Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | NSTG | |
Entity Registrant Name | NANOSTRING TECHNOLOGIES INC | |
Entity Central Index Key | 1,401,708 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 21,690,543 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 5,416 | $ 20,583 |
Short-term investments | 51,724 | 53,453 |
Accounts receivable, net | 16,728 | 22,193 |
Inventory | 14,544 | 13,812 |
Prepaid expenses and other | 3,953 | 3,744 |
Total current assets | 92,365 | 113,785 |
Restricted cash | 143 | 143 |
Property and equipment, net | 13,657 | 12,158 |
Other assets | 368 | 287 |
Total assets | 106,533 | 126,373 |
Current liabilities: | ||
Accounts payable | 2,145 | 4,935 |
Accrued liabilities | 9,117 | 12,344 |
Deferred revenue, current portion | 20,798 | 19,033 |
Deferred rent, current portion | 337 | 13 |
Lease financing obligations, current portion | 26 | 58 |
Total current liabilities | 32,423 | 36,383 |
Deferred revenue, net of current portion | 20,656 | 22,664 |
Deferred rent and other long-term liabilities | 8,763 | 7,655 |
Long-term debt and lease financing obligations, net of current portion and debt issuance costs | 47,748 | 47,366 |
Total liabilities | 109,590 | 114,068 |
Commitment and contingencies | ||
Stockholders’ equity (deficit): | ||
Preferred stock, $0.0001 par value, 15,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.0001 par value, 150,000 shares authorized; 21,684 and 21,528 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 2 | 2 |
Additional paid-in capital | 285,381 | 281,900 |
Accumulated other comprehensive loss | (48) | (57) |
Accumulated deficit | (288,392) | (269,540) |
Total stockholders’ equity (deficit) | (3,057) | 12,305 |
Total liabilities and stockholders’ equity (deficit) | $ 106,533 | $ 126,373 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 21,684,000 | 21,528,000 |
Common stock, shares outstanding (in shares) | 21,684,000 | 21,528,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Product and service | $ 15,765 | $ 12,136 |
Collaboration | 2,298 | 2,561 |
Total revenue | 18,063 | 14,697 |
Costs and expenses: | ||
Cost of product and service revenue | 7,163 | 5,870 |
Research and development | 10,801 | 7,208 |
Selling, general and administrative | 17,565 | 14,904 |
Total costs and expenses | 35,529 | 27,982 |
Loss from operations | (17,466) | (13,285) |
Other income (expense): | ||
Interest income | 147 | 68 |
Interest expense | (1,501) | (1,315) |
Other income (expense), net | 13 | (71) |
Total other income (expense), net | (1,341) | (1,318) |
Net loss before provision for income tax | (18,807) | (14,603) |
Provision for income tax | (45) | 0 |
Net loss | $ (18,852) | $ (14,603) |
Net loss per share - basic and diluted (in dollars per share) | $ (0.87) | $ (0.74) |
Weighted average shares used in computing basic and diluted net loss per share (in shares) | 21,588 | 19,669 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (18,852) | $ (14,603) |
Change in unrealized gain or loss on short-term investments | 9 | 34 |
Comprehensive loss | $ (18,843) | $ (14,569) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities | ||
Net loss | $ (18,852) | $ (14,603) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 814 | 692 |
Stock-based compensation expense | 2,267 | 1,927 |
Amortization of premium on short-term investments | 89 | 70 |
Interest accrued on long-term debt | 42 | 37 |
Conversion of accrued interest to long-term debt | 359 | 315 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 5,466 | 4,198 |
Inventory | (837) | (2,379) |
Prepaid expenses and other | (193) | 758 |
Other assets | (82) | 0 |
Accounts payable | (2,103) | 270 |
Accrued liabilities | (3,382) | (4,610) |
Deferred revenue | (244) | 20,002 |
Deferred rent and other liabilities | 1,390 | 904 |
Net cash (used in) provided by operating activities | (15,266) | 7,581 |
Investing activities | ||
Purchases of property and equipment | (2,493) | (828) |
Proceeds from sale of short-term investments | 1,000 | 1,250 |
Proceeds from maturity of short-term investments | 10,775 | 11,200 |
Purchases of short-term investments | (10,125) | (12,450) |
Net cash used in investing activities | (843) | (828) |
Financing activities | ||
Repayment of lease financing obligations | 32 | 68 |
Tax withholdings related to net share settlements of restricted stock units | (248) | 0 |
Proceeds from issuance of common stock for employee stock purchase plan | 926 | 767 |
Proceeds from exercise of stock options | 288 | 269 |
Net cash provided by financing activities | 934 | 968 |
Net (decrease) increase in cash and cash equivalents | (15,175) | 7,721 |
Effect of exchange rate changes on cash and cash equivalents | 8 | 10 |
Cash and cash equivalents | ||
Beginning of period | 20,583 | 21,856 |
End of period | $ 5,416 | $ 29,587 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | NanoString Technologies, Inc. (the “Company”) was incorporated in the state of Delaware on June 20, 2003. The Company’s headquarters is located in Seattle, Washington. The Company’s technology enables direct detection, identification and quantification of individual target molecules in a biological sample by attaching a unique color coded fluorescent reporter to each target molecule of interest. The Company markets its proprietary nCounter Analysis System, consisting of instruments and consumables, including its Prosigna Breast Cancer Assay, to academic, government and biopharmaceutical and clinical laboratory customers. In addition, the Company is collaborating with multiple biopharma companies to develop companion diagnostic tests for various cancer therapies. The Company has incurred losses to date and expects to incur additional losses in the foreseeable future. The Company continues to devote the majority of its resources to the growth of its business in accordance with its business plan. The Company’s activities have been financed primarily through the sale of equity securities and incurrence of indebtedness, and to a lesser extent, capital leases and other borrowings. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of the Company and its wholly-owned subsidiaries. The unaudited condensed consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for annual financial statements. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and U.S. GAAP for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and results of its operations as of and for the periods presented. Unless indicated otherwise, all amounts presented in financial tables are presented in thousands, except for per share and par value amounts. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of the Company’s operations for the three month period ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year or for any other period. Revenue Recognition The Company recognizes revenue when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the price to the customer is fixed or determinable and (4) collectability is reasonably assured. The Company generates the majority of its revenue from the sale of products and services. The Company’s products consist of its proprietary nCounter Analysis Systems and related consumables. Services consist of extended warranties and service fees for assay processing. A delivered product or service is considered to be a separate unit of accounting when it has value to the customer on a stand-alone basis. Products or services have value on a stand-alone basis if they are sold separately by any vendor or the customer could resell the delivered product. Instruments, consumables and in vitro diagnostic kits are considered to be separate units of accounting as they are sold separately and revenue is recognized upon transfer of ownership, which is generally upon shipment. Instrument revenue related to installation and calibration services is recognized when services are rendered by the Company. Such services can also be provided by the Company’s distribution partners and other third parties. For instruments sold solely to run Prosigna assays, training must be provided prior to instrument revenue recognition. Instrument revenue from leased instruments is recognized ratably over the lease term. Service revenue is recognized when earned, which is generally upon the rendering of the related services. Service agreements and service fees for assay processing are each considered separate units of accounting as they are sold separately. The Company offers service agreements on its nCounter Analysis Systems for periods ranging from 12 to 36 months after the end of the standard 12 -month warranty period. Service agreements are generally separately priced. Revenue from service agreements is deferred and recognized in income on a straight-line basis over the service period. For arrangements with multiple deliverables, the Company allocates the agreement consideration at the inception of the agreement to the deliverables based upon their relative selling prices. To date, selling prices have been established by reference to vendor specific objective evidence based on stand-alone sales transactions for each deliverable. Vendor specific objective evidence is considered to have been established when a substantial majority of individual sales transactions within the previous 12-month period fall within a reasonably narrow range, which the Company has defined to be plus or minus 15% of the median sales price of actual stand-alone sales transactions. The Company uses its best estimate of selling price for individual deliverables when vendor specific objective evidence or third-party evidence is unavailable. Allocated revenue is only recognized for each deliverable when the revenue recognition criteria have been met. The Company enters into collaborative agreements that may generate upfront fees with subsequent milestone payments that may be earned upon completion of development-related milestones. The Company is able to estimate the total cost of services under the arrangements and recognizes collaboration revenue using a proportional performance model. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs under the arrangements. Revenue recognized at any point in time is limited to cash received and amounts contractually due. Changes in estimates of total expected costs are accounted for prospectively as a change in estimate. From period to period, collaboration revenue can fluctuate substantially based on the achievement of development-related milestones. Recently Adopted Accounting Pronouncement In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) entitled “ASU 2015-11, Inventory – Simplifying the Measurement of Inventory.” The standard requires entities to measure inventory at the lower of cost and net realizable value. The Company adopted ASU 2015-11 in the first quarter of 2017 and did not have a material impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In March 2016, FASB issued “ASU 2016-09, Improvements to Employee Share-Based Payment Accounting” which amends Accounting Standard Codification Topic 718, “Compensation – Stock Compensation”. The standard includes provisions intended to simplify various aspects related to the accounting and presentation for stock-based payments in the financial statements, including the income tax effects of stock-based payments, minimum withholding requirements upon award settlement, and the method of calculating forfeitures in the recognition of stock compensation expense. The Company adopted ASU 2016-09 in the first quarter of 2017 and has elected to account for forfeitures as they occur to determine the amount of compensation cost to be recognized. The accounting policy election was adopted applying a modified retrospective approach, and did not have a material impact on the consolidated results of operations, financial condition, cash flows, or financial statement disclosures. Employee taxes paid for withheld shares are presented as a financing activity in the consolidated statements of cash flows, as required by the new standard, and was adopted retrospectively. Other provisions of ASU 2016-09 related to the accounting for the tax effects of stock-based payments have no impact on its consolidated results of operations, as the Company records a valuation allowance for deferred tax assets related to excess tax benefits from stock-based payment transactions. Recent Accounting Pronouncements As an “emerging growth company,” the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As a result, its financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. In May 2014, FASB issued “ASU 2014-09, Revenue from Contracts with Customers.” The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to a customer. This guidance will replace most existing revenue recognition guidance. In March 2016, the FASB issued “ASU 2016-08, Principal vs Agent Considerations (Reporting Revenue Gross versus Net)” which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued “ASU 2016-10, Identifying Performance Obligations and Licensing” which clarifies the implementation guidance on identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued “ASU 2016-12, Narrow-Scope Improvements and Practical Expedients” which provides practical expedients for contract modifications and clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. The Company is continuing to evaluate the impact of the standard and its related amendments on all of its revenues and expects to complete its evaluation during the second half of 2017. The Company will adopt the new guidance effective January 1, 2018 and intends to use the modified retrospective method of adoption. Under this approach, the Company will recognize the cumulative effect, if any, of changes in revenue recognition related to prior periods as an adjustment to its opening accumulated deficit balance. Due to the complexity of certain collaboration agreements, the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and vary in some instances. The new standard also requires more extensive disclosures related to revenue recognition, particularly in quarterly financial statements. The Company is continuing to evaluate the impact of the standard on all of its revenues, including those mentioned above, and its assessments may change in the future based on its ongoing evaluation. In January 2016, FASB issued “ASU 2016-01, Financial Instruments: Overall.” The standard addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The standard will become effective for the Company beginning January 1, 2018. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In February 2016, FASB issued “ASU 2016-02, Leases – Recognition and Measurement of Financial Assets and Financial Liabilities.” The standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. The standard requires lessors to classify leases as either sales-type, finance or operating. A sales-type lease occurs if the lessor transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. The standard will become effective for the Company beginning January 1, 2019. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In June 2016, FASB issued “ASU 2016-13, Financial Instruments: Credit Losses”. The standard provides information about expected credit losses on financial instruments at each reporting date, and to change how other than temporary impairments on investments securities are recorded. The standard will become effective for the Company beginning on January 1, 2020 with early adoption permitted. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In August 2016, FASB issued “ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”. The standard provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows and is intended to reduce diversity in practice with respect to these items. The standard is applied using a retrospective transition method and will become effective for the Company beginning January 1, 2018. The Company does not anticipate adoption of this standard will have a material impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In November 2016, FASB issued “ASU 2016-18, Statement of Cash Flows: Restricted Cash”. The standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents, along with cash and cash equivalents, when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The standard will become effective for the Company beginning January 1, 2018, with early adoption permitted. The Company does not anticipate adoption of this standard will have a material impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Outstanding stock options, restricted stock units and warrants have not been included in the calculation of diluted net loss per share because to do so would be anti-dilutive. Accordingly, the numerator and the denominator used in computing both basic and diluted net loss per share for each period are the same. The following shares underlying outstanding options, restricted stock units and warrants were excluded from the computation of basic and diluted net loss per share for the periods presented because their effect would have been anti-dilutive (in thousands): Three Months Ended 2017 2016 Options to purchase common stock 5,157 4,531 Restricted stock units 238 83 Common stock warrants 332 572 |
Concentration of Risks
Concentration of Risks | 3 Months Ended |
Mar. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risks | Concentration of Risks Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. Cash is invested in accordance with the Company’s investment policy, which includes guidelines intended to minimize and diversify credit risk. Most of the Company’s investments are not federally insured. The Company has credit risk related to the collectability of its accounts receivable. The Company performs initial and ongoing evaluations of its customers’ credit history or financial position and generally extends credit on account without collateral. The Company has not experienced any significant credit losses to date. The Company had one customer/collaborator, Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc. (“Merck”) that individually represented 14% and 15% of total revenue during the three months ended March 31, 2017 and 2016, respectively. The Company had no customers or collaborators that represented more than 10% of total accounts receivable as of March 31, 2017 or December 31, 2016 . The Company is also subject to supply chain risks related to the outsourcing of the manufacturing and production of its instruments to sole suppliers. Although there are a limited number of manufacturers for instruments of this type, the Company believes that other suppliers could provide similar products on comparable terms. Similarly, the Company sources certain raw materials used in the manufacture of consumables from certain sole suppliers. A change in suppliers could cause a delay in manufacturing and a possible loss of sales, which would adversely affect operating results. |
Short-term Investments
Short-term Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term Investments | Short-term Investments Short-term investments consisted of available-for-sale securities as follows (in thousands): Type of securities as of March 31, 2017 Amortized cost Gross unrealized gains Gross unrealized losses Fair value Corporate debt securities $ 37,264 $ 5 $ (28 ) $ 37,241 U.S. government-related debt securities 14,507 — (24 ) 14,483 Total available-for-sale securities $ 51,771 $ 5 $ (52 ) $ 51,724 Type of securities as of December 31, 2016 Amortized cost Gross unrealized gains Gross unrealized losses Fair value Corporate debt securities $ 36,198 $ 4 $ (42 ) $ 36,160 U.S. government-related debt securities 17,312 1 (20 ) 17,293 Total available-for-sale securities $ 53,510 $ 5 $ (62 ) $ 53,453 The fair values of available-for-sale securities by contractual maturity were as follows (in thousands): March 31, 2017 December 31, 2016 Maturing in one year or less $ 44,701 $ 46,310 Maturing in one to three years 7,023 7,143 Total available-for-sale securities $ 51,724 $ 53,453 The Company has both the intent and ability to sell its available-for-sale investments maturing greater than one year within 12 months from the balance sheet date and, accordingly, has classified these securities as current in the consolidated balance sheet. The following table summarizes investments that have been in a continuous unrealized loss position as of March 31, 2017 (in thousands). Less Than 12 Months 12 Months or Greater Total Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Corporate debt securities $ 21,244 $ (28 ) $ — $ — $ 21,244 $ (28 ) U.S. government-related debt securities 14,483 (24 ) — — 14,483 (24 ) Total $ 35,727 $ (52 ) $ — $ — $ 35,727 $ (52 ) The Company invests in securities that are rated investment grade or better. The unrealized losses on investments as of March 31, 2017 and December 31, 2016 were primarily caused by interest rate increases. The Company reviews the individual securities in its portfolio to determine whether a decline in a security’s fair value below the amortized cost basis is other-than-temporary. The Company determined that as of March 31, 2017 , there were no investments in its portfolio that were other-than-temporarily impaired. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to measure fair value. The three levels of the fair value hierarchy are as follows: • Level 1 — Quoted prices in active markets for identical assets and liabilities. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The recorded amounts of certain financial instruments, including cash, accounts receivable, prepaid expenses and other, accounts payable and accrued liabilities, approximate fair value due to their relatively short-term maturities. The recorded amount of the Company’s long-term debt approximates fair value because the related interest rates approximate rates currently available to the Company. The Company’s available-for-sale securities by level within the fair value hierarchy were as follows (in thousands): As of March 31, 2017 Level 1 Level 2 Level 3 Total Cash equivalents: Money market fund $ 3,705 $ — $ — $ 3,705 Short-term investments: Corporate debt securities — 37,241 — 37,241 U.S. government-related debt securities — 14,483 — 14,483 Total $ 3,705 $ 51,724 $ — $ 55,429 As of December 31, 2016 Level 1 Level 2 Level 3 Total Cash equivalents: Money market fund $ 16,715 $ — $ — $ 16,715 Short-term investments: Corporate debt securities — 36,160 — 36,160 U.S. government-related debt securities — 17,293 — 17,293 Total $ 16,715 $ 53,453 $ — $ 70,168 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consisted of the following as of the date indicated (in thousands): March 31, 2017 December 31, 2016 Raw materials $ 3,948 $ 4,277 Work in process 3,858 4,046 Finished goods 6,738 5,489 Total inventory $ 14,544 $ 13,812 |
Long-term Debt and Lease Financ
Long-term Debt and Lease Financing Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Lease Financing Obligations | Long-term Debt and Lease Financing Obligations In April 2014, the Company entered into a term loan agreement under which it may borrow up to $45.0 million , including an option to defer payment of a portion of the interest that would accrue on the borrowing under the term loan agreement. Upon initial closing, the Company borrowed $20.0 million , and in October 2014, the Company borrowed an additional $10.0 million under the term loan agreement. In October 2015, the Company amended the term loan agreement to, among other provisions, increase the maximum borrowing capacity to $60.0 million (excluding deferred interest), reduce the applicable interest rate from 12.5% to 12.0% , extend the interest-only period through March 2021, and extend the final maturity to March 2022. Under the amended agreement, borrowings accrue interest at 12.0% annually, payable quarterly, of which 3.0% can be deferred during the first six years of the term at the Company’s option and paid together with the principal at maturity. The Company has elected to exercise the option to defer payment of interest and has recorded $3.2 million of deferred interest through March 31, 2017 . In December 2015, the Company borrowed an additional $10.0 million under the terms of the amended agreement. In June 2016, the Company borrowed an additional $5.0 million . Total borrowings and deferred interest under the amended term loan agreement were $48.2 million and $47.8 million as of March 31, 2017 and December 31, 2016 , respectively. Under the amended term loan agreement, the Company may pay interest-only for the first seven years of the term and principal payments are due in four equal installments during the eighth year of the term. The Company has the option to prepay the term loan, in whole or part, at any time subject to payment of a redemption fee of up to 4% , which declines 1% annually, with no redemption fee payable if prepayment occurs after the fourth year of the loan. In addition, a facility fee equal to 2.0% of the amount borrowed plus any accrued interest is payable at the end of the term or when the loan is repaid in full. A long-term liability of $1.1 million for the facility fee is being accreted using the effective interest method over the term of the loan agreement. Obligations under the term loan agreement are collateralized by substantially all of the Company’s assets. The term loan agreement contains customary conditions to borrowings, events of default and negative covenants, including covenants that could limit the Company’s ability to, among other things, incur additional indebtedness, liens or other encumbrances, make dividends or other distributions; buy, sell or transfer assets; engage in any new line of business; and enter into certain transactions with affiliates. The term loan agreement also includes a $2.0 million minimum liquidity covenant and revenue-based financial requirements, specifically $85.0 million for 2017 with annual increases of $15.0 million for each subsequent fiscal year thereafter. If the Company’s actual revenue is below the minimum annual revenue requirement for any given year, it may avoid a related default by generating proceeds from an equity or subordinated debt issuance equal to the shortfall between its actual revenue and the minimum revenue requirement. The Company was in compliance with its financial covenants as of March 31, 2017 . Long-term debt and lease financing obligations, consisted of the following (in thousands): March 31, 2017 December 31, 2016 Term loans payable $ 48,202 $ 47,844 Lease financing obligations 26 58 Total long-term debt and lease financing obligations 48,228 47,902 Unamortized debt issuance costs (454 ) (478 ) Current portion of lease financing obligations (26 ) (58 ) Long-term debt and lease financing obligations, net of debt issuance costs and current portion $ 47,748 $ 47,366 Scheduled future principal payments for outstanding debt and lease financing obligations were as follows at March 31, 2017 (in thousands): Years Ending December 31, Remainder of 2017 $ 26 2018 — 2019 — 2020 — 2021 36,152 Thereafter 12,050 $ 48,228 |
Collaboration Agreements
Collaboration Agreements | 3 Months Ended |
Mar. 31, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Collaboration Agreements | Collaboration Agreements The Company uses a proportional performance model to recognize collaboration revenue over the Company’s performance period for each collaboration agreement. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs under the arrangement. Revenue recognized at any point in time is limited to cash received and amounts contractually due. Changes in estimates of total expected costs are accounted for prospectively as a change in estimate. All amounts received or due are classified as collaboration revenue as they are earned. Celgene Corporation In March 2014, the Company entered into a collaboration agreement with Celgene Corporation (“Celgene”) to develop, seek regulatory approval for, and commercialize a companion diagnostic assay for use in screening patients with Diffuse Large B-Cell Lymphoma. The Company is eligible to receive payments totaling up to $45.0 million , of which $5.8 million was received as an upfront payment upon delivery of certain information to Celgene, $17.0 million is for potential success-based development and regulatory milestones, and the remainder is for potential commercial payments in the event sales of the test do not exceed certain pre-specified minimum annual revenue during the first three years following regulatory approval. There have been several amendments to the collaboration agreement to expand the scope of development work and in return the Company has received additional payments totaling $2.1 million . The Company will retain all commercial rights to the diagnostic test developed under this collaboration, subject to certain backup rights granted to Celgene to commercialize the diagnostic test in a particular country if the Company elects to cease distribution or elects not to distribute the diagnostic in such country. Assuming success in the clinical trial process, and subject to regulatory approval, the Company will market and sell the diagnostic assay and Celgene has agreed to make certain potential commercial payments to the Company in the event sales of the assay do not exceed certain pre-specified minimum annual revenues during the first three years following regulatory approval. The Company achieved and was paid for milestones totaling $6.0 million during 2014. The process of successfully developing a product candidate, obtaining regulatory approval and ultimately commercializing a product candidate is highly uncertain and the attainment of any additional milestones is therefore uncertain and difficult to predict. In addition, certain milestones are outside the Company’s control and are dependent on the performance of Celgene and the outcome of a clinical trial and related regulatory processes. Accordingly, the Company is not able to reasonably estimate when, if at all, any additional milestone payments may be payable to the Company by Celgene. The Company recognized collaboration revenue related to the Celgene agreement of $0.1 million and $0.7 million for the three months ended March 31, 2017 and 2016 , respectively. At March 31, 2017 , the Company had recorded $5.4 million of deferred revenue related to the Celgene collaboration, of which $1.7 million is estimated to be recognizable as revenue within one year. Merck & Co., Inc. In May 2015, the Company entered into a clinical research collaboration agreement with Merck, to develop an assay intended to optimize immune-related gene expression signatures and evaluate the potential to predict benefit from Merck’s anti-PD-1therapy, KEYTRUDA. Under the terms of the collaboration agreement, the Company received $3.9 million in payments during 2015. In February 2016, the Company expanded its collaboration with Merck by entering into a new development collaboration agreement to clinically develop and commercialize a novel diagnostic test, based on an optimized gene expression signature, to predict response to KEYTRUDA in multiple tumor types. In connection with the execution of the development collaboration agreement, the Company and Merck terminated the May 2015 clinical research collaboration and moved all remaining activities under the related work plan to the new development collaboration agreement. Under the terms of the new collaboration agreement, the Company is responsible for developing and validating the diagnostic test and, if the parties thereafter determine to proceed, will also be responsible for seeking regulatory approval for and commercializing the related test products. During 2016, the Company received $12.0 million upfront as a technology access fee and is eligible to receive up to an additional $12.0 million of near-term preclinical milestone payments, of which $8.5 million was achieved and received during 2016, and other potential downstream regulatory milestone payments. In addition, the Company is eligible to receive funding for certain development costs. The Company recognized collaboration revenue of $2.1 million and $1.3 million related to the Merck agreement for the three months ended March 31, 2017 and 2016 , respectively. As of March 31, 2017 , the Company had recorded $20.9 million of deferred revenue related to the Merck collaboration, $11.7 million of which is estimated to be recognized as revenue within one year. The Company received development funding of $1.8 million and $1.9 million for the three months ended March 31, 2017 and 2016 , respectively. Medivation, Inc. and Astellas Pharma, Inc. In January 2016, the Company entered into a collaboration agreement with Medivation, Inc. ("Medivation") and Astellas Pharma Inc. (“Astellas”) to pursue the translation of a novel gene expression signature algorithm discovered by Medivation into a companion diagnostic assay using the nCounter Analysis System. Under the terms of the collaboration agreement, the Company will modify its PAM50-based Prosigna Breast Cancer Assay for potential use as a companion diagnostic test for XTANDI (enzalutamide) for triple negative breast cancer. XTANDI is currently approved by the U.S. Food and Drug Administration for the treatment of metastatic castration-resistant prostate cancer. The modified Prosigna test will be based upon data from a Phase 2 trial conducted by Medivation and Astellas that evaluated enzalutamide in patients with triple negative breast cancer. Under the terms of the collaboration agreement, the Company will be responsible for developing and validating the diagnostic test and, if the parties thereafter determine to proceed, will also be responsible for seeking regulatory approval for and commercializing the test. During 2016 , the Company received $6.0 million upfront for technology access, $6.0 million in pre-clinical milestones, and is eligible to receive up to $10.0 million in development funding over the term of the agreement, in addition to other potential downstream milestone payments. During the three months ended March 31, 2017 , the Company increased its estimated future costs related to the Medivation/Astellas agreement, resulting in a $0.2 million reduction of cumulative revenue for the three months ended March 31, 2017 . The Company recognized collaboration revenue of $0.6 million related to the Medivation/Astellas agreement for the three months ended March 31, 2016 . As of March 31, 2017 , the Company had recorded $10.6 million of deferred revenue related to the Medivation/Astellas collaboration, $4.0 million of which is estimated to be recognized as revenue within one year. The Company received development funding of $0.4 million for the three months ended March 31, 2017 and none for the three months ended March 31, 2016 . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, the Company may become involved in litigation relating to claims arising from the ordinary course of business. Management believes that there are no claims or actions pending against the Company currently, the ultimate disposition of which would have a material adverse effect on the Company’s consolidated results of operation, financial condition or cash flows. |
Information about Geographic Ar
Information about Geographic Areas | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Information about Geographic Areas | Information about Geographic Areas The Company operates as a single reportable segment and enables customers to perform both research and clinical testing on its nCounter Analysis Systems. The Company has one sales force that sells these systems to both research and clinical testing labs, and its nCounter Elements reagents can be used for both research and diagnostic testing. In addition, the Company’s Prosigna Breast Cancer Assay is marketed to clinical laboratories. The Company has also entered into collaboration agreements with Celgene, Merck and Medivation and Astellas. The following table of total revenue is based on the geographic location of the Company’s customers, distributors and collaborators. For sales to distributors, their geographic location may be different from the geographic locations of the ultimate end user. Americas consists of the United States, Canada, Mexico and South America; and Asia Pacific includes Japan, China, South Korea, Singapore, Malaysia and Australia. Revenue by geography was as follows (in thousands): Three Months Ended March 31, 2017 2016 Americas $ 12,211 $ 10,083 Europe & Middle East 4,415 2,853 Asia Pacific 1,437 1,761 Total revenue $ 18,063 $ 14,697 Total revenue in the United States was $11.8 million and $9.6 million for the three months ended March 31, 2017 and 2016 , respectively. The Company’s assets are primarily located in the United States and not allocated to any specific geographic region. Substantially all of the Company’s long-lived assets are located in the United States. |
Basis of Presentation and Sum18
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements reflect the accounts of the Company and its wholly-owned subsidiaries. The unaudited condensed consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for annual financial statements. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and U.S. GAAP for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and results of its operations as of and for the periods presented. Unless indicated otherwise, all amounts presented in financial tables are presented in thousands, except for per share and par value amounts. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of the Company’s operations for the three month period ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year or for any other period. |
Revenue Recognition | The Company recognizes revenue when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the price to the customer is fixed or determinable and (4) collectability is reasonably assured. The Company generates the majority of its revenue from the sale of products and services. The Company’s products consist of its proprietary nCounter Analysis Systems and related consumables. Services consist of extended warranties and service fees for assay processing. A delivered product or service is considered to be a separate unit of accounting when it has value to the customer on a stand-alone basis. Products or services have value on a stand-alone basis if they are sold separately by any vendor or the customer could resell the delivered product. Instruments, consumables and in vitro diagnostic kits are considered to be separate units of accounting as they are sold separately and revenue is recognized upon transfer of ownership, which is generally upon shipment. Instrument revenue related to installation and calibration services is recognized when services are rendered by the Company. Such services can also be provided by the Company’s distribution partners and other third parties. For instruments sold solely to run Prosigna assays, training must be provided prior to instrument revenue recognition. Instrument revenue from leased instruments is recognized ratably over the lease term. Service revenue is recognized when earned, which is generally upon the rendering of the related services. Service agreements and service fees for assay processing are each considered separate units of accounting as they are sold separately. The Company offers service agreements on its nCounter Analysis Systems for periods ranging from 12 to 36 months after the end of the standard 12 -month warranty period. Service agreements are generally separately priced. Revenue from service agreements is deferred and recognized in income on a straight-line basis over the service period. For arrangements with multiple deliverables, the Company allocates the agreement consideration at the inception of the agreement to the deliverables based upon their relative selling prices. To date, selling prices have been established by reference to vendor specific objective evidence based on stand-alone sales transactions for each deliverable. Vendor specific objective evidence is considered to have been established when a substantial majority of individual sales transactions within the previous 12-month period fall within a reasonably narrow range, which the Company has defined to be plus or minus 15% of the median sales price of actual stand-alone sales transactions. The Company uses its best estimate of selling price for individual deliverables when vendor specific objective evidence or third-party evidence is unavailable. Allocated revenue is only recognized for each deliverable when the revenue recognition criteria have been met. The Company enters into collaborative agreements that may generate upfront fees with subsequent milestone payments that may be earned upon completion of development-related milestones. The Company is able to estimate the total cost of services under the arrangements and recognizes collaboration revenue using a proportional performance model. Costs incurred to date compared to total expected costs are used to determine proportional performance, as this is considered to be representative of the delivery of outputs under the arrangements. Revenue recognized at any point in time is limited to cash received and amounts contractually due. Changes in estimates of total expected costs are accounted for prospectively as a change in estimate. From period to period, collaboration revenue can fluctuate substantially based on the achievement of development-related milestones. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncement In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) entitled “ASU 2015-11, Inventory – Simplifying the Measurement of Inventory.” The standard requires entities to measure inventory at the lower of cost and net realizable value. The Company adopted ASU 2015-11 in the first quarter of 2017 and did not have a material impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In March 2016, FASB issued “ASU 2016-09, Improvements to Employee Share-Based Payment Accounting” which amends Accounting Standard Codification Topic 718, “Compensation – Stock Compensation”. The standard includes provisions intended to simplify various aspects related to the accounting and presentation for stock-based payments in the financial statements, including the income tax effects of stock-based payments, minimum withholding requirements upon award settlement, and the method of calculating forfeitures in the recognition of stock compensation expense. The Company adopted ASU 2016-09 in the first quarter of 2017 and has elected to account for forfeitures as they occur to determine the amount of compensation cost to be recognized. The accounting policy election was adopted applying a modified retrospective approach, and did not have a material impact on the consolidated results of operations, financial condition, cash flows, or financial statement disclosures. Employee taxes paid for withheld shares are presented as a financing activity in the consolidated statements of cash flows, as required by the new standard, and was adopted retrospectively. Other provisions of ASU 2016-09 related to the accounting for the tax effects of stock-based payments have no impact on its consolidated results of operations, as the Company records a valuation allowance for deferred tax assets related to excess tax benefits from stock-based payment transactions. Recent Accounting Pronouncements As an “emerging growth company,” the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As a result, its financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. In May 2014, FASB issued “ASU 2014-09, Revenue from Contracts with Customers.” The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to a customer. This guidance will replace most existing revenue recognition guidance. In March 2016, the FASB issued “ASU 2016-08, Principal vs Agent Considerations (Reporting Revenue Gross versus Net)” which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued “ASU 2016-10, Identifying Performance Obligations and Licensing” which clarifies the implementation guidance on identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued “ASU 2016-12, Narrow-Scope Improvements and Practical Expedients” which provides practical expedients for contract modifications and clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. The Company is continuing to evaluate the impact of the standard and its related amendments on all of its revenues and expects to complete its evaluation during the second half of 2017. The Company will adopt the new guidance effective January 1, 2018 and intends to use the modified retrospective method of adoption. Under this approach, the Company will recognize the cumulative effect, if any, of changes in revenue recognition related to prior periods as an adjustment to its opening accumulated deficit balance. Due to the complexity of certain collaboration agreements, the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and vary in some instances. The new standard also requires more extensive disclosures related to revenue recognition, particularly in quarterly financial statements. The Company is continuing to evaluate the impact of the standard on all of its revenues, including those mentioned above, and its assessments may change in the future based on its ongoing evaluation. In January 2016, FASB issued “ASU 2016-01, Financial Instruments: Overall.” The standard addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The standard will become effective for the Company beginning January 1, 2018. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In February 2016, FASB issued “ASU 2016-02, Leases – Recognition and Measurement of Financial Assets and Financial Liabilities.” The standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. The standard requires lessors to classify leases as either sales-type, finance or operating. A sales-type lease occurs if the lessor transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. The standard will become effective for the Company beginning January 1, 2019. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In June 2016, FASB issued “ASU 2016-13, Financial Instruments: Credit Losses”. The standard provides information about expected credit losses on financial instruments at each reporting date, and to change how other than temporary impairments on investments securities are recorded. The standard will become effective for the Company beginning on January 1, 2020 with early adoption permitted. The Company is currently assessing the impact adoption of this standard will have on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In August 2016, FASB issued “ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”. The standard provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows and is intended to reduce diversity in practice with respect to these items. The standard is applied using a retrospective transition method and will become effective for the Company beginning January 1, 2018. The Company does not anticipate adoption of this standard will have a material impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In November 2016, FASB issued “ASU 2016-18, Statement of Cash Flows: Restricted Cash”. The standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents, along with cash and cash equivalents, when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The standard will become effective for the Company beginning January 1, 2018, with early adoption permitted. The Company does not anticipate adoption of this standard will have a material impact on its consolidated results of operations, financial condition, cash flows, and financial statement disclosures. |
Net Loss Per Share | Net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Outstanding stock options, restricted stock units and warrants have not been included in the calculation of diluted net loss per share because to do so would be anti-dilutive. Accordingly, the numerator and the denominator used in computing both basic and diluted net loss per share for each period are the same. |
Fair Value Measurements | The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to measure fair value. The three levels of the fair value hierarchy are as follows: • Level 1 — Quoted prices in active markets for identical assets and liabilities. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The recorded amounts of certain financial instruments, including cash, accounts receivable, prepaid expenses and other, accounts payable and accrued liabilities, approximate fair value due to their relatively short-term maturities. The recorded amount of the Company’s long-term debt approximates fair value because the related interest rates approximate rates currently available to the Company. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Shares Underlying Outstanding Options and Warrants were Excluded from Computation of Basic and Diluted Net Loss Per Share | The following shares underlying outstanding options, restricted stock units and warrants were excluded from the computation of basic and diluted net loss per share for the periods presented because their effect would have been anti-dilutive (in thousands): Three Months Ended 2017 2016 Options to purchase common stock 5,157 4,531 Restricted stock units 238 83 Common stock warrants 332 572 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term Investments Available-for-Sale Securities | Short-term investments consisted of available-for-sale securities as follows (in thousands): Type of securities as of March 31, 2017 Amortized cost Gross unrealized gains Gross unrealized losses Fair value Corporate debt securities $ 37,264 $ 5 $ (28 ) $ 37,241 U.S. government-related debt securities 14,507 — (24 ) 14,483 Total available-for-sale securities $ 51,771 $ 5 $ (52 ) $ 51,724 Type of securities as of December 31, 2016 Amortized cost Gross unrealized gains Gross unrealized losses Fair value Corporate debt securities $ 36,198 $ 4 $ (42 ) $ 36,160 U.S. government-related debt securities 17,312 1 (20 ) 17,293 Total available-for-sale securities $ 53,510 $ 5 $ (62 ) $ 53,453 |
Fair Values of Available-for-Sale Securities by Contractual Maturity | The fair values of available-for-sale securities by contractual maturity were as follows (in thousands): March 31, 2017 December 31, 2016 Maturing in one year or less $ 44,701 $ 46,310 Maturing in one to three years 7,023 7,143 Total available-for-sale securities $ 51,724 $ 53,453 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block] | The following table summarizes investments that have been in a continuous unrealized loss position as of March 31, 2017 (in thousands). Less Than 12 Months 12 Months or Greater Total Fair value Gross unrealized losses Fair value Gross unrealized losses Fair value Gross unrealized losses Corporate debt securities $ 21,244 $ (28 ) $ — $ — $ 21,244 $ (28 ) U.S. government-related debt securities 14,483 (24 ) — — 14,483 (24 ) Total $ 35,727 $ (52 ) $ — $ — $ 35,727 $ (52 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Company's Available-for-Sale Securities by Level within Fair Value Hierarchy | The Company’s available-for-sale securities by level within the fair value hierarchy were as follows (in thousands): As of March 31, 2017 Level 1 Level 2 Level 3 Total Cash equivalents: Money market fund $ 3,705 $ — $ — $ 3,705 Short-term investments: Corporate debt securities — 37,241 — 37,241 U.S. government-related debt securities — 14,483 — 14,483 Total $ 3,705 $ 51,724 $ — $ 55,429 As of December 31, 2016 Level 1 Level 2 Level 3 Total Cash equivalents: Money market fund $ 16,715 $ — $ — $ 16,715 Short-term investments: Corporate debt securities — 36,160 — 36,160 U.S. government-related debt securities — 17,293 — 17,293 Total $ 16,715 $ 53,453 $ — $ 70,168 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of the date indicated (in thousands): March 31, 2017 December 31, 2016 Raw materials $ 3,948 $ 4,277 Work in process 3,858 4,046 Finished goods 6,738 5,489 Total inventory $ 14,544 $ 13,812 |
Long-term Debt and Lease Fina23
Long-term Debt and Lease Financing Obligations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Components of Borrowings, Including Current Portion | Long-term debt and lease financing obligations, consisted of the following (in thousands): March 31, 2017 December 31, 2016 Term loans payable $ 48,202 $ 47,844 Lease financing obligations 26 58 Total long-term debt and lease financing obligations 48,228 47,902 Unamortized debt issuance costs (454 ) (478 ) Current portion of lease financing obligations (26 ) (58 ) Long-term debt and lease financing obligations, net of debt issuance costs and current portion $ 47,748 $ 47,366 |
Scheduled Future Principal Payments under Outstanding Debt Obligations | Scheduled future principal payments for outstanding debt and lease financing obligations were as follows at March 31, 2017 (in thousands): Years Ending December 31, Remainder of 2017 $ 26 2018 — 2019 — 2020 — 2021 36,152 Thereafter 12,050 $ 48,228 |
Information about Geographic 24
Information about Geographic Areas (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Classification of Revenue by Geography | Revenue by geography was as follows (in thousands): Three Months Ended March 31, 2017 2016 Americas $ 12,211 $ 10,083 Europe & Middle East 4,415 2,853 Asia Pacific 1,437 1,761 Total revenue $ 18,063 $ 14,697 |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2017 | |
Significant Accounting Policies [Line Items] | |
Standard warranty period | 12 months |
Percentage used to determine discount for stand-alone sales (previous 12 months) | 15.00% |
Minimum | |
Significant Accounting Policies [Line Items] | |
Extended warranty period | 12 months |
Maximum | |
Significant Accounting Policies [Line Items] | |
Extended warranty period | 36 months |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Shares Underlying Outstanding Options and Warrants were Excluded from Computation of Basic and Diluted Net Loss Per Share (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 5,157 | 4,531 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 238 | 83 |
Common stock warrants | Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 332 | 572 |
Concentration of Risks - Additi
Concentration of Risks - Additional Information (Detail) - Customer Concentration Risk - Total revenue - Customer | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Concentration Risk [Line Items] | ||
Number of customer that individually represented more than 10% of total revenue and accounts receivable | 1 | 1 |
Concentration risk percentage | 14.00% | 15.00% |
Short-term Investments - Availa
Short-term Investments - Available-for-Sale Securities (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 51,771 | $ 53,510 |
Gross unrealized gains | 5 | 5 |
Gross unrealized losses | (52) | (62) |
Fair value | 51,724 | 53,453 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 37,264 | 36,198 |
Gross unrealized gains | 5 | 4 |
Gross unrealized losses | (28) | (42) |
Fair value | 37,241 | 36,160 |
U.S. government-related debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 14,507 | 17,312 |
Gross unrealized gains | 0 | 1 |
Gross unrealized losses | (24) | (20) |
Fair value | $ 14,483 | $ 17,293 |
Short-term Investments - Fair V
Short-term Investments - Fair Values of Available-for-Sale Securities by Contractual Maturity (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investments, Debt and Equity Securities [Abstract] | ||
Maturing in one year or less | $ 44,701 | $ 46,310 |
Maturing in one to three years | 7,023 | 7,143 |
Total available-for-sale securities | $ 51,724 | $ 53,453 |
Short-term Investments - Additi
Short-term Investments - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Investments that were other-than-temporarily impaired | $ 0 |
Short-term Investments Short-te
Short-term Investments Short-term Investments - Summary of Investments in a Continuous Loss Position (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
Less Than 12 Months, Fair value | $ 35,727 |
Less Than 12 Months, Gross unrealized losses | (52) |
12 Months or Greater, Fair value | 0 |
12 Months or Greater, Gross unrealized losses | 0 |
Total, Fair value | 35,727 |
Total, Gross unrealized losses | (52) |
Corporate debt securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Less Than 12 Months, Fair value | 21,244 |
Less Than 12 Months, Gross unrealized losses | (28) |
12 Months or Greater, Fair value | 0 |
12 Months or Greater, Gross unrealized losses | 0 |
Total, Fair value | 21,244 |
Total, Gross unrealized losses | (28) |
U.S. government-related debt securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Less Than 12 Months, Fair value | 14,483 |
Less Than 12 Months, Gross unrealized losses | (24) |
12 Months or Greater, Fair value | 0 |
12 Months or Greater, Gross unrealized losses | 0 |
Total, Fair value | 14,483 |
Total, Gross unrealized losses | $ (24) |
Fair Value Measurements - Compa
Fair Value Measurements - Company's Available-for-Sale Securities by Level within Fair Value Hierarchy (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 51,724 | $ 53,453 |
Total | 55,429 | 70,168 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 37,241 | 36,160 |
U.S. government-related debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 14,483 | 17,293 |
Money market fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,705 | 16,715 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 3,705 | 16,715 |
Level 1 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 1 | U.S. government-related debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 1 | Money market fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,705 | 16,715 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 51,724 | 53,453 |
Level 2 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 37,241 | 36,160 |
Level 2 | U.S. government-related debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 14,483 | 17,293 |
Level 2 | Money market fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Level 3 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 3 | U.S. government-related debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 3 | Money market fund | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,948 | $ 4,277 |
Work in process | 3,858 | 4,046 |
Finished goods | 6,738 | 5,489 |
Inventory, net | $ 14,544 | $ 13,812 |
Long-term Debt and Lease Fina34
Long-term Debt and Lease Financing Obligations - Additional Information (Detail) | 3 Months Ended | ||||||
Mar. 31, 2017USD ($)installment | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Apr. 30, 2014USD ($) | |
Line of Credit Facility [Line Items] | |||||||
Term loans payable | $ 48,202,000 | $ 47,844,000 | |||||
Term Loan Agreement | |||||||
Line of Credit Facility [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 60,000,000 | $ 45,000,000 | |||||
Credit facility, additional borrowing capacity | $ 5,000,000 | $ 10,000,000 | $ 10,000,000 | ||||
Percentage of accrue interest | 12.00% | 12.50% | |||||
Percentage of deferred payment | 3.00% | ||||||
Interest deferral period | 6 years | ||||||
Deferred interest payment | $ 3,200,000 | ||||||
Term loans payable | $ 48,200,000 | $ 47,800,000 | |||||
Interest payment period | 7 years | ||||||
Number of installments | installment | 4 | ||||||
Percentage payment up on repayment of principal amount | 2.00% | ||||||
Long term liability | $ 1,100,000 | ||||||
Minimum liquidity | 2,000,000 | ||||||
Annual revenue requirements | 85,000,000 | ||||||
Increase in annual revenue in fiscal years | $ 15,000,000 | ||||||
Term Loan Agreement | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Credit facility, additional borrowing capacity | $ 20,000,000 | ||||||
Percentage of redemption fee | 4.00% | ||||||
Annual percentage decrease | 1.00% |
Long-term Debt and Lease Fina35
Long-term Debt and Lease Financing Obligations - Components of Borrowings, Including Current Portion (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Term loans payable | $ 48,202 | $ 47,844 |
Lease financing obligations | 26 | 58 |
Total long-term debt and lease financing obligations | 48,228 | 47,902 |
Unamortized debt issuance costs | (454) | (478) |
Lease financing obligations, current portion | 26 | 58 |
Long-term debt and lease financing obligations, net of debt issuance costs and current portion | 47,748 | 47,366 |
Term Loan Agreement | ||
Debt Instrument [Line Items] | ||
Term loans payable | 48,200 | 47,800 |
Lease financing obligations, current portion | 26 | 58 |
Long-term debt and lease financing obligations, net of debt issuance costs and current portion | $ 47,748 | $ 47,366 |
Long-term Debt and Lease Fina36
Long-term Debt and Lease Financing Obligations - Scheduled Future Principal Payments under Outstanding Debt Obligations (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,017 | $ 26 | |
2,018 | 0 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 36,152 | |
Thereafter | 12,050 | |
Total long-term debt and lease financing obligations | $ 48,228 | $ 47,902 |
Collaboration Agreements - Addi
Collaboration Agreements - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | 34 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Revenue recognized under collaboration agreement | $ 2,298,000 | $ 2,561,000 | ||||||
Estimated deferred revenue recognized within one year | 20,798,000 | $ 19,033,000 | $ 19,033,000 | |||||
Medivation, Inc. and Astellas Pharma, Inc. | Development Funding [Member] | Maximum | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Maximum success-based milestone payments | 10,000,000 | |||||||
Collaborative Arrangement | Celgene Corporation | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Maximum success-based milestone payments | $ 17,000,000 | |||||||
Minimum annual revenue period | 3 years | |||||||
Revenue recognized under collaboration agreement | 100,000 | 700,000 | ||||||
Deferred revenue recorded under collaboration agreement | 5,400,000 | |||||||
Estimated deferred revenue recognized within one year | $ 1,700,000 | |||||||
Collaborative agreement period | 1 year | |||||||
Collaborative Arrangement | Celgene Corporation | Maximum | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Maximum success-based milestone payments | $ 45,000,000 | |||||||
Collaborative Arrangement | Celgene Corporation | Upfront Payment Arrangement | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaboration agreement upfront payment | $ 5,800,000 | $ 2,100,000 | ||||||
Deferred revenue recorded under collaboration agreement | $ 6,000,000 | |||||||
Collaborative Arrangement | Merck Sharp & Dohme Corp. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Deferred revenue recorded under collaboration agreement | $ 20,900,000 | |||||||
Collaborative Arrangement | Merck Sharp & Dohme Corp. | Upfront Payment Arrangement | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaboration agreement upfront payment | 12,000,000 | $ 3,900,000 | 8,500,000 | |||||
Collaborative Arrangement | Merck Sharp & Dohme Corp. | Development Funding [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaboration agreement upfront payment | 1,800,000 | 1,900,000 | ||||||
Collaborative Arrangement | Medivation, Inc. and Astellas Pharma, Inc. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaboration agreement upfront payment | 400,000 | |||||||
Revenue recognized under collaboration agreement | (200,000) | 600,000 | $ 0 | |||||
Deferred revenue recorded under collaboration agreement | $ 10,600,000 | |||||||
Collaborative agreement period | 1 year | |||||||
Collaborative Arrangement | Medivation, Inc. and Astellas Pharma, Inc. | Upfront Payment Arrangement | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaboration agreement upfront payment | 0 | 6,000,000 | ||||||
New Clinical Collaborative Arrangement [Member] | Merck Sharp & Dohme Corp. | Maximum | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Maximum success-based milestone payments | 12,000,000 | |||||||
Clinical Research Collaborative Arrangement | Merck Sharp & Dohme Corp. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Revenue recognized under collaboration agreement | $ 2,100,000 | $ 1,300,000 | ||||||
Estimated deferred revenue recognized within one year | $ 11,700,000 | |||||||
Collaborative agreement period | 1 year | |||||||
Clinical Research Collaborative Arrangement | Medivation, Inc. and Astellas Pharma, Inc. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Estimated deferred revenue recognized within one year | $ 4,000,000 | |||||||
Clinical Research Collaborative Arrangement | Medivation, Inc. and Astellas Pharma, Inc. | Maximum | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Maximum success-based milestone payments | $ 6,000,000 |
Information about Geographic 38
Information about Geographic Areas - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)sales_forceSegment | Mar. 31, 2016USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Number of sales forces | sales_force | 1 | |
Number of reportable segment | Segment | 1 | |
Total revenue | $ 18,063 | $ 14,697 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 11,800 | $ 9,600 |
Information about Geographic 39
Information about Geographic Areas - Classification of Revenue by Geography (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 18,063 | $ 14,697 |
Americas | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 12,211 | 10,083 |
Europe & Middle East | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 4,415 | 2,853 |
Asia Pacific | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 1,437 | $ 1,761 |