Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 25, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | TNDM | |
Entity Registrant Name | TANDEM DIABETES CARE INC | |
Entity Central Index Key | 1,438,133 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 30,351,361 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 40,610 | $ 43,088 |
Restricted cash | 2,000 | 2,000 |
Short-term investments | 27,816 | 28,018 |
Accounts receivable, net | 9,093 | 14,055 |
Inventory | 20,196 | 17,543 |
Prepaid and other current assets | 2,852 | 2,280 |
Total current assets | 102,567 | 106,984 |
Property and equipment, net | 15,939 | 15,526 |
Other long-term assets | 107 | 105 |
Total assets | 120,642 | 124,725 |
Current liabilities: | ||
Accounts payable | 5,974 | 5,234 |
Accrued expense | 2,173 | 2,121 |
Employee-related liabilities | 9,538 | 11,761 |
Deferred revenue | 1,681 | 1,822 |
Other current liabilities | 5,458 | 5,582 |
Total current liabilities | 24,824 | 26,520 |
Notes payable—long-term | 44,106 | 29,275 |
Deferred rent—long-term | 2,469 | 2,743 |
Other long-term liabilities | 3,299 | 2,719 |
Total liabilities | $ 74,698 | $ 61,257 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 100,000 shares authorized as of March 31, 2016 and December 31, 2015, 30,348 and 30,255 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively. | $ 30 | $ 30 |
Additional paid-in capital | 387,491 | 384,551 |
Accumulated other comprehensive income | 40 | 20 |
Accumulated deficit | (341,617) | (321,133) |
Total stockholders’ equity | 45,944 | 63,468 |
Total liabilities and stockholders’ equity | 120,642 | 124,725 |
Patents [Member] | ||
Current assets: | ||
Patents, net | $ 2,029 | $ 2,110 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 30,348,000 | 30,255,000 |
Common stock, shares outstanding | 30,348,000 | 30,255,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Sales | $ 20,058 | $ 12,308 |
Cost of sales | 13,130 | 9,500 |
Gross profit | 6,928 | 2,808 |
Operating expenses: | ||
Selling, general and administrative | 21,997 | 19,355 |
Research and development | 4,169 | 3,863 |
Total operating expenses | 26,166 | 23,218 |
Operating loss | (19,238) | (20,410) |
Other income (expense), net: | ||
Interest and other income | 118 | 99 |
Interest and other expense | (1,364) | (897) |
Total other expense, net | (1,246) | (798) |
Net loss | (20,484) | (21,208) |
Other comprehensive loss: | ||
Unrealized gain on short-term investments | 20 | 39 |
Comprehensive loss | $ (20,464) | $ (21,169) |
Net loss per share, basic and diluted | $ (0.68) | $ (0.83) |
Weighted average shares used to compute basic and diluted net loss per share | 30,294 | 25,522 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities | ||
Net loss | $ (20,484) | $ (21,208) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 1,334 | 1,182 |
Interest expense related to amortization of debt discount and debt issuance costs | 78 | 35 |
Provision for allowance for doubtful accounts | 372 | (31) |
Payment in kind interest accrual of notes payable | 212 | |
Amortization of premium (discount) on short-term investments | 17 | (18) |
Stock-based compensation expense | 2,800 | 3,773 |
Other | (35) | (60) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 4,590 | 2,457 |
Inventory | (2,622) | (1,658) |
Prepaid and other current assets | (572) | (56) |
Other long-term assets | (2) | (17) |
Accounts payable | 1,020 | 1,354 |
Accrued expense | 36 | (260) |
Employee-related liabilities | (2,223) | (933) |
Deferred revenue | (141) | (37) |
Other current liabilities | (139) | (160) |
Deferred rent | (210) | (151) |
Other long-term liabilities | 24 | 366 |
Net cash used in operating activities | (15,945) | (15,422) |
Investing activities | ||
Purchase of short-term investments | (13,441) | (39,099) |
Proceeds from sales and maturities of short-term investments | 13,750 | 21,500 |
Purchase of property and equipment | (1,945) | (600) |
Purchase of patents | (74) | |
Net cash used in investing activities | (1,636) | (18,273) |
Financing activities | ||
Issuance of notes payable, net of issuance costs | 14,994 | |
Proceeds from public offering, net of offering costs | 64,851 | |
Proceeds from issuance of common stock | 109 | 217 |
Net cash provided by financing activities | 15,103 | 65,068 |
Net (decrease) increase in cash and cash equivalents | (2,478) | 31,373 |
Cash and cash equivalents at beginning of period | 43,088 | 31,176 |
Cash and cash equivalents at end of period | 40,610 | 62,549 |
Supplemental disclosures of cash flow information | ||
Interest paid | 1,009 | 863 |
Supplemental schedule of noncash investing and financing activities | ||
Debt issuance cost included in other long-term liabilities | 452 | |
Property and equipment included in accounts payable | $ 441 | $ 1,638 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation The Company Tandem Diabetes Care, Inc. is a medical device company focused on the design, development and commercialization of a family of products for people with insulin-dependent diabetes. The Company is incorporated in the state of Delaware. Unless the context requires otherwise, the terms the “Company” or “Tandem” refer to Tandem Diabetes Care, Inc. The Company currently manufactures and sells three insulin pump products in the United States that are designed to address large and differentiated needs of the insulin-dependent diabetes market: · the t:slim ® · the t:flex ® · the t:slim G4 Insulin Delivery System, or t:slim G4, a Continuous Glucose Monitoring (“CGM”) enabled pump with touch-screen simplicity. The Company designed and commercialized its products based on its proprietary technology platform and consumer-focused approach. The Company began commercial sales of its first product, t:slim, in August 2012. During 2015, the Company commenced commercial sales of two additional insulin pumps: t:flex in May 2015 and t:slim G4 in September 2015. Basis of Presentation The Company has prepared the accompanying unaudited condensed financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments which are of a normal and recurring nature, considered necessary for a fair presentation of the financial information contained herein, have been included. Interim financial results are not necessarily indicative of results anticipated for the full year or any other period(s). These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, from which the balance sheet information herein was derived but excludes disclosures required by GAAP for complete financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies There have been no significant changes in our significant accounting policies during the three months ended March 31, 2016, as compared with those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015. Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes as of the date of the financial statements. Actual results could materially differ from those estimates and assumptions. Restricted Cash Restricted cash as of March 31, 2016 and December 31, 2015 was comprised of a $2.0 million minimum cash balance requirement in connection with the Company’s Term Loan Agreement, as amended by Consent and Amendment Agreement, dated June 20, 2014, Omnibus Amendment Agreement No. 2, dated February 23, 2015 and Amendment No. 3 to Term Loan Agreement, dated January 8, 2016 (as amended, the “Term Loan Agreement”) Accounts Receivable The Company grants credit to various customers in the normal course of business. The Company maintains an allowance for doubtful accounts for potential credit losses. Provisions are made, generally, for receivables greater than 120 days past due and based upon a specific review of other outstanding invoices. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expense, and employee-related liabilities are reasonable estimates of their fair values because of the short-term nature of these assets and liabilities. Short-term investments and foreign exchange forward contracts that are not designated as hedges notes payable Revenue Recognition Revenue is generated from sales, in the United States, of insulin pumps, disposable cartridges and infusion sets to individual customers and third-party distributors that resell the product to insulin-dependent diabetes customers. The Company is paid directly by customers who use the products, distributors and third-party insurance payors. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title passed, the price is fixed or determinable, and collectability is reasonably assured. These criteria are applied as follows: The evidence of an arrangement generally consists of contractual arrangements with distributors, third-party insurance payors or direct customers. Transfer of title and risk and rewards of ownership are passed upon shipment of the pump to distributors or upon delivery to the customer. The selling prices are fixed and agreed upon based on the contracts with distributors, the customer and contracted insurance payors, if applicable. For sales to customers associated with insurance providers with whom there is no contract, revenue is recognized upon collection of cash, at which time the price is determinable. The Company generally does not offer rebates to its distributors and customers. The Company considers the overall creditworthiness and payment history of the distributor, customer and the contracted insurance payor in determining whether collectability is reasonably assured. Revenue Recognition for Arrangements with Multiple Deliverables The Company considers the deliverables in its product offering as separate units of accounting and recognizes deliverables as revenue upon delivery only if (i) the deliverable has standalone value and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is probable and substantially controlled by the Company. The Company allocates consideration to the separate units of accounting, unless the undelivered elements were deemed perfunctory and inconsequential. The Company uses the relative selling price method, in which allocation of consideration is based on vendor-specific objective evidence (VSOE) if available, third-party evidence (TPE), or if VSOE and TPE are not available, management’s best estimate of a standalone selling price (ESP) for the undelivered elements. The Company offers a cloud-based data management application, t:connect, which is made available to customers upon purchase of any of its insulin pumps. This service is deemed an undelivered element at the time of the insulin pump sale. Because the Company has neither VSOE nor TPE for this deliverable, the allocation of revenue is based on the Company’s ESP. The Company establishes its ESP based on the estimated cost to provide such services, including consideration for a reasonable profit margin, which is then corroborated by comparable market data. The Company allocates fair value based on management’s ESP to this element at the time of sale and is recognizing the revenue over the four-year hosting period. At March 31, 2016 and December 31, 2015, $1.2 million and $1.1 million, respectively, were recorded as deferred revenue for the t:connect hosting service. All other undelivered elements at the time of sale are deemed inconsequential or perfunctory. Product Returns The Company offers a 30-day right of return to its customers from the date of shipment of any of its insulin pumps, provided a physician’s confirmation of the medical reason for the return is received. Estimated allowances for sales returns are based on historical returned quantities as compared to pump shipments in those same periods of return. The return rate is then applied to the sales of the current period to establish a reserve at the end of the period. The return rates used in the reserve are adjusted for known or expected changes in the marketplace when appropriate. The allowance for product returns is recorded as a reduction of revenue and accounts receivable in the period in which the related sale is recorded. The amounts recorded on the Company’s balance sheet for product return allowance were Warranty Reserve The Company generally provides a four-year warranty on its insulin pumps to end user customers and may replace any pumps that do not function in accordance with the product specifications. t:slim pumps returned to the Company may be refurbished and redeployed, but the Company does not currently refurbish t:flex or t:slim G4 pumps. The Company evaluates the reserve quarterly and makes adjustments when appropriate. Changes to the actual replacement rates could have a material impact on the Company’s estimated liability. At March 31, 2016 and December 31, 2015, the warranty reserve was $4.2 million and $3.5 million, respectively. The following table provides a reconciliation of the change in product warranty liabilities through March 31, 2016 (in thousands): Balance at December 31, 2015 $ 3,547 Provision for warranties issued during the period 1,737 Settlements made during the period (1,669 ) Increases in warranty estimates 634 Balance at March 31, 2016 $ 4,249 Current portion $ 1,727 Non-current portion 2,522 Total $ 4,249 Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award, and the portion that is ultimately expected to vest is recognized as compensation expense over the requisite service period on a straight-line basis. The Company estimates the fair value of stock options issued under the 2013 Stock Incentive Plan (the “2013 Plan”) and shares issued under the Employee Stock Purchase Plan (“ESPP”) using a Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model requires the use of subjective assumptions including volatility, expected term, and risk-free rate. For awards that vest based on service conditions, the Company recognizes expense using the straight-line method less estimated forfeitures based on historical experience. The Company records the expense for stock option grants to non-employees based on the estimated fair value of the stock options using the Black-Scholes option-pricing model. The fair value of non-employee awards is remeasured at each reporting period as the underlying awards vest unless the instruments are fully vested, immediately exercisable and nonforfeitable on the date of grant. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares that were outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the sum of the weighted-average number of dilutive common share equivalents outstanding for the period determined using the treasury stock method. Dilutive common share equivalents are comprised of warrants, potential awards granted pursuant to the ESPP, and options outstanding under the Company’s other equity incentive plans. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share (because inclusion would be anti-dilutive) are as follows (in common stock equivalent shares): Three Months Ended March 31, 2016 2015 Warrants for common stock 990 990 Common stock options 606 2,163 ESPP 162 127 1,758 3,280 Reclassifications Certain reclassifications of prior year amounts have been made to conform to the current year presentation. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update on changing certain aspects of accounting for share-based payments to employees. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting, and to make a policy election to account for forfeitures as they occur. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted, but all of the guidance must be adopted in the same period. The Company is in the process of assessing the impact of the adoption of the standard on its financial statements. In February 2016, FASB issued final guidance for lease accounting. The new guidance requires lessees to put most leases on their balance sheet but to recognize expenses on their income statement in a manner similar to today’s accounting. The new guidance also eliminates today’s real estate-specific provisions for all entities. The standard is effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is in the process of assessing the impact of the adoption of the standard on its financial statements. In May 2014, FASB and the International Accounting Standards Board issued a comprehensive new revenue recognition standard that will supersede existing revenue guidance under U.S. GAAP and International Financial Reporting Standards. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. On July 9, 2015, the FASB approved a one-year deferral of the effective date of the standard to December 15, 2017 and early application is permitted, but not before the original effective date of December 15, 2016. The Company is in the process of assessing the impact of the adoption of the standard on its financial statements. In April 2015, the FASB issued ASU No. 2015-03 amended requirements that require debt issuance costs, related to a recognized debt liability, to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, effective for the Company beginning January 1, 2016 and applied retroactively for all consolidated balance sheets presented. The Company applied the amended presentation requirements in the first quarter 2016, which resulted in the reclassification of $0.4 million of debt issuance costs in the Company’s balance sheet from other long-term assets to long term notes payable at December 31, 2015. |
Short-Term Investments
Short-Term Investments | 3 Months Ended |
Mar. 31, 2016 | |
Investments Debt And Equity Securities [Abstract] | |
Short-Term Investments | 3. Short-Term Investments The Company invests in various securities, principally in debt instruments of financial institutions and corporations. The following represents a summary of the estimated fair value of short-term investments at March 31, 2016 and December 31, 2015 (in thousands): At March 31, 2016 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities: Commercial paper Less than 1 $ 23,435 $ 40 $ — $ 23,475 US Treasuries Less than 1 2,012 — — 2,012 Government-sponsored enterprise securities Less than 1 2,005 — — 2,005 $ 27,452 $ 40 $ — $ 27,492 Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 320 $ 7 $ (3 ) $ 324 Total $ 27,772 $ 47 $ (3 ) $ 27,816 At December 31, 2015 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities: Commercial paper Less than 1 $ 21,712 $ 23 $ — $ 21,735 US Treasuries Less than 1 2,035 — (1 ) $ 2,034 Government-sponsored enterprise securities Less than 1 4,029 — (2 ) 4,027 $ 27,776 $ 23 $ (3 ) $ 27,796 Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 224 $ 1 $ (3 ) $ 222 Total $ 28,000 $ 24 $ (6 ) $ 28,018 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory Inventory consisted of the following (in thousands): March 31, December 31, 2016 2015 Raw materials $ 11,541 $ 10,606 Work in process 3,692 3,394 Finished goods 4,963 3,543 Total $ 20,196 $ 17,543 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements Authoritative guidance on fair value measurements defines fair value, establishes a consistent framework for measuring fair value, and expands disclosures for each major asset and liability category measured at fair value on either a recurring or a nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities . Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly for substantially the full term of the asset or liability . Level 3: Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities, which require the reporting entity to develop its own valuation techniques that require input assumptions . The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): Fair Value Measurements at March 31, 2016 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (1) $ 23,736 $ 23,736 $ — $ — Commercial paper 23,475 — 23,475 — Mutual funds held for nonqualified deferred compensation plan participants (2) 324 324 — — US Treasuries 2,012 2,012 — — Government-sponsored enterprise securities 2,005 — 2,005 — Total assets $ 51,552 $ 26,072 $ 25,480 $ — Liabilities Deferred compensation (2) $ 324 $ 324 $ — $ — Total liabilities $ 324 $ 324 $ — $ — Fair Value Measurements at December 31, 2015 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (1) $ 23,402 $ 23,402 $ — $ — Commercial paper 21,735 — 21,735 — Mutual funds held for nonqualified deferred compensation plan participants (2) 222 222 — — US Treasuries 2,034 2,034 — — Government-sponsored enterprise securities 4,027 — 4,027 — Total assets $ 51,420 $ 25,658 $ 25,762 $ — Liabilities Deferred compensation (2) $ 222 $ 222 $ — $ — Total liabilities $ 222 $ 222 $ — $ — (1) Cash equivalents included money market funds and commercial paper with a maturity of three months or less from the date of purchase. (2) Deferred compensation plans are compensation plans directed by the Company and structured as a Rabbi Trust for certain executives and non-employee directors. The investment assets of the Rabbi Trust are valued using quoted market prices multiplied by the number of shares held in each trust account. The related deferred compensation liability represents the fair value of the investment assets . The Company’s Level 2 financial instruments are valued using market prices on less active markets with observable valuation inputs such as interest rates and yield curves. The Company obtains the fair value of Level 2 financial instruments from quoted market prices, calculated prices or quotes from third-party pricing services. The Company validates these prices through independent valuation testing and review of portfolio valuations provided by the Company’s investment managers. There were no transfers between Level 1 and Level 2 securities during the three months ended March 31, 2016. |
Term Loan Agreement with Capita
Term Loan Agreement with Capital Royalty Partners | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Term Loan Agreement with Capital Royalty Partners | 6. Term Loan Agreement with Capital Royalty Partners In January 2016, the Company entered into a third amendment to its Term Loan Agreement with Capital Royalty Partners (the “Third Amendment”). The Term Loan Agreement with Capital Royalty Partners was previously amended by Consent and Amendment Agreement, dated June 20, 2014, and Omnibus Amendment Agreement No. 2, dated February 23, 2015. Under its Term Loan Agreement with Capital Royalty Partners, the Company had aggregate borrowings outstanding of $30.2 million (such amount, the “First Tranche”) as of December 31, 2015. Under the Third Amendment, the Company borrowed $15.0 million (such amount, the “Second Tranche”) in January 2016, and the Third Amendment provides the Company with a one-time option to draw up to an additional $35.0 million in increments of $5.0 million on or before December 31, 2016 (such amount, to the extent drawn, the “Third Tranche”). The other principal terms of the Term Loan Agreement with Capital Royalty Partners were not amended by the Third Amendment. Accordingly, interest continues to be payable, at the Company’s option, (i) in cash at a rate of 11.5% per annum or (ii) at a rate of 9.5% of the 11.5% per annum in cash and 2.0% of the 11.5% per annum (the “PIK Loan”) to be added to the principal of the loan and subject to accruing interest. Interest-only payments continue to be due quarterly on March 31, June 30, September 30 and December 31 of each year of the interest-only payment period, which ends on December 31, 2019. The principal balance continues to be due in full at the end of the term of the loan, which is March 31, 2020 (the “Maturity Date”). The Term Loan Agreement with Capital Royalty Partners provides for prepayment fees in an amount equal to one percent (1.0%) of the outstanding balance of the loan if the loan is repaid prior to March 31, 2017, after which there is no prepayment fee. The term loan is collateralized by all assets of the Company. the Company was in compliance with all of the covenants in its Term Loan Agreement with Capital Royalty Partners. The Company had elected to pay interest in cash at a rate of 11.5% per annum through September 30, 2015. For the three months ended March 31, 2016 and December 31, 2015, the Company elected to pay interest in cash at a rate of 9.5% per annum and to have 2.0% per annum added to the principal of the loan. As a result, $212,000 and $153,000 was added to the principal of the loan for the three months ended March 31, 2016 and December 31, 2015, respectively. The Company had $45.4 million aggregate borrowings outstanding under its Term Loan Agreement with Capital Royalty Partners as of March 31, 2016. Pursuant to the Third Amendment, the Company has agreed to pay, on the earlier of (i) the Maturity Date; (ii) the date that the loan under its Term Loan Agreement with Capital Royalty Partners becomes due, and (iii) the date on which the Company makes a voluntary pre-payment of the loan, a financing fee equal to three percent (3.0%) of the sum of (x) the aggregate amount of the Second Tranche and Third Tranche drawn, and (y) any PIK Loans issued in relation to the Second Tranche and Third Tranche (collectively, the “Back End Financing Fee”). As of March 31, 2016 the Company had accrued $0.5 million for the Back End Financing Fee in other long term liabilities and as contra-debt in notes payable-long term on the accompanying balance sheet. The Company treated this amendment as a modification. The present value of the future cash flows under the Third Amendment did not exceed the present value of the future cash flows under the previous terms by more than 10%. The Back End Financing Fee and the remaining balance of debt issuance costs and debt discount of the term loan are amortized to interest expense over the remaining term of the Third Amendment using the effective interest method. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Public Offering In the first quarter of 2015, the Company completed a public offering of 6,037,500 shares of its common stock at a public offering price of $11.50 per share. Net cash proceeds from the public offering were approximately $64.9 million, after deducting underwriting discounts, commissions and offering expenses paid by the Company. Shares Reserved for Future Issuance The following shares of the Company’s common stock were reserved for future issuance at March 31, 2016: Shares underlying outstanding warrants 990,031 Shares underlying outstanding stock options 6,796,078 Shares authorized for future equity award grants 2,053,101 Shares authorized for issuance as ESPP awards 770,787 10,609,997 The Company issued 93,314 shares of its common stock upon the exercise of stock options and warrants during the three months ended March 31, 2016, and issued 260,091 shares of its common stock upon the exercise of stock options and warrants during the year ended December 31, 2015. The ESPP enables eligible employees to purchase shares of the Company’s common stock using their after tax payroll deductions, subject to certain conditions. The ESPP consists of a two-year offering period with four six-month purchase periods which begin in May and November of each year. There were 302,171 Stock-Based Compensation The assumptions used in the Black-Scholes option-pricing model are as follows: Stock Option Three Months Ended March 31, 2016 2015 Weighted average grant date fair value (per share) $ 3.74 $ 8.58 Risk-free interest rate 1.4 % 1.7 % Expected dividend yield 0.0 % 0.0 % Expected volatility 55.5 % 70.4 % Expected term (in years) 6.1 6.1 The following table summarizes the allocation of stock-based compensation expense (in thousands): Three Months Ended March 31, 2016 2015 Cost of sales $ 240 $ 324 Selling, general & administrative 2,250 2,978 Research and development 310 471 Total $ 2,800 $ 3,773 The total stock-based compensation capitalized as part of the cost of inventory was $0.2 million and $0.1 million at March 31, 2016 and December 31, 2015, respectively. |
Collaborations
Collaborations | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaborations | 8. Collaborations DexCom Development and Commercialization Agreement In February 2012, the Company entered into a Development and Commercialization Agreement (the “DexCom Agreement”) with DexCom, Inc. (“DexCom”) for the purpose of collaborating on the development and commercialization of an integrated system which incorporates t:slim Insulin Delivery System with DexCom’s proprietary continuous glucose monitoring system. Under the DexCom Agreement, the Company paid DexCom $1.0 million at the commencement of the collaboration in 2012, $1.0 million in 2014 upon the achievement of t:slim G4 pre-market approval (“PMA”) submission to the FDA and an additional $1.0 million in September 2015 upon obtaining approval of the PMA submission from the FDA. All payments were recorded as research and development costs in their respective years. Additionally, upon commercialization and as compensation for the non-exclusive license rights, under the original DexCom Agreement the Company agreed to pay DexCom a royalty calculated at $100 per integrated system sold. In September 2015, the Company entered into an amendment to the DexCom Agreement (the “Amendment”). Pursuant to the Amendment, in lieu of the $100 royalty payment for each integrated system sold, the Company will commit $100 of each t:slim G4 integrated system sold to incremental marketing activities associated with t:slim G4 integrated systems that are in addition to a level of ordinary course marketing activities or marketing activities to support other Company and DexCom jointly funded development projects. The committed marketing fund is recorded as an increase to cost of sales and current liability in the period that the related t:slim G4 sale is recorded. As of March 31, 2016 and December 31, 2015, the Company has recorded such marketing fund liability of $0.7 million and $0.4 million, respectively, in other current liabilities on the accompanying balance sheet. JDRF Collaboration In January 2013, the Company entered into a Research, Development and Commercialization Agreement (“JDRF Agreement”) with JDRF to develop the t:dual Infusion System, a first-of-its-kind, dual-chamber infusion pump for the management of diabetes. According to the terms of the JDRF Agreement, JDRF would provide research funding of up to $3.0 million based on the achievement of research and development milestones, not to exceed research costs incurred by the Company. Any intellectual property developed by either party in the performance of the agreement would be owned or exclusively licensed by the Company. Payments that the Company received to fund the collaboration efforts under the terms of the JDRF Agreement were recorded as restricted cash and current and long-term liabilities. The liabilities were recognized as an offset of research and development expenses straight-line over the remaining months until anticipated completion of the final milestone, only to the extent that the restricted cash was utilized to fund such development activities. In February 2016, the Company and JDRF entered into a termination agreement (“JDRF Termination Agreement”), where both parties mutually terminated the JDRF Agreement. As of December 31, 2015, milestone payment achievements totaled $0.7 million, and research and development costs were offset cumulatively by $0.5 million. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies From time to time, the Company may be subject to legal proceedings or regulatory encounters or other matters arising in the ordinary course of business, including actions with respect to intellectual property, employment, product liability, and contractual matters. In connection with these matters, the Company assesses, on a regular basis, the probability and range of possible loss based on the developments in these matters. A liability is recorded in the financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Because of the uncertainties related to the occurrence, amount, and range of loss on any pending actions, the Company is currently unable to predict their ultimate outcome, and, with respect to any pending litigation or claim where no liability has been accrued, to make a meaningful estimate of the reasonably possible loss or range of loss that could result from an unfavorable outcome. At each of March 31, 2016 and December 31, 2015, there were no material matters for which the negative outcome was considered probable or estimable. |
Organization and Basis of Pre15
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
The Company | The Company Tandem Diabetes Care, Inc. is a medical device company focused on the design, development and commercialization of a family of products for people with insulin-dependent diabetes. The Company is incorporated in the state of Delaware. Unless the context requires otherwise, the terms the “Company” or “Tandem” refer to Tandem Diabetes Care, Inc. The Company currently manufactures and sells three insulin pump products in the United States that are designed to address large and differentiated needs of the insulin-dependent diabetes market: · the t:slim ® · the t:flex ® · the t:slim G4 Insulin Delivery System, or t:slim G4, a Continuous Glucose Monitoring (“CGM”) enabled pump with touch-screen simplicity. The Company designed and commercialized its products based on its proprietary technology platform and consumer-focused approach. The Company began commercial sales of its first product, t:slim, in August 2012. During 2015, the Company commenced commercial sales of two additional insulin pumps: t:flex in May 2015 and t:slim G4 in September 2015. |
Basis of Presentation | Basis of Presentation The Company has prepared the accompanying unaudited condensed financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments which are of a normal and recurring nature, considered necessary for a fair presentation of the financial information contained herein, have been included. Interim financial results are not necessarily indicative of results anticipated for the full year or any other period(s). These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, from which the balance sheet information herein was derived but excludes disclosures required by GAAP for complete financial statements. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes as of the date of the financial statements. Actual results could materially differ from those estimates and assumptions. |
Restricted Cash | Restricted Cash Restricted cash as of March 31, 2016 and December 31, 2015 was comprised of a $2.0 million minimum cash balance requirement in connection with the Company’s Term Loan Agreement, as amended by Consent and Amendment Agreement, dated June 20, 2014, Omnibus Amendment Agreement No. 2, dated February 23, 2015 and Amendment No. 3 to Term Loan Agreement, dated January 8, 2016 (as amended, the “Term Loan Agreement”) |
Accounts Receivable | Accounts Receivable The Company grants credit to various customers in the normal course of business. The Company maintains an allowance for doubtful accounts for potential credit losses. Provisions are made, generally, for receivables greater than 120 days past due and based upon a specific review of other outstanding invoices. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expense, and employee-related liabilities are reasonable estimates of their fair values because of the short-term nature of these assets and liabilities. Short-term investments and foreign exchange forward contracts that are not designated as hedges notes payable |
Revenue Recognition | Revenue Recognition Revenue is generated from sales, in the United States, of insulin pumps, disposable cartridges and infusion sets to individual customers and third-party distributors that resell the product to insulin-dependent diabetes customers. The Company is paid directly by customers who use the products, distributors and third-party insurance payors. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title passed, the price is fixed or determinable, and collectability is reasonably assured. These criteria are applied as follows: The evidence of an arrangement generally consists of contractual arrangements with distributors, third-party insurance payors or direct customers. Transfer of title and risk and rewards of ownership are passed upon shipment of the pump to distributors or upon delivery to the customer. The selling prices are fixed and agreed upon based on the contracts with distributors, the customer and contracted insurance payors, if applicable. For sales to customers associated with insurance providers with whom there is no contract, revenue is recognized upon collection of cash, at which time the price is determinable. The Company generally does not offer rebates to its distributors and customers. The Company considers the overall creditworthiness and payment history of the distributor, customer and the contracted insurance payor in determining whether collectability is reasonably assured. Revenue Recognition for Arrangements with Multiple Deliverables The Company considers the deliverables in its product offering as separate units of accounting and recognizes deliverables as revenue upon delivery only if (i) the deliverable has standalone value and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is probable and substantially controlled by the Company. The Company allocates consideration to the separate units of accounting, unless the undelivered elements were deemed perfunctory and inconsequential. The Company uses the relative selling price method, in which allocation of consideration is based on vendor-specific objective evidence (VSOE) if available, third-party evidence (TPE), or if VSOE and TPE are not available, management’s best estimate of a standalone selling price (ESP) for the undelivered elements. The Company offers a cloud-based data management application, t:connect, which is made available to customers upon purchase of any of its insulin pumps. This service is deemed an undelivered element at the time of the insulin pump sale. Because the Company has neither VSOE nor TPE for this deliverable, the allocation of revenue is based on the Company’s ESP. The Company establishes its ESP based on the estimated cost to provide such services, including consideration for a reasonable profit margin, which is then corroborated by comparable market data. The Company allocates fair value based on management’s ESP to this element at the time of sale and is recognizing the revenue over the four-year hosting period. At March 31, 2016 and December 31, 2015, $1.2 million and $1.1 million, respectively, were recorded as deferred revenue for the t:connect hosting service. All other undelivered elements at the time of sale are deemed inconsequential or perfunctory. Product Returns The Company offers a 30-day right of return to its customers from the date of shipment of any of its insulin pumps, provided a physician’s confirmation of the medical reason for the return is received. Estimated allowances for sales returns are based on historical returned quantities as compared to pump shipments in those same periods of return. The return rate is then applied to the sales of the current period to establish a reserve at the end of the period. The return rates used in the reserve are adjusted for known or expected changes in the marketplace when appropriate. The allowance for product returns is recorded as a reduction of revenue and accounts receivable in the period in which the related sale is recorded. The amounts recorded on the Company’s balance sheet for product return allowance were |
Warranty Reserve | Warranty Reserve The Company generally provides a four-year warranty on its insulin pumps to end user customers and may replace any pumps that do not function in accordance with the product specifications. t:slim pumps returned to the Company may be refurbished and redeployed, but the Company does not currently refurbish t:flex or t:slim G4 pumps. The Company evaluates the reserve quarterly and makes adjustments when appropriate. Changes to the actual replacement rates could have a material impact on the Company’s estimated liability. At March 31, 2016 and December 31, 2015, the warranty reserve was $4.2 million and $3.5 million, respectively. The following table provides a reconciliation of the change in product warranty liabilities through March 31, 2016 (in thousands): Balance at December 31, 2015 $ 3,547 Provision for warranties issued during the period 1,737 Settlements made during the period (1,669 ) Increases in warranty estimates 634 Balance at March 31, 2016 $ 4,249 Current portion $ 1,727 Non-current portion 2,522 Total $ 4,249 |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award, and the portion that is ultimately expected to vest is recognized as compensation expense over the requisite service period on a straight-line basis. The Company estimates the fair value of stock options issued under the 2013 Stock Incentive Plan (the “2013 Plan”) and shares issued under the Employee Stock Purchase Plan (“ESPP”) using a Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model requires the use of subjective assumptions including volatility, expected term, and risk-free rate. For awards that vest based on service conditions, the Company recognizes expense using the straight-line method less estimated forfeitures based on historical experience. The Company records the expense for stock option grants to non-employees based on the estimated fair value of the stock options using the Black-Scholes option-pricing model. The fair value of non-employee awards is remeasured at each reporting period as the underlying awards vest unless the instruments are fully vested, immediately exercisable and nonforfeitable on the date of grant. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares that were outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the sum of the weighted-average number of dilutive common share equivalents outstanding for the period determined using the treasury stock method. Dilutive common share equivalents are comprised of warrants, potential awards granted pursuant to the ESPP, and options outstanding under the Company’s other equity incentive plans. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share (because inclusion would be anti-dilutive) are as follows (in common stock equivalent shares): Three Months Ended March 31, 2016 2015 Warrants for common stock 990 990 Common stock options 606 2,163 ESPP 162 127 1,758 3,280 |
Reclassifications | Reclassifications Certain reclassifications of prior year amounts have been made to conform to the current year presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update on changing certain aspects of accounting for share-based payments to employees. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting, and to make a policy election to account for forfeitures as they occur. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted, but all of the guidance must be adopted in the same period. The Company is in the process of assessing the impact of the adoption of the standard on its financial statements. In February 2016, FASB issued final guidance for lease accounting. The new guidance requires lessees to put most leases on their balance sheet but to recognize expenses on their income statement in a manner similar to today’s accounting. The new guidance also eliminates today’s real estate-specific provisions for all entities. The standard is effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is in the process of assessing the impact of the adoption of the standard on its financial statements. In May 2014, FASB and the International Accounting Standards Board issued a comprehensive new revenue recognition standard that will supersede existing revenue guidance under U.S. GAAP and International Financial Reporting Standards. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. On July 9, 2015, the FASB approved a one-year deferral of the effective date of the standard to December 15, 2017 and early application is permitted, but not before the original effective date of December 15, 2016. The Company is in the process of assessing the impact of the adoption of the standard on its financial statements. In April 2015, the FASB issued ASU No. 2015-03 amended requirements that require debt issuance costs, related to a recognized debt liability, to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, effective for the Company beginning January 1, 2016 and applied retroactively for all consolidated balance sheets presented. The Company applied the amended presentation requirements in the first quarter 2016, which resulted in the reclassification of $0.4 million of debt issuance costs in the Company’s balance sheet from other long-term assets to long term notes payable at December 31, 2015. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Reconciliation of Change in Product Warranty Liabilities | The following table provides a reconciliation of the change in product warranty liabilities through March 31, 2016 (in thousands): Balance at December 31, 2015 $ 3,547 Provision for warranties issued during the period 1,737 Settlements made during the period (1,669 ) Increases in warranty estimates 634 Balance at March 31, 2016 $ 4,249 Current portion $ 1,727 Non-current portion 2,522 Total $ 4,249 |
Schedule of Anti-Dilutive Securities | Potentially dilutive securities not included in the calculation of diluted net loss per share (because inclusion would be anti-dilutive) are as follows (in common stock equivalent shares): Three Months Ended March 31, 2016 2015 Warrants for common stock 990 990 Common stock options 606 2,163 ESPP 162 127 1,758 3,280 |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Estimated Fair Value of Short-Term Investments | The following represents a summary of the estimated fair value of short-term investments at March 31, 2016 and December 31, 2015 (in thousands): At March 31, 2016 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities: Commercial paper Less than 1 $ 23,435 $ 40 $ — $ 23,475 US Treasuries Less than 1 2,012 — — 2,012 Government-sponsored enterprise securities Less than 1 2,005 — — 2,005 $ 27,452 $ 40 $ — $ 27,492 Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 320 $ 7 $ (3 ) $ 324 Total $ 27,772 $ 47 $ (3 ) $ 27,816 At December 31, 2015 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities: Commercial paper Less than 1 $ 21,712 $ 23 $ — $ 21,735 US Treasuries Less than 1 2,035 — (1 ) $ 2,034 Government-sponsored enterprise securities Less than 1 4,029 — (2 ) 4,027 $ 27,776 $ 23 $ (3 ) $ 27,796 Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 224 $ 1 $ (3 ) $ 222 Total $ 28,000 $ 24 $ (6 ) $ 28,018 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | Inventory consisted of the following (in thousands): March 31, December 31, 2016 2015 Raw materials $ 11,541 $ 10,606 Work in process 3,692 3,394 Finished goods 4,963 3,543 Total $ 20,196 $ 17,543 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): Fair Value Measurements at March 31, 2016 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (1) $ 23,736 $ 23,736 $ — $ — Commercial paper 23,475 — 23,475 — Mutual funds held for nonqualified deferred compensation plan participants (2) 324 324 — — US Treasuries 2,012 2,012 — — Government-sponsored enterprise securities 2,005 — 2,005 — Total assets $ 51,552 $ 26,072 $ 25,480 $ — Liabilities Deferred compensation (2) $ 324 $ 324 $ — $ — Total liabilities $ 324 $ 324 $ — $ — Fair Value Measurements at December 31, 2015 (Level 1) (Level 2) (Level 3) Assets Cash equivalents (1) $ 23,402 $ 23,402 $ — $ — Commercial paper 21,735 — 21,735 — Mutual funds held for nonqualified deferred compensation plan participants (2) 222 222 — — US Treasuries 2,034 2,034 — — Government-sponsored enterprise securities 4,027 — 4,027 — Total assets $ 51,420 $ 25,658 $ 25,762 $ — Liabilities Deferred compensation (2) $ 222 $ 222 $ — $ — Total liabilities $ 222 $ 222 $ — $ — (1) Cash equivalents included money market funds and commercial paper with a maturity of three months or less from the date of purchase. (2) Deferred compensation plans are compensation plans directed by the Company and structured as a Rabbi Trust for certain executives and non-employee directors. The investment assets of the Rabbi Trust are valued using quoted market prices multiplied by the number of shares held in each trust account. The related deferred compensation liability represents the fair value of the investment assets . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of Shares of Common Stock Reserved for Future Issuance | The following shares of the Company’s common stock were reserved for future issuance at March 31, 2016: Shares underlying outstanding warrants 990,031 Shares underlying outstanding stock options 6,796,078 Shares authorized for future equity award grants 2,053,101 Shares authorized for issuance as ESPP awards 770,787 10,609,997 |
Schedule of Assumptions Used in Black-Scholes Option-Pricing Model | The assumptions used in the Black-Scholes option-pricing model are as follows: Stock Option Three Months Ended March 31, 2016 2015 Weighted average grant date fair value (per share) $ 3.74 $ 8.58 Risk-free interest rate 1.4 % 1.7 % Expected dividend yield 0.0 % 0.0 % Expected volatility 55.5 % 70.4 % Expected term (in years) 6.1 6.1 |
Summary for Allocation of Stock-Based Compensation Expense | The following table summarizes the allocation of stock-based compensation expense (in thousands): Three Months Ended March 31, 2016 2015 Cost of sales $ 240 $ 324 Selling, general & administrative 2,250 2,978 Research and development 310 471 Total $ 2,800 $ 3,773 |
Organization and Basis of Pre21
Organization and Basis of Presentation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016Product | |
Accounting Policies [Abstract] | |
Number of products sold | 3 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Restricted cash | $ 2,000 | $ 2,000 |
Receivables considered as uncollectible, maximum past due days | 120 days | |
Revenue recognition hosting period | 4 years | |
Offered period for sales return | 30 days | |
Allowance for product returns | $ 200 | 300 |
Warranty reserve | 4,249 | 3,547 |
Debt issuance cost | 400 | |
Warranty reserves [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Warranty reserve | 4,200 | 3,500 |
Connect Hosting Service [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Deferred revenue | $ 1,200 | 1,100 |
Tandem Pump [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Warranty period offered | 4 years | |
Slim cartridges and infusion sets [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Warranty period offered | 6 months | |
Original Term Loan Agreement [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Restricted cash | $ 2,000 | $ 2,000 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Summary of Reconciliation of Change in Product Warranty Liabilities (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Movement In Standard And Extended Product Warranty Increase Decrease Roll Forward | |
Beginning balance | $ 3,547 |
Provision for warranties issued during the period | 1,737 |
Settlements made during the period | (1,669) |
Increases in warranty estimates | 634 |
Ending balance | 4,249 |
Current portion | 1,727 |
Non-current portion | $ 2,522 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Schedule of Anti-Dilutive Securities (Detail) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1,758 | 3,280 |
Warrants for common stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 990 | 990 |
Common stock options [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 606 | 2,163 |
Employee stock purchase plan [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 162 | 127 |
Short-Term Investments - Summar
Short-Term Investments - Summary of Estimated Fair Value of Short-Term Investments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Amortized Cost | $ 27,452 | $ 27,776 |
Short-term investments, Unrealized Gain | 40 | 23 |
Short-term investments, Unrealized Loss | (3) | |
Short-term investments, Estimated Fair Value | 27,492 | 27,796 |
Short-term investments, Amortized Cost | 27,772 | 28,000 |
Short-term investments, Unrealized Gain | 47 | 24 |
Short-term investments, Unrealized Loss | (3) | (6) |
Short-term investments, Estimated Fair Value | 27,816 | 28,018 |
Commercial paper [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Amortized Cost | 23,435 | 21,712 |
Short-term investments, Unrealized Gain | 40 | 23 |
Short-term investments, Estimated Fair Value | $ 23,475 | $ 21,735 |
Commercial paper [Member] | Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Maturity (in years) | 1 year | 1 year |
US Treasury [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Amortized Cost | $ 2,012 | $ 2,035 |
Short-term investments, Unrealized Loss | (1) | |
Short-term investments, Estimated Fair Value | $ 2,012 | $ 2,034 |
US Treasury [Member] | Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Maturity (in years) | 1 year | 1 year |
Government-sponsored enterprise securities [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Amortized Cost | $ 2,005 | $ 4,029 |
Short-term investments, Unrealized Loss | (2) | |
Short-term investments, Estimated Fair Value | $ 2,005 | $ 4,027 |
Government-sponsored enterprise securities [Member] | Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Maturity (in years) | 1 year | 1 year |
Trading securities — mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Amortized Cost | $ 320 | $ 224 |
Short-term investments, Unrealized Gain | 7 | 1 |
Short-term investments, Unrealized Loss | (3) | (3) |
Short-term investments, Estimated Fair Value | $ 324 | $ 222 |
Inventory - Summary of Inventor
Inventory - Summary of Inventory (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 11,541 | $ 10,606 |
Work in process | 3,692 | 3,394 |
Finished goods | 4,963 | 3,543 |
Total | $ 20,196 | $ 17,543 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | $ 51,552 | $ 51,420 |
Total liabilities | 324 | 222 |
Cash equivalents [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 23,736 | 23,402 |
Commercial paper [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 23,475 | 21,735 |
Mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 324 | 222 |
US Treasuries [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 2,012 | 2,034 |
Government-sponsored enterprise securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 2,005 | 4,027 |
Deferred compensation [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 324 | 222 |
Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 26,072 | 25,658 |
Total liabilities | 324 | 222 |
Level 1 [Member] | Cash equivalents [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 23,736 | 23,402 |
Level 1 [Member] | Mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 324 | 222 |
Level 1 [Member] | US Treasuries [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 2,012 | 2,034 |
Level 1 [Member] | Deferred compensation [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 324 | 222 |
Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 25,480 | 25,762 |
Level 2 [Member] | Commercial paper [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 23,475 | 21,735 |
Level 2 [Member] | Government-sponsored enterprise securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | $ 2,005 | $ 4,027 |
Fair Value Measurements - Sch28
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2016 | |
Maximum [Member] | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Cash equivalents maturity term | 3 months |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | Mar. 31, 2016USD ($) |
Fair Value Disclosures [Abstract] | |
Transfer between level 1 and level 2 securities | $ 0 |
Term Loan Agreement with Capi30
Term Loan Agreement with Capital Royalty Partners - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | ||||
Interest rate | 11.50% | |||
Interest payable as cash | 9.50% | 9.50% | ||
Compounded interest payable | 2.00% | 2.00% | ||
Minimum annual revenues attainable in 2016 | $ 65,000,000 | |||
Minimum annual revenues attainable in 2017 | 80,000,000 | |||
Minimum annual revenues attainable after 2017 | 95,000,000 | |||
Additional amount borrowed | $ 212,000 | $ 153,000 | ||
Present value of the future cash flows | 10.00% | |||
Term Loan Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Loan outstanding | $ 45,400,000 | |||
Interest rate | 11.50% | |||
Interest payable as cash | 9.50% | |||
Compounded interest payable | 2.00% | |||
Interest-only payments description | The other principal terms of the Term Loan Agreement with Capital Royalty Partners were not amended by the Third Amendment. Accordingly, interest continues to be payable, at the Company’s option, (i) in cash at a rate of 11.5% per annum or (ii) at a rate of 9.5% of the 11.5% per annum in cash and 2.0% of the 11.5% per annum (the “PIK Loan”) to be added to the principal of the loan and subject to accruing interest. Interest-only payments continue to be due quarterly on March 31, June 30, September 30 and December 31 of each year of the interest-only payment period, which ends on December 31, 2019. | |||
Maturity date for interest-only payment | Dec. 31, 2019 | |||
Maturity date for principal balance | Mar. 31, 2020 | |||
Prepayment fee percentage | 1.00% | |||
Term Loan Agreement [Member] | First Tranche [Member] | ||||
Debt Instrument [Line Items] | ||||
Loan outstanding | $ 30,200,000 | |||
Third Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of Financing Fee | 3.00% | |||
Third Amendment [Member] | Other Long Term Liabilities And As Contra-Debt In Notes Payable-Long Term [Member] | ||||
Debt Instrument [Line Items] | ||||
Accrued back end financing fee | $ 500,000 | |||
Third Amendment [Member] | Second Tranche [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility amount borrowed | $ 15,000,000 | |||
Third Amendment [Member] | Third Tranche [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility maximum one time drawing capacity | 35,000,000 | |||
Line of credit facility drawing capacity incremental value | $ 5,000,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from secondary public offering | $ 64.9 | ||
Common stock shares issued | 93,314 | 260,091 | |
Total stock-based compensation capitalized as part of cost of inventory | $ 0.2 | $ 0.1 | |
Secondary Public Offering [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares offered for public offering | 6,037,500 | ||
Shares offering price per share | $ 11.50 | ||
ESPP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Purchase of common stock under ESPP | 0 | 302,171 | |
Offering Period | 2 years | ||
Purchase Period | four six-month |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Shares of Common Stock Reserved for Future Issuance (Detail) | Mar. 31, 2016shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 10,609,997 |
Shares underlying outstanding warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 990,031 |
Shares underlying outstanding stock options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 6,796,078 |
Shares authorized for future equity award grants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 2,053,101 |
Shares authorized for issuance as ESPP awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 770,787 |
Stockholders' Equity - Schedu33
Stockholders' Equity - Schedule of Assumptions Used in Black-Scholes Option-Pricing Model (Detail) - Employee Stock Option [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value (per share) | $ 3.74 | $ 8.58 |
Risk-free interest rate | 1.40% | 1.70% |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility | 55.50% | 70.40% |
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Stockholders' Equity - Summary
Stockholders' Equity - Summary for Allocation of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | $ 2,800 | $ 3,773 |
Cost of sales [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | 240 | 324 |
Selling, general & administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | 2,250 | 2,978 |
Research and development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | $ 310 | $ 471 |
Collaborations - Additional Inf
Collaborations - Additional Information (Detail) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2012USD ($) | Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($)$ / IntegratedSystem | Feb. 29, 2016USD ($) | Sep. 30, 2015USD ($) |
DexCom Agreement [Member] | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Reimbursement of development costs | $ 1,000,000 | ||||||
Additional payment upon achievement of milestones | $ 1,000,000 | ||||||
Additional research and development expense upon FDA approval | $ 1,000,000 | ||||||
Commit for incremental marketing activities | $ / IntegratedSystem | 100 | ||||||
Marketing fund liability amount | $ 400,000 | $ 700,000 | |||||
JDRF Agreement [Member] | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Research and development offset cumulative amount | 500,000 | ||||||
Aggregate amount of milestone payment achievements | $ 700,000 | ||||||
JDRF Agreement [Member] | Scenario Forecast [Member] | Maximum [Member] | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Research and development offset cumulative amount | $ 3,000,000 | ||||||
JDRF Termination Agreement [Member] | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Repayment of milestone payments received | $ 700,000 |