District Court for the District of Delaware against ONT Inc. for patent infringement. The complaint is based on our U.S. Patent No. 9,678,056 entitled “Control of Enzyme Translation in Nanopore Sequencing”, granted June 13, 2017, and U.S. Patent No. 9,738,929 entitled “Nucleic Acid Sequence Analysis”, granted August 22, 2017. We are seeking remedies including injunctive relief, damages and costs. On December 14, 2017, the defendants filed a motion to dismiss the complaint, alleging that the asserted patent claims in the 9,738,929 patent recite patent ineligible subject matter. On January 5, 2018, we filed our opposition to this motion. A hearing on this motion is scheduled to occur on February 27, 2018. A trial for these matters is scheduled to occur in March 2020 . UK and German Court Proceedings On February 2, 2017, we filed a claim in the High Court of England and Wales against Oxford Nanopore Technologies Ltd. (“ONT Ltd.”) and Metrichor for infringement of Patent EP(UK) 3 045 542, which is in the same patent family as the patents asserted in the USITC action referred to above. We are seeking remedies including injunctive relief, damages, and costs. On March 27, 2017, the defendants in the case filed their defense and counterclaim, denying infringement and seeking a declaration that the asserted patent is invalid. We filed our reply and defense to counterclaim on April 12, 2017. A case management conference was held on June 13, 2017. On August 31, 2017 we added a claim for infringement of a newly granted divisional, EP(UK) 3 170 904. On December 22, 2017, ONT Ltd. added to the action a request for declaration of non-infringement of its 1D2 product. On January 12, 2018 we served reply to ONT’s request for a declaration of non-infringement, asserting infringement of both patents by ONT’s 1D2 product. A trial for these matters is scheduled to occur in May 2018. On April 21, 2017, ONT Ltd. and Harvard University filed a claim against us in the High Court of England and Wales for infringement of Patent EP(UK) 1 192 453, a patent owned by Harvard University and entitled “Molecular and atomic scale evaluation of biopolymers,” and for which ONT Ltd. alleges it holds an exclusive license. ONT Ltd. and Harvard University are seeking remedies including injunctive relief, damages, and costs. On April 25, 2017, ONT Ltd. announced that it also had filed a claim against us in the District Court of Mannheim, Germany, for infringement of the German version of the patent. On November 2, 2017, we filed our statement of defense in the German infringement matter and we also filed a separate nullity action in Germany to establish that the EP 1 192 453 patent is invalid. On December 6, 2017, we filed a cross-complaint in the German infringement matter alleging ONT Ltd.’s infringement in Germany of our EP 3 045 542 patent. The trial date for the German infringement matter and cross-complaint is set for July 27, 2018 . A trial for the UK matter is scheduled to occur in March 2019. Litigation is inherently unpredictable, and it is too early in the proceedings to predict the outcome of these lawsuits or any impact they may have on us. As such, the estimated financial effect associated with these complaints cannot be made as of the date of filing of this Annual Report on Form 10-K. Litigation is a significant ongoing expense, recognized in sales, general and administrative expense, with an uncertain outcome, and has been in the past and may in the future be a material expense for the Company. Management believes this investment is important to protect the Company’s intellectual property position, even recognizing the uncertainty of the outcome. From time to time, we may also be involved in a variety of other claims, lawsuits, investigations and proceedings relating to securities laws, product liability, patent infringement, contract disputes, employment and other matters that arise in the normal course of our business. In addition, third parties may, from time to time, assert claims against us in the form of letters and other communications. We record a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We currently do not believe that the ultimate outcome of any of the matters described above is probable or reasonably estimable, or that these matters will have a material adverse effect on our business; however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of litigation and settlement costs, diversion of management resources and other factors. Indemnification Pursuant to Delaware law and agreements entered into with each of our directors and officers, we may have obligations, under certain circumstances, to hold harmless and indemnify each of our directors and officers against losses suffered or incurred by the indemnified party in connection with their service to us, and judg e ments, fines, settlements and expenses related to claims arising against such directors and officers to the fullest extent permitted under Delaware law, our bylaws and certificate of incorporation. We also enter and have entered into indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law. In addition, we may have obligations to hold harmless and indemnify third parties involved with our fund raising efforts and their respective affiliates, directors, officers, employees, agents or other representatives against any and all losses, claims, damages and liabilities related to claims arising against such parties pursuant to the terms of agreements entered into between such third parties and us in connection with such fund raising efforts. To the extent that any such indemnification obligations apply to the lawsuits described above, any associated expenses incurred are included within the related accrued litigation expense amounts. No additional liability associated with such indemnification obligations has been recorded at December 31, 2017. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | NOTE 8. INCOME TAXES A reconciliation between the statutory federal income tax and our effective tax rates as a percentage of loss before income taxes are as follows: Years ended December 31, 2017 2016 2014 Statutory tax rate 35.0 % 35.0 % 35.0 % State tax rate, net of federal benefit 8.6 5.4 (3.5) Stock-based compensation (1.9) (1.6) (4.0) R&D credit 3.6 5.0 11.0 Tax reform (123.3) - - Other 0.3 (0.9) (0.6) Change in valuation allowance 77.7 (42.9) (37.9) Effective income tax rate 0.0 % 0.0 % 0.0 % Temporary differences and carryforwards that gave rise to significant portions of deferred taxes are as follows (in thousands): December 31, Deferred tax assets: 2017 2016 Net operating loss carryforwards $ 194,440 $ 264,183 Research and development credits 39,145 32,043 Accruals and reserves 14,480 20,088 Depreciation — 1,170 Deferred rent 3,360 — Total deferred tax assets 251,425 317,484 Less: Valuation allowance (249,202) (317,412) Deferred tax liabilities: Depreciation (2,223) — Deferred rent (72) Net deferred tax assets $ — $ — Due to uncertainties surrounding the realization of deferred tax assets through future taxable income, we have provided a full valuation allowance and, therefore, have not recognized any benefits from net operating losses and other deferred tax assets. A valuation allowance is recorded when it is more likely than not that all or some portion of the deferred income tax assets will not be realized. We regularly assess the need for a valuation allowance against our deferred income tax assets by considering both positive and negative evidence related to whether it is more likely than not that our deferred income tax assets will be realized. In evaluating our ability to recover our deferred income tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. Accordingly, we have provided a full valuation allowance against our net deferred tax assets as of December 31, 2017 and 2016, respectively For the year ended December 31, 201 7 , our valuation allowance de creased to $249.2 m illion relative to the 2016 allowance primarily due to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was enacted in December 2017 (see further details below). For the year ended December 31, 201 6 , our valuation allowance increased to $317.4 million relative to the 2015 allowance primarily because of an increase in deferred tax assets related to net operating losses, state tax credits, and changes in accruals and reserves. As of December 31, 201 7 , we had federal and state net operating loss carryforwards of approximately $757.0 m illion and $532.2 million, respectively, available to reduce future taxable income, if any. The federal net operating loss carryforward s begin expiring in 2024 , and the state net operating loss carryforward s have expiration in 2017 and beyond. We also had federal and California state research and development credit carryforwards of approximately $30.8 million and $31.8 million, respectively, as of December 31, 201 7 . The federal research and development credits begin expiring in 2024 if not utilized. The California tax research and development credits can be carried forward indefinitely. We adopted ASU 2016-09 during the first quarter of 2017. Prior to adopting ASU2016-09, t ax attributes related to stock option windfall deductions were not recorded until they result ed in a reduction of cash tax payable. The impact from adopting ASU2016-09 was a tax affected increase to the federal and state deferred tax assets of $6.0 million and $0.6 million, respectively, with a corresponding adjustment to our valuation allowance. The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in certain situations where equity transactions result in a change of ownership as defined by Internal Revenue Code Section 382. In the event we experience an additional ownership change for tax purposes, utilization of our United States net operating loss and tax credit carryforwards could be limited. As of December 31, 201 7 , our total unrecognized tax benefit was $1 8.8 million, of which none of the tax benefit, if recognized, would affect the effective income tax rate due to the valuation allowance that currently offsets deferred tax assets. We do not anticipate the total amount of unrecognized income tax benefits to significantly increase or decrease in the next 12 months. A reconciliation of the beginning and ending unrecognized tax benefit balance is as follows (in thousands): Balance as of December 31, 2014 $ 16,952 Decrease in balance related to tax positions taken in prior year (44) Increase in balance related to tax positions taken during current year 1,827 Balance as of December 31, 2015 18,735 Decrease in balance related to tax positions taken in prior year (3,892) Increase in balance related to tax positions taken during current year 1,942 Balance as of December 31, 2016 16,785 Decrease in balance related to tax positions taken in prior year — Increase in balance related to tax positions taken during current year 2,001 Balance as of December 31, 2017 $ 18,786 Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2017 and 201 6 , we had no accrued interest or penalties due to our net operating losses available to offset any tax adjustment. We file U.S. federal and various state income tax returns. For U.S. federal and state income tax purposes, the statute of limitations currently remains open for the years ending December 31, 201 4 to present and December 31, 201 3 to present, respectively. In addition, all of the net operating losses and research and development credit carryforwards that may be utilized in future years may be subject to examination. We are not currently under examination by income tax authorities in any jurisdiction. The Tax Act was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Among the many changes effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings. In addition, in 2017 we were sub ject to a one-time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, we have made reasonable estimates of the effects and recorded provisional amounts in the financial statements as of December 31, 2017. As we collect and analyze data, interpret the Tax Act, and receive additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, it may make adjustments to the provisional amounts. Those adjustments may impact the provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018. The Tax Act reduces the U.S. statutory tax rate from 35% to 21% for years after 2017. Accordingly, we have re-measured our deferred taxes as of December 31, 2017 to reflect the reduced rate that will apply in future periods when the deferred taxes are settled or realized. We have also adjusted our valuation allowance on our deferred tax assets as a result of changes in the Tax Act. Provisional amounts for the one-time transition tax have been recorded as of December 31, 2017 and are subject to change during 2018. The Tax Act requires us to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. We have recorded a provisional amount for the one-time transitional tax , which is fully offset by current year net operating losses. The provisional amount is based on estimates of the effects of the Tax Act, as a full analysis requires significant data from our foreign subsidiaries that is not regularly collected or analyzed. The total provisional adjustments to our tax provision for the year ended December 31, 2017 is a non-cash impact of $113.0 million. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | NOTE 9. STOCKHOLDERS’ EQUITY Preferred Stock Our Certificate of Incorporation, as amended and restated in October 2010 in connection with the closing of our initial public offering, authorizes us to issue 1,000,000,000 shares of $0.001 par value common stock and 50,000,000 shares of $0.001 par value preferred stock. As of December 31, 2017 and 2016, there were no shares of preferred stock issued or outstanding . Common Stock Common stockholders are entitled to dividends when and if declared by our board of directors. There have been no dividends declared to date. The holder of each share of common stock is entitled to one vote. For the year ended December 31,2016, we issued 6.5 million shares of our common stock at an average price of $9.19 through our “at-the-market” offering, resulting in net proceeds of $58.2 million. In February 2017, we filed a prospectus supplement pursuant to which we could offer and sell, from time to time, additional shares of our common stock having an aggregate offering price of up to $60.0 million. During 2017 we issued 3.2 million shares of our common stock at an average price of $3.86 per share through our “at-the-market” offering, resulting in net proceeds of $11.9 million. We terminated our “at-the-market” offering program in June 2017. We paid a commission equal to 3% of the gross proceeds from the sale of shares of our common stock under the sales agreement. In August 2017, we filed a shelf registration statement on Form S-3 with the SEC pursuant to which we may, from time to time, sell up to an aggregate of $150.0 million of our common stock, preferred stock, depository shares, warrants, units or debt securities. On August 18, 2017, the registration statement was declared effective by the SEC, which allows us to access the capital markets for the three-year period following this effective date. Underwritten Public Equity Offering In June 2017, we issued and sold a total of 17.7 million shares of our common stock at a price to the public of $3.10 per share in an underwritten public offering. We paid a commission equal to 4% of the gross proceeds from the sale of shares of our common stock under the underwriting agreement. The total proceeds to us from the offering, after deducting the underwriting commission and offering expenses, were approximately $52.5 million. In February 2018, we issued and sold a total of 14,375,000 shares of our common stock at a price to the public of $2.40 per share in an underwritten public offering. We paid a commission equal to 4% of the gross proceeds from the sale of shares of our common stock under the underwriting agreement. The total net proceeds to us from the offering, after deducting the underwriting commission and estimated offering expenses, were approximately $32.8 million. We may need to raise additional capital in the future through the sale of equity or convertible debt securities, including future “at-the-market” offerings. Subject to certain exceptions set forth in our existing Facility Agreement, holders of our Notes may elect to receive 25% of the net proceeds from financing activities that include an equity component as prepayment of the Notes to be applied first, to accrued and unpaid interest and second, to principal. To the extent we raise additional capital in the future through the sale of common stock, including without limitation, sales of common stock pursuant to an “at-the-market” offering program , we may be obligated, at the election of the holders, to pay 25% of the net proceeds from any such financing activities as partial payment of the Notes. Warrants In connection with the execution of the Facility Agreement, we issued immediately exercisable warrants to purchase 5.5 million shares of common stock at an exercise price per share initially equal to $2.63 , all of which were net exercised during 2016 resulting in the issuance of approximately 4.2 million shares. The cashless net exercise of the warrants did not result in any additional funds being collected by us. As of December 31, 2017 and 2016, no warrants remained outstanding. Equity Plans As of December 31, 201 7 , we had three active equity plans: 1) the 2010 Equity Incentive Plan or “2010 Plan,” 2) the 2010 Outside Director Equity Incentive Plan or “2010 Director Plan,” and 3) the 2010 Employee Stock Purchase Plan or “ESPP”, all of which we adopted upon the effectiveness of our initial public offering in October 2010. Prior to the adoption of these plans, we granted options pursuant to the 2004 Equity Incentive Plan and 2005 Stock Plan. Upon termination of the predecessor plans, the shares available for grant at the time of termination, and shares subsequently returned to the plans upon forfeiture or option termination, were transferred to the successor plan in effect at the time of share return. We issue new shares of common stock upon the exercise of stock options. 2010 Equity Incentive Plan and Outside Director Equity Incentive Plan Stock options granted under the 2010 Plan may be either Incentive Stock Option (“ I SO”) or Non-Qualified Stock Option (“NSO”). ISOs may be granted only to employees. NSOs may be granted to employees, consultants and directors. Stock options under the 2010 Plan may be granted with a term of up to ten years and at prices no less than the fair market value of our common stock on the date of grant. To date, stock options granted to existing employees generally vest over four years on a monthly basis and stock options granted to new employees vest at a rate of 25% upon the first anniversary of the vesting commencement date and 1/48th per month thereafter. In January 201 8 , an additional 7.0 million shares were reserved under the 2010 Plan. Stock options granted under the 2010 Director Plan provide for the grant of NSOs. Stock options under the 2010 Plan may be granted with a term of up to ten years and at prices no less than the fair market value of our common stock on the date of grant. To date, stock options granted to existing directors generally vest over one year on a monthly basis and stock options granted to new directors generally vest over three years at a rate of one -third upon the first anniversary of the vesting commencement date and 1/36th per month thereafter. As of December 31, 201 7 we had an aggregate of 6.8 million shares of common stock reserved for future issuance under the 2010 Plan and 2010 Director Plan. 2010 Employee Stock Purchase Plan We adopted the ESPP in October 2010. Our ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Each offering period will generally consist of four purchase periods, each purchase period being approximately six months. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or at the end of a purchase period. Each offering period will generally end and the shares will be purchased twice yearly on March 1 and September 1. If the stock price at the end of the purchase period is lower than the stock price at the beginning of the offering period, that offering period will then be terminated and new offering period comes to place. As of December 31, 201 7 , 1.3 million s hares of our common stock remain available for issuance under the Plan. The ESPP provides for an annual increase to the shares available for issuance at the beginning of each calendar year equal to 2% of the common shares then outstanding. During January 201 8 , an additional 2.3 million shares were reserved under the ESPP. The following table summarizes stock option activity for all stock option plans for the year ended December 31, 201 7 (in thousands, except per share amounts): Stock Options Outstanding Shares available Number Weighted average for grant of shares Exercise price exercise price Balances, December 31, 2016 6,471 22,501 $ 1.16 – 16.00 $ 6.30 Additional shares reserved 4,634 Options granted (6,239) 6,239 $ 2.66 – 5.37 $ 4.84 Options exercised — (1,407) $ 1.16 – 5.27 $ 2.55 Options canceled 1,929 (1,929) $ 1.16 – 16.00 $ 7.00 Balances, December 31, 2017 6,795 25,404 $ 1.16 – 16.00 $ 6.10 The following table summarizes information with respect to stock options outstanding and exercisable under the plans at December 31, 2017: Options Outstanding Options Exercisable Weighted average Number remaining contractual Weighted average Number Weighted average outstanding life (Years) exercise price vested exercise price 25,404,152 6.51 $ 6.10 16,802,740 $ 6.05 The aggregate intrinsic value of the outstanding and exercisable options presented in the table above totaled $ 1.7 million and $1.6 million, respectively. The aggregate intrinsic value represents the total pretax intrinsic value (i.e., the difference between $2.64 , our closing stock price on the last trading day of our fourth quarter of 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 201 7 . The aggregate intrinsic value changes at each reporting date based on the fair market value of our common stock. The weighted average remaining contractual life for exercisable options is 5.43 years. The vested and expected to vest option as of December 31, 2017 totaled 22,324,228, with aggregate intrinsic value of $1.6 million, weighted average exercise price per share of $6.04 and weighted average remaining contractual life of 6.23 years. The total intrinsic v alue of stock options exercised during the years ended December 31, 2017, 2016 and 2015 was $1.7 million, $4.7 million and $3.5 million , respectively. The total fair valu e of stock options vested during the years ended December 31, 2017, 2016 and 2015 was $6.4 million, $20.7 million and $7.3 million , respectively. Stock-based Compensation Total stock-based compensation expense consists of the following (in thousands): Years Ended December 31, 2017 2016 2015 Cost of revenue $ 2,311 $ 2,133 $ 1,313 Research and development 8,506 8,257 5,196 Sales, general and administrative 9,535 9,172 7,331 Total stock-based compensation expense $ 20,352 $ 19,562 $ 13,840 As of December 31, 201 7 and December 31, 201 6 , $441,000 and $389,000 of stock-based compensation cost was capitalized in inventory on our consolidated balance sheets, respectively. The tax benefit of stock-based compensation expense was immaterial for the years ended December 31, 2017, 2016 and 2015. Stock Options We estimated the fair value of employee stock option using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. For the years ended December 31, 2017, 2016 and 2015, the weighted average fair value at grant date per stock option was $3.08 , $5.47 and $4.75 , respectively. We recorded stock-based compensation expense for stock options of $17.2 million, $15.7 million and $10.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. For the years ended December 31, 2017, 2016 and 2015, the fair value of employee stock options was estimated using the following weighted average assumptions: Years Ended December 31, 2017 2016 2015 Expected term (years) 6.1 years 6.1 years 6.1 years Expected volatility 70.0% 70.0% 70.0% Risk-free interest rate 2.1% 1.5% 1.7% Dividend yield — — — As of December 31, 201 7 , $ 22.5 million of total unrecognized compensation expense related to stock options was expected to be recognized over a weighted-average period of 2.5 years. Future option grants will increase the amount of compensation expense to be recorded in those future periods. Cash received from option exercises for the years ended December 31, 2017, 2016 and 2015 was $3.6 million, $2.5 million and $3.0 million, respectively. ESPP We estimated the fair value of ESPP using the Black-Scholes option pricing model. For the years ended December 31, 2017, 2016 and 2015, weighted average fair value at grant date for ESPP was $2.28 , $4.21 and $2.20 , respectively. We recorded stock-based compensation expense for ESPP of $3.1 million, $3.7 million and $3.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. For the years ended December 31, 2017, 2016 and 2015, the fair value of ESPP was estimated using the following assumptions: Years Ended December 31, 2017 2016 2015 Expected term (years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 70.0% 70.0% 70.0% Risk-free interest rate 0.8% - 1.4% 0.5% - 0.9% 0.1% - 0.7% Dividend yield — — — For the years ended December 31, 2017 and 2016 and 2015, 1.3 million shares, 1.3 million shares and 1.1 million shares of common stock were purchased under the ESPP, respectively. Cash received through the ESPP for the years ended December 31, 2017, 2016 and 2015 was $5.3 million, $5.2 million and $4.4 million, respectively . |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Net Loss Per Share [Abstract] | |
Net Loss Per Share | NOTE 10. NET LOSS PER SHARE The following options outstanding and warrants to purchase common stock were excluded from the computation of diluted net loss per share for the periods presented because the effect of including such shares would have been antidilutive: Years Ended December 31, (in thousands) 2017 2016 2015 Options outstanding 25,404 22,501 19,468 Warrants to purchase common stock — — 5,500 |
Segment And Geographic Informat
Segment And Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment And Geographic Information [Abstract] | |
Segment And Geographic Information | NOTE 11. SEGMENT AND GEOGRAPHIC INFORMATION We are organized as, and operate in, one reportable segment: the development, manufacturing and marketing of an integrated platform for genetic analysis. Our chief operating decision-maker is our Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of evaluating financial performance and allocating resources, accompanied by information about revenue by geographic regions. Our assets are primarily located in the United States of America and not allocated to any specific region and we do not measure the performance of geographic regions based upon asset-based metrics. Therefore, geographic information is presented only for revenue. Revenue by geographic region is based on the ship to address on the customer order. A summary of our revenue by geographic location for the years ended December 31, 2017, 2016 and 2015 is as follows, with Roche related contractual revenue classified as revenue from the United States: Years Ended December 31, (in millions) 2017 2016 2015 North America $ 40.6 $ 50.8 $ 68.8 Europe 13.2 20.0 9.0 Asia Pacific (including the Middle East) 39.7 19.9 15.0 Total $ 93.5 $ 90.7 $ 92.8 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Event [Abstract] | |
Subsequent Event | NOTE 13. SUBSEQUENT EVENT In February 2018, we issued and sold a total of 14,375,000 shares of our common stock at a price to the public of $2.40 per share in an underwritten public offering. We paid a commission equal to 4% of the gross proceeds from the sale of shares of our common stock under the underwriting agreement. The total net proceeds to us from the offering, after deducting the underwriting commission and estimated offering expenses, were approximately $32.8 million. Subject to certain exceptions set forth in our Facility Agreement, holders of our Notes may elect to receive up to 25% of the net proceeds from financing activities that include an equity component as prepayment of the Notes to be applied first, to accrued and unpaid interest and second, to principal. However, on February 15, 2018 holders representing a majority of the aggregate principal amount of the outstanding Notes waived such right in connection with the issuance and sale of shares of common stock under our February 2018 underwritten public offering. |
Summary Of Significant Accoun19
Summary Of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2017 | |
Summary Of Significant Accounting Policies [Abstract] | |
Basis Of Presentation And Consolidation | Basis of Presentation and Consolidation Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or U.S. GAAP, as set forth in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC. The consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. Translation adjustments resulting from translating foreign subsidiaries’ results of operations and assets and liabilities into U.S. dollars are immaterial for all periods presented. |
Use Of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. 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 2017, we recorded a charge to cost of service and other revenue of $1.6 million relating to leased RS II instruments primarily due to a change in the estimated useful life of these instruments. The charge of $1.6 million increased loss per share by $0.01 for the year ended December 31, 2017. |
Fair Value Of Financial Instruments | Fair Value of Financial Instruments 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. The fair value hierarchy established under U.S. GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are as follows: • Level 1: quoted prices in active markets for identical assets or liabilities; • Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider an active market as one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, we view an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our non-performance risk, or that of our counterparty, is considered in determining the fair values of liabilities and assets, respectively. 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. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the entire fair value measurement requires management to make judg e ments and consider factors specific to the asset or liability. 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 that were measured on a recurring basis as of December 31, 2017 and December 31, 2016 respectively (in thousands): December 31, 2017 December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Cash and money market funds $ 14,858 $ — $ — $ 14,858 $ 14,516 $ — $ — $ 14,516 Commercial paper — 1,649 — 1,649 — 2,249 — 2,249 US government & agency securities — — — — — — — — Total cash and cash equivalents 14,858 1,649 — 16,507 14,516 2,249 — 16,765 Investments: Commercial paper — 20,394 — 20,394 — 23,583 — 23,583 Corporate debt securities — 9,034 — 9,034 — 10,739 — 10,739 US government & agency securities — 16,937 — 16,937 — 20,579 — 20,579 Asset backed securities — — — — — 312 — 312 Total investments — 46,365 — 46,365 — 55,213 — 55,213 Long-term restricted cash: Cash 4,500 — — 4,500 4,500 — — 4,500 Total assets measured at fair value $ 19,358 $ 48,014 $ — $ 67,372 $ 19,016 $ 57,462 $ — $ 76,478 Liabilities Financing derivative $ — $ — $ 183 $ 183 $ — $ — $ 356 $ 356 Total liabilities measured at fair value $ — $ — $ 183 $ 183 $ — $ — $ 356 $ 356 The estimated fair value of the Financing Derivative liability (as defined in “Note 6. Notes Payable’) was determined using Level 3 inputs, or significant unobservable inputs. Refer to “Note 6. Notes Payable” for a detailed description and valuation approach. Changes to the estimated fair value of the Financing Derivative are recorded in “Other income (expense), net” in the consolidated statements of operations and comprehensive loss. The following table provides the changes in the fair value of the Financial Derivative for the year ended December 31, 2017 and 2016 (in thousands), respectively: Financing Derivative Amount Balance as of December 31, 2015 $ 600 Gain on change in fair value of Financing Derivative (244) Balance as of December 31, 2016 356 Loss on change in fair value of Financing Derivative 653 Change in fair value due to partial exercise of derivative associated with $4.5 million principal payoff (826) Balance as of December 31, 2017 $ 183 For the year ended December 31, 2017, there were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis and our valuation techniques did not change compared to the prior year. 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 current liabilities approximate fair value due to their short maturities. We determined the fair value of the Notes (as defined in “Note 6. Notes Payable”) from the debt facility we entered into during the first quarter of 2013 using Level 3 inputs, or significant unobservable inputs. The value of the Notes 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 a 10.3% and 10.6% weighted average market yield at December 31, 2017 and December 31, 2016, respectively. Refer to “Note 6. Notes Payable” for additional details regarding the Notes. The estimated fair value and carrying value of the Notes are as follows (in thousands): December 31, 2017 December 31, 2016 Fair Value Carrying Value Fair Value Carrying Value Long-term notes payable $ 15,664 $ 13,635 $ 19,788 $ 16,106 |
Cash And Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Investments | Investments We have designated all investments as available-for-sale and therefore, such investments are reported at fair value, with unrealized gains and losses recognized in accumulated other comprehensive income (loss) (“OCI”) in stockholders’ equity. The cost of marketable securities is adjusted for the amortization of premiums and discounts to expected maturity. Premium and discount amortization is included in other income, net. Realized gains and losses, as well as interest income, on available-for-sale securities are also included in other income, net. The cost of securities sold is based on the specific identification method. We include all of our available-for-sale securities in current assets. All of our investments are subject to a periodic impairment review. We recognize an impairment charge when a decline in the fair value of our investments below the cost basis is judged to be other-than-temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which an investment’s fair value has been less than its cost basis, the financial condition and near-term prospects of the investee, extent of the loss related to credit of the issuer, the expected cash flows from the security, our intent to sell the security and whether or not we will be required to sell the security before the recovery of its amortized cost. During the years ended December 31, 2017, 2016 and 2015, we did not recognize any impairment charges on our investments as it is more likely than not that we will recover their amortized cost basis upon sale or maturity. |
Concentration And Other Risks | Concentration and Other Risks The counterparties to the agreements relating to our investment securities consist of various major corporations, financial institutions, municipalities and government agencies of high credit standing. Our accounts receivable are derived from net revenue to customers and distributors located in the United States and other countries. We perform credit evaluations of our customers’ financial condition and, generally, require no collateral from our customers. We regularly review our accounts receivable including consideration of factors such as historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer’s ability to pay. We have not experienced any significant credit losses to date. Excluding contractual revenue from the Roche agreement, which has now been terminated, for the year ended December 31, 2017, one customer, Gene Company Limited, accounted for approximately 31% of our total revenue, for the years ended December 31, 2016 and 2015, no customer accounted for more than 10% of our total revenue. As of both December 31, 2017 and 2016, 84% of our accounts receivable were from domestic customers. As of December 31, 2017, one c ustomer, Gene Company Limited, represented approximately 20 % of our net accounts receivable. As of December 31, 2016, no customer represented more than 10% of our net accounts receivable. We currently purchase several key parts and components used in the manufacture of our products from a limited number of suppliers. Generally we have been able to obtain an adequate supply of such parts and components. However, an extended interruption in the supply of parts and components currently obtained from our suppliers could adversely affect our business and consolidated financial statements. |
Inventory | Inventory We early adopted the Accounting Standards Update (“ASU”) No. 2015-11, Simplifying the Measurement of Inventory in the year ended December 31, 2016 effective January 1, 2016. The adoption did not result in any material impact to inventory . As a result, our inventories are stated at the lower of average cost or net realizable value. Cost is determined using the first-in, first-out (“FIFO”) method. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess or obsolete balances. |
Property And Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation and any impairment charges. Depreciation is computed using the straight-line method over the estimated useful life of the asset, generally two to three years for computer equipment, three to five years for software, three to seven years for furniture and fixtures, three to five years for lab equipment and 30 years for buildings. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the related asset. Major improvements are capitalized, while maintenance and repairs are expensed as incurred. |
Long-Term Restricted Cash | Long-term Restricted Cash As required under the lease agreement for our corporate offices (the “O’Brien lease”), we were required to establish a letter of credit for the benefits of the landlord and to submit $4.5 million as a deposit for the letter of credit in October 2015; and, as such, $4.5 million was recorded in “Long-term restricted cash” in the consolidated balance sheet as of such year and continued to be so recorded as of both December 31, 2017 and December 31, 2016. |
Impairment Of Long-Lived Assets | Impairment of Long-Lived Assets We periodically review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset is impaired or the estimated useful lives are no longer appropriate. Fair value is estimated based on discounted future cash flows. If indicators of impairment exist and the undiscounted projected cash flows associated with such assets are less than the carrying amount of the asset, an impairment loss is recorded to write the asset down to its estimated fair value. To date, we have not recorded any impairment charges. |
Revenue Recognition | Revenue Recognition Our revenue is generated primarily from the sale of products and services, in addition to revenue from collaboration agreements. Product revenue consists of sales of our instruments and related consumables; Service and other revenue primarily consist of revenue earned from product maintenance agreements, instrument lease agreements and grant revenue. Contractual revenue relates to revenue recognized from the collaboration agreement under which we received an upfront fee and may receive contingent milestone payments. Our deliverables under the arrangement include licenses to intellectual property rights and research and development services. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. For instances where final acceptance of the product or system is required, revenue is deferred until all acceptance criteria have been met. Revenue for product sales is generally recognized upon customer acceptance. For certain qualified distributors revenue is recognized based upon shipment terms. Revenue for product maintenance agreements is recognized when earned, which is generally ratably over the service period. In order to assess whether the price is fixed or determinable, we evaluate whether refund rights exist. If refund rights exist or payment terms are based on future performance, we defer revenue recognition until the price becomes fixed or determinable. We assess collectability based on a number of factors, including customer creditworthiness. If we determine that collection of amounts due is not reasonably assured, revenue recognition is deferred until receipt of payment. We regularly enter into arrangements, comprised of one or more contracts, from which revenue is derived from multiple deliverables including a mix of products and or services. Revenue recognition for contracts with multiple deliverables is based on the individual units of accounting determined to exist in the contract. A delivered item is considered a separate unit of accounting when (i) the delivered item has value to the customer on a stand-alone basis; and (ii) if a general right of return exists, the delivery or performance of an undelivered item is considered probable and under our control. Items are considered to have stand-alone value when they are sold separately by any vendor or when the customer could resell the item on a stand-alone basis. Our revenue arrangements generally do not have a general right of return. When a deliverable does not meet the criteria to be considered a separate unit of accounting, we group it with other deliverables that, when combined, meet the criteria, and the appropriate allocation of arrangement consideration and revenue recognition is determined. Consideration is allocated at the inception of the contract to all deliverables based on their relative selling price. In order to determine the relative selling price of a deliverable, we apply, in order, vendor-specific objective evidence (“VSOE”); third-party evidence if VSOE is not available; and lastly our best estimate of selling price for the deliverable if neither VSOE nor third-party evidence is available. In order to establish VSOE, we must regularly sell the product or service on a standalone basis with a substantial majority of sales priced within a relatively narrow range. If an insufficient number of standalone sales exist and VSOE cannot be determined, we then consider whether third party evidence can be used to establish selling price. Due to the lack of similar products and services sold by other companies within our industry, we have not established selling price using third-party evidence. If neither VSOE nor third party evidence of selling price exists, we determine our best estimate of selling price using a combination of prices set by our pricing committee adjusted for applicable discounts and customer orders received to date. Deferred service revenue primarily represents product maintenance agreement revenue that is expected to be recognized over the related service period, generally one to three years. For instrument lease agreements we entered into with our customers, they are classified as operating-type leases and revenue from these leases is recognized on a straight-line basis over the respective lease term, once the lessee takes (or has the right to take) control/possession of the property under the lease. Effectively, this occurs once installation is complete and acceptance has been obtained. |
Cost Of Revenue | Cost of Revenue Cost of revenue reflects the direct cost of product components, third-party manufacturing services and our internal manufacturing overhead and customer service infrastructure costs incurred to produce, deliver, maintain and support our instruments, consumables, and services. There are no incremental costs associated with our contractual revenue; all product development costs are reflected in research and development expense. Manufacturing overhead is predominantly comprised of labor and facility costs. We determine and capitalize manufacturing overhead into inventory based on a standard cost model that approximates actual costs. Service costs include the direct costs of components used in support, repair and maintenance of customer instruments as well as the cost of personnel, materials, shipping and support infrastructure necessary to support the installed customer base. |
Research And Development | Research and Development Research and development expense consists primarily of expenses for personnel engaged in the development of our SMRT Sequencing technology, the design and development of our future products and current product enhancements. These expenses also include prototype-related expenditures, development equipment and supplies, facilities costs and other related overhead. We expense research and development costs during the period in which the costs are incurred. However, we defer and capitalize non-refundable advance payments made for research and development activities until the related goods are received or the related services are rendered. |
Leases | Leases We categorize leases at their inception as either operating or capital leases. On certain of our lease agreements, we may receive tenant improvement allowances, rent holidays and other incentives. Rent expense is recorded on a straight-line basis over the term of the lease. The difference between rent expense recognized and amounts paid under the lease agreement is recorded as deferred rent in the balance sheets. Leasehold improvements are capitalized at cost and depreciated over the shorter of their expected useful life or the life of the lease. Tenant improvements afforded to us by landlord incentives are recorded as leasehold improvement assets with corresponding deferred rent liabilities. For build-to-suit lease arrangements, we evaluate the extent of our financial and operational involvement in the tenant improvements to determine whether we are considered the owner of the construction project under U.S. GAAP. When we are considered the owner of a project, we record the shell of the facility at its fair value at the date construction commences with a corresponding facility financing obligation. Improvements to the facility during the construction project are capitalized and, to the extent funded by lessor afforded incentives, with corresponding increases to the facility financing obligation. Payments we make under leases in which we are considered the owner of the facility are allocated to land rental expense, based on the relative values of the land and building at the commencement of construction, reductions of the facility financing obligation and interest expense recognized on the outstanding obligation. To the extent gross future payments do not equal the recorded liability, the liability is settled upon return of the facility to the lessor. Any difference between the book value of the assets and remaining facility obligation are recorded in other expense, net. For existing arrangements, the differences are expected to be immaterial. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax basis of our assets and liabilities and the amounts reported in the financial statements. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carryforwards. A full valuation allowance is provided against our net deferred tax assets as it is more likely than not that the deferred tax assets will not be fully realized. We review our positions taken relative to income taxes. To the extent our tax positions are more likely than not going to result in additional taxes, we would accrue the estimated amount of tax related to such uncertain positions. |
Stock-Based Compensation | Stock-based Compensation Stock-based compensation expense for all stock-based compensation awards is based on the grant date fair value estimated using the Black-Scholes option pricing model. We have limited historical information available to support the underlying estimates of certain assumptions required to value stock options. The expected term of options is estimated based on the simplified method. We do not have sufficient trading history to solely rely on the volatility of our own common stock for establishing expected volatility. Therefore, we based our expected volatility on the historical stock volatilities of our common stock as well as several comparable publicly listed companies over a period equal to the expected term of the options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the stock option. We estimate our forfeiture rate based on an analysis of our actual forfeitures and will continue to evaluate the adequacy of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover behavior and other factors. The impact from a forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual number of future forfeitures differs from that which was estimated, we may be required to record adjustments to stock-based compensation expense in future periods. We recognize compensation expense on a straight-line basis over the requisite service period. We elected to use the simplified method to calculate the beginning pool of excess tax benefits. |
Other Comprehensive Income (Loss) | Other Comprehensive Income (loss) Other comprehensive income (loss) is comprised of unrealized gains (losses) on our investment securities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Standards In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which amends the current stock compensation guidance. The amendments simplify the accounting for the taxes related to stock-based compensation, including adjustments to how excess tax benefits and a company's payments for tax withholdings should be classified. Furthermore, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. We adopted this guidance as of January 1, 2017. Prior to adoption, the excluded windfall deductions for federal and state purposes were $6.0 million and $0.6 million, respectively. Upon adoption of ASU 2016-09, we recognized the excluded windfall deductions as a deferred tax asset with a corresponding increase to valuation allowance. Our total deferred tax assets were $321.5 million as of January 1, 2017, and were fully offset by a valuation allowance. Further, we did not elect an accounting policy change to record forfeitures as they occur and thus we continue to estimate forfeitures at each period. During August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, which requires management to evaluate whether there are conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern in the next 12 months from the filing date of the Annual Report on Form 10-K for the year ended December 31, 2017 and to provide disclosures when certain criteria are met. The guidance is effective for annual periods beginning after December 15, 2016 and interim reporting periods starting in the first quarter of 2017. We adopted this standard as of December 31, 2016. Cash, cash equivalents and investments at December 31, 2017 totaled $62.9 million, compared to $72.0 million at December 31, 2016. We believe that our existing cash, cash equivalents and investments will be sufficient to fund our projected operating requirements for at least the next 12 months; however, we may raise additional capital in the future. Our view regarding sufficiency of cash and liquidity is primarily based on our financial forecast for 2018, which includes various assumptions regarding demand for our products. Generally, we expect demand for our products to increase. Factors that may affect our capital needs include, but are not limited to, slower than expected adoption of our products resulting in lower sales of our products and services; future acquisitions; our ability to obtain new collaboration and customer arrangements; the progress of our research and development programs; initiation or expansion of research programs and collaborations; litigation costs, including the costs involved in preparing, filing, prosecuting, defending and enforcing intellectual property rights; the purchase of patent licenses; and other factors. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases. The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases . ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. In May 2014, the FASB issued ASU 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. 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 2018. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. While we are continuing to assess all potential impacts of the new standard on our consolidated financial statements, we plan to adopt the standard using the modified retrospective approach with the cumulative effect of adoption, if any, to be recognized as an adjustment to our accumulated deficit on January 1, 2018. The new revenue standard is principle-based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. We are still in the process of evaluating the effect of the new standard on our historical financial statements and disclosures. While we have not completed our evaluation, we currently believe that the impact of adopting the standard will not materially change the amount or timing of our recognition of revenue and related costs. Accordingly, we do not expect to recognize a material adjustment to our accumulated deficit upon adoption on January 1, 2018. As we complete our evaluation of this new standard, new information may arise that could change our current understanding of the impact to revenue and expense recognized. Additionally, we will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust our assessment and implementation plans accordingly. |
Summary Of Significant Accoun20
Summary Of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary Of Assets And Liabilities Measured At Fair Value On A Recurring Basis | December 31, 2017 December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Cash and money market funds $ 14,858 $ — $ — $ 14,858 $ 14,516 $ — $ — $ 14,516 Commercial paper — 1,649 — 1,649 — 2,249 — 2,249 US government & agency securities — — — — — — — — Total cash and cash equivalents 14,858 1,649 — 16,507 14,516 2,249 — 16,765 Investments: Commercial paper — 20,394 — 20,394 — 23,583 — 23,583 Corporate debt securities — 9,034 — 9,034 — 10,739 — 10,739 US government & agency securities — 16,937 — 16,937 — 20,579 — 20,579 Asset backed securities — — — — — 312 — 312 Total investments — 46,365 — 46,365 — 55,213 — 55,213 Long-term restricted cash: Cash 4,500 — — 4,500 4,500 — — 4,500 Total assets measured at fair value $ 19,358 $ 48,014 $ — $ 67,372 $ 19,016 $ 57,462 $ — $ 76,478 Liabilities Financing derivative $ — $ — $ 183 $ 183 $ — $ — $ 356 $ 356 Total liabilities measured at fair value $ — $ — $ 183 $ 183 $ — $ — $ 356 $ 356 |
Changes In Fair Value Of Financial Derivative | Financing Derivative Amount Balance as of December 31, 2015 $ 600 Gain on change in fair value of Financing Derivative (244) Balance as of December 31, 2016 356 Loss on change in fair value of Financing Derivative 653 Change in fair value due to partial exercise of derivative associated with $4.5 million principal payoff (826) Balance as of December 31, 2017 $ 183 |
Estimated Fair Value And Carrying Value of Notes | December 31, 2017 December 31, 2016 Fair Value Carrying Value Fair Value Carrying Value Long-term notes payable $ 15,664 $ 13,635 $ 19,788 $ 16,106 |
Cash And Cash Equivalents And21
Cash And Cash Equivalents And Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash And Cash Equivalents And Investments [Abstract] | |
Summary Of Cash, Cash Equivalents And Investments | As of December 31, 2017 Gross Gross Amortized unrealized unrealized Fair Cost gains losses Value Cash and cash equivalents: Cash and money market funds $ 14,858 $ — $ — $ 14,858 Commercial paper 1,649 — — 1,649 Total cash and cash equivalents 16,507 — — 16,507 Investments: Commercial paper 20,408 — (14) 20,394 Corporate debt securities 9,043 — (9) 9,034 Asset backed securities — — — — US government & agency securities 16,946 — (9) 16,937 Total investments 46,397 — (32) 46,365 Total cash, cash equivalents and investments $ 62,904 $ — $ (32) $ 62,872 Long-term restricted cash: Cash $ 4,500 $ — $ — $ 4,500 As of December 31, 2016 Gross Gross Amortized unrealized unrealized Fair Cost gains losses Value Cash and cash equivalents: Cash and money market funds $ 14,516 $ — $ — $ 14,516 Commercial paper 2,249 — — 2,249 Total cash and cash equivalents 16,765 — — 16,765 Investments: Commercial paper 23,581 5 (3) 23,583 Corporate debt securities 10,741 1 (3) 10,739 Asset backed securities 312 — — 312 US government & agency securities 20,574 7 (2) 20,579 Total investments 55,208 13 (8) 55,213 Total cash, cash equivalents and investments $ 71,973 $ 13 $ (8) $ 71,978 Long-term restricted cash: Cash $ 4,500 $ — $ — $ 4,500 |
Summary Of Contractual Maturities Of Cash Equivalents And Available-For-Sale Investments | (in thousands) Fair Value Due in one year or less $ 48,014 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Components [Abstract] | |
Components Of Inventory | December 31, (in thousands) 2017 2016 Purchased materials $ 8,884 $ 4,817 Work in process 9,994 7,287 Finished goods 4,187 3,530 Inventory $ 23,065 $ 15,634 |
Components Of Prepaid Expenses And Other Current Assets | December 31, (in thousands) 2017 2016 Receivable from Prior Landlord $ — $ 5,000 Rent deposits for O'Brien building — 2,160 Prepaid expenses 1,318 2,342 Other current assets 931 476 Prepaid expenses and other current assets $ 2,249 $ 9,978 |
Components Of Other Long-term Assets | December 31, (in thousands) 2017 2016 Rent deposits and tenant improvements for O'Brien building $ — $ 9,641 Other 45 172 Other long-term assets $ 45 $ 9,813 |
Components Of Property And Equipment, Net | December 31, (in thousands) 2017 2016 Building $ — $ 1,160 Laboratory equipment and machinery 24,703 23,337 Leasehold improvements 29,728 8,138 Computer equipment 8,301 7,170 Software 4,615 5,189 Furniture and fixtures 2,382 823 Construction in progress 385 5,772 70,114 51,589 Less: Accumulated depreciation (32,194) (37,029) Property and equipment, net $ 37,920 $ 14,560 |
Schedule Of Accrued Expenses | December 31, (in thousands) 2017 2016 Salaries and benefits $ 7,570 $ 8,562 Accrued product development costs 2,034 5,411 Inventory accrual, professional services, accrued interest and other 3,014 2,631 Accrued expenses $ 12,618 $ 16,604 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable [Abstract] | |
Schedule Of Payments Due Under Facility Agreement | Amount Years ending December 31, (in thousands) 2018 $ 1,400 2019 1,400 2020 16,491 Total remaining payments 19,291 Less: interest and discounts (5,656) Notes payable $ 13,635 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies [Abstract] | |
Schedule Of Future Annual Minimum Lease Payments | Amount Years ending December 31, (in thousands) 2018 $ 6,822 2019 6,930 2020 7,056 2021 7,272 2022 7,488 Thereafter 39,222 Total minimum lease payments $ 74,790 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Reconciliation Of Federal Income Tax Rate | Years ended December 31, 2017 2016 2014 Statutory tax rate 35.0 % 35.0 % 35.0 % State tax rate, net of federal benefit 8.6 5.4 (3.5) Stock-based compensation (1.9) (1.6) (4.0) R&D credit 3.6 5.0 11.0 Tax reform (123.3) - - Other 0.3 (0.9) (0.6) Change in valuation allowance 77.7 (42.9) (37.9) Effective income tax rate 0.0 % 0.0 % 0.0 % |
Reconciliation Of Deferred Tax Assets And Liabilities | December 31, Deferred tax assets: 2017 2016 Net operating loss carryforwards $ 194,440 $ 264,183 Research and development credits 39,145 32,043 Accruals and reserves 14,480 20,088 Depreciation — 1,170 Deferred rent 3,360 — Total deferred tax assets 251,425 317,484 Less: Valuation allowance (249,202) (317,412) Deferred tax liabilities: Depreciation (2,223) — Deferred rent (72) Net deferred tax assets $ — $ — |
Reconciliation Of Unrecognized Tax Benefit Accounts | Balance as of December 31, 2014 $ 16,952 Decrease in balance related to tax positions taken in prior year (44) Increase in balance related to tax positions taken during current year 1,827 Balance as of December 31, 2015 18,735 Decrease in balance related to tax positions taken in prior year (3,892) Increase in balance related to tax positions taken during current year 1,942 Balance as of December 31, 2016 16,785 Decrease in balance related to tax positions taken in prior year — Increase in balance related to tax positions taken during current year 2,001 Balance as of December 31, 2017 $ 18,786 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity [Line Items] | |
Summary Of Stock Option Activity | Stock Options Outstanding Shares available Number Weighted average for grant of shares Exercise price exercise price Balances, December 31, 2016 6,471 22,501 $ 1.16 – 16.00 $ 6.30 Additional shares reserved 4,634 Options granted (6,239) 6,239 $ 2.66 – 5.37 $ 4.84 Options exercised — (1,407) $ 1.16 – 5.27 $ 2.55 Options canceled 1,929 (1,929) $ 1.16 – 16.00 $ 7.00 Balances, December 31, 2017 6,795 25,404 $ 1.16 – 16.00 $ 6.10 |
Reconciliation Of Outstanding And Exercisable Stock Options | Options Outstanding Options Exercisable Weighted average Number remaining contractual Weighted average Number Weighted average outstanding life (Years) exercise price vested exercise price 25,404,152 6.51 $ 6.10 16,802,740 $ 6.05 |
Schedule Of Stock-Based Compensation Expense | Years Ended December 31, 2017 2016 2015 Cost of revenue $ 2,311 $ 2,133 $ 1,313 Research and development 8,506 8,257 5,196 Sales, general and administrative 9,535 9,172 7,331 Total stock-based compensation expense $ 20,352 $ 19,562 $ 13,840 |
Stock Options [Member] | |
Stockholders' Equity [Line Items] | |
Schedule Of Fair Value Of Employee Stock Options | Years Ended December 31, 2017 2016 2015 Expected term (years) 6.1 years 6.1 years 6.1 years Expected volatility 70.0% 70.0% 70.0% Risk-free interest rate 2.1% 1.5% 1.7% Dividend yield — — — |
ESPP [Member] | |
Stockholders' Equity [Line Items] | |
Schedule Of Fair Value Of Employee Stock Options | Years Ended December 31, 2017 2016 2015 Expected term (years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 70.0% 70.0% 70.0% Risk-free interest rate 0.8% - 1.4% 0.5% - 0.9% 0.1% - 0.7% Dividend yield — — — |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net Loss Per Share [Abstract] | |
Antidilutive Shares Excluded From Computation Of Diluted Net Loss Per Share | Years Ended December 31, (in thousands) 2017 2016 2015 Options outstanding 25,404 22,501 19,468 Warrants to purchase common stock — — 5,500 |
Segment And Geographic Inform28
Segment And Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment And Geographic Information [Abstract] | |
Schedule Of Revenue By Geographic Location | Years Ended December 31, (in millions) 2017 2016 2015 North America $ 40.6 $ 50.8 $ 68.8 Europe 13.2 20.0 9.0 Asia Pacific (including the Middle East) 39.7 19.9 15.0 Total $ 93.5 $ 90.7 $ 92.8 |
Unaudited Selected Quarterly Fi
Unaudited Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Unaudited Selected Quarterly Financial Data [Abstract] | |
Schedule Of Unaudited Quarterly Financial Data | Fiscal 2017 Quarter Ended (in thousands, except per share data) March 31, June 30, September 30, December 31, Total revenue $ 24,915 $ 20,073 $ 23,545 $ 24,935 Total gross profit 8,937 8,001 8,227 9,494 Total operating expenses 32,236 32,388 29,796 30,023 Loss from operations (23,299) (24,387) (21,569) (20,529) Net loss (23,867) (25,539) (22,021) (20,762) Basic and diluted net loss per share $ (0.26) $ (0.26) $ (0.19) $ (0.18) Weighted average shares used in computing net loss per share (1) 92,970 97,360 115,771 116,259 Fiscal 2016 Quarter Ended (in thousands, except per share data) March 31, June 30, September 30, December 31, Total revenue $ 19,127 $ 20,747 $ 25,118 $ 25,722 Total gross profit 9,504 10,644 12,638 11,374 Total operating expenses 28,069 28,714 29,373 29,248 Loss from operations (18,565) (18,070) (16,735) (17,874) Net loss (19,352) (18,499) (17,494) (19,030) Basic and diluted net loss per share $ (0.23) $ (0.21) $ (0.19) $ (0.21) Weighted average shares used in computing net loss per share (1) 83,604 88,148 92,110 92,660 |
Summary Of Significant Accoun30
Summary Of Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | ||||
Dec. 31, 2017USD ($)customer$ / shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 01, 2017USD ($) | Oct. 31, 2015USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Cost to cost of service and other revenue related to change in estimated useful life of lease instruments | $ 1,600,000 | ||||
Cost to cost of service and other revenue related to change in estimated useful life of lease instruments, impact on earnings per share | $ / shares | $ (0.01) | ||||
Fair value assets liabilities transfer between levels | $ 0 | ||||
Future cash flows weighted average market yield | 10.30% | 10.60% | |||
Investments impariment charges | $ 0 | $ 0 | $ 0 | ||
Long-term restricted cash | 4,500,000 | 4,500,000 | $ 4,500,000 | ||
Long-lived assets impairment charges | 0 | ||||
Deferred tax assets | 251,425,000 | 317,484,000 | $ 321,500,000 | ||
Cash, cash equivalents and investments | $ 62,900,000 | $ 72,000,000 | |||
Sales Revenue, Net [Member] | Gene Company Limited [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 31.00% | ||||
Number of individual customers | customer | 1 | ||||
Accounts Receivable [Member] | Domestic Customers [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 84.00% | 84.00% | |||
Accounts Receivable [Member] | Gene Company Limited [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 20.00% | ||||
Number of individual customers | customer | 1 | ||||
Building [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 30 years | ||||
Minimum [Member] | Computer Equipment [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 2 years | ||||
Minimum [Member] | Software [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 3 years | ||||
Minimum [Member] | Furniture and Fixtures [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 3 years | ||||
Minimum [Member] | Lab Equipment [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 3 years | ||||
Maximum [Member] | Computer Equipment [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 3 years | ||||
Maximum [Member] | Software [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 5 years | ||||
Maximum [Member] | Furniture and Fixtures [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 7 years | ||||
Maximum [Member] | Lab Equipment [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment estimated useful life | 5 years | ||||
Federal [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Excluded windfall tax deductions | $ 6,000,000 | ||||
State [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Excluded windfall tax deductions | $ 600,000 |
Summary Of Significant Accoun31
Summary Of Significant Accounting Policies (Summary Of Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Total assets measured at fair value | $ 67,372 | $ 76,478 |
Liabilities | ||
Total liabilities measured at fair value | 183 | 356 |
Financing Derivative [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 183 | 356 |
Cash and cash equivalents [Member] | ||
Assets | ||
Total cash and cash equivalents | 16,507 | 16,765 |
Cash and cash equivalents [Member] | Cash and money market funds [Member] | ||
Assets | ||
Total cash and cash equivalents | 14,858 | 14,516 |
Cash and cash equivalents [Member] | Commercial paper [Member] | ||
Assets | ||
Total cash and cash equivalents | 1,649 | 2,249 |
Investments [Member] | ||
Assets | ||
Total investments | 46,365 | 55,213 |
Investments [Member] | Commercial paper [Member] | ||
Assets | ||
Total investments | 20,394 | 23,583 |
Investments [Member] | Corporate debt securities [Member] | ||
Assets | ||
Total investments | 9,034 | 10,739 |
Investments [Member] | U.S. government and agency securities [Member] | ||
Assets | ||
Total investments | 16,937 | 20,579 |
Investments [Member] | Asset backed securities [Member] | ||
Assets | ||
Total investments | 312 | |
Long-term restricted cash [Member] | Cash [Member] | ||
Assets | ||
Long-term restricted cash | 4,500 | 4,500 |
Level 1 [Member] | ||
Assets | ||
Total assets measured at fair value | 19,358 | 19,016 |
Level 1 [Member] | Cash and cash equivalents [Member] | ||
Assets | ||
Total cash and cash equivalents | 14,858 | 14,516 |
Level 1 [Member] | Cash and cash equivalents [Member] | Cash and money market funds [Member] | ||
Assets | ||
Total cash and cash equivalents | 14,858 | 14,516 |
Level 1 [Member] | Long-term restricted cash [Member] | Cash [Member] | ||
Assets | ||
Long-term restricted cash | 4,500 | 4,500 |
Level 2 [Member] | ||
Assets | ||
Total assets measured at fair value | 48,014 | 57,462 |
Level 2 [Member] | Cash and cash equivalents [Member] | ||
Assets | ||
Total cash and cash equivalents | 1,649 | 2,249 |
Level 2 [Member] | Cash and cash equivalents [Member] | Commercial paper [Member] | ||
Assets | ||
Total cash and cash equivalents | 1,649 | 2,249 |
Level 2 [Member] | Investments [Member] | ||
Assets | ||
Total investments | 46,365 | 55,213 |
Level 2 [Member] | Investments [Member] | Commercial paper [Member] | ||
Assets | ||
Total investments | 20,394 | 23,583 |
Level 2 [Member] | Investments [Member] | Corporate debt securities [Member] | ||
Assets | ||
Total investments | 9,034 | 10,739 |
Level 2 [Member] | Investments [Member] | U.S. government and agency securities [Member] | ||
Assets | ||
Total investments | 16,937 | 20,579 |
Level 2 [Member] | Investments [Member] | Asset backed securities [Member] | ||
Assets | ||
Total investments | 312 | |
Level 3 [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 183 | 356 |
Level 3 [Member] | Financing Derivative [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | $ 183 | $ 356 |
Summary Of Significant Accoun32
Summary Of Significant Accounting Policies (Changes In Fair Value Of Financial Derivative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning Balance | $ 356 | $ 600 | ||
(Gain) Loss on change in fair value of Financing Derivative | 653 | (244) | ||
Change in fair value due to partial exercise of derivative associated with $4.5 million principal payoff | (826) | |||
Ending Balance | 183 | $ 356 | ||
Repayment of notes payable | $ 4,500 | |||
Notes [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Repayment of notes payable | $ 4,500 | $ 4,500 |
Summary Of Significant Accoun33
Summary Of Significant Accounting Policies (Estimated Fair Value And Carrying Value Of Notes) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Estimated Fair Value [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term notes payable | $ 15,664 | $ 19,788 |
Carrying Value [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term notes payable | $ 13,635 | $ 16,106 |
Contractual Revenue (Details)
Contractual Revenue (Details) - Roche Agreement [Member] - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2013 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2017 | Dec. 31, 2014 | Dec. 31, 2016 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Non-refundable upfront payment | $ 35,000,000 | |||||||||||||||
Amortization | $ 3,600,000 | $ 3,600,000 | $ 3,600,000 | $ 3,600,000 | $ 3,600,000 | $ 3,600,000 | $ 3,600,000 | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | ||||
Deferred revenue | $ 1,300,000 | $ 1,300,000 | ||||||||||||||
Collaborative arrangement expiration | Feb. 10, 2017 | |||||||||||||||
Maximum potential for additional payments to be recognized upon the achievement of certain development milestones | $ 40,000,000 | |||||||||||||||
Remaining potential for additional payments to be recognized upon the achievement of certain development milestones | $ 0 | |||||||||||||||
First Milestone [Member] | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Deferred revenue, revenue recognized | $ 10,000,000 | |||||||||||||||
Second Milestone [Member] | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Deferred revenue, revenue recognized | $ 10,000,000 | |||||||||||||||
Third (Final) Milestone [Member] | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Deferred revenue, revenue recognized | $ 20,000,000 |
Cash And Cash Equivalents And35
Cash And Cash Equivalents And Investments (Summary Of Cash, Cash Equivalents And Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 62,904 | $ 71,973 |
Gross unrealized gains | 13 | |
Gross unrealized losses | (32) | (8) |
Fair value | 62,872 | 71,978 |
Cash and cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 16,507 | 16,765 |
Fair value | 16,507 | 16,765 |
Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 46,397 | 55,208 |
Gross unrealized gains | 13 | |
Gross unrealized losses | (32) | (8) |
Fair value | 46,365 | 55,213 |
Cash and money market funds [Member] | Cash and cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 14,858 | 14,516 |
Fair value | 14,858 | 14,516 |
Commercial paper [Member] | Cash and cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,649 | 2,249 |
Fair value | 1,649 | 2,249 |
Commercial paper [Member] | Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 20,408 | 23,581 |
Gross unrealized gains | 5 | |
Gross unrealized losses | (14) | (3) |
Fair value | 20,394 | 23,583 |
Corporate debt securities [Member] | Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 9,043 | 10,741 |
Gross unrealized gains | 1 | |
Gross unrealized losses | (9) | (3) |
Fair value | 9,034 | 10,739 |
Asset backed securities [Member] | Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 312 | |
Fair value | 312 | |
U.S. government and agency securities [Member] | Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 16,946 | 20,574 |
Gross unrealized gains | 7 | |
Gross unrealized losses | (9) | (2) |
Fair value | 16,937 | 20,579 |
Cash [Member] | Long-term restricted cash [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4,500 | 4,500 |
Fair value | $ 4,500 | $ 4,500 |
Cash And Cash Equivalents And36
Cash And Cash Equivalents And Investments (Summary Of Contractual Maturities Of Cash Equivalents And Available-For-Sale Investments) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Cash And Cash Equivalents And Investments [Abstract] | |
Due in one year or less | $ 48,014 |
Balance Sheet Components (Narra
Balance Sheet Components (Narrative) (Details) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2017USD ($)item | Sep. 30, 2017item | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 31, 2017USD ($) | Jul. 23, 2015USD ($) | |
Balance Sheet Components [Line Items] | |||||||||||
Prepaid expenses and other current assets | $ 2,249,000 | $ 2,249,000 | $ 2,249,000 | $ 9,978,000 | |||||||
Receivable from Prior Landlord | 5,000,000 | ||||||||||
Other long-term assets | 45,000 | 45,000 | 45,000 | 9,813,000 | |||||||
Construction-in-progress | 5,800,000 | ||||||||||
Depreciation expense | 8,442,000 | 3,875,000 | $ 3,677,000 | ||||||||
O’Brien Lease Agreement [Member] | |||||||||||
Balance Sheet Components [Line Items] | |||||||||||
Prepaid expenses and other current assets | 0 | 0 | 0 | 2,200,000 | |||||||
Other long-term assets | 9,600,000 | ||||||||||
Leasehold improvements | 9,600,000 | $ 9,600,000 | 9,600,000 | ||||||||
Construction-in-progress | 5,200,000 | ||||||||||
Tenant improvements | $ 28,800,000 | ||||||||||
Peninsula Innovation Partners, LLC [Member] | |||||||||||
Balance Sheet Components [Line Items] | |||||||||||
Lease incentive receivable, noncurrent | $ 20,000,000 | ||||||||||
Receivable from Prior Landlord | $ 5,000,000 | ||||||||||
Peninsula Innovation Partners, LLC [Member] | Third Lease Amendment Agreement [Member] | |||||||||||
Balance Sheet Components [Line Items] | |||||||||||
Increase in receivable from Existing Landlord | $ 65,000 | ||||||||||
Increase in landlord payments | $ 65,000 | ||||||||||
Landlord payment received | $ 2,628,000 | ||||||||||
Peninsula Innovation Partners, LLC [Member] | Fourth Lease Amendment Agreement [Member] | |||||||||||
Balance Sheet Components [Line Items] | |||||||||||
Landlord payment received | $ 1,682,000 | $ 1,682,000 | |||||||||
Peninsula Innovation Partners, LLC [Member] | Fifth Lease Amendment Agreement [Member] | |||||||||||
Balance Sheet Components [Line Items] | |||||||||||
Landlord payment received | $ 755,000 | $ 755,000 | |||||||||
Number of buildings in which the term and rent abatement period were extended | item | 2 | ||||||||||
Number of buildings returned to Prior Landlord | item | 2 | 2 |
Balance Sheet Components (Compo
Balance Sheet Components (Components Of Inventory) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Components [Abstract] | ||
Purchased materials | $ 8,884 | $ 4,817 |
Work in process | 9,994 | 7,287 |
Finished goods | 4,187 | 3,530 |
Inventory | $ 23,065 | $ 15,634 |
Balance Sheet Components (Com39
Balance Sheet Components (Components Of Prepaid Expenses And Other Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Components [Abstract] | ||
Receivable from Prior Landlord | $ 5,000 | |
Rent deposits for O'Brien building | 2,160 | |
Prepaid expenses | $ 1,318 | 2,342 |
Other current assets | 931 | 476 |
Prepaid expenses and other current assets | $ 2,249 | $ 9,978 |
Balance Sheet Components (Com40
Balance Sheet Components (Components Of Other Long-Term Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Components [Abstract] | ||
Rent deposits and tenant improvements for O'Brien building | $ 9,641 | |
Other | $ 45 | 172 |
Other long-term assets | $ 45 | $ 9,813 |
Balance Sheet Components (Com41
Balance Sheet Components (Components Of Property and Equipment, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 70,114 | $ 51,589 |
Less: Accumulated depreciation | (32,194) | (37,029) |
Property and equipment, net | 37,920 | 14,560 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,160 | |
Laboratory Equipment And Machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 24,703 | 23,337 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 29,728 | 8,138 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 8,301 | 7,170 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 4,615 | 5,189 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,382 | 823 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 385 | $ 5,772 |
Balance Sheet Components (Sched
Balance Sheet Components (Schedule Of Accrued Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Components [Abstract] | ||
Salaries and benefits | $ 7,570 | $ 8,562 |
Accrued product development costs | 2,034 | 5,411 |
Inventory accrual, professional services, accrued interest and other | 3,014 | 2,631 |
Accrued expenses | $ 12,618 | $ 16,604 |
Notes Payable (Narrative) (Deta
Notes Payable (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Jul. 31, 2017 | Jun. 30, 2017 | Feb. 28, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||||
Number of shares of common stock called by issuance of warrants | 5,500,000 | 4,200,000 | ||||
Aggregate exercise price of common stock called by issuance of warrants | $ 2.63 | |||||
Warrants outstanding | 0 | 0 | ||||
Repayment of notes payable | $ 4,500,000 | |||||
Future cash flows weighted average market yield | 10.30% | 10.60% | ||||
Fair value of the financing derivative | $ 183,000 | $ 356,000 | $ 600,000 | |||
Notes payable, non-current | 13,635,000 | 16,106,000 | ||||
Facility Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Cash and cash equivalent minimum amount quarterly required | $ 2,000,000 | |||||
Facility agreement period | 7 years | |||||
Percentage of net proceeds from out side financing or equity component | 25.00% | |||||
Percentage of principal amount repaid | 100.00% | |||||
Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of notes | $ 20,500,000 | |||||
Debt instrument, stated interest rate | 8.75% | |||||
Repayment of notes payable | $ 4,500,000 | $ 4,500,000 | ||||
Fair value of the notes | $ 14,100,000 | |||||
Fair value of the warrants | 6,400,000 | |||||
Proceeds from issuance of debt | 20,500,000 | |||||
Carrying value of the notes | 12,800,000 | |||||
Original issue discount | $ 7,700,000 | |||||
Aggregate principal amount | 16,000,000 | 20,500,000 | ||||
Debt discount that has yet to be amortized | 2,400,000 | 4,400,000 | ||||
Notes payable, non-current | $ 13,600,000 | $ 16,100,000 | ||||
Maturity date | Dec. 31, 2020 |
Notes Payable (Schedule Of Paym
Notes Payable (Schedule Of Payments Due Under Facility Agreement) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Notes Payable [Abstract] | |
2,018 | $ 1,400 |
2,019 | 1,400 |
2,020 | 16,491 |
Total remaining payments | 19,291 |
Less: interest and discounts | (5,656) |
Notes payable | $ 13,635 |
Commitments And Contingencies45
Commitments And Contingencies (Narrative) (Details) | Jul. 23, 2015USD ($)item | Jul. 22, 2015USD ($) | Dec. 31, 2017USD ($)item | Sep. 30, 2017item | Jun. 30, 2017USD ($) | May 31, 2017USD ($) | Aug. 31, 2016USD ($) | Feb. 29, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 31, 2017USD ($) | Jun. 30, 2016USD ($) | Oct. 31, 2015USD ($) |
Operating Leased Assets [Line Items] | |||||||||||||||||||
Future minimum rent payments | $ 74,790,000 | $ 74,790,000 | $ 74,790,000 | ||||||||||||||||
Other liabilities, non-current | $ 1,664,000 | ||||||||||||||||||
Gain on lease amendments | $ 23,043,000 | ||||||||||||||||||
Receivable from Prior Landlord | 5,000,000 | ||||||||||||||||||
Rent expense | 6,300,000 | 200,000 | $ 1,100,000 | ||||||||||||||||
Prepaid expenses and other current assets | 2,249,000 | 2,249,000 | 2,249,000 | 9,978,000 | |||||||||||||||
Other long-term assets | 45,000 | 45,000 | 45,000 | 9,813,000 | |||||||||||||||
Long-term restricted cash | 4,500,000 | 4,500,000 | 4,500,000 | 4,500,000 | $ 4,500,000 | ||||||||||||||
Deferred rent, non-current | 14,453,000 | 14,453,000 | 14,453,000 | 19,000 | |||||||||||||||
Other commitments estimated amount | 16,200,000 | 16,200,000 | 16,200,000 | ||||||||||||||||
Additional liability associated with indemnification obligations | 0 | 0 | 0 | ||||||||||||||||
Property, plant and equipment | 70,114,000 | 70,114,000 | 70,114,000 | 51,589,000 | |||||||||||||||
Peninsula Innovation Partners, LLC [Member] | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Receivable from Prior Landlord | 5,000,000 | ||||||||||||||||||
O’Brien Lease Agreement [Member] | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Future minimum rent payments | 0 | 0 | $ 0 | ||||||||||||||||
Lease term | 132 months | 11 years | |||||||||||||||||
Rent expense first twelve months | $ 540,000 | ||||||||||||||||||
Rent expense last twelve months | 711,000 | ||||||||||||||||||
Expected prepaid rent | 2,200,000 | ||||||||||||||||||
Expected security deposit | 4,500,000 | ||||||||||||||||||
Prepaid expenses and other current assets | 0 | 0 | $ 0 | 2,200,000 | |||||||||||||||
Other long-term assets | 9,600,000 | ||||||||||||||||||
Expected improvement allowance | $ 12,600,000 | ||||||||||||||||||
Long-term restricted cash | 4,500,000 | 4,500,000 | 4,500,000 | 4,500,000 | |||||||||||||||
Tenant improvements | $ 28,800,000 | ||||||||||||||||||
Tenant allowance paid by landlord | 12,600,000 | ||||||||||||||||||
Deferred rent, non-current | 12,600,000 | ||||||||||||||||||
Leasehold Improvements [Member] | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Property, plant and equipment | 29,728,000 | $ 29,728,000 | 29,728,000 | 8,138,000 | |||||||||||||||
Lease Amendment Agreement [Member] | Peninsula Innovation Partners, LLC [Member] | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Number of eligible payments from existing landlord | item | 4 | ||||||||||||||||||
Eligible payments from existing landlord | $ 5,000,000 | ||||||||||||||||||
Gain on lease amendments | $ 23,000,000 | ||||||||||||||||||
Aggregate Landlord payments receivable | $ 20,000,000 | $ 20,000,000 | |||||||||||||||||
Landlord payment received | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | ||||||||||||||||
Second Lease Amendment Agreement [Member] | Peninsula Innovation Partners, LLC [Member] | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Receivable from Prior Landlord | $ 5,000,000 | ||||||||||||||||||
Prepaid expenses and other current assets | $ 5,000,000 | ||||||||||||||||||
Third Lease Amendment Agreement [Member] | Peninsula Innovation Partners, LLC [Member] | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Landlord payment received | $ 2,628,000 | ||||||||||||||||||
Increase in receivable from Existing Landlord | $ 65,000 | ||||||||||||||||||
Increase in landlord payments | $ 65,000 | ||||||||||||||||||
Fourth Lease Amendment Agreement [Member] | Peninsula Innovation Partners, LLC [Member] | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Landlord payment received | $ 1,682,000 | $ 1,682,000 | |||||||||||||||||
Gain (loss) on termination of lease | $ 0 | ||||||||||||||||||
Fifth Lease Amendment Agreement [Member] | Peninsula Innovation Partners, LLC [Member] | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Landlord payment received | $ 755,000 | $ 755,000 | |||||||||||||||||
Number of buildings in which the term and rent abatement period were extended | item | 2 | ||||||||||||||||||
Number of buildings returned to Prior Landlord | item | 2 | 2 |
Commitments And Contingencies46
Commitments And Contingencies (Schedule Of Future Annual Minimum Lease Payments) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments And Contingencies [Abstract] | |
2,018 | $ 6,822 |
2,019 | 6,930 |
2,020 | 7,056 |
2,021 | 7,272 |
2,022 | 7,488 |
Thereafter | 39,222 |
Total minimum lease payments | $ 74,790 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||||
Increase in valuation allowance | $ 249,200 | $ 317,400 | |||
Benefit of federal net operating loss deferred tax assets | 6,000 | ||||
Benefit of state net operating loss deferred tax assets | 600 | ||||
Total unrecognized tax benefit | $ 18,786 | 16,785 | $ 18,735 | $ 16,952 | |
Period of increase or decrease in total amount of unrecognized income tax benefits | 12 months | ||||
Accrued interest or penalties | $ 0 | $ 0 | |||
Statutory tax rate | 35.00% | 35.00% | 35.00% | ||
Pprovisional adjustments to tax provision | $ 113,000 | ||||
Scenario, Plan [Member] | |||||
Income Taxes [Line Items] | |||||
Statutory tax rate | 21.00% | ||||
Accumulated foreign subsidiary earnings tax rate | 15.50% | ||||
Remaining earnings tax rate | 8.00% | ||||
Federal [Member] | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | $ 757,000 | ||||
Net operating loss carryforward, expiration | 2,024 | ||||
Research and development credit carryforward | $ 30,800 | ||||
Research and developmen tax credit carryforward, expiration | 2,024 | ||||
State [Member] | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | $ 532,200 | ||||
Net operating loss carryforward, expiration | 2,017 | ||||
Research and development credit carryforward | $ 31,800 |
Income Taxes (Reconciliation Of
Income Taxes (Reconciliation Of Federal Income Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
Statutory tax rate | 35.00% | 35.00% | 35.00% |
State tax rate, net of federal benefit | 8.60% | 5.40% | (3.50%) |
Stock-based compensation | (1.90%) | (1.60%) | (4.00%) |
R&D credit | 3.60% | 5.00% | 11.00% |
Tax reform | (123.30%) | ||
Other | 0.30% | (0.90%) | (0.60%) |
Change in valuation allowance | 77.70% | (42.90%) | (37.90%) |
Effective income tax rate | 0.00% | 0.00% | 0.00% |
Income Taxes (Reconciliation 49
Income Taxes (Reconciliation Of Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 | Dec. 31, 2016 |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 194,440 | $ 264,183 | |
Research and development credits | 39,145 | 32,043 | |
Depreciation | 1,170 | ||
Accruals and reserves | 14,480 | 20,088 | |
Deferred rent | 3,360 | ||
Total deferred tax assets | 251,425 | $ 321,500 | 317,484 |
Less: Valuation allowance | (249,202) | (317,412) | |
Deferred tax liabilities: | |||
Depreciation | (2,223) | ||
Deferred rent | (72) | ||
Net deferred tax assets |
Income Taxes (Reconciliation 50
Income Taxes (Reconciliation Of Unrecognized Tax Benefit Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
Unrecognized tax benefit, Beginning balance | $ 16,785 | $ 18,735 | $ 16,952 |
Decrease in balance related to tax positions taken in prior year | (3,892) | (44) | |
Increase in balance related to tax positions taken during current year | 2,001 | 1,942 | 1,827 |
Unrecognized tax benefit, Ending balance | $ 18,786 | $ 16,785 | $ 18,735 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Feb. 28, 2018USD ($)$ / sharesshares | Jan. 31, 2018shares | Jun. 30, 2017$ / sharesshares | Jun. 30, 2017$ / shares | Dec. 31, 2017USD ($)item$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Aug. 31, 2017USD ($) | Feb. 28, 2017USD ($) | Feb. 28, 2013$ / sharesshares | Oct. 31, 2010$ / sharesshares | |
Stockholders' Equity [Line Items] | |||||||||||
Common Stock, shares authorized | shares | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||||||||
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred Stock, shares authorized | shares | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred Stock, shares issued | shares | 0 | 0 | |||||||||
Preferred Stock, shares outstanding | shares | 0 | 0 | |||||||||
Common stock, dividends declared | $ / shares | $ 0 | ||||||||||
Voting right of common stock share holders | one | ||||||||||
Voting right of common stock share holdes, number of votes | item | 1 | ||||||||||
Amount of common stock, preferred stock, depositiry shares, warrants, units or debt securities available in future public offerings | $ 150,000,000 | ||||||||||
Number of shares of common stock called by issuance of warrants | shares | 4,200,000 | 5,500,000 | |||||||||
Aggregate exercise price of common stock called by issuance of warrants | $ / shares | $ 2.63 | ||||||||||
Number of shares of common stock called by issuance of warrants, outstanding | shares | 0 | 0 | |||||||||
Number of equity compensation plans | item | 3 | ||||||||||
Aggregate intrinsic value outstanding | $ 1,700,000 | ||||||||||
Aggregate intrinsic value exercisable options | $ 1,600,000 | ||||||||||
Stock price | $ / shares | $ 2.64 | ||||||||||
Weighted average remaining contractual life for exercisable | 5 years 5 months 5 days | ||||||||||
Vested and expected to vest, outstanding | shares | 22,324,228 | ||||||||||
Vested and expected to vest, aggregate intrinsic value | $ 1,600,000 | ||||||||||
Vested and expected to vest, weighted average exercise price | $ / shares | $ 6.04 | ||||||||||
Vested and expected to vest, weighted average remaining contractual life | 6 years 2 months 23 days | ||||||||||
Total intrinsic value of options exercised | $ 1,700,000 | $ 4,700,000 | $ 3,500,000 | ||||||||
Fair value of options vested | 6,400,000 | 20,700,000 | 7,300,000 | ||||||||
Stock-based compensation cost capitalized in inventory | 441,000 | 389,000 | |||||||||
Stock-based compensation | $ 20,352,000 | $ 19,562,000 | $ 13,840,000 | ||||||||
2010 Plan [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Stock option grant, term | 10 years | ||||||||||
Stock option grant, vest | 4 years | ||||||||||
Stock option grant, vest rate upon first anniversary | 25.00% | ||||||||||
Stock option grant, vest rate per month thereafter | 2.08% | ||||||||||
2010 Director Plan [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Stock option grant, term | 10 years | ||||||||||
Stock option grant, vest rate upon first anniversary | 33.00% | ||||||||||
Stock option grant, vest rate per month thereafter | 2.78% | ||||||||||
2010 Director Plan [Member] | Minimum [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Stock option grant, vest | 1 year | ||||||||||
2010 Director Plan [Member] | Maximum [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Stock option grant, vest | 3 years | ||||||||||
2010 Plan and 2010 Director Plan [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Common stock reserved for issuance | shares | 6,800,000 | ||||||||||
ESPP [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Common stock reserved for issuance | shares | 1.3 | ||||||||||
Percentage of outstanding common stock used to determine annual plan increase | 2.00% | ||||||||||
Number of purchase periods | item | 4 | ||||||||||
Purchase period of ESPP | 6 months | ||||||||||
Percentage of fair market value at which stock can be purchased | 85.00% | ||||||||||
Weighted average fair value at grant date | $ / shares | $ 2.28 | $ 4.21 | $ 2.20 | ||||||||
Stock-based compensation | $ 3,100,000 | $ 3,700,000 | $ 3,600,000 | ||||||||
Common stock purchased under plan | shares | 1,300,000 | 1,300,000 | 1,100,000 | ||||||||
Cash received from option exercises | $ 5,300,000 | $ 5,200,000 | $ 4,400,000 | ||||||||
At the Market Offering [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Common stock offering price shares | $ 60,000,000 | ||||||||||
Aggregate offering price of shares sold | $ 11,865,000 | $ 58,200,000 | 29,100,000 | ||||||||
Shares issued | shares | 3,200,000 | 6,500,000 | |||||||||
Average common stock price per share | $ / shares | $ 3.86 | $ 9.19 | |||||||||
Proceeds from issuance of common stock from offering, net of issuance costs | $ 11,865,000 | $ 58,200,000 | 29,100,000 | ||||||||
Commissions | 3.00% | ||||||||||
At the Market Offering [Member] | Common Stock [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Aggregate offering price of shares sold | $ 3,000 | $ 7,000 | $ 4,000 | ||||||||
Shares issued | shares | 3,171,000 | 6,526,000 | 4,075,000 | ||||||||
Underwritten Public Equity Offering [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Aggregate offering price of shares sold | $ 52,530,000 | ||||||||||
Shares issued | shares | 17,700,000 | ||||||||||
Proceeds from issuance of common stock from offering, net of issuance costs | 52,530,000 | ||||||||||
Commissions | 4.00% | ||||||||||
Price per share | $ / shares | $ 3.10 | $ 3.10 | |||||||||
Underwritten Public Equity Offering [Member] | Common Stock [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Aggregate offering price of shares sold | $ 18,000 | ||||||||||
Shares issued | shares | 17,732,000 | ||||||||||
Stock Options [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Weighted average remaining contractual life | 2 years 6 months | ||||||||||
Weighted average fair value at grant date | $ / shares | $ 3.08 | $ 5.47 | $ 4.75 | ||||||||
Stock-based compensation | $ 17,200,000 | $ 15,700,000 | $ 10,200,000 | ||||||||
Unrecognized compensation costs | 22,500,000 | ||||||||||
Cash received from option exercises | $ 3,600,000 | $ 2,500,000 | $ 3,000,000 | ||||||||
Subsequent Event [Member] | 2010 Plan [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Additional common stock reserved for issuance | shares | 7,000,000 | ||||||||||
Subsequent Event [Member] | ESPP [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Additional common stock reserved for issuance | shares | 2,300,000 | ||||||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Shares issued | shares | 14,375,000 | ||||||||||
Proceeds from issuance of common stock from offering, net of issuance costs | $ 32,800,000 | ||||||||||
Commissions | 4.00% | ||||||||||
Price per share | $ / shares | $ 2.40 | ||||||||||
Notes [Member] | |||||||||||
Stockholders' Equity [Line Items] | |||||||||||
Holders may elect to receive net proceeds from financing activities, percentage | 25.00% | ||||||||||
Holders may elect to receive net proceeds from financing activities as partial payment of notes | 25.00% |
Stockholders' Equity (Summary O
Stockholders' Equity (Summary Of Stock Option Activity) (Details) - Stock Options [Member] - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Additional shares reserved, Shares available for grant | 4,634 | |
$1.16 – 16.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balances, December 31, 2016, Shares available for grant | 6,471 | |
Balances, December 31, 2017, Shares available for grant | 6,795 | 6,471 |
Balances, December 31, 2016, Number of shares | 22,501 | |
Balances, December 31, 2017, Number of shares | 25,404 | 22,501 |
Exercise price, lower range | $ 1.16 | $ 1.16 |
Exercise price, upper range | 16 | 16 |
Balances, December 31, 2016, Weighted average exercise price | 6.30 | |
Balances, December 31, 2017, Weighted average exercise price | $ 6.10 | $ 6.30 |
$2.66 – 5.37 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options granted, Shares available for grant | (6,239) | |
Options granted, Number of shares | 6,239 | |
Exercise price, lower range | $ 2.66 | |
Exercise price, upper range | 5.37 | |
Options granted, Weighted average exercise price | $ 4.84 | |
$1.16 – 5.27 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options exercised, Number of shares | (1,407) | |
Exercise price, lower range | $ 1.16 | |
Exercise price, upper range | 5.27 | |
Options exercised, Weighted average exercise price | $ 2.55 | |
$1.16 – 16.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options canceled, Shares available for grant | 1,929 | |
Options canceled, Number of shares | (1,929) | |
Exercise price, lower range | $ 1.16 | |
Exercise price, upper range | 16 | |
Options canceled, Weighted average exercise price | $ 7 |
Stockholders' Equity (Reconcili
Stockholders' Equity (Reconciliation Of Outstanding And Exercisable Stock Options) (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Stockholders' Equity [Abstract] | |
Number outstanding | shares | 25,404,152 |
Weighted average remaining contractual life | 6 years 6 months 4 days |
Weighted average exercise price | $ / shares | $ 6.10 |
Number vested | shares | 16,802,740 |
Weighted average exercise price | $ / shares | $ 6.05 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule Of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 20,352 | $ 19,562 | $ 13,840 |
Cost of revenue [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 2,311 | 2,133 | 1,313 |
Research and development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 8,506 | 8,257 | 5,196 |
Sales, general and administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 9,535 | $ 9,172 | $ 7,331 |
Stockholders' Equity (Schedul55
Stockholders' Equity (Schedule Of Fair Value Of Employee Stock Options) (Details) - Stock Options [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term | 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% |
Risk-free interest rate | 2.10% | 1.50% | 1.70% |
Dividend yield |
Stockholders' Equity (Schedul56
Stockholders' Equity (Schedule Of Fair Value Of Employee Stock Purchase Plan) (Details) - ESPP [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected volatility | 70.00% | 70.00% | 70.00% |
Risk-free interest rate, minimum | 0.80% | 0.50% | 0.10% |
Risk-free interest rate, maximum | 1.40% | 0.90% | 0.70% |
Dividend yield | |||
Minimum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term | 6 months | 6 months | 6 months |
Maximum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term | 2 years | 2 years | 2 years |
Net Loss Per Share (Antidilutiv
Net Loss Per Share (Antidilutive Shares Excluded From Computation Of Diluted Net Loss Per Share) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from the computation of earnings per share | 25,404 | 22,501 | 19,468 |
Warrants to purchase common stock [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from the computation of earnings per share | 5,500 |
Segment And Geographic Inform58
Segment And Geographic Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Revenue | $ 24,935 | $ 23,545 | $ 20,073 | $ 24,915 | $ 25,722 | $ 25,118 | $ 20,747 | $ 19,127 | $ 93,468 | $ 90,714 | $ 92,782 |
North America [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 40,600 | 50,800 | 68,800 | ||||||||
Europe [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 13,200 | 20,000 | 9,000 | ||||||||
Asia Pacific (including the Middle East) [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 39,700 | $ 19,900 | $ 15,000 |
Unaudited Selected Quarterly 59
Unaudited Selected Quarterly Financial Data (Schedule Of Unaudited Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Unaudited Selected Quarterly Financial Data [Abstract] | |||||||||||
Total revenue | $ 24,935 | $ 23,545 | $ 20,073 | $ 24,915 | $ 25,722 | $ 25,118 | $ 20,747 | $ 19,127 | $ 93,468 | $ 90,714 | $ 92,782 |
Total gross profit | 9,494 | 8,227 | 8,001 | 8,937 | 11,374 | 12,638 | 10,644 | 9,504 | 34,659 | 44,160 | 53,450 |
Total operating expenses | 30,023 | 29,796 | 32,388 | 32,236 | 29,248 | 29,373 | 28,714 | 28,069 | 124,443 | 115,404 | 82,584 |
Loss from operations | (20,529) | (21,569) | (24,387) | (23,299) | (17,874) | (16,735) | (18,070) | (18,565) | (89,784) | (71,244) | (29,134) |
Net loss | $ (20,762) | $ (22,021) | $ (25,539) | $ (23,867) | $ (19,030) | $ (17,494) | $ (18,499) | $ (19,352) | $ (92,189) | $ (74,375) | $ (31,696) |
Basic and diluted net loss per share | $ (0.18) | $ (0.19) | $ (0.26) | $ (0.26) | $ (0.21) | $ (0.19) | $ (0.21) | $ (0.23) | |||
Weighted average shares used in computing net loss per share | 116,259 | 115,771 | 97,360 | 92,970 | 92,660 | 92,110 | 88,148 | 83,604 | 105,682 | 89,148 | 75,614 |
Subsequent Event (Narrative) (D
Subsequent Event (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Dec. 31, 2017 | |
Subsequent Event [Member] | Underwriting Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Shares issued | 14,375,000 | |
Price per share | $ 2.40 | |
Commissions | 4.00% | |
Proceeds from issuance of common stock from offering, net of issuance costs | $ 32.8 | |
Notes [Member] | ||
Subsequent Event [Line Items] | ||
Holders may elect to receive net proceeds from financing activities, percentage | 25.00% |