Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | TNDM | ||
Entity Registrant Name | TANDEM DIABETES CARE INC | ||
Entity Central Index Key | 1,438,133 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 44,699,404 | ||
Entity Public Float | $ 30.7 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and cash equivalents | $ 13,700 | $ 44,678 | |
Restricted cash | 2,000 | ||
Short-term investments | 479 | 8,860 | |
Accounts receivable, net | 20,793 | 11,172 | |
Inventory, net | 26,993 | 21,195 | |
Prepaid and other current assets | 2,191 | 4,187 | |
Total current assets | 64,156 | 92,092 | |
Property and equipment, net | 19,631 | 18,409 | |
Restricted cash - long term | 10,000 | ||
Other long-term assets | 102 | 107 | |
Total assets | 95,346 | 112,392 | |
Current liabilities: | |||
Accounts payable | 5,150 | 7,513 | |
Accrued expense | 2,832 | 1,629 | |
Employee-related liabilities | 14,488 | 10,183 | |
Deferred revenue | 2,526 | 5,208 | |
Common stock warrants | 5,432 | ||
Other current liabilities | 5,657 | 6,943 | |
Total current liabilities | 36,085 | 31,476 | |
Notes payable—long-term | 76,541 | 78,960 | |
Deferred rent—long-term | 4,687 | 2,609 | |
Other long-term liabilities | 7,181 | 5,274 | |
Total liabilities | 124,494 | 118,319 | |
Commitments and contingencies | |||
Stockholders’ deficit: | |||
Common stock, $0.001 par value; 100,000 shares authorized as of December 31, 2017 and 2016, respectively, 10,119 and 3,110 shares issued and outstanding at December 31, 2017 and 2016, respectively(1) | [1] | 10 | 3 |
Additional paid-in capital | 448,455 | 398,651 | |
Accumulated other comprehensive loss | (1) | ||
Accumulated deficit | (477,613) | (404,580) | |
Total stockholders’ deficit | (29,148) | (5,927) | |
Total liabilities and stockholders’ deficit | 95,346 | 112,392 | |
Patents [Member] | |||
Current assets: | |||
Patents, net | $ 1,457 | $ 1,784 | |
[1] | The issued and outstanding shares of common stock have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017. |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
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 | 10,119,000 | 3,110,000 |
Common stock, shares outstanding | 10,119,000 | 3,110,000 |
Reverse stock split description | 1-for-10 reverse stock split |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Statement [Abstract] | ||||
Sales | $ 107,601 | $ 84,248 | $ 72,850 | |
Cost of sales | 63,507 | 60,656 | 46,270 | |
Gross profit | 44,094 | 23,592 | 26,580 | |
Operating expenses: | ||||
Selling, general and administrative | 86,377 | 82,834 | 78,621 | |
Research and development | 20,661 | 18,809 | 16,963 | |
Total operating expenses | 107,038 | 101,643 | 95,584 | |
Operating loss | (62,944) | (78,051) | (69,004) | |
Other income (expense), net | ||||
Interest and other income | 239 | 296 | 337 | |
Interest and other expense | (11,341) | (5,707) | (3,741) | |
Change in fair value of stock warrants | 1,021 | |||
Total other expense, net | (10,081) | (5,411) | (3,404) | |
Loss before taxes | (73,025) | (83,462) | (72,408) | |
Provision for income tax expense (benefit) | 8 | (15) | 10 | |
Net loss | (73,033) | (83,447) | (72,418) | |
Other comprehensive loss: | ||||
Unrealized gain (loss) on short-term investments | 1 | (21) | 12 | |
Comprehensive loss | $ (73,032) | $ (83,468) | $ (72,406) | |
Net loss per share, basic and diluted | [1] | $ (12.87) | $ (27.30) | $ (25.04) |
Weighted average shares used to compute basic and diluted net loss per share | [1] | 5,677 | 3,057 | 2,892 |
[1] | The issued and outstanding shares of common stock have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017. |
STATEMENTS OF OPERATIONS AND C5
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) | Oct. 09, 2017 | Dec. 31, 2017 |
Income Statement [Abstract] | ||
Reverse stock split description | 1-for-10 reverse stock split | |
Reverse stock split, conversion ratio | 0.1 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | [1] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | ||
Balance at Dec. 31, 2014 | $ 54,572 | $ 2 | [1] | $ 303,277 | $ 8 | $ (248,715) | ||
Balance, Shares at Dec. 31, 2014 | [1] | 2,366,000 | ||||||
Exercise of common stock warrants | 122 | 122 | ||||||
Exercise of common stock warrants, Shares | [1] | 2,000 | ||||||
Exercise of stock options | 337 | 337 | ||||||
Exercise of stock options, Shares | [1] | 24,000 | ||||||
Issuance of common stock in public offering, net of underwriter’s discount and offering costs | 64,862 | $ 1 | [1] | 64,861 | ||||
Issuance of common stock in public offering, net of underwriter’s discount and offering costs, Shares | [1] | 603,000 | ||||||
Issuance of common stock for Employee Stock Purchase Plan | 2,934 | 2,934 | ||||||
Issuance of common stock for Employee Stock Purchase Plan, Shares | [1] | 31,000 | ||||||
Stock-based compensation | 13,047 | 13,047 | ||||||
Unrealized gain (loss) on short-term investments | 12 | 12 | ||||||
Net loss | (72,418) | (72,418) | ||||||
Balance at Dec. 31, 2015 | 63,468 | $ 3 | [1] | 384,578 | 20 | (321,133) | ||
Balance, Shares at Dec. 31, 2015 | [1] | 3,026,000 | ||||||
Exercise of stock options | $ 170 | 170 | ||||||
Exercise of stock options, Shares | 14,866 | 15,000 | [1] | |||||
Issuance of common stock for Employee Stock Purchase Plan | $ 2,151 | 2,151 | ||||||
Issuance of common stock for Employee Stock Purchase Plan, Shares | [1] | 69,000 | ||||||
Stock-based compensation | 11,752 | 11,752 | ||||||
Unrealized gain (loss) on short-term investments | (21) | (21) | ||||||
Net loss | (83,447) | (83,447) | ||||||
Balance at Dec. 31, 2016 | (5,927) | $ 3 | [1] | 398,651 | (1) | (404,580) | ||
Balance, Shares at Dec. 31, 2016 | [1] | 3,110,000 | ||||||
Exercise of stock options | $ 270 | 270 | ||||||
Exercise of stock options, Shares | 24,406 | 24,000 | [1] | |||||
Issuance of common stock in public offering, net of underwriter’s discount and offering costs | $ 33,353 | $ 7 | [1] | 33,346 | ||||
Issuance of common stock in public offering, net of underwriter’s discount and offering costs, Shares | [1] | 6,946,000 | ||||||
Issuance of common stock warrants in connection with term loan | 3,331 | 3,331 | ||||||
Issuance of common stock for Employee Stock Purchase Plan | 300 | 300 | ||||||
Issuance of common stock for Employee Stock Purchase Plan, Shares | [1] | 39,000 | ||||||
Stock-based compensation | 12,557 | 12,557 | ||||||
Unrealized gain (loss) on short-term investments | 1 | $ 1 | ||||||
Net loss | (73,033) | (73,033) | ||||||
Balance at Dec. 31, 2017 | $ (29,148) | $ 10 | [1] | $ 448,455 | $ (477,613) | |||
Balance, Shares at Dec. 31, 2017 | [1] | 10,119,000 | ||||||
[1] | The shares and amounts of common stock and amounts of additional paid-in capital have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017. |
STATEMENTS OF STOCKHOLDERS' EQ7
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) | Oct. 09, 2017 | Dec. 31, 2017 |
Statement Of Stockholders Equity [Abstract] | ||
Reverse stock split description | 1-for-10 reverse stock split | |
Reverse stock split, conversion ratio | 0.1 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||
Net loss | $ (73,033) | $ (83,447) | $ (72,418) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization expense | 6,866 | 5,489 | 4,829 |
Interest expense related to amortization of debt discount and debt issuance costs | 1,883 | 274 | 138 |
Payment in kind interest accrual of notes payable | 1,657 | 927 | 153 |
Provision for allowance for doubtful accounts | 824 | 632 | 70 |
Provision for inventory reserve | 26 | 3,343 | 404 |
Change in fair value of common stock warrants | (1,021) | ||
Amortization of (discount) premium on short-term investments | (16) | (85) | 4 |
Stock-based compensation expense | 12,628 | 11,660 | 13,096 |
Other | 159 | (78) | (76) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (10,445) | 2,251 | (6,473) |
Inventory, net | (5,894) | (6,904) | (6,084) |
Prepaid and other current assets | 1,831 | (2,466) | (395) |
Other long-term assets | 4 | (2) | 131 |
Accounts payable | (1,953) | 3,234 | 3,355 |
Accrued expense | 1,203 | (497) | (734) |
Employee-related liabilities | 3,873 | (1,578) | 2,039 |
Deferred revenue | (3,906) | 4,610 | 981 |
Other current liabilities | 260 | 573 | 1,924 |
Deferred rent | (692) | 1 | (631) |
Other long-term liabilities | (390) | 890 | 923 |
Net cash used in operating activities | (66,136) | (61,173) | (58,764) |
Investing activities | |||
Purchase of short-term investments | (30,622) | (80,191) | |
Proceeds from sales and maturities of short-term investments | 8,500 | 50,000 | 88,450 |
Purchase of property and equipment | (5,718) | (8,930) | (5,764) |
Purchase of patents | (74) | ||
Net cash provided by investing activities | 2,782 | 10,448 | 2,421 |
Financing activities | |||
Issuance of notes payable, net of issuance costs | 49,994 | ||
Restricted cash in connection with notes payable | (8,000) | ||
Proceeds from public offering, net of offering costs | 39,806 | 64,862 | |
Proceeds from issuance of common stock | 570 | 2,321 | 3,393 |
Net cash provided by financing activities | 32,376 | 52,315 | 68,255 |
Net increase (decrease) in cash and cash equivalents | (30,978) | 1,590 | 11,912 |
Cash and cash equivalents at beginning of period | 44,678 | 43,088 | 31,176 |
Cash and cash equivalents at end of period | 13,700 | 44,678 | 43,088 |
Supplemental disclosures of cash flow information | |||
Interest paid | 7,876 | 4,401 | 3,345 |
Income taxes paid | 22 | 23 | 9 |
Supplemental schedule of noncash investing and financing activities | |||
Lease incentive - lessor-paid tenant improvements | 3,292 | 933 | |
Property and equipment included in accounts payable & other current liabilities | 92 | 501 | $ 1,457 |
Debt discount included in other long-term liabilities | 4,137 | $ 1,509 | |
Common stock warrants issued in connection with term loan | $ 3,331 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [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 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 manufactures and sells insulin pump products in the United States that are designed to address large and differentiated needs of the insulin-dependent diabetes market. The Company’s pump products currently include: the t:slim X2 Insulin Delivery System, or t:slim X2, the next-generation flagship product that is updatable and designed to display Dexcom G5 continuous glucose monitoring, or CGM, sensor information directly on the pump Home Screen; and the t:flex Insulin Delivery System, or t:flex, for people with greater insulin needs. 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. In October 2016, the Company commenced commercial sales of t:slim X2 and discontinued new sales of t:slim. In September 2017, the Company commenced commercial sales of t:slim X2 with Dexcom G5 Mobile CGM integration, or t:slim X2 with G5, and discontinued new sales of t:slim G4. The Company will continue to provide ongoing service and support to existing t:slim and t:slim G4 customers. In July 2016, the Company received clearance from the U.S. Food and Drug Administration (“FDA”) to begin offering the Tandem Device Updater, a Mac In July 2016, the Company also announced and launched a Technology Upgrade Program that provided eligible t:slim and t:slim G4 customers a path to obtain t:slim X2, or, as of September 2017, t:slim X2 with G5. Participating customers had the right to exchange their original t:slim and t:slim G4 for a t:slim X2 or t:slim X2 with G5, under a variable pricing structure. The Technology Upgrade Program expired on September 30, 2017. In September 2017, the Company commenced commercial sales of products using the t:lock Connector, or t:lock, which replaces the standard Luer-lok connector that historically joined an infusion set to the cartridge. t:lock incorporates a smaller inner cavity than the Luer-lok connector, which reduces the amount of insulin used in the cartridge fill process and reduces the time required to fill the infusion set tubing. The financial statements included in this Annual Report have been prepared on a basis that assumes that the Company will continue as a going concern, and do not include any adjustments that may result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of the Company’s liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has incurred operating losses since its inception and as reflected in the accompanying financial statements, the Company had an accumulated deficit of $477.6 million as of December 31, 2017. The Company’s ability to achieve profitable operations primarily depends upon achieving a level of revenues adequate to support its cost structure. The Company has relied on its ability to fund its operations through private and public equity and debt financing. Management expects operating losses and negative cash flows to continue for at least the next 12 months. Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company’s realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to raise additional equity or refinance its existing debt and ultimately, to attain profitability. There is no assurance that the Company will be successful in raising additional funds or that, if it does raise additional funds, that it will be able to attain profitability or even continue in business. At December 31, 2017, the Company had $24.2 million in cash and cash equivalents and short-term investments, which included $10.0 million of restricted cash. In February 2018 (see Note 12 “Subsequent Event”), the Company completed a registered public offering of 34,500,000 shares of its common stock at a public offering price of $2.00 per share. The gross proceeds from the offering were approximately $69.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. Management evaluated the Company’s ability to continue as a going concern within one year of the financial statements being issued and believes that the cash on hand and proceeds from the February financing will be sufficient to satisfy its liquidity requirements for at least the next 12 months. The Company’s ability to continue as a going concern, meet its minimum liquidity requirements in the future or satisfy the other covenants under the Term Loan Agreement is dependent on its ability to continue to grow the business by executing its strategy to achieve renewal pump sales objectives, develop and launch new products, increase gross profits from higher sales of infusion sets, maximize manufacturing efficiencies and leverage early investments made in the sales, clinical and marketing organization. If the Company does not achieve these objectives, it may in the future seek additional capital from public or private offerings of its capital stock or it may elect to borrow additional amounts under new credit lines or from other sources. If the Company issues equity or debt securities to raise additional funds, its existing stockholders may experience dilution, it may incur significant financing costs, and the new equity or debt securities may have rights, preferences and privileges senior to those of its existing stockholders. There can be no assurance that equity or debt financing will be available on acceptable terms, or at all. Reverse Stock Split On October 9, 2017, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of common stock. The par value per share and the authorized number of shares of common stock and preferred stock were not adjusted as a result of the reverse stock split. All common stock share and per-share amounts for all periods presented in these financial statements have been adjusted to reflect the reverse stock split. The number of authorized shares of common stock remains at 100 million shares. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the financial statements in conformity with 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 differ materially from those estimates and assumptions. Segment Reporting Operating segments are identified as components of an enterprise about which segment discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and managed its business as one segment, operating in the United States. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less from the date of purchase and that can be liquidated without prior notice or penalty, to be cash equivalents. Short-Term Investments Based on the nature of the assets, the Company’s short-term investments are classified as either available-for-sale or trading securities. Such securities are carried at fair value as determined by prices for identical or similar securities at the balance sheet date. The Company’s short-term investments consist of Level 1 and Level 2 financial instruments in the fair value hierarchy. The net unrealized gains or losses on available-for-sale securities are reported as a component of other comprehensive loss within the statements of operations and accumulated other comprehensive (loss) income as a separate component of stockholders’ deficit on the balance sheets. Unrealized gains or losses on trading securities are reported as a component of other income or expense within the statements of operations. The Company determines the realized gains or losses of available-for-sale securities using the specific identification method and includes net realized gains and losses as a component of other income or expense within the statements of operations. The Company periodically reviews available-for-sale securities for other than temporary declines in fair value below the cost basis whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. To date, no other than temporary declines in fair value have been identified. Restricted Cash As of December 31, 2017 and 2016 the Company recorded $10.0 million and $2.0 million of restricted cash, respectively, for the minimum cash balance requirement in connection with the Term Loan Agreement (see Note 5, “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 based on historical experience, assessment of specific risk, specific review of outstanding invoices or various assumptions and estimates that are believed to be reasonable under the circumstances. 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. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. The Company maintains deposit accounts in federally insured financial institutions in excess of federally insured limits. The Company also maintains investments in money market funds that are not federally insured. Additionally, the Company has established guidelines regarding investment instruments and their maturities, which are designed to maintain preservation of principal and liquidity. The following table summarizes customers who accounted for 10% or more of net accounts receivable: December 31, 2017 2016 Edgepark Medical Supplies, Inc. 17.7 % 15.2 % Byram Healthcare 17.2 % 14.7 % CCS Medical, Inc. 16.2 % N/A The following table summarizes customers who accounted for 10% or more of sales for the periods presented: December 31, 2017 2016 2015 Edgepark Medical Supplies, Inc. 21.5 % 18.7 % 17.8 % Byram Healthcare 14.0 % 14.0 % 17.2 % Solara Medical Supplies, Inc. N/A 10.7 % N/A CCS Medical 10.3 % N/A N/A 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 The estimated fair value of certain of the Company’s common stock warrants is determined by using the Black-Scholes pricing model as of December 31, 2017, as discussed in Note 4. Certain trade-in rights previously offered by the Company pursuant to the Technology Upgrade Program to certain eligible customers have been determined to be guarantees under applicable accounting guidance. The Company recorded a liability for the estimated fair value of the guarantees at their inception. The Program expired on September 30, 2017, at which time the remaining guarantee liabilities of $1.1 were recognized as sales. For further details regarding our guarantees, see the following section “Revenue Recognition” within Note 2 and Note 4, “Fair Value Measurements.” Inventory, Net Inventories are valued at the lower of cost or market (net realizable value), determined by the first-in, first-out method. Inventory is recorded using standard cost, including material, labor and overhead costs. The Company periodically reviews inventories for potential impairment based on quantities on hand, expectations of future use, judgments based on quality control testing data and assessments of the likelihood of scrapping or obsoleting certain inventories. Long Lived Assets Property and Equipment Property and equipment, which primarily consist of office furniture and equipment, manufacturing equipment, scientific equipment, computer equipment, and leasehold improvements, are stated at cost. Property and equipment are depreciated over the estimated useful lives of the assets, generally three to seven years, using the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the remaining lease term. Maintenance and repair costs are expensed as incurred. Patents Costs associated with the purchase or licensing of patents associated with the Company’s commercialized products are capitalized. The Company reviews its capitalized patent costs periodically to determine that they have future value and an alternative future use. Costs related to patents that the Company is not actively pursuing for commercial purposes are expensed. The Company amortizes patent costs over the lesser of the duration of the patent term or the estimated useful lives of 10 years, beginning with the date the patents are issued or acquired. The Company periodically re-evaluates the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of all of its long-lived assets, including property and equipment and acquired patents. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the asset to the Company’s business objective. The Company has not recognized any impairment losses through December 31, 2017. Deferred Rent Rent expense on noncancelable leases containing known future scheduled rent increases is recorded on a straight-line basis over the term of the respective leases beginning when the Company takes possession of the leased property. The difference between rent expense and rent paid is accounted for as deferred rent. The current portion of deferred rent was included in other current liabilities on the Company’s balance sheet. Landlord improvement allowances and other such lease incentives are recorded as property and equipment and as deferred rent and are amortized on a straight-line basis as a reduction to rent expense. Research and Development Costs All research and development costs are charged to expense as incurred. Such costs include personnel-related costs, including stock-based compensation, supplies, license fees, development prototypes, outside design and testing services, depreciation, allocated facilities and information services, clinical trial costs, milestone payments under the Company’s development and commercialization agreements Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred income tax assets or liabilities are recognized based on the temporary differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. An amount is accrued for the estimate of additional tax liability, including interest and penalties, for any uncertain tax positions taken or expected to be taken in an income tax return. The Company reviews and updates the accrual for uncertain tax positions as more definitive information becomes available. For further information, see Note 7, “Income Taxes.” 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. Trade-In Rights The Company launched a Technology Upgrade Program in 2016, which expired September 30, 2017. The trade-in rights associated with the Program were accounted for as guarantees or rights to return based on specific factors and circumstances, including the period of time the trade-in rights were exercisable, the likelihood that the trade-in rights would be exercised, and the amount of the specified-price trade-in value. The Company determined that trade-in rights for t:slim G4 Pump customers were generally guarantees. The Company accounted for the guarantees under applicable accounting standards, which require a guarantor to recognize, at the inception of the guarantees, a liability for the estimated fair value of the obligation undertaken in issuing the guarantees. Subsequently, the initial liability recognized for the guarantees was reduced as the Company was released from the risk under the guarantees, which was when the trade-in right was exercised or the right expired. The guarantees were accounted for as an element of a multiple element arrangement. The estimated fair value of the guarantees was based on various economic and customer behavioral assumptions, including the probability that a trade-in right would be exercised, the specified trade-in amount, the expected fair value of the used t:slim G4 Pump at trade-in and the expected sales price of a t:slim X2 Pump. Upon expiration of the Program at September 30, 2017, the remaining guarantee liabilities of $1.1 were recognized as sales compared to $1.2 million There were no guarantee liabilities at December 31, 2017. The Company determined that t:slim Pump trade-in rights were in-substance rights to return products. Such rights to return were accounted for pursuant to the right of return accounting guidance. As the Company did not have sufficient history to reasonably estimate returns associated with trade-in rights, all eligible t:slim Pump sales between July 2016 and October 2016, which was when the company discontinued new shipments of t:slim, were recorded as deferred revenue until the trade-in right was exercised or the right expired. At December 31, 2017 and 2016, $65,000 and $3.2 million, respectively, were recorded as a trade-in rights reserve in deferred revenue on the accompanying balance sheet. 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 amount of the determined guarantee fair value is allocated in full to the guarantee and the remaining allocable consideration is allocated to other separate units of accounting using 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. In July 2016, the Company received clearance from the FDA to begin offering the Tandem Device Updater, a Mac four-year period, which is the hosting period for t:connect and the period that software upgrades are expected to be provided. At December 31, 2017 and 2016, $2.0 million and $1.6 million , respectively. 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 amount recorded on the Company’s balance sheets for product return allowance was . 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. Insulin pumps returned to the Company may be refurbished and redeployed. 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 December 31, 2017 and December 31, 2016, the warranty reserve was $5.6 million and $5.7 million, respectively. The following table provides a reconciliation of the change in estimated warranty liabilities for the years ended December 31, 2017 and 2016: December 31, (in thousands) 2017 2016 Balance at beginning of the year $ 5,690 $ 3,547 Provision for warranties issued during the period 5,613 8,830 Settlements made during the period (6,742 ) (8,739 ) Increases in warranty estimates 1,079 2,052 Balance at end of the year $ 5,640 $ 5,690 Current portion $ 2,596 $ 2,302 Non-current portion $ 3,044 3,388 Total $ 5,640 $ 5,690 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 Company’s 2013 Stock Incentive Plan (“2013 Plan”) and shares issued under the Company’s 2013 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. Warrant Liabilities The Company Advertising Costs The Company expenses advertising costs as they are incurred. For the years ended December 31, 2017, 2016 and 2015, advertising costs were $1.1 million, $0.9 million, and $1.0 million, respectively. Shipping and Handling Expenses Shipping and handling expenses associated with product delivery are included within cost of sales in the Company’s statements of operations. Comprehensive Loss All components of comprehensive loss, including net loss, are reported in the financial statements in the period in which they are recognized. Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities. 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 loss per share is calculated in accordance with the treasury stock method and reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted to common stock. 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 warrants that are recorded as a liability in the accompanying balance sheet, the calculation of diluted loss per share requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of the warrants and the presumed exercise of such securities are dilutive to loss per share for the period, an adjustment to net loss used in the calculation is required to remove the change in fair value of the warrants from the numerator for the period. Likewise, an adjustment to the denominator is required to reflect the related dilutive shares, if any, under the treasury stock method. 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, in thousands): Year Ended December 31, 2017 2016 2015 Warrants for common stock — — 99 Common stock options — 151 202 ESPP — 2 — — 153 301 Reclassifications Certain reclassifications of prior year amounts have been made to conform to the current year presentation. Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance that clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company does not believe the adoption of the standard, effective January 1, 2018, will have a material impact on the Company’s statement of cash flow. In June 2016, FASB issued a new credit loss standard that changes the impairment model for most financial assets and certain other instruments. for annual periods beginning after December 15, 2018, and interim periods within those years In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) (“ASU 2016-09”), which is intended to simplify several areas of accounting for share-based payment arrangements. The amendments in this update cover such areas as the recognition In February 2016, FASB issued final guidance for lease accounting. The new guidance requires lessees to recognize most lease liabilities and corresponding right-of-use assets with terms greater than twelve months on their balance sheet but to recognize expenses on their income statement in a manner similar to current accounting principles. The new guidance also eliminates the current real estate-specific provisions for all entities. The standard is effective for public companies for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company believes the adoption will modify its analyses and disclosures of lease agreements since operating leases are a significant portion of the Company’s total lease commitments. 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 (“Revenue from Contracts with Customers Standard”) that will supersede existing revenue guidance under U.S. GAAP and International Financial Reporting Standards. The Revenue from Contracts with Customers 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. The Revenue from Contracts with Customers Standard will be effective for the Company beginning in its first quarter of 2018, and early adoption is permitted. Subsequently, FASB issued the following standards related to Revenue from Contracts with Customers Standard: Principal versus Agent Considerations; Identifying Performance Obligations and Licensing; and Narrow-Scope Improvements and Practical Expedients (collectively, the “new revenue standards”). The new revenue standards may be applied retrospectively to each prior period presented (full retrospective method) or retrospectively with the cumulative effect recognized as of the date of adoption (the modified retrospective method). The Company will adopt the new revenue standard in the first quarter of 2018 utilizing the modified retrospective method. This adoption will not have a material impact on the recognition of revenues for the sale of its products through third-party distributors and insurance payors with whom it has contractual arrangements, which generally comprise approximately 99% of its sales. For sales that are impacted by this adoption, revenue is currently recognized upon collection of cash at which time the price is considered determinable. Pursuant to this new standard, such revenue will be recognized upon delivery to the customer at the estimated transaction price, using the expected value method. As a result, on January 1, 2018, the Company will record a net adjustment to accumulated deficit in the amount of approximately $0.2 million, reflecting this accounting change. Additionally, the Company has given consideration to the accounting for warranty and commissions, for which there will not be a material change to its current method of expense recognition . |
Financial Statement Information
Financial Statement Information | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Financial Statement Information | 3. Financial Statement Information Short-term investments The Company invests in investment securities, principally debt instruments of financial institutions and corporations it evaluates to have strong credit ratings. The following represents a summary of the estimated fair value of short-term investments at December 31, 2017 and 2016 (in thousands): At December 31, 2017 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 459 $ 20 $ — $ 479 Total $ 459 $ 20 $ — $ 479 At December 31, 2016 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities: Commercial paper Less than 1 $ 8,483 $ 1 $ (2 ) $ 8,482 Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 354 $ 26 $ (2 ) $ 378 Total $ 8,837 $ 27 $ (4 ) $ 8,860 Accounts Receivable Accounts receivable consisted of the following (in thousands): December 31, 2017 2016 Accounts receivable $ 22,071 $ 12,112 Less allowance for doubtful accounts, and product returns (1,278 ) (940 ) Total $ 20,793 $ 11,172 The following table provides a reconciliation of the change in estimated allowance for doubtful accounts, and product returns for the years ended December 31, 2017, 2016 and 2015 (in thousands): Allowance for doubtful accounts Balance at December 31, 2014 $ 253 Provision for doubtful accounts and return reserves 70 Write-offs and adjustments, net of recoveries (102 ) Balance at December 31, 2015 $ 221 Provision for doubtful accounts and return reserves 632 Write-offs and adjustments, net of recoveries (118 ) Balance at December 31, 2016 $ 735 Provision for doubtful accounts and return reserves 824 Write-offs and adjustments, net of recoveries (524 ) Balance at December 31, 2017 $ 1,035 Inventory Inventory consisted of the following at (in thousands): December 31, 2017 2016 Raw materials $ 10,328 $ 9,375 Work in process 3,812 4,395 Finished goods 12,853 7,425 Total $ 26,993 $ 21,195 The increase in inventory at December 31, 2017 as compared to December 31, 2016 is primarily due to an increase in infusion set finished goods in connection with the commercial launch of the t:lock infusion set. Property and Equipment Property and equipment consisted of the following at (in thousands): December 31, 2017 2016 Leasehold improvements $ 13,924 $ 8,851 Computer equipment and software 9,040 7,844 Office furniture and equipment 4,686 4,185 Manufacturing and scientific equipment 17,505 16,785 45,155 37,665 Less accumulated depreciation and amortization (25,524 ) (19,256 ) Total $ 19,631 $ 18,409 Depreciation and amortization expense related to property and equipment amounted to $6.5 million, $5.2 million, and $4.5 million for the years ended December 31, 2017, 2016, and 2015, respectively. Intangible Assets Subject to Amortization Intangible assets subject to amortization consist of patents purchased or licensed that are related to the Company’s commercialized products. The following represents the capitalized patents at December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 Gross amount $ 3,247 $ 3,247 Accumulated amortization (1,790 ) (1,463 ) Total $ 1,457 $ 1,784 Weighted average remaining amortization period (in months) 54 66 Amortization expense related to intangible assets subject to amortization amounted to $0.3 million for each of the years ended December 31, 2017, 2016, and 2015. The amortization expense is recorded in cost of sales in the statement of operations. The estimated annual amortization is $0.3 million for periods 2018 through 2021, and $0.2 million in 2022. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. 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 December 31, 2017 and 2016, 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 December 31, 2017 December 31, 2017 Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 23,700 $ 23,700 $ — $ — Mutual funds held for nonqualified deferred compensation plan participants (2) 479 479 — — Total assets $ 24,179 $ 24,179 $ — $ — Liabilities Common stock warrants $ 5,432 $ — $ — $ 5,432 Deferred compensation (2) 479 479 — — Total liabilities $ 5,911 $ 479 $ — $ 5,432 Fair Value Measurements at December 31, 2016 December 31, 2016 Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 39,941 $ 39,941 $ — $ — Commercial paper 8,482 — 8,482 — Mutual funds held for nonqualified deferred compensation plan participants (2) 378 378 — — Total assets $ 48,801 $ 40,319 $ 8,482 $ — Liabilities Deferred compensation (2) $ 378 $ 378 $ — $ — Total liabilities $ 378 $ 378 $ — $ — (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 years ended December 31, 2017 and 2016. Level 3 liabilities at December 31, 2017 include the Series A and Series B common stock warrants issued by the Company in connection with the public offering of common stock in October 2017. These warrants were initially valued at $6.5 million on the date of issuance utilizing a Black-Scholes pricing model. The Series A warrants to purchase 4,630,000 shares of the Company’s common stock have a contractual life of five years with an exercise price of $3.50 per share. The Series B warrants to purchase 4,630,000 shares of the Company’s common stock have a contractual life of six months with an exercise price of $3.50 per share. The Company reassesses the fair value of the Series A and Series B warrants at each reporting date utilizing a Black-Scholes pricing model. Inputs used in the pricing model include estimates of stock price volatility, expected warrant life and risk-free interest rate. The Company develops its estimates based on publicly available historical data. The assumptions used to estimate the fair values of the common stock warrants at December 31, 2017 are presented below: Series A Warrants Series B Warrants Risk-free interest rate 2.2 % 1.4 % Expected dividend yield 0.0 % 0.0 % Expected volatility 63.5 % 80.3 % Expected term (in years) 4.8 0.3 The following table presents a summary of changes in fair value of the Company’s total Level 3 financial assets for the year ended December 31, 2017: Balance at offering date $ 6,453 Decrease in fair value included in change in fair value of common stock warrants (1,021 ) Balance at end of year $ 5,432 As of December 31, 2016, the Company recorded a $1.2 million as a guarantee liability in other current liabilities on the accompanying balance sheet, and as a reduction of revenue in the statement of operations and other comprehensive loss. There were no guarantee liabilities at December 31, 2017. Guarantees are not measured at fair value on a recurring basis; they are not included in the tables above |
Term Loan Agreement
Term Loan Agreement | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Term Loan Agreement | 5. Term Loan Agreement At December 31, 2017, the Company had $82.7 million of aggregate borrowings outstanding under the Term Loan Agreement. In January 2016, the Company entered into Amendment No. 3 to the Term Loan Agreement (the “Third Amendment”) which allowed the Company to borrow up to an additional $50.0 million. T Under the principal of the Term Loan Agreement, interest is 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 are 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 is due in full at the end of the term of the loan, which is March 31, 2020 (the “Maturity Date”). The Company had elected to pay interest in cash at a rate of 11.5% per annum through September 30, 2015. Beginning October 1, 2015, the Company elected to pay interest in cash at a rate of 9.5% per annum and for a rate of 2.0% per annum to be added to the principal of the loan. As a result, $1.7 million and $0.9 million was added to the principal of the loan for the years ended December 31, 2017 and 2016, respectively, which the Company refers to as PIK Loans. Pursuant to the Third Amendment, the Company agreed to pay, on the earlier of (i) the Maturity Date, (ii) the date that the loan under the Term Loan Agreement becomes due, and (iii) the date on which the Company makes a voluntary pre-payment of the loan, a financing fee equal to 3.0% of the sum of (x) the aggregate amount drawn under the Third Amendment, and (y) any PIK Loans issued in relation to the Third Amendment (collectively, the “Back End Financing Fee”). In March 2017, we entered into the Fourth Amendment to the Term Loan Agreement (the “Fourth Amendment”), which included a limited waiver of a potential event of default that could have resulted from the explanatory paragraph in the audit report of our independent registered public accounting firm contained in our financial statements for the year ended December 31, 2016. In consideration for the waiver, we agreed to: (i) issue Capital Royalty Partners ten-year warrants to purchase an aggregate of 193,788 shares of our common stock at an exercise price equal to $23.50 per share, the closing price of our common stock on the NASDAQ Global Market on the date of the Fourth Amendment, (ii) increase our minimum cash balance requirement under the Term Loan Agreement from $2.0 million to $10.0 million, (iii) provide Capital Royalty Partners the same information we make available to our board of directors, subject to limited exceptions, and (iv) not incur additional third party indebtedness secured solely by accounts receivable, inventory and cash. In addition, the Fourth Amendment included a covenant which required us to complete a financing in which our gross proceeds from the sale of equity securities was at least $30.0 million, no later than January 15, 2018. As of December 31, 2017, the Company was in compliance with this covenant. Furthermore, the Company agreed to increase the Back End Financing Fee to 5.0% The Company treated the execution of both the Third Amendment and Fourth Amendment as a modification for accounting purposes. The present value of the future cash flows under these amendments 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 loan are amortized to interest expense over the remaining term using the effective interest method. Future minimum principal payments under the Term Loan Agreement as of December 31, 2017, are as follows (in thousands): Year ended December 31, 2018 $ — 2019 — 2020 82,737 2021 — 2022 — Thereafter — Total $ 82,737 Less current portion of notes payable — Notes payable, net of current portion $ 82,737 On February 6, 2018, the Company entered into the Fifth Amendment, which includes a limited advance waiver of a potential event of default that could have resulted from a qualification regarding the Company’s ability to continue as a going concern in the audit report for the year ended December 31, 2017. The Fifth Amendment includes a covenant requiring the Company to complete a financing in which gross proceeds from the sale of equity securities is at least $20.0 million, no later than August 30, 2018, which was satisfied with the February 2018 financing (Note 12 “Subsequent Event”). In addition, the Company agreed to increase the Back End Financing Fee from 5.0% to 6.0% of the entire aggregate principal amount of borrowings outstanding, including total PIK Loans issued, under the Term Loan Agreement. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | 6. Stockholders’ Equity (Deficit) Public Offerings In the first quarter of 2015, the Company completed a public offering of 603,750 shares of its common stock at a public offering price of $115.00 per share. Gross cash proceeds from the public offering were approximately $69.4 million, after deducting underwriting discounts In March 2017, the Company completed a registered public offering of 1,850,000 shares of our common stock at a public offering price of $12.50 per share. The gross proceeds from the offering were approximately $23.1 million, before deducting underwriting discounts and commissions and other offering expenses. From July 2017 through September 2017, the Company sold 464,108 shares of common stock under our “at-the-market” offering program at prices ranging from $5.64 to $10.54. The gross proceeds from the offering were $4.3 million, before deducting underwriting discounts and commissions and other offering expenses. In October 2017, the Company completed the October Financing, pursuant to which it sold 4,630,000 shares of our common stock, Series A warrants to purchase up to 4,630,000 shares of our common stock and Series B warrants to purchase up to 4,630,000 shares of common stock at a public offering price of $3.50 per share and accompanying warrants. The gross proceeds from the October Financing were approximately $16.2 million, before deducting underwriting discounts and commissions and other offering expenses. Each series of warrants, if exercised by all holders in full, may result in additional gross proceeds to us of $16.2 million. In February 2018, the Company completed a registered public offering of 34,500,000 shares of common stock at a public offering price of $2.00 per share. The gross proceeds from the offering were approximately $69.0 million, before deducting underwriting discounts and commissions and other offering expenses. Stock Plans In September 2006, the Company adopted the Company’s 2006 Stock Incentive Plan (the “2006 Plan”) under which, as amended, 268,561 shares of common stock were reserved for issuance to employees, non-employee directors and consultants of the Company. The 2006 Plan was closed in 2013 with the approval of the 2013 Stock Incentive Plan (the “2013 Plan”) and no further options will be granted under the 2006 Plan. In October 2013, the Company’s board of directors approved the 2013 Plan. The 2013 Plan became effective immediately prior to the completion of the initial public offering. An initial 480,900 shares of common stock were reserved for issuance under the 2013 Plan. Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, restricted stock and restricted stock units to individuals who are then employees, officers, directors or consultants of the Company. The shares available for issuance under the 2013 Plan were increased by 124,823 shares and 121,018 shares on January 1, 2017 and 2016, respectively, in accordance with an “evergreen” provision under the 2013 Plan. As of December 31, 2017, zero shares were available for future issuance under the 2013 Plan, and options to purchase 1,331,269 shares have been granted and are outstanding under the 2006 Plan and 2013 Plan. Common Stock Options The maximum term of stock options granted under the 2006 Plan and 2013 Plan is ten years. The options generally vest 25% on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years. The following table summarizes stock option activities for the 2006 Plan and 2013 Plan: Total Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2015 574,607 $ 107.22 7.99 $ 19,158 Granted 316,316 $ 45.75 Exercised (14,866 ) $ 11.49 $ 1,049 Canceled/forfeited/expired (53,792 ) $ 126.19 Outstanding at December 31, 2016 822,265 $ 84.05 7.92 $ 1,593 Granted 615,067 $ 4.69 Exercised (24,406 ) $ 11.06 $ 338 Canceled/forfeited/expired (81,657 ) $ 110.21 Outstanding at December 31, 2017 1,331,269 $ 47.11 8.08 $ - Vested and expected to vest at December 31, 2017 1,313,053 $ 47.55 8.07 $ - Exercisable at December 31, 2017 602,646 $ 84.93 6.39 $ - This table does not include 811,800 shares granted pursuant to the 2013 Plan that are expressly subject to and conditioned upon the approval by our stockholders of an increase to the number of shares authorized under the 2013 Plan. Employee Stock Purchase Plan In October 2013, the Company adopted the ESPP, which enables eligible employees to purchase shares of the Company’s common stock using their after tax payroll deductions, subject to certain conditions. The ESPP initially authorized the issuance of 55,600 shares of common stock pursuant to purchase rights granted to employees. The number of shares of common stock reserved for issuance increases on January 1 of each calendar year, from January 1, 2014 through January 1, 2023, by the lesser of (a) one percent (1%) of the number of shares issued and outstanding on the immediately preceding December 31, or (b) such lesser number of shares as determined by the Administrator. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. In the years ended December 31, 2017 and 2016, 38,929 shares and 69,233 shares , respectively, were purchased under the ESPP. 13 shares remained available for issuance under the ESPP. The Company announced the suspension of the ESPP as of May 16, 2017 due to a lack of available shares. The suspension was accounted for as a cancellation of an award with no consideration. The previously unrecognized compensation cost as of the suspension date of $2.4 million was fully expensed during the second quarter of 2017. Prior to the suspension of the ESPP, eligible employees could contribute, normally through payroll deductions, up to 15% of their earnings for the purchase of common stock under the ESPP. The purchase price of common stock under the ESPP is the lesser of: (a) 85% of the fair market value of a share of the Company’s common stock on the first date of an offering or (b) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. Generally, the ESPP consists of a two-year offering period with four six-month purchase periods. Stock-Based Compensation. The compensation cost that has been included in the statement of operations for all stock-based compensation arrangements was as follows (in thousands): Year Ended December 31, 2017 2016 2015 Cost of sales $ 1,360 $ 1,016 $ 1,162 Selling, general & administrative 10,020 9,360 10,517 Research and development 1,248 1,284 1,417 Total $ 12,628 $ 11,660 $ 13,096 This table does not include value for 811,800 shares granted pursuant to the 2013 Plan that are expressly subject to and conditioned upon the approval by our stockholders of an increase to the number of shares authorized under the 2013 Plan The total stock-based compensation capitalized as part of the cost of the Company’s inventory was $0.2 million and $0.2 million at December 31, 2017 and 2016, respectively. There was no expense for stock option grants to non-employees for the years ended December 31, 2017 and 2016. For the year 2015, the expense for stock option grants to non-employees was $35,000, and is included in the table above as a component of selling, general and administrative expenses. At December 31, 2017, the total unamortized stock-based compensation expense of approximately $6.0 million will be recognized over the remaining weighted average vesting term of approximately 1.9 years. The assumptions used in the Black-Scholes option-pricing model are as follows: Stock Option Year Ended December 31, 2017 2016 2015 Weighted average grant date fair value (per share) $ 2.65 $ 24.30 $ 71.50 Risk-free interest rate 2.1 % 1.7 % 1.7 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 60.8 % 57.5 % 64.7 % Expected term (in years) 5.8 5.8 6.0 ESPP Year Ended December 31, 2017 (1) 2016 Weighted average grant date fair value (per share) N/A $ 17.80 Risk-free interest rate N/A 0.7 % Expected dividend yield N/A 0.0 % Expected volatility N/A 62.7 % Expected term (in years) N/A 1.3 (1) There were no grants made pursuant to the ESPP during the year ended December 31, 2017. Risk-free Interest Rate . The risk-free interest rate assumption was based on the United States Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. Expected Dividend Yield . The expected dividend yield is zero because the Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Expected Volatility . Prior to January 1, 2016, the expected volatility is estimated based on volatilities of a peer group of similar companies whose share prices are publicly available. Since January 1, 2016, the expected volatility is estimated based on a weighted-average volatility of the Company’s actual historical volatility since its initial public offering in November 2013 and the historical stock volatilities of a peer group of similar companies whose share prices are publicly available . The Company continues to use the historical volatility of peer entities due to the lack of sufficient historical data of its stock price. The peer group consisted of other publicly traded companies in the same industry and in a similar stage of development. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Expected Term . The Company utilized the simplified method for estimating the expected term of stock option grants. Under this approach, the weighted-average expected term is presumed to be the average of the vesting term and the contractual term of the option. The Company estimates the expected term of the ESPP using expected life for each tranche during the two-year offering period. The Company also estimates forfeitures at the time of grant, and revises those estimates in subsequent periods if actual forfeitures differ from its estimates. Historical data was used to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. Common Stock Reserved for Future Issuance The following shares of common stock are reserved for future issuance at December 31, 2017 (in thousands): Common stock warrants outstanding 9,553 Stock options issued and outstanding 1,331 Authorized for future option grants — Employee stock purchase plan — 10,884 This table does not include 811,800 million shares granted pursuant to the 2013 Plan that are expressly subject to and conditioned upon the approval by our stockholders of an increase to the number of shares authorized under the 2013 Plan. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The expense (benefit) for income taxes reconciles to the amount computed by applying the federal statutory rate to income before taxes as follows (in thousands): Year Ended December 31, 2017 2016 2015 Income tax benefit at federal statutory rate $ (24,829 ) $ (28,362 ) $ (24,616 ) State income tax, net of federal benefit (2,034 ) (2,393 ) (2,285 ) Warrants revaluation (347 ) Research and development credits (480 ) (720 ) (1,796 ) Uncertain tax position — 3,154 Stock-based compensation 3,214 1,686 1,904 Tax Cuts and Jobs Acts 51,577 Other (7 ) 456 550 Removal of net operating losses and research and development credits 145 — 8,344 Change in valuation allowance (27,231 ) 29,318 14,755 Income tax expense (benefit) $ 8 $ (15 ) $ 10 Significant components of the Company’s net deferred income tax assets at December 31, 2017 and 2016 are shown below (in thousands). A valuation allowance has been recorded to offset the net deferred tax asset as of December 31, 2017 and 2016, as the realization of such assets does not meet the more-likely-than-not threshold. December 31, 2017 2016 Deferred tax assets: Net operating loss (NOL) carryforwards $ 81,483 $ 100,251 Research and development tax credits carryforwards 3,517 2,543 Capitalized research and development expenses 12,746 16,673 Deferred rent 170 537 Accrued compensation 8,809 11,332 Other 3,969 5,931 Total deferred tax assets 110,694 137,267 Less valuation allowance (110,694 ) (137,267 ) Net deferred tax assets $ — $ — The remaining California NOL carry forwards of $181.3 million will expire beginning in 2028. As of December 31, 2017, the Company has accumulated federal and state NOL carryforwards of approximately $335.3 million and $306.0 million, respectively, not considering the annual limitation of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) discussed below. The federal and state tax loss carryforwards begin to expire in 2026 and 2018, respectively, unless previously utilized. The Company also has federal and California research credit carryforwards of approximately $4.4 million and $5.3 million, respectively. The federal research credit carryforwards will begin expiring in 2028 unless previously utilized. The California research credit will carry forward indefinitely. In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting (''ASU 2016-09''). ASU 2016-09 simplifies how several aspects of share-based payments are accounted for and presented in the financial statements. ASU 2016-09 is effective for public companies for and adopted by the Company in 2017. The Company adopted this ASU in 2017. The Company has excess tax benefits for which a benefit could not be previously recognized of approximately $1.8 million. Upon adoption the balance of the unrecognized excess tax benefits were reversed with the impact recorded to retained earnings which was fully offset by a change to the valuation allowance. Utilization of the NOLs and R&D credit carryforwards are subject to annual limitations due to ownership change limitations that have occurred or that could occur in the future, as required by Section 382 of the Code, as well as similar state and foreign provisions. These ownership changes may limit the amount of NOLs and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. Although the Company determined that it is more likely than not that an ownership change had occurred in March 2015, the Company has not completed a formal update of its Section 382 analysis subsequent to December 31, 2013. Until this analysis has been updated, the Company has removed deferred tax assets for NOLs of $16.0 million and research and development credits of $2.9 million from its deferred tax asset schedule and has recorded a corresponding decrease to its valuation allowance. The amount presented as a deferred tax asset with respect to losses and credits after the removal of potentially limited amounts reflects the estimated asset value using the Section 382 limitation criteria as of the date of the March 2015 public offering of 603,750 shares of common stock, given that it is possible that this transaction may have triggered the limitation. When this analysis is finalized, the Company will reassess the amount of NOLs and credits subject to limitation under Section 382. Due to the existence of the valuation allowance, future changes in the deferred tax assets related to these tax attributes will not impact the Company’s effective tax rate. The evaluation of uncertainty in a tax position is a two-step process. The first step involves recognition. The Company determines whether it is more likely than not that a tax position will be sustained upon tax examination, including resolution of any related appeals or litigation, based on only the technical merits of the position. The technical merits of a tax position are derived from both statutory and judicial authority (legislation and statutes, legislative intent, regulations, rulings, and case law) and their applicability to the facts and circumstances of the tax position. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate resolution with a taxing authority. In December 2017, the Tax Cuts and Jobs Act (the “2017 Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact the company, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. The 2017 Tax Act also provides for the acceleration of depreciation for certain assets placed in service after September 27, 2017 as well as prospective changes beginning in 2018, including additional limitations on executive compensation, limitations on the deductibility of interest and capitalization of research and development expenditures. Reduction of the U.S. Corporate Income Tax Rate: The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company's deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from the highest graduated tax of 35% to a 21% flat tax. As a result of the tax rate, our deferred tax assets were decreased by $51.6 million and the valuation allowance was decreased by the same amount, resulting in no net tax expense. The Act will no longer allow deductions for compensation in excess of $1 million for certain employees, even if paid as commissions or performance based compensation. It also subjects the principal executive officer, principal financial officer and three other highest paid officers to the limitation and once the individual becomes a covered person, the individual will remain a covered person for all future years. The tax effects of these provisions requires further analysis which is expected to be completed in the second half of 2018. The company recognized the income tax effects of the 2017 Tax Act in its 2017 financial statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, in the reporting period in which the 2017 Act was signed into law. As such, the Company's financial results reflect the provisional income tax effects of the 2017 Tax Act for which the accounting under ASC Topic 740 is incomplete but a reasonable estimate could be determined. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits at the beginning and end of the years ended December 31, 2017, 2016 and 2015 (in thousands): Year Ended December 31, 2017 2016 2015 Gross unrecognized tax benefits at the beginning of the year $ 8,167 $ 7,594 $ 3,539 Increases related to current year positions 411 580 474 Increases (decreases) related to prior year positions (457 ) (7 ) 3,581 Expiration of unrecognized tax benefits — — — Gross unrecognized tax benefits at the end of the year $ 8,121 $ 8,167 $ 7,594 As of December 31, 2017, the Company had $6.7 million of unrecognized tax benefits that, if recognized and realized would impact the effective tax rate. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest and penalties on the Company’s balance sheets and has not recognized interest and penalties in the statements of operations for the years ended December 31, 2017 and 2016. The Company does not expect any significant increases or decreases to its unrecognized tax benefits within the next 12 months. The Company is subject to taxation in the United States and state jurisdictions. The Company’s tax years from 2006 (inception) are subject to examination by the United States and state authorities due to the carry forward of unutilized NOLs and research and development credits. |
Collaborations
Collaborations | 12 Months Ended |
Dec. 31, 2017 | |
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 the t:slim Insulin Delivery System with DexCom’s proprietary CGM system. Between 2012 and 2015, the Company paid to DexCom a total of $3.0 million in licensing fees. Additionally, upon commercialization of t:slim G4, 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 agreed to 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 Pump sale is recorded. The Company recorded such marketing fund commitment of $1.1 million and $0.7 million in the years ended December 31, 2017 and 2016, respectively. |
Employee-Benefits
Employee-Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Pension And Other Postretirement Plans Disclosure [Abstract] | |
Employee Benefits | 9. Employee Benefits Employee 401(k) Plan The Company has a defined contribution 401(k) plan for employees who are at least 18 years of age. Employees are eligible to participate in the plan beginning on the first day of the calendar quarter following their date of hire. Under the terms of the plan, employees may make voluntary contributions as a percent of compensation. The Company does not provide a matching contribution program. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. 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 December 31, 2017 and 2016, there were no material matters for which a negative outcome was considered probable or estimable. Operating leases Under a noncancelable operating lease agreement (“Existing Operating Lease”), the Company leases manufacturing, laboratory and office space in San Diego, California. On December 27, 2017, the Company entered into an amendment to the Existing Operating Lease which terminates the lease with respect to the building located at 11045 Roselle Street as of January 31, 2018 and extends the remaining Existing Operating Lease term through May 2022. The building located at 11045 Roselle Street, which primarily housed the Company’s manufacturing and related operations, was largely replaced by a facility located on Barnes Canyon Road in San Diego, California (the “Barnes Canyon Lease”). Pursuant to the amendment, the Company has the right to terminate the lease on the remaining buildings effective May 31, 2021 upon (i) delivery of written notice to the landlord no later than June 1, 2020, and (ii) an early termination payment to the landlord of approximately $419,000. In connection with the Existing Operating Lease, the Company has a unsecured standby letter of credit arrangement with a bank under which the landlord of the building is the beneficiary. On June 30, 2016, the Company entered into the Barnes Canyon Lease. The Barnes Canyon Lease is scheduled to expire in November 2023. The Company will also have a one-time option to extend the term of the lease for a period of not less than 36 months and not greater than 60 months, by delivering notice to the landlord at least nine months and not more than 12 months prior to the expiration of the lease. The Barnes Canyon Lease allows for a Tenant Improvement Allowance of up to approximately $3.4 million to be applied to non-structural improvements to the building. Amounts utilized by the Company from the TI Allowance are subject to an interest accrual at a rate of 8.0% per annum and must be repaid in full during the lease term in monthly installments (the “TI Rent”) concurrently with the base rent. During the years ended December 31 2017 and 2016, costs incurred for non-structural improvements to the facility were $3.9 million and $1.0 million, respectively, of which $2.6 million and $0.7 million, respectively, were funded by the landlord. The Company retains the right at any time during the lease term to prepay all or any portion of the TI Allowance drawn and outstanding without penalty, in which case the outstanding TI Rent would be reduced to reflect the TI Allowance prepayment and interest would cease to accrue on the prepaid portion of the TI Allowance. The monthly rent, except TI Rent mentioned above, increases by a fixed percentage each year on the anniversary of the respective rent commencement date of the Existing Operating Lease and Barnes Canyon Lease. The difference between the straight-line expense over the term of the lease and actual amounts paid are recorded as deferred rent. Future minimum payments under the aforementioned noncancelable operating leases for each of the five succeeding years following December 31, 2017 are as follows (in thousands): 2018 $ 2,705 2019 2,757 2020 2,873 2021 2,959 2022 1,650 Thereafter 642 $ 13,586 Not included , which totaled $0.4 million during the year ended December 31, 2017 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 11. Selected Quarterly Financial Data (Unaudited) Quarterly financial information for fiscal 2017 and 2016 is presented in the following table, in thousands, except per share data: For the Quarter Ending March 31 June 30 September 30 December 31 2017: Revenue $ 18,977 $ 21,327 $ 27,003 $ 40,294 Gross profit $ 6,753 $ 8,001 $ 11,873 $ 17,468 Operating expenses $ 27,979 $ 26,970 $ 25,039 $ 27,050 Operating loss $ (21,226 ) $ (18,969 ) $ (13,166 ) $ (9,583 ) Net loss $ (23,792 ) $ (21,801 ) $ (16,034 ) $ (11,406 ) Basic and diluted net loss per share (1) $ (7.46 ) $ (4.36 ) $ (3.09 ) $ (1.23 ) 2016: Revenue $ 20,058 $ 22,985 $ 12,293 $ 28,912 Gross profit $ 6,927 $ 8,176 $ (1,577 ) $ 10,065 Operating expenses $ 26,166 $ 25,229 $ 26,837 $ 23,411 Operating loss $ (19,239 ) $ (17,053 ) $ (28,414 ) $ (13,346 ) Net loss $ (20,485 ) $ (18,326 ) $ (29,815 ) $ (14,822 ) Basic and diluted net loss per share (1) $ (6.80 ) $ (6.00 ) $ (9.70 ) $ (4.80 ) (1) Net loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly per-share calculations will not necessarily equal the annual per share calculation. The issued and outstanding shares of common stock have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 12. Subsequent Event In February 2018, the Company completed a registered public offering of 34,500,000 shares of common stock at a public offering price of $2.00 per share. The gross proceeds from the offering were approximately $69.0 million, before deducting underwriting discounts and commissions and other offering expenses. In February 2018, the Company entered into the Fifth Amendment to its Term Loan Agreement, which includes a limited advance waiver of a potential event of default that could have resulted from a qualification regarding the Company’s ability to continue as a going concern in the audit report for the year ended December 31, 2017. The Fifth Amendment includes a covenant requiring the Company to complete a financing in which gross proceeds from the sale of equity securities is at least $20.0 million, no later than August 30, 2018, which was satisfied with the February 2018 financing. In addition, the Company agreed to increase the Back End Financing Fee from 5.0% to 6.0% of the entire aggregate principal amount of borrowings outstanding, including total PIK Loans issued, under the Term Loan Agreement. |
Organization and Basis of Pre21
Organization and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
The Company | The Company Tandem Diabetes Care, Inc. is a medical device company focused on the design, development and commercialization 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 manufactures and sells insulin pump products in the United States that are designed to address large and differentiated needs of the insulin-dependent diabetes market. The Company’s pump products currently include: the t:slim X2 Insulin Delivery System, or t:slim X2, the next-generation flagship product that is updatable and designed to display Dexcom G5 continuous glucose monitoring, or CGM, sensor information directly on the pump Home Screen; and the t:flex Insulin Delivery System, or t:flex, for people with greater insulin needs. 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. In October 2016, the Company commenced commercial sales of t:slim X2 and discontinued new sales of t:slim. In September 2017, the Company commenced commercial sales of t:slim X2 with Dexcom G5 Mobile CGM integration, or t:slim X2 with G5, and discontinued new sales of t:slim G4. The Company will continue to provide ongoing service and support to existing t:slim and t:slim G4 customers. In July 2016, the Company received clearance from the U.S. Food and Drug Administration (“FDA”) to begin offering the Tandem Device Updater, a Mac In July 2016, the Company also announced and launched a Technology Upgrade Program that provided eligible t:slim and t:slim G4 customers a path to obtain t:slim X2, or, as of September 2017, t:slim X2 with G5. Participating customers had the right to exchange their original t:slim and t:slim G4 for a t:slim X2 or t:slim X2 with G5, under a variable pricing structure. The Technology Upgrade Program expired on September 30, 2017. In September 2017, the Company commenced commercial sales of products using the t:lock Connector, or t:lock, which replaces the standard Luer-lok connector that historically joined an infusion set to the cartridge. t:lock incorporates a smaller inner cavity than the Luer-lok connector, which reduces the amount of insulin used in the cartridge fill process and reduces the time required to fill the infusion set tubing. The financial statements included in this Annual Report have been prepared on a basis that assumes that the Company will continue as a going concern, and do not include any adjustments that may result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of the Company’s liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has incurred operating losses since its inception and as reflected in the accompanying financial statements, the Company had an accumulated deficit of $477.6 million as of December 31, 2017. The Company’s ability to achieve profitable operations primarily depends upon achieving a level of revenues adequate to support its cost structure. The Company has relied on its ability to fund its operations through private and public equity and debt financing. Management expects operating losses and negative cash flows to continue for at least the next 12 months. |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company’s realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to raise additional equity or refinance its existing debt and ultimately, to attain profitability. There is no assurance that the Company will be successful in raising additional funds or that, if it does raise additional funds, that it will be able to attain profitability or even continue in business. At December 31, 2017, the Company had $24.2 million in cash and cash equivalents and short-term investments, which included $10.0 million of restricted cash. In February 2018 (see Note 12 “Subsequent Event”), the Company completed a registered public offering of 34,500,000 shares of its common stock at a public offering price of $2.00 per share. The gross proceeds from the offering were approximately $69.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. Management evaluated the Company’s ability to continue as a going concern within one year of the financial statements being issued and believes that the cash on hand and proceeds from the February financing will be sufficient to satisfy its liquidity requirements for at least the next 12 months. The Company’s ability to continue as a going concern, meet its minimum liquidity requirements in the future or satisfy the other covenants under the Term Loan Agreement is dependent on its ability to continue to grow the business by executing its strategy to achieve renewal pump sales objectives, develop and launch new products, increase gross profits from higher sales of infusion sets, maximize manufacturing efficiencies and leverage early investments made in the sales, clinical and marketing organization. If the Company does not achieve these objectives, it may in the future seek additional capital from public or private offerings of its capital stock or it may elect to borrow additional amounts under new credit lines or from other sources. If the Company issues equity or debt securities to raise additional funds, its existing stockholders may experience dilution, it may incur significant financing costs, and the new equity or debt securities may have rights, preferences and privileges senior to those of its existing stockholders. There can be no assurance that equity or debt financing will be available on acceptable terms, or at all. |
Reverse Stock Split | Reverse Stock Split On October 9, 2017, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of common stock. The par value per share and the authorized number of shares of common stock and preferred stock were not adjusted as a result of the reverse stock split. All common stock share and per-share amounts for all periods presented in these financial statements have been adjusted to reflect the reverse stock split. The number of authorized shares of common stock remains at 100 million shares. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with 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 differ materially from those estimates and assumptions. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which segment discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and managed its business as one segment, operating in the United States. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less from the date of purchase and that can be liquidated without prior notice or penalty, to be cash equivalents. |
Short Term Investments | Short-Term Investments Based on the nature of the assets, the Company’s short-term investments are classified as either available-for-sale or trading securities. Such securities are carried at fair value as determined by prices for identical or similar securities at the balance sheet date. The Company’s short-term investments consist of Level 1 and Level 2 financial instruments in the fair value hierarchy. The net unrealized gains or losses on available-for-sale securities are reported as a component of other comprehensive loss within the statements of operations and accumulated other comprehensive (loss) income as a separate component of stockholders’ deficit on the balance sheets. Unrealized gains or losses on trading securities are reported as a component of other income or expense within the statements of operations. The Company determines the realized gains or losses of available-for-sale securities using the specific identification method and includes net realized gains and losses as a component of other income or expense within the statements of operations. The Company periodically reviews available-for-sale securities for other than temporary declines in fair value below the cost basis whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. To date, no other than temporary declines in fair value have been identified. |
Restricted Cash | Restricted Cash As of December 31, 2017 and 2016 the Company recorded $10.0 million and $2.0 million of restricted cash, respectively, for the minimum cash balance requirement in connection with the Term Loan Agreement (see Note 5, “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 based on historical experience, assessment of specific risk, specific review of outstanding invoices or various assumptions and estimates that are believed to be reasonable under the circumstances. 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. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. The Company maintains deposit accounts in federally insured financial institutions in excess of federally insured limits. The Company also maintains investments in money market funds that are not federally insured. Additionally, the Company has established guidelines regarding investment instruments and their maturities, which are designed to maintain preservation of principal and liquidity. The following table summarizes customers who accounted for 10% or more of net accounts receivable: December 31, 2017 2016 Edgepark Medical Supplies, Inc. 17.7 % 15.2 % Byram Healthcare 17.2 % 14.7 % CCS Medical, Inc. 16.2 % N/A The following table summarizes customers who accounted for 10% or more of sales for the periods presented: December 31, 2017 2016 2015 Edgepark Medical Supplies, Inc. 21.5 % 18.7 % 17.8 % Byram Healthcare 14.0 % 14.0 % 17.2 % Solara Medical Supplies, Inc. N/A 10.7 % N/A CCS Medical 10.3 % N/A N/A |
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 The estimated fair value of certain of the Company’s common stock warrants is determined by using the Black-Scholes pricing model as of December 31, 2017, as discussed in Note 4. Certain trade-in rights previously offered by the Company pursuant to the Technology Upgrade Program to certain eligible customers have been determined to be guarantees under applicable accounting guidance. The Company recorded a liability for the estimated fair value of the guarantees at their inception. The Program expired on September 30, 2017, at which time the remaining guarantee liabilities of $1.1 were recognized as sales. For further details regarding our guarantees, see the following section “Revenue Recognition” within Note 2 and Note 4, “Fair Value Measurements.” |
Inventory, Net | Inventory, Net Inventories are valued at the lower of cost or market (net realizable value), determined by the first-in, first-out method. Inventory is recorded using standard cost, including material, labor and overhead costs. The Company periodically reviews inventories for potential impairment based on quantities on hand, expectations of future use, judgments based on quality control testing data and assessments of the likelihood of scrapping or obsoleting certain inventories. |
Long Lived Assets | Long Lived Assets Property and Equipment Property and equipment, which primarily consist of office furniture and equipment, manufacturing equipment, scientific equipment, computer equipment, and leasehold improvements, are stated at cost. Property and equipment are depreciated over the estimated useful lives of the assets, generally three to seven years, using the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the remaining lease term. Maintenance and repair costs are expensed as incurred. Patents Costs associated with the purchase or licensing of patents associated with the Company’s commercialized products are capitalized. The Company reviews its capitalized patent costs periodically to determine that they have future value and an alternative future use. Costs related to patents that the Company is not actively pursuing for commercial purposes are expensed. The Company amortizes patent costs over the lesser of the duration of the patent term or the estimated useful lives of 10 years, beginning with the date the patents are issued or acquired. The Company periodically re-evaluates the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of all of its long-lived assets, including property and equipment and acquired patents. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the asset to the Company’s business objective. The Company has not recognized any impairment losses through December 31, 2017. |
Deferred Rent | Deferred Rent Rent expense on noncancelable leases containing known future scheduled rent increases is recorded on a straight-line basis over the term of the respective leases beginning when the Company takes possession of the leased property. The difference between rent expense and rent paid is accounted for as deferred rent. The current portion of deferred rent was included in other current liabilities on the Company’s balance sheet. Landlord improvement allowances and other such lease incentives are recorded as property and equipment and as deferred rent and are amortized on a straight-line basis as a reduction to rent expense. |
Research and Development Costs | Research and Development Costs All research and development costs are charged to expense as incurred. Such costs include personnel-related costs, including stock-based compensation, supplies, license fees, development prototypes, outside design and testing services, depreciation, allocated facilities and information services, clinical trial costs, milestone payments under the Company’s development and commercialization agreements |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred income tax assets or liabilities are recognized based on the temporary differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. An amount is accrued for the estimate of additional tax liability, including interest and penalties, for any uncertain tax positions taken or expected to be taken in an income tax return. The Company reviews and updates the accrual for uncertain tax positions as more definitive information becomes available. For further information, see Note 7, “Income Taxes.” |
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. Trade-In Rights The Company launched a Technology Upgrade Program in 2016, which expired September 30, 2017. The trade-in rights associated with the Program were accounted for as guarantees or rights to return based on specific factors and circumstances, including the period of time the trade-in rights were exercisable, the likelihood that the trade-in rights would be exercised, and the amount of the specified-price trade-in value. The Company determined that trade-in rights for t:slim G4 Pump customers were generally guarantees. The Company accounted for the guarantees under applicable accounting standards, which require a guarantor to recognize, at the inception of the guarantees, a liability for the estimated fair value of the obligation undertaken in issuing the guarantees. Subsequently, the initial liability recognized for the guarantees was reduced as the Company was released from the risk under the guarantees, which was when the trade-in right was exercised or the right expired. The guarantees were accounted for as an element of a multiple element arrangement. The estimated fair value of the guarantees was based on various economic and customer behavioral assumptions, including the probability that a trade-in right would be exercised, the specified trade-in amount, the expected fair value of the used t:slim G4 Pump at trade-in and the expected sales price of a t:slim X2 Pump. Upon expiration of the Program at September 30, 2017, the remaining guarantee liabilities of $1.1 were recognized as sales compared to $1.2 million There were no guarantee liabilities at December 31, 2017. The Company determined that t:slim Pump trade-in rights were in-substance rights to return products. Such rights to return were accounted for pursuant to the right of return accounting guidance. As the Company did not have sufficient history to reasonably estimate returns associated with trade-in rights, all eligible t:slim Pump sales between July 2016 and October 2016, which was when the company discontinued new shipments of t:slim, were recorded as deferred revenue until the trade-in right was exercised or the right expired. At December 31, 2017 and 2016, $65,000 and $3.2 million, respectively, were recorded as a trade-in rights reserve in deferred revenue on the accompanying balance sheet. 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 amount of the determined guarantee fair value is allocated in full to the guarantee and the remaining allocable consideration is allocated to other separate units of accounting using 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. In July 2016, the Company received clearance from the FDA to begin offering the Tandem Device Updater, a Mac four-year period, which is the hosting period for t:connect and the period that software upgrades are expected to be provided. At December 31, 2017 and 2016, $2.0 million and $1.6 million , respectively. 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 amount recorded on the Company’s balance sheets for product return allowance was . |
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. Insulin pumps returned to the Company may be refurbished and redeployed. 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 December 31, 2017 and December 31, 2016, the warranty reserve was $5.6 million and $5.7 million, respectively. The following table provides a reconciliation of the change in estimated warranty liabilities for the years ended December 31, 2017 and 2016: December 31, (in thousands) 2017 2016 Balance at beginning of the year $ 5,690 $ 3,547 Provision for warranties issued during the period 5,613 8,830 Settlements made during the period (6,742 ) (8,739 ) Increases in warranty estimates 1,079 2,052 Balance at end of the year $ 5,640 $ 5,690 Current portion $ 2,596 $ 2,302 Non-current portion $ 3,044 3,388 Total $ 5,640 $ 5,690 |
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 Company’s 2013 Stock Incentive Plan (“2013 Plan”) and shares issued under the Company’s 2013 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. |
Warrant Liabilities | Warrant Liabilities The Company |
Advertising Costs | Advertising Costs The Company expenses advertising costs as they are incurred. For the years ended December 31, 2017, 2016 and 2015, advertising costs were $1.1 million, $0.9 million, and $1.0 million, respectively. |
Shipping and Handling Expenses | Shipping and Handling Expenses Shipping and handling expenses associated with product delivery are included within cost of sales in the Company’s statements of operations. |
Comprehensive Loss | Comprehensive Loss All components of comprehensive loss, including net loss, are reported in the financial statements in the period in which they are recognized. Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities. |
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 loss per share is calculated in accordance with the treasury stock method and reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted to common stock. 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 warrants that are recorded as a liability in the accompanying balance sheet, the calculation of diluted loss per share requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of the warrants and the presumed exercise of such securities are dilutive to loss per share for the period, an adjustment to net loss used in the calculation is required to remove the change in fair value of the warrants from the numerator for the period. Likewise, an adjustment to the denominator is required to reflect the related dilutive shares, if any, under the treasury stock method. 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, in thousands): Year Ended December 31, 2017 2016 2015 Warrants for common stock — — 99 Common stock options — 151 202 ESPP — 2 — — 153 301 |
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 August 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance that clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. The Company does not believe the adoption of the standard, effective January 1, 2018, will have a material impact on the Company’s statement of cash flow. In June 2016, FASB issued a new credit loss standard that changes the impairment model for most financial assets and certain other instruments. for annual periods beginning after December 15, 2018, and interim periods within those years In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) (“ASU 2016-09”), which is intended to simplify several areas of accounting for share-based payment arrangements. The amendments in this update cover such areas as the recognition In February 2016, FASB issued final guidance for lease accounting. The new guidance requires lessees to recognize most lease liabilities and corresponding right-of-use assets with terms greater than twelve months on their balance sheet but to recognize expenses on their income statement in a manner similar to current accounting principles. The new guidance also eliminates the current real estate-specific provisions for all entities. The standard is effective for public companies for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company believes the adoption will modify its analyses and disclosures of lease agreements since operating leases are a significant portion of the Company’s total lease commitments. 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 (“Revenue from Contracts with Customers Standard”) that will supersede existing revenue guidance under U.S. GAAP and International Financial Reporting Standards. The Revenue from Contracts with Customers 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. The Revenue from Contracts with Customers Standard will be effective for the Company beginning in its first quarter of 2018, and early adoption is permitted. Subsequently, FASB issued the following standards related to Revenue from Contracts with Customers Standard: Principal versus Agent Considerations; Identifying Performance Obligations and Licensing; and Narrow-Scope Improvements and Practical Expedients (collectively, the “new revenue standards”). The new revenue standards may be applied retrospectively to each prior period presented (full retrospective method) or retrospectively with the cumulative effect recognized as of the date of adoption (the modified retrospective method). The Company will adopt the new revenue standard in the first quarter of 2018 utilizing the modified retrospective method. This adoption will not have a material impact on the recognition of revenues for the sale of its products through third-party distributors and insurance payors with whom it has contractual arrangements, which generally comprise approximately 99% of its sales. For sales that are impacted by this adoption, revenue is currently recognized upon collection of cash at which time the price is considered determinable. Pursuant to this new standard, such revenue will be recognized upon delivery to the customer at the estimated transaction price, using the expected value method. As a result, on January 1, 2018, the Company will record a net adjustment to accumulated deficit in the amount of approximately $0.2 million, reflecting this accounting change. Additionally, the Company has given consideration to the accounting for warranty and commissions, for which there will not be a material change to its current method of expense recognition . |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Customers Accounted for 10% or More | The following table summarizes customers who accounted for 10% or more of net accounts receivable: December 31, 2017 2016 Edgepark Medical Supplies, Inc. 17.7 % 15.2 % Byram Healthcare 17.2 % 14.7 % CCS Medical, Inc. 16.2 % N/A The following table summarizes customers who accounted for 10% or more of sales for the periods presented: December 31, 2017 2016 2015 Edgepark Medical Supplies, Inc. 21.5 % 18.7 % 17.8 % Byram Healthcare 14.0 % 14.0 % 17.2 % Solara Medical Supplies, Inc. N/A 10.7 % N/A CCS Medical 10.3 % N/A N/A |
Summary of Reconciliation of Change in Estimated Warranty Liabilities | The following table provides a reconciliation of the change in estimated warranty liabilities for the years ended December 31, 2017 and 2016: December 31, (in thousands) 2017 2016 Balance at beginning of the year $ 5,690 $ 3,547 Provision for warranties issued during the period 5,613 8,830 Settlements made during the period (6,742 ) (8,739 ) Increases in warranty estimates 1,079 2,052 Balance at end of the year $ 5,640 $ 5,690 Current portion $ 2,596 $ 2,302 Non-current portion $ 3,044 3,388 Total $ 5,640 $ 5,690 |
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, in thousands): Year Ended December 31, 2017 2016 2015 Warrants for common stock — — 99 Common stock options — 151 202 ESPP — 2 — — 153 301 |
Financial Statement Informati23
Financial Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [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 December 31, 2017 and 2016 (in thousands): At December 31, 2017 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 459 $ 20 $ — $ 479 Total $ 459 $ 20 $ — $ 479 At December 31, 2016 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities: Commercial paper Less than 1 $ 8,483 $ 1 $ (2 ) $ 8,482 Trading securities: Mutual funds held for nonqualified deferred compensation plan participants $ 354 $ 26 $ (2 ) $ 378 Total $ 8,837 $ 27 $ (4 ) $ 8,860 |
Summary of Accounts Receivable | Accounts receivable consisted of the following (in thousands): December 31, 2017 2016 Accounts receivable $ 22,071 $ 12,112 Less allowance for doubtful accounts, and product returns (1,278 ) (940 ) Total $ 20,793 $ 11,172 |
Reconciliation of Change in Estimated Allowance for Doubtful Accounts, and Product Returns | The following table provides a reconciliation of the change in estimated allowance for doubtful accounts, and product returns for the years ended December 31, 2017, 2016 and 2015 (in thousands): Allowance for doubtful accounts Balance at December 31, 2014 $ 253 Provision for doubtful accounts and return reserves 70 Write-offs and adjustments, net of recoveries (102 ) Balance at December 31, 2015 $ 221 Provision for doubtful accounts and return reserves 632 Write-offs and adjustments, net of recoveries (118 ) Balance at December 31, 2016 $ 735 Provision for doubtful accounts and return reserves 824 Write-offs and adjustments, net of recoveries (524 ) Balance at December 31, 2017 $ 1,035 |
Summary of Inventory | Inventory consisted of the following at (in thousands): December 31, 2017 2016 Raw materials $ 10,328 $ 9,375 Work in process 3,812 4,395 Finished goods 12,853 7,425 Total $ 26,993 $ 21,195 |
Summary of Property and Equipment | Property and equipment consisted of the following at (in thousands): December 31, 2017 2016 Leasehold improvements $ 13,924 $ 8,851 Computer equipment and software 9,040 7,844 Office furniture and equipment 4,686 4,185 Manufacturing and scientific equipment 17,505 16,785 45,155 37,665 Less accumulated depreciation and amortization (25,524 ) (19,256 ) Total $ 19,631 $ 18,409 |
Summary of Capitalized Patents | The following represents the capitalized patents at December 31, 2017 and 2016 (in thousands) December 31, 2017 2016 Gross amount $ 3,247 $ 3,247 Accumulated amortization (1,790 ) (1,463 ) Total $ 1,457 $ 1,784 Weighted average remaining amortization period (in months) 54 66 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 and 2016, 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 December 31, 2017 December 31, 2017 Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 23,700 $ 23,700 $ — $ — Mutual funds held for nonqualified deferred compensation plan participants (2) 479 479 — — Total assets $ 24,179 $ 24,179 $ — $ — Liabilities Common stock warrants $ 5,432 $ — $ — $ 5,432 Deferred compensation (2) 479 479 — — Total liabilities $ 5,911 $ 479 $ — $ 5,432 Fair Value Measurements at December 31, 2016 December 31, 2016 Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 39,941 $ 39,941 $ — $ — Commercial paper 8,482 — 8,482 — Mutual funds held for nonqualified deferred compensation plan participants (2) 378 378 — — Total assets $ 48,801 $ 40,319 $ 8,482 $ — Liabilities Deferred compensation (2) $ 378 $ 378 $ — $ — Total liabilities $ 378 $ 378 $ — $ — (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 . |
Schedule of Assumptions Used to Estimate Fair Values of Common Stock Warrants | The assumptions used to estimate the fair values of the common stock warrants at December 31, 2017 are presented below: Series A Warrants Series B Warrants Risk-free interest rate 2.2 % 1.4 % Expected dividend yield 0.0 % 0.0 % Expected volatility 63.5 % 80.3 % Expected term (in years) 4.8 0.3 |
Summary of Changes in Fair Value of Total Level 3 Financial Assets | The following table presents a summary of changes in fair value of the Company’s total Level 3 financial assets for the year ended December 31, 2017: Balance at offering date $ 6,453 Decrease in fair value included in change in fair value of common stock warrants (1,021 ) Balance at end of year $ 5,432 |
Term Loan Agreement (Tables)
Term Loan Agreement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Future Minimum Principal Payments Under Term Loan Agreement | Future minimum principal payments under the Term Loan Agreement as of De cember 31, 2017, are as follows (in thousands): Year ended December 31, 2018 $ — 2019 — 2020 82,737 2021 — 2022 — Thereafter — Total $ 82,737 Less current portion of notes payable — Notes payable, net of current portion $ 82,737 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Summary of Stock Option Activities for 2006 Plan and 2013 Plan | The following table summarizes stock option activities for the 2006 Plan and 2013 Plan: Total Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2015 574,607 $ 107.22 7.99 $ 19,158 Granted 316,316 $ 45.75 Exercised (14,866 ) $ 11.49 $ 1,049 Canceled/forfeited/expired (53,792 ) $ 126.19 Outstanding at December 31, 2016 822,265 $ 84.05 7.92 $ 1,593 Granted 615,067 $ 4.69 Exercised (24,406 ) $ 11.06 $ 338 Canceled/forfeited/expired (81,657 ) $ 110.21 Outstanding at December 31, 2017 1,331,269 $ 47.11 8.08 $ - Vested and expected to vest at December 31, 2017 1,313,053 $ 47.55 8.07 $ - Exercisable at December 31, 2017 602,646 $ 84.93 6.39 $ - |
Summary of Compensation Cost Included in Statement of Operations | The compensation cost that has been included in the statement of operations for all stock-based compensation arrangements was as follows (in thousands): Year Ended December 31, 2017 2016 2015 Cost of sales $ 1,360 $ 1,016 $ 1,162 Selling, general & administrative 10,020 9,360 10,517 Research and development 1,248 1,284 1,417 Total $ 12,628 $ 11,660 $ 13,096 |
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 Year Ended December 31, 2017 2016 2015 Weighted average grant date fair value (per share) $ 2.65 $ 24.30 $ 71.50 Risk-free interest rate 2.1 % 1.7 % 1.7 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 60.8 % 57.5 % 64.7 % Expected term (in years) 5.8 5.8 6.0 ESPP Year Ended December 31, 2017 (1) 2016 Weighted average grant date fair value (per share) N/A $ 17.80 Risk-free interest rate N/A 0.7 % Expected dividend yield N/A 0.0 % Expected volatility N/A 62.7 % Expected term (in years) N/A 1.3 |
Schedule of Shares of Common Stock Reserved for Future Issuance | The following shares of common stock are reserved for future issuance at December 31, 2017 (in thousands): Common stock warrants outstanding 9,553 Stock options issued and outstanding 1,331 Authorized for future option grants — Employee stock purchase plan — 10,884 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The expense (benefit) for income taxes reconciles to the amount computed by applying the federal statutory rate to income before taxes as follows (in thousands): Year Ended December 31, 2017 2016 2015 Income tax benefit at federal statutory rate $ (24,829 ) $ (28,362 ) $ (24,616 ) State income tax, net of federal benefit (2,034 ) (2,393 ) (2,285 ) Warrants revaluation (347 ) Research and development credits (480 ) (720 ) (1,796 ) Uncertain tax position — 3,154 Stock-based compensation 3,214 1,686 1,904 Tax Cuts and Jobs Acts 51,577 Other (7 ) 456 550 Removal of net operating losses and research and development credits 145 — 8,344 Change in valuation allowance (27,231 ) 29,318 14,755 Income tax expense (benefit) $ 8 $ (15 ) $ 10 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s net deferred income tax assets at December 31, 2017 and 2016 are shown below (in thousands). A valuation allowance has been recorded to offset the net deferred tax asset as of December 31, 2017 and 2016, as the realization of such assets does not meet the more-likely-than-not threshold. December 31, 2017 2016 Deferred tax assets: Net operating loss (NOL) carryforwards $ 81,483 $ 100,251 Research and development tax credits carryforwards 3,517 2,543 Capitalized research and development expenses 12,746 16,673 Deferred rent 170 537 Accrued compensation 8,809 11,332 Other 3,969 5,931 Total deferred tax assets 110,694 137,267 Less valuation allowance (110,694 ) (137,267 ) Net deferred tax assets $ — $ — |
Schedule of Unrecognized Tax Benefits | The following table summarizes the activity related to the Company’s gross unrecognized tax benefits at the beginning and end of the years ended December 31, 2017, 2016 and 2015 (in thousands): Year Ended December 31, 2017 2016 2015 Gross unrecognized tax benefits at the beginning of the year $ 8,167 $ 7,594 $ 3,539 Increases related to current year positions 411 580 474 Increases (decreases) related to prior year positions (457 ) (7 ) 3,581 Expiration of unrecognized tax benefits — — — Gross unrecognized tax benefits at the end of the year $ 8,121 $ 8,167 $ 7,594 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments Under Noncancelable Operating Leases | Future minimum payments under the aforementioned noncancelable operating leases for each of the five succeeding years following December 31, 2017 are as follows (in thousands): 2018 $ 2,705 2019 2,757 2020 2,873 2021 2,959 2022 1,650 Thereafter 642 $ 13,586 |
Selected Quarterly Financial 29
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Quarterly financial information for fiscal 2017 and 2016 is presented in the following table, in thousands, except per share data: For the Quarter Ending March 31 June 30 September 30 December 31 2017: Revenue $ 18,977 $ 21,327 $ 27,003 $ 40,294 Gross profit $ 6,753 $ 8,001 $ 11,873 $ 17,468 Operating expenses $ 27,979 $ 26,970 $ 25,039 $ 27,050 Operating loss $ (21,226 ) $ (18,969 ) $ (13,166 ) $ (9,583 ) Net loss $ (23,792 ) $ (21,801 ) $ (16,034 ) $ (11,406 ) Basic and diluted net loss per share (1) $ (7.46 ) $ (4.36 ) $ (3.09 ) $ (1.23 ) 2016: Revenue $ 20,058 $ 22,985 $ 12,293 $ 28,912 Gross profit $ 6,927 $ 8,176 $ (1,577 ) $ 10,065 Operating expenses $ 26,166 $ 25,229 $ 26,837 $ 23,411 Operating loss $ (19,239 ) $ (17,053 ) $ (28,414 ) $ (13,346 ) Net loss $ (20,485 ) $ (18,326 ) $ (29,815 ) $ (14,822 ) Basic and diluted net loss per share (1) $ (6.80 ) $ (6.00 ) $ (9.70 ) $ (4.80 ) (1) Net loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly per-share calculations will not necessarily equal the annual per share calculation. The issued and outstanding shares of common stock have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017. |
Organization and Basis of Pre30
Organization and Basis of Presentation - Additional Information (Detail) $ / shares in Units, $ in Thousands | Oct. 09, 2017shares | Feb. 28, 2018USD ($)$ / sharesshares | Oct. 31, 2017$ / sharesshares | Mar. 31, 2017shares | Mar. 31, 2015$ / sharesshares | Mar. 31, 2015$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares |
Organization And Basis Of Presentation [Line Items] | ||||||||
Operating losses and accumulated deficit | $ | $ (477,613) | $ (404,580) | ||||||
Cash and cash equivalents and short-term investments including restricted cash | $ | 24,200 | |||||||
Restricted cash | $ | $ 10,000 | |||||||
Shares offered for public offering | shares | 603,750 | |||||||
Reverse stock split of company's issued and outstanding shares of common stock description | 1-for-10 reverse stock split | |||||||
Reverse stock split, conversion ratio | 0.1 | |||||||
Number of authorized shares of common stock remains | shares | 100,000,000 | 100,000,000 | 100,000,000 | |||||
Secondary Public Offering [Member] | ||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||
Shares offered for public offering | shares | 4,630,000 | 1,850,000 | 603,750 | |||||
Shares offering price per share | $ / shares | $ 3.50 | $ 115 | $ 115 | $ 12.50 | ||||
Secondary Public Offering [Member] | Subsequent Event [Member] | ||||||||
Organization And Basis Of Presentation [Line Items] | ||||||||
Shares offered for public offering | shares | 34,500,000 | |||||||
Shares offering price per share | $ / shares | $ 2 | |||||||
Proceeds from issuance of common stock, gross | $ | $ 69,000 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Additional Information (Detail) | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 01, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2014USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of operating segments | Segment | 1 | ||||||
Restricted cash | $ 2,000,000 | ||||||
Guarantee liabilities recognized as sales | $ 1,100,000 | ||||||
Company amortizes patent costs over their estimated useful life | 54 months | 66 months | |||||
Guarantee liabilities in other current liabilities | $ 0 | $ 1,200,000 | |||||
Offered period for sales return | 30 days | ||||||
Allowance for product returns | $ 200,000 | 200,000 | |||||
Warranty reserve | 5,640,000 | 5,690,000 | $ 3,547,000 | ||||
Advertising cost | 1,100,000 | 900,000 | 1,000,000 | ||||
Excess tax benefits for which benefit could not previously be recognized | $ 8,121,000 | 8,167,000 | $ 7,594,000 | $ 3,539,000 | |||
Percentage of revenue recognition from contracts with customers | 99.00% | ||||||
ASU 2016-09 [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Excess tax benefits for which benefit could not previously be recognized | $ 1,800,000 | $ 600,000 | |||||
ASU 2014-09: Revenue from Contracts with Customers [Member] | Subsequent Event [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Net adjustment to accumulated deficit | $ 200,000 | ||||||
Warranty reserves [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Warranty reserve | 5,600,000 | 5,700,000 | |||||
Connect Hosting Service [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Deferred revenue | $ 2,000,000 | 1,600,000 | |||||
Revenue recognition hosting period | 4 years | ||||||
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 | ||||||
Trade-in rights reserve [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Deferred revenue | $ 65,000 | 3,200,000 | |||||
Patents [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Company amortizes patent costs over their estimated useful life | 10 years | ||||||
Minimum [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Estimated useful lives of the assets | 3 years | ||||||
Maximum [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Estimated useful lives of the assets | 7 years | ||||||
Term Loan Agreement [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Restricted cash | $ 10,000,000 | $ 2,000,000 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Summary of Customers Accounted for 10% or More (Detail) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable [Member] | Byram Healthcare [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 17.20% | 14.70% | |
Accounts Receivable [Member] | Edgepark Medical Supplies Inc [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 17.70% | 15.20% | |
Accounts Receivable [Member] | CCS Medical Inc [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 16.20% | ||
Sales Revenue Net [Member] | Byram Healthcare [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 14.00% | 14.00% | 17.20% |
Sales Revenue Net [Member] | Edgepark Medical Supplies Inc [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 21.50% | 18.70% | 17.80% |
Sales Revenue Net [Member] | Solara Medical Supplies, Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 10.70% | ||
Sales Revenue Net [Member] | CCS Medical Inc [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 10.30% |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Summary of Reconciliation of Change in Estimated Warranty Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Movement In Standard And Extended Product Warranty Increase Decrease Roll Forward | ||
Beginning balance | $ 5,690 | $ 3,547 |
Provision for warranties issued during the period | 5,613 | 8,830 |
Settlements made during the period | (6,742) | (8,739) |
Increases in warranty estimates | 1,079 | 2,052 |
Ending balance | 5,640 | 5,690 |
Current portion | 2,596 | 2,302 |
Non-current portion | $ 3,044 | $ 3,388 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Anti-Dilutive Securities (Detail) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 153 | 301 |
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 | 99 | |
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 | 151 | 202 |
ESPP [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2 |
Financial Statement Informati35
Financial Statement Information - Summary of Estimated Fair Value of Short-Term Investments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Amortized Cost | $ 8,837 | $ 459 |
Short-term investments, Unrealized Gain | 27 | 20 |
Short-term investments, Unrealized Loss | (4) | |
Short-term investments, Estimated Fair Value | 8,860 | 479 |
Trading securities — mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Trading securities, Amortized Cost | 354 | 459 |
Trading securities, Unrealized Gain | 26 | 20 |
Trading securities, Unrealized Loss | (2) | |
Trading securities, Estimated Fair Value | 378 | $ 479 |
Commercial paper [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Amortized Cost | 8,483 | |
Available-for-sale investment securities, Unrealized Gain | 1 | |
Available-for-sale investment securities, Unrealized Loss | (2) | |
Available-for-sale investment securities, Estimated Fair Value | $ 8,482 | |
Commercial paper [Member] | Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Maturity (in years) | 1 year |
Financial Statement Informati36
Financial Statement Information - Summary of Accounts receivable (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Receivable Net [Abstract] | ||
Accounts receivable | $ 22,071 | $ 12,112 |
Less allowance for doubtful accounts, and product returns | (1,278) | (940) |
Total | $ 20,793 | $ 11,172 |
Financial Statement Informati37
Financial Statement Information - Reconciliation of Change in Estimated Allowance for Doubtful Accounts, and Product Returns (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts | |||
Beginning Balance | $ 735 | $ 221 | $ 253 |
Provision for doubtful accounts and return reserves | 824 | 632 | 70 |
Write-offs and adjustments, net of recoveries | (524) | (118) | (102) |
Ending Balance | $ 1,035 | $ 735 | $ 221 |
Financial Statement Informati38
Financial Statement Information - Summary of Inventory (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 10,328 | $ 9,375 |
Work in process | 3,812 | 4,395 |
Finished goods | 12,853 | 7,425 |
Total | $ 26,993 | $ 21,195 |
Financial Statement Informati39
Financial Statement Information - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 45,155 | $ 37,665 |
Less accumulated depreciation and amortization | (25,524) | (19,256) |
Total property and equipment, net | 19,631 | 18,409 |
Leasehold improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 13,924 | 8,851 |
Computer equipment and software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 9,040 | 7,844 |
Office furniture and equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,686 | 4,185 |
Manufacturing and scientific equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 17,505 | $ 16,785 |
Financial Statement Informati40
Financial Statement Information - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Balance Sheet Components [Abstract] | |||
Depreciation and amortization expense related to property and equipment | $ 6.5 | $ 5.2 | $ 4.5 |
Amortization expense related to intangible assets | 0.3 | $ 0.3 | $ 0.3 |
Estimated annual amortization for 2018 | 0.3 | ||
Estimated annual amortization for 2019 | 0.3 | ||
Estimated annual amortization for 2020 | 0.3 | ||
Estimated annual amortization for 2021 | 0.3 | ||
Estimated annual amortization for 2022 | $ 0.2 |
Financial Statement Informati41
Financial Statement Information - Summary of Capitalized Patents (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Weighted average remaining amortization period (in months) | 54 months | 66 months |
Patents [Member] | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross amount | $ 3,247 | $ 3,247 |
Accumulated amortization | (1,790) | (1,463) |
Total | $ 1,457 | $ 1,784 |
Weighted average remaining amortization period (in months) | 10 years |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | $ 24,179 | $ 48,801 |
Total liabilities | 5,911 | 378 |
Cash equivalents [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 23,700 | 39,941 |
Commercial paper [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 8,482 | |
Mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 479 | 378 |
Common stock warrants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 5,432 | |
Deferred compensation [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 479 | 378 |
Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 24,179 | 40,319 |
Total liabilities | 479 | 378 |
Level 1 [Member] | Cash equivalents [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 23,700 | 39,941 |
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 | 479 | 378 |
Level 1 [Member] | Deferred compensation [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 479 | 378 |
Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 8,482 | |
Level 2 [Member] | Commercial paper [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | $ 8,482 | |
Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 5,432 | |
Level 3 [Member] | Common stock warrants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | $ 5,432 |
Fair Value Measurements - Sch43
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
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) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Transfer between level 1 and level 2 securities | $ 0 | $ 0 | |
Warrants initial value | 6,500,000 | ||
Guarantee liabilities in other current liabilities | $ 0 | $ 1,200,000 | |
Series A warrants [Member] | Secondary Public Offering [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Warrants issue to purchase common stock | 4,630,000 | 4,630,000 | |
Warrants exercise price | $ 3.50 | ||
Public offering period | 5 years | ||
Series B warrants [Member] | Secondary Public Offering [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Warrants issue to purchase common stock | 4,630,000 | 4,630,000 | |
Warrants exercise price | $ 3.50 | ||
Public offering period | 6 months |
Fair Value Measurements - Sch45
Fair Value Measurements - Schedule of Assumptions Used to Estimate Fair Values of Common Stock Warrants (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Series A Warrants [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Risk-free interest rate | 2.20% |
Expected dividend yield | 0.00% |
Expected volatility | 63.50% |
Expected term (in years) | 4 years 9 months 18 days |
Series B Warrants [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Risk-free interest rate | 1.40% |
Expected dividend yield | 0.00% |
Expected volatility | 80.30% |
Expected term (in years) | 3 months 18 days |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes in Fair Value of Total Level 3 Financial Assets (Detail) $ in Thousands | 2 Months Ended |
Dec. 31, 2017USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation Calculation Roll Forward | |
Balance at offering date | $ 6,453 |
Decrease in fair value included in change in fair value of common stock warrants | (1,021) |
Balance at end of year | $ 5,432 |
Term Loan Agreement - Additiona
Term Loan Agreement - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Feb. 28, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Jan. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 01, 2015 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | |||||||||
Loan outstanding | $ 82,737,000 | ||||||||
Minimum annual revenues attainable in 2017 | 80,000,000 | ||||||||
Minimum annual revenues attainable after 2017 | 95,000,000 | ||||||||
Compounded interest payable | 2.00% | ||||||||
Additional amount borrowed | 1,657,000 | $ 927,000 | $ 153,000 | ||||||
Term Loan Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan outstanding | $ 81,100,000 | $ 82,700,000 | 81,100,000 | ||||||
Interest rate | 11.50% | 11.50% | |||||||
Interest payable as cash | 9.50% | 9.50% | |||||||
Compounded interest payable | 2.00% | ||||||||
Interest-only payments description | Under the principal terms of the Term Loan Agreement, interest is 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 are 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 | ||||||||
Minimum cash balance | $ 10,000,000 | 2,000,000 | $ 2,000,000 | ||||||
Term Loan Agreement [Member] | Minimum [Member] | Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of financing fee | 5.00% | ||||||||
Term Loan Agreement [Member] | Maximum [Member] | Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of financing fee | 6.00% | ||||||||
Third Amendment [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility amount borrowed | $ 35,000,000 | $ 15,000,000 | |||||||
Line of credit facility additional borrowing capacity | $ 50,000,000 | ||||||||
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 | $ 4,100,000 | ||||||||
Fourth Amendment [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Warrants life | 10 years | ||||||||
Warrants issue to purchase common stock | 193,788 | ||||||||
Warrants exercise price | $ 23.50 | ||||||||
Equity finance completion last date | Jan. 15, 2018 | ||||||||
Prepayment fee percentage | 5.00% | ||||||||
Present value of the future cash flows | 10.00% | ||||||||
Fourth Amendment [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Gross proceeds from sale of equity securities on event of default occurred due to going concern qualification | $ 30,000,000 | ||||||||
Fifth Amendment [Member] | Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Equity finance completion last date | Aug. 30, 2018 | ||||||||
Prepayment fee percentage | 6.00% | ||||||||
Fifth Amendment [Member] | Minimum [Member] | Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Gross proceeds from sale of equity securities on event of default occurred due to going concern qualification | $ 20,000,000 |
Term Loan Agreement - Future Mi
Term Loan Agreement - Future Minimum Principal Payments Under Term Loan Agreement (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Long Term Debt By Maturity [Abstract] | |
2,020 | $ 82,737 |
Total | 82,737 |
Notes payable, net of current portion | $ 82,737 |
Stockholders' Equity (Deficit49
Stockholders' Equity (Deficit) - Additional Information (Detail) - USD ($) | Jan. 01, 2017 | Jan. 01, 2016 | Feb. 28, 2018 | Oct. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2015 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2013 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares offered for public offering | 603,750 | ||||||||||||
Proceeds from secondary public offering | $ 69,400,000 | ||||||||||||
Gross proceeds from secondary public offering | $ 16,200,000 | $ 23,100,000 | |||||||||||
Expected gross proceeds upon exercise of warrants | $ 16,200,000 | ||||||||||||
Common stock reserved for future issuance | 10,884,000 | ||||||||||||
Options outstanding | 1,331,269 | 822,265 | 574,607 | ||||||||||
Shares granted | 615,067 | 316,316 | |||||||||||
Stock-based compensation expenses | $ 12,628,000 | $ 11,660,000 | $ 13,096,000 | ||||||||||
Total stock-based compensation capitalized as part of cost of inventory | 200,000 | 200,000 | |||||||||||
Unamortized compensation expense | $ 6,000,000 | ||||||||||||
Share-based compensation expense remaining weighted average vesting term | 1 year 10 months 24 days | ||||||||||||
Expected dividend yield | 0.00% | ||||||||||||
Selling, general & administrative [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expenses | $ 10,020,000 | 9,360,000 | 10,517,000 | ||||||||||
Non-employees [Member] | Selling, general & administrative [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expenses | $ 0 | $ 0 | $ 35,000 | ||||||||||
Employee Stock Option [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Vesting period of remaining stock | 3 years | ||||||||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | ||||||||||
First Anniversary of Vesting Date [Member] | Employee Stock Option [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock vested percentage | 25.00% | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Gross proceeds from secondary public offering | $ 69,000,000 | ||||||||||||
2006 Stock Incentive Plan [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Common stock reserved for future issuance | 268,561 | ||||||||||||
2006 Stock Incentive Plan [Member] | Employee Stock Option [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum term of stock options | 10 years | ||||||||||||
2013 Stock Incentive Plan [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Common stock reserved for future issuance | 0 | 480,900 | |||||||||||
Increase in common stock reserve for issuance | 124,823 | 121,018 | |||||||||||
2013 Stock Incentive Plan [Member] | Common Stock [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares granted | 811,800 | ||||||||||||
2013 Stock Incentive Plan [Member] | Employee Stock Option [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum term of stock options | 10 years | ||||||||||||
Shares granted | 811,800 | ||||||||||||
2013 Stock Incentive Plan [Member] | Stock Based Compensation [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares granted | 811,800 | ||||||||||||
Secondary Public Offering [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares offered for public offering | 4,630,000 | 1,850,000 | 603,750 | ||||||||||
Shares offering price per share | $ 3.50 | $ 115 | $ 115 | $ 12.50 | |||||||||
Secondary Public Offering [Member] | Subsequent Event [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares offered for public offering | 34,500,000 | ||||||||||||
Shares offering price per share | $ 2 | ||||||||||||
Secondary Public Offering [Member] | Series A warrants [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Warrants issue to purchase common stock | 4,630,000 | 4,630,000 | |||||||||||
Secondary Public Offering [Member] | Series B warrants [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Warrants issue to purchase common stock | 4,630,000 | 4,630,000 | |||||||||||
At The Market Offering Program [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Proceeds from secondary public offering | $ 4,300,000 | ||||||||||||
At The Market Offering Program [Member] | Common Stock [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares offered for public offering | 464,108 | ||||||||||||
At The Market Offering Program [Member] | Common Stock [Member] | Minimum [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares offering price per share | $ 5.64 | ||||||||||||
At The Market Offering Program [Member] | Common Stock [Member] | Maximum [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares offering price per share | $ 10.54 | ||||||||||||
ESPP [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Increase in common stock reserve for issuance | 31,096 | 30,255 | |||||||||||
Shares granted | 0 | ||||||||||||
Issuance of common stock available for grant | 55,600 | ||||||||||||
Percentage of common stock reserve for issuance to be increased | 1.00% | ||||||||||||
Purchase of common stock under ESPP | 38,929 | 69,233 | |||||||||||
Common stock reserved for issuance description | The number of shares of common stock reserved for issuance increases on January 1 of each calendar year, from January 1, 2014 through January 1, 2023, by the lesser of (a) one percent (1%) of the number of shares issued and outstanding on the immediately preceding December 31, or (b) such lesser number of shares as determined by the Administrator. | ||||||||||||
Number of shares available for grant | 13 | ||||||||||||
Stock-based compensation expenses | $ 2,400,000 | ||||||||||||
Maximum percentage that employee can contribute for purchase of common stock | 15.00% | ||||||||||||
Offering Period | 2 years | ||||||||||||
Purchase Period | four six-month | ||||||||||||
ESPP [Member] | Date of Offering [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Purchase price of common stock on date of purchase | 85.00% | ||||||||||||
ESPP [Member] | Date of Purchase [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Purchase price of common stock on date of purchase | 85.00% |
Stockholders' Equity (Deficit50
Stockholders' Equity (Deficit) - Summary of Stock Option Activities for 2006 Plan and 2013 Plan (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders Equity Note [Abstract] | |||
Options, Outstanding at beginning of period | 822,265 | 574,607 | |
Options, Granted | 615,067 | 316,316 | |
Options, Exercised | (24,406) | (14,866) | |
Options, Canceled/forfeited/expired | (81,657) | (53,792) | |
Options, Outstanding at end of period | 1,331,269 | 822,265 | 574,607 |
Options, Vested and expected to vest at December 31, 2017 | 1,313,053 | ||
Options, Exercisable at December 31, 2017 | 602,646 | ||
Weighted-Average Exercise Price Per Share, Outstanding at beginning of period | $ 84.05 | $ 107.22 | |
Weighted-Average Exercise Price Per Share, Granted | 4.69 | 45.75 | |
Weighted-Average Exercise Price Per Share, Exercised | 11.06 | 11.49 | |
Weighted-Average Exercise Price Per Share, Canceled/forfeited/expired | 110.21 | 126.19 | |
Weighted-Average Exercise Price Per Share, Outstanding at end of period | 47.11 | $ 84.05 | $ 107.22 |
Weighted-Average Exercise Price Per Share, Vested and expected to vest at December 31, 2017 | 47.55 | ||
Weighted-Average Exercise Price Per Share, Exercisable at December 31, 2017 | $ 84.93 | ||
Weighted-Average Remaining Contractual Life, Outstanding | 8 years 29 days | 7 years 11 months 1 day | 7 years 11 months 26 days |
Weighted-Average Remaining Contractual Life, Vested and expected to vest at December 31, 2017 | 8 years 25 days | ||
Weighted-Average Remaining Contractual Life, Exercisable at December 31, 2017 | 6 years 4 months 20 days | ||
Aggregate Intrinsic Value, Outstanding at beginning period | $ 1,593 | $ 19,158 | |
Aggregate Intrinsic Value, Exercised | $ 338 | $ 1,049 |
Stockholders' Equity (Deficit51
Stockholders' Equity (Deficit) - Summary of Compensation Cost Included in Statement of Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Compensation cost | $ 12,628 | $ 11,660 | $ 13,096 |
Cost of sales [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Compensation cost | 1,360 | 1,016 | 1,162 |
Selling, general & administrative [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Compensation cost | 10,020 | 9,360 | 10,517 |
Research and development [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Compensation cost | $ 1,248 | $ 1,284 | $ 1,417 |
Stockholders' Equity (Deficit52
Stockholders' Equity (Deficit) - Schedule of Assumptions Used in Black-Scholes Option-Pricing Model (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | ||
Employee Stock Option [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted average grant date fair value (per share) | $ 2.65 | $ 24.30 | $ 71.50 |
Risk-free interest rate | 2.10% | 1.70% | 1.70% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 60.80% | 57.50% | 64.70% |
Expected term (in years) | 5 years 9 months 18 days | 5 years 9 months 18 days | 6 years |
ESPP [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted average grant date fair value (per share) | $ 17.80 | ||
Risk-free interest rate | 0.70% | ||
Expected dividend yield | 0.00% | ||
Expected volatility | 62.70% | ||
Expected term (in years) | 1 year 3 months 18 days |
Stockholders' Equity (Deficit53
Stockholders' Equity (Deficit) - Schedule of Assumptions Used in Black-Scholes Option-Pricing Model (Parenthetical) (Detail) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grants made during period | 615,067 | 316,316 |
ESPP [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grants made during period | 0 |
Stockholders' Equity (Deficit54
Stockholders' Equity (Deficit) - Schedule of Shares of Common Stock Reserved for Future Issuance (Detail) shares in Thousands | Dec. 31, 2017shares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 10,884 |
Common stock warrants [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 9,553 |
Stock options issued and outstanding [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 1,331 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit at federal statutory rate | $ (24,829) | $ (28,362) | $ (24,616) |
State income tax, net of federal benefit | (2,034) | (2,393) | (2,285) |
Warrants revaluation | (347) | ||
Research and development credits | (480) | (720) | (1,796) |
Uncertain tax position | 3,154 | ||
Stock-based compensation | 3,214 | 1,686 | 1,904 |
Tax Cuts and Jobs Acts | 51,577 | ||
Other | (7) | 456 | 550 |
Removal of net operating losses and research and development credits | 145 | 8,344 | |
Change in valuation allowance | (27,231) | 29,318 | 14,755 |
Income tax expense (benefit) | $ 8 | $ (15) | $ 10 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2015 |
Deferred tax assets: | |||
Net operating loss (NOL) carryforwards | $ 81,483 | $ 100,251 | $ 16,000 |
Research and development tax credits carryforwards | 3,517 | 2,543 | $ 2,900 |
Capitalized research and development expenses | 12,746 | 16,673 | |
Deferred rent | 170 | 537 | |
Accrued compensation | 8,809 | 11,332 | |
Other | 3,969 | 5,931 | |
Total deferred tax assets | 110,694 | 137,267 | |
Less valuation allowance | $ (110,694) | $ (137,267) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Mar. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Line Items] | |||||||
Accumulated federal NOL carryforwards | $ 335,300,000 | ||||||
Accumulated state NOL carryforwards | 306,000,000 | ||||||
Research and development tax credits carryforwards | $ 2,900,000 | $ 3,517,000 | $ 2,543,000 | ||||
Deferred Tax Assets Tax Credit Carryforwards Research Expiration Year | 2,028 | ||||||
Excess tax benefits for which benefit could not previously be recognized | $ 8,121,000 | 8,167,000 | $ 7,594,000 | $ 3,539,000 | |||
Deferred tax assets for NOLs | $ 16,000,000 | $ 81,483,000 | 100,251,000 | ||||
Shares issued for public offering | 603,750 | ||||||
Evaluation of tax position, description | The evaluation of uncertainty in a tax position is a two-step process. The first step involves recognition. The Company determines whether it is more likely than not that a tax position will be sustained upon tax examination, including resolution of any related appeals or litigation, based on only the technical merits of the position. The technical merits of a tax position are derived from both statutory and judicial authority (legislation and statutes, legislative intent, regulations, rulings, and case law) and their applicability to the facts and circumstances of the tax position. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate resolution with a taxing authority. | ||||||
U.S. federal statutory tax rate | 35.00% | ||||||
Tax cuts and jobs act of 2017, change in tax rate, deferred tax asset | $ 51,600,000 | ||||||
Tax cuts and jobs cut act of 2017, change in tax rate, decrease in valuation allowance | 51,600,000 | ||||||
Tax cuts and jobs act of 2017, change in tax rate, net tax expense | 0 | ||||||
Maximum deductions on compensation for certain employees as per 2017 tax act | 1,000,000 | ||||||
Unrecognized tax benefits | 6,700,000 | ||||||
Accrual interest and penalties | $ 0 | $ 0 | |||||
Scenario, Forecast [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
U.S. federal statutory tax rate | 21.00% | ||||||
Minimum [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Income tax Realization | 50.00% | ||||||
ASU 2016-09 [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Excess tax benefits for which benefit could not previously be recognized | $ 1,800,000 | $ 600,000 | |||||
Federal [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Research and development tax credits carryforwards | $ 4,400,000 | ||||||
Tax credit carryforward, expiration date | 2,026 | ||||||
California [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Research and development tax credits carryforwards | $ 5,300,000 | ||||||
State and Local [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Tax credit carryforward, expiration date | 2,018 | ||||||
California [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Remaining NOL carry forwards amount | $ 181,300,000 | ||||||
NOL carry forwards expiration year | 2,028 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Gross unrecognized tax benefits at the beginning of the year | $ 8,167 | $ 7,594 | $ 3,539 |
Increases related to current year positions | 411 | 580 | 474 |
Increases (decreases) related to prior year positions | (457) | (7) | 3,581 |
Gross unrecognized tax benefits at the end of the year | $ 8,121 | $ 8,167 | $ 7,594 |
Collaborations - Additional Inf
Collaborations - Additional Information (Detail) - DexCom Agreement [Member] $ in Millions | 12 Months Ended | 36 Months Ended | |
Dec. 31, 2017USD ($)$ / IntegratedSystem | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Licensing fees paid | $ 3 | ||
Commit for incremental marketing activities | $ / IntegratedSystem | 100 | ||
Marketing fund commitment amount | $ 1.1 | $ 0.7 |
Employee-Benefits - Additional
Employee-Benefits - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Pension And Other Postretirement Plans Disclosure [Abstract] | |
Minimum age of employees for defined contribution plan | 18 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Jun. 30, 2016Lease | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Noncancelable Operating Lease Agreement Amended Due on May 2019 [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Lease agreement expiration period | 2018-01 | |||
Amended lease expiration period | 2022-05 | |||
Right to terminate description | The Company has the right to terminate the lease on the remaining buildings effective May 31, 2021 upon (i) delivery of written notice to the landlord no later than June 1, 2020, and (ii) an early termination payment to the landlord of approximately $419,000. | |||
Early termination payment | $ 419,000 | |||
Unsecured standby letter of credit | $ 500,000 | |||
Lease agreement expiration period | Jul. 14, 2019 | |||
Barnes Canyon Lease Due on November 2023 [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Lease agreement expiration period | 2023-11 | |||
Lease term description | The Barnes Canyon Lease is scheduled to expire in November 2023. The Company will also have a one-time option to extend the term of the lease for a period of not less than 36 months and not greater than 60 months, by delivering notice to the landlord at least nine months and not more than 12 months prior to the expiration of the lease. | |||
Number of option to extend lease term | Lease | 1 | |||
Interest accrual rate on amounts utilized from tenant improvement allowance | 8.00% | |||
Non structural improvements costs | $ 3,900,000 | $ 1,000,000 | ||
Funded by landlord | 2,600,000 | 700,000 | ||
Tl Rent 2016 | 0 | |||
Tl Rent 2017 | 400,000 | |||
Tl Rent 2018 | 600,000 | |||
Tl Rent 2019 | 600,000 | |||
Tl Rent 2020 | 600,000 | |||
Tl Rent 2021 | 600,000 | |||
Tl Rent 2022 | 600,000 | |||
Tl Rent 2023 | 600,000 | |||
Barnes Canyon Lease Due on November 2023 [Member] | Minimum [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Period of extended lease term | 36 months | |||
Notice period for extend lease term to landlord | 9 months | |||
Barnes Canyon Lease Due on November 2023 [Member] | Maximum [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Period of extended lease term | 60 months | |||
Notice period for extend lease term to landlord | 12 months | |||
Tenant improvement allowances received under operating lease | 3,400,000 | |||
Existing Operating Lease and Barnes Canyon Lease [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Deferred rent arising from rent escalations and lease incentives | 5,600,000 | 3,700,000 | ||
Rent expense | $ 3,500,000 | $ 3,100,000 | $ 2,600,000 |
Commitments and Contingencies62
Commitments and Contingencies - Schedule of Future Minimum Payments Under Noncancelable Operating Leases (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,018 | $ 2,705 |
2,019 | 2,757 |
2,020 | 2,873 |
2,021 | 2,959 |
2,022 | 1,650 |
Thereafter | 642 |
Total | $ 13,586 |
Selected Quarterly Financial 63
Selected Quarterly Financial Data (Unaudited) (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||
Revenue | $ 40,294 | $ 27,003 | $ 21,327 | $ 18,977 | $ 28,912 | $ 12,293 | $ 22,985 | $ 20,058 | $ 107,601 | $ 84,248 | $ 72,850 | |||||||||||
Gross profit | 17,468 | 11,873 | 8,001 | 6,753 | 10,065 | (1,577) | 8,176 | 6,927 | 44,094 | 23,592 | 26,580 | |||||||||||
Operating expenses | 27,050 | 25,039 | 26,970 | 27,979 | 23,411 | 26,837 | 25,229 | 26,166 | 107,038 | 101,643 | 95,584 | |||||||||||
Operating loss | (9,583) | (13,166) | (18,969) | (21,226) | (13,346) | (28,414) | (17,053) | (19,239) | (62,944) | (78,051) | (69,004) | |||||||||||
Net loss | $ (11,406) | $ (16,034) | $ (21,801) | $ (23,792) | $ (14,822) | $ (29,815) | $ (18,326) | $ (20,485) | $ (73,033) | $ (83,447) | $ (72,418) | |||||||||||
Basic and diluted net loss per share | $ (1.23) | [1] | $ (3.09) | [1] | $ (4.36) | [1] | $ (7.46) | [1] | $ (4.80) | [1] | $ (9.70) | [1] | $ (6) | [1] | $ (6.80) | [1] | $ (12.87) | [2] | $ (27.30) | [2] | $ (25.04) | [2] |
[1] | Net loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly per-share calculations will not necessarily equal the annual per share calculation. The issued and outstanding shares of common stock have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017. | |||||||||||||||||||||
[2] | The issued and outstanding shares of common stock have been restated for all periods presented to reflect the effects of the 1-for-10 reverse stock split, which was effective on October 9, 2017. |
Selected Quarterly Financial 64
Selected Quarterly Financial Data (Unaudited) (Parenthetical) (Detail) | Oct. 09, 2017 | Dec. 31, 2017 |
Quarterly Financial Information Disclosure [Abstract] | ||
Reverse stock split of company's issued and outstanding shares of common stock description | 1-for-10 reverse stock split | |
Reverse stock split, conversion ratio | 0.1 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Feb. 28, 2018 | Oct. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | |
Subsequent Event [Line Items] | ||||||
Shares offered for public offering | 603,750 | |||||
Gross proceeds from secondary public offering | $ 16,200,000 | $ 23,100,000 | ||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Gross proceeds from secondary public offering | $ 69,000,000 | |||||
Subsequent Event [Member] | Fifth Amendment [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Equity finance completion last date | Aug. 30, 2018 | |||||
Subsequent Event [Member] | Fifth Amendment [Member] | Minimum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Gross proceeds from sale of equity securities on event of default occurred due to going concern qualification | $ 20,000,000 | |||||
Subsequent Event [Member] | Term Loan Agreement [Member] | Minimum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of financing fee | 5.00% | |||||
Subsequent Event [Member] | Term Loan Agreement [Member] | Maximum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Percentage of financing fee | 6.00% | |||||
Secondary Public Offering [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Shares offered for public offering | 4,630,000 | 1,850,000 | 603,750 | |||
Shares offering price per share | $ 3.50 | $ 115 | $ 115 | $ 12.50 | ||
Secondary Public Offering [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Shares offered for public offering | 34,500,000 | |||||
Shares offering price per share | $ 2 | |||||
Public offering issuance period | 2018-02 |