Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 15, 2019 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
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 | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 57,717,618 | ||
Entity Public Float | $ 1.1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 41,826 | $ 13,700 |
Short-term investments | 87,201 | 479 |
Accounts receivable, net | 35,193 | 20,793 |
Inventory, net | 19,896 | 26,993 |
Prepaid and other current assets | 3,769 | 2,191 |
Total current assets | 187,885 | 64,156 |
Property and equipment, net | 17,151 | 19,631 |
Restricted cash - long-term | 10,000 | |
Other long-term assets | 128 | 102 |
Total assets | 206,294 | 95,346 |
Current liabilities: | ||
Accounts payable | 6,824 | 5,150 |
Accrued expense | 3,930 | 2,832 |
Employee-related liabilities | 24,030 | 14,488 |
Deferred revenue | 4,600 | 2,526 |
Common stock warrants | 17,926 | 5,432 |
Other current liabilities | 8,978 | 5,657 |
Total current liabilities | 66,288 | 36,085 |
Notes payable—long-term | 76,541 | |
Deferred rent—long-term | 3,799 | 4,687 |
Other long-term liabilities | 4,932 | 7,181 |
Total liabilities | 75,019 | 124,494 |
Commitments and contingencies | ||
Stockholders’ equity (deficit): | ||
Common stock, $0.001 par value; 200,000 and 100,000 shares authorized as of December 31, 2018 and December 31, 2017, respectively. 57,554 and 10,119 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively. | 57 | 10 |
Additional paid-in capital | 731,306 | 448,455 |
Accumulated other comprehensive loss | (13) | |
Accumulated deficit | (600,075) | (477,613) |
Total stockholders’ equity (deficit) | 131,275 | (29,148) |
Total liabilities and stockholders’ equity (deficit) | 206,294 | 95,346 |
Patents [Member] | ||
Current assets: | ||
Patents, net | $ 1,130 | $ 1,457 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 100,000,000 |
Common stock, shares issued | 57,554,000 | 10,119,000 |
Common stock, shares outstanding | 57,554,000 | 10,119,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Sales | $ 183,866 | $ 107,601 | $ 84,248 |
Cost of sales | 94,044 | 63,507 | 60,656 |
Gross profit | 89,822 | 44,094 | 23,592 |
Operating expenses: | |||
Selling, general and administrative | 105,226 | 86,377 | 82,834 |
Research and development | 29,227 | 20,661 | 18,809 |
Total operating expenses | 134,453 | 107,038 | 101,643 |
Operating loss | (44,631) | (62,944) | (78,051) |
Other income (expense), net | |||
Interest and other income | 1,462 | 239 | 296 |
Interest and other expense | (7,584) | (11,341) | (5,707) |
Loss on extinguishment of debt | (5,313) | ||
Change in fair value of stock warrants | (66,494) | 1,021 | |
Total other expense, net | (77,929) | (10,081) | (5,411) |
Loss before taxes | (122,560) | (73,025) | (83,462) |
Provision for income tax (benefit) expense | 51 | 8 | (15) |
Net loss | (122,611) | (73,033) | (83,447) |
Other comprehensive loss: | |||
Unrealized gain (loss) on short-term investments | (13) | 1 | (21) |
Comprehensive loss | $ (122,624) | $ (73,032) | $ (83,468) |
Net loss per share - basic and diluted | $ (2.55) | $ (12.87) | $ (27.30) |
Weighted average shares used to compute basic and diluted net loss per share | 48,129 | 5,677 | 3,057 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2015 | $ 63,468 | $ 3 | $ 384,578 | $ 20 | $ (321,133) |
Balance, Shares at Dec. 31, 2015 | 3,026,000 | ||||
Exercise of stock options | 170 | 170 | |||
Exercise of stock options, Shares | 15,000 | ||||
Issuance of common stock for Employee Stock Purchase Plan | 2,151 | 2,151 | |||
Issuance of common stock for Employee Stock Purchase Plan, Shares | 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 | 398,651 | (1) | (404,580) |
Balance, Shares at Dec. 31, 2016 | 3,110,000 | ||||
Exercise of stock options | $ 270 | 270 | |||
Exercise of stock options, Shares | 24,406 | 24,000 | |||
Issuance of common stock in public offering, net of underwriter’s discount and offering costs | $ 33,353 | $ 7 | 33,346 | ||
Issuance of common stock in public offering, net of underwriter’s discount and offering costs, Shares | 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 | 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 | 448,455 | (477,613) | |
Balance, Shares at Dec. 31, 2017 | 10,119,000 | ||||
Exercise of stock options | $ 1,027 | 1,027 | |||
Exercise of stock options, Shares | 136,042 | 136,000 | |||
Exercise of common stock warrants | $ 29,575 | $ 9 | 29,566 | ||
Exercise of common stock warrants, Shares | 8,603,000 | ||||
Issuance of common stock in public offering, net of underwriter’s discount and offering costs | 172,929 | $ 39 | 172,890 | ||
Issuance of common stock in public offering, net of underwriter’s discount and offering costs, Shares | 38,535,000 | ||||
Fair value of common stock warrants at time of exercise | 54,000 | 54,000 | |||
Issuance of common stock for Employee Stock Purchase Plan | 1,364 | 1,364 | |||
Issuance of common stock for Employee Stock Purchase Plan, Shares | 81,000 | ||||
Stock-based compensation | 24,003 | 24,003 | |||
Stock-based compensation, Shares | 80,000 | ||||
Unrealized gain (loss) on short-term investments | (13) | (13) | |||
Adjustment to retained earnings from adoption of ASC 606 | 149 | 149 | |||
Net loss | (122,611) | (122,611) | |||
Balance at Dec. 31, 2018 | $ 131,275 | $ 57 | $ 731,306 | $ (13) | $ (600,075) |
Balance, Shares at Dec. 31, 2018 | 57,554,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | 27 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Operating activities | ||||
Net loss | $ (122,611) | $ (73,033) | $ (83,447) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization expense | 5,821 | 6,866 | 5,489 | |
Interest expense related to amortization of debt discount and debt issuance costs | 1,721 | 1,883 | 274 | |
Payment in kind interest accrual of notes payable | 1,657 | 927 | $ 2,700 | |
Provision for allowance for doubtful accounts | 1,448 | 824 | 632 | |
Provision for inventory reserve | 607 | 26 | 3,343 | |
Change in fair value of common stock warrants | 66,494 | (1,021) | ||
Amortization of premium (discount) on short-term investments | 539 | (16) | (85) | |
Stock-based compensation expense | 23,736 | 12,628 | 11,660 | |
Loss on extinguishment of debt | 5,313 | |||
Other | 152 | 159 | (78) | |
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | (15,848) | (10,445) | 2,251 | |
Inventory, net | 6,756 | (5,894) | (6,904) | |
Prepaid and other current assets | (1,576) | 1,831 | (2,466) | |
Other long-term assets | (26) | 4 | (2) | |
Accounts payable | 1,641 | (1,953) | 3,234 | |
Accrued expense | 1,097 | 1,203 | (497) | |
Employee-related liabilities | 9,542 | 3,873 | (1,578) | |
Deferred revenue | 2,074 | (3,906) | 4,610 | |
Other current liabilities | 3,219 | 260 | 573 | |
Deferred rent | (785) | (692) | 1 | |
Other long-term liabilities | 2,367 | (390) | 890 | |
Net cash used in operating activities | (8,319) | (66,136) | (61,173) | |
Investing activities | ||||
Purchases of short-term investments | (123,553) | (30,622) | ||
Proceeds from sales and maturities of short-term investments | 35,800 | 8,500 | 50,000 | |
Purchase of property and equipment | (2,986) | (5,718) | (8,930) | |
Net cash provided by (used in) investing activities | (90,739) | 2,782 | 10,448 | |
Financing activities | ||||
Issuance of notes payable, net of issuance costs | 49,994 | |||
Principal payments on notes payable | (87,711) | |||
Proceeds from public offering, net of offering costs | 172,929 | 39,806 | ||
Proceeds from issuance of common stock under Company stock plans | 2,391 | 570 | 2,321 | |
Proceeds from exercise of common stock warrants | 29,575 | |||
Net cash provided by financing activities | 117,184 | 40,376 | 52,315 | |
Net increase (decrease) in cash and cash equivalents and restricted cash | 18,126 | (22,978) | 1,590 | |
Cash and cash equivalents and restricted cash at beginning of period | 23,700 | 46,678 | 45,088 | |
Cash and cash equivalents and restricted cash at end of period | 41,826 | 23,700 | 46,678 | $ 23,700 |
Supplemental disclosures of cash flow information | ||||
Interest paid | 10,805 | 7,876 | 4,401 | |
Income taxes paid | 16 | 22 | 23 | |
Supplemental schedule of noncash investing and financing activities | ||||
Lease incentive - lessor-paid tenant improvements | 13 | 3,292 | ||
Property and equipment included in accounts payable & other current liabilities | 125 | 92 | 501 | |
Debt discount included in other long-term liabilities | 4,137 | $ 1,509 | ||
Common stock warrants issued in connection with term loan | $ 3,331 | |||
Unsettled purchase of investments classified as cash equivalents in other current liabilities | $ 1,708 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
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 that are designed to address large and differentiated needs of the insulin-dependent diabetes market. The Company’s manufacturing and sales activities primarily focus on the t:slim X2 Insulin Delivery System, or t:slim X2, the Company’s flagship pump platform that is capable of remote feature updates and designed to display continuous glucose monitoring, or CGM, sensor information directly on the pump home screen. The Company’s insulin pump products are generally considered durable medical equipment, and have an expected lifespan of at least four years. In addition to selling insulin pumps, the Company sells disposable products that are used together with the pumps and are replaced every few days, including cartridges for storing and delivering insulin, and infusion sets that connect the insulin pump to a user’s body. The Company’s insulin pump products are compatible with the Tandem Device Updater, a Mac The Company began commercial sales of its first product, t:slim, in August 2012 and subsequently commercialized t:flex in May 2015, t:slim G4 in September 2015 and t:slim X2 in October 2016. The t:slim X2 hardware platform now represents 100% of new pump shipments, but the Company will continue to provide ongoing service and support to existing t:slim, t:slim G4 and t:flex customers. In June 2018, the Company received approval by the United States Food and Drug Administration, or FDA, for t:slim X2 with Basal-IQ technology, the Company’s first-generation Automated Insulin Delivery, or AID, algorithm, and commenced commercial sales of this product in August 2018. During the third quarter of 2018, the Company commenced sales of the t:slim X2 in select geographies outside the United States, including The consolidated At December 31, 2018, the Company had $129.0 million in cash and cash equivalents and short-term investments. The Company has incurred operating losses since its inception and, as reflected in the accompanying consolidated financial statements, the Company had an accumulated deficit of $600.1 million as of December 31, 2018. Management believes that cash and cash equivalents and short-term investments on hand will be sufficient to satisfy the Company’s liquidity requirements for at least the next 12 months from the date of this filing. The Company’s ability to execute on its business strategy, meet its future liquidity requirements, and achieve and maintain profitable operations, is dependent on a number of factors, including its ability to continue to gain market acceptance of its products and achieve a level of revenues adequate to support its cost structure, achieve renewal pump sales objectives, develop and launch new products, increase gross profits from higher sales of infusion sets, maximize manufacturing efficiencies, satisfy increasing production requirements, leverage the investments made in its sales, clinical, marketing and customer support organizations and operate its business and manufacture and sell products without infringing third party intellectual property rights. The Company has funded its operations primarily through private and public equity and debt financing. The Company 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. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and include the accounts of Tandem Diabetes Care, Inc. and its wholly owned subsidiary in Canada. All significant intercompany balances and transactions have been eliminated in consolidation. 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 consolidated Reclassifications Certain reclassifications of prior year amounts related to the presentation of restricted cash on the statement of cash flows have been made to conform to the current year presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the consolidated 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 consolidated financial statements and accompanying notes as of the date of the consolidated 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 discrete financial information is available for evaluation by the chief operating decision-maker, or the CODM in making decisions regarding resource allocation and assessing performance. The Company’s current product offering consists primarily of insulin pumps, disposable cartridges and infusion sets for the storage and delivery of insulin. The Company has viewed its operations and managed its business as one segment . 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 as a separate component of stockholders’ equity (deficit) on the consolidated balance sheets. Unrealized gains or losses on trading securities are reported as a component of other income or expense within the consolidated 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 consolidated 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, the Company has not identified any other than temporary declines in fair value of its short-term investments. Restricted Cash The Company recorded $10.0 million of restricted cash as of December 31, 2017, for the minimum cash balance requirement in connection with the Term Loan Agreement (see Note 5, Term Loan Agreement). Due to the full repayment of the term loan in August 2018, no restricted cash balance was required at December 31, 2018. In January 2018, the Company adopted new guidance from the Financial Accounting Standards Board or the FASB that clarified how entities should classify certain cash receipts and cash payments on the statement of cash flows. As a result, the restricted cash balance that existed in prior periods is included as a component of cash and cash equivalents and restricted cash on the statement of cash flows in the relevant periods presented. Accounts Receivable The Company grants credit to various customers in the ordinary 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, review of outstanding invoices, and 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, 2018 2017 Byram Healthcare 15.5 % 17.2 % CCS Medical, Inc. 10.1 % 16.2 % Edgepark Medical Supplies, Inc. N/A 17.7 % The following table summarizes customers who accounted for 10% or more of sales for the periods presented: Year Ended December 31, 2018 2017 2016 Edgepark Medical Supplies, Inc. 19.4 % 21.5 % 18.7 % Byram Healthcare 15.6 % 14.0 % 14.0 % Solara Medical Supplies, Inc. N/A N/A 10.7 % CCS Medical N/A 10.3 % 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 Certain trade-in rights previously offered by the Company pursuant to the Technology Upgrade Program to certain eligible customers were 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. Valuation of Inventory Inventories are valued at the lower of cost or 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 and adjust inventory to its net realizable value, based on quantities on hand and firm purchase commitments, expectations of future use, judgments based on quality control testing data and assessments of the likelihood of scrapping or obsoleting certain inventories based on future demand for its products and market conditions. 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, less accumulated depreciation. 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, 2018. 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 is included in other current liabilities on the Company’s consolidated 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. Tax law and rate changes are reflected in income in the period such changes are enacted. 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 includes interest and penalties related to income taxes, including unrecognized tax benefits, within income tax expense. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and the valuation allowance recorded against net deferred tax assets. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. The Company will continue to assess the need for a valuation allowance on its deferred tax assets by evaluating both positive and negative evidence that may exist. Any adjustment to the net deferred tax asset valuation allowance would be recorded in the statement of operations for the period that the adjustment is determined to be required. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions and, starting with 2018, a corporation income tax return in Canada. 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 primarily from sales 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. In January 2018, the Company adopted the Revenue from Contracts with Customers Standard which supersedes existing revenue guidance under U.S. GAAP and International Financial Reporting Standards. Pursuant to the Revenue from Contracts with Customers Standard’s core principle, subsequent to January 1, 2018, the Company recognizes 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. The Company elected to implement this new standard utilizing the modified retrospective method. Under this approach, the Company applied the new standard to all new contracts initiated on or after the effective date, and, for contracts which had remaining obligations as of the effective date, the Company recorded an adjustment to the opening balance of accumulated deficit. The accounting for the significant majority of the Company’s revenues is not impacted by the new guidance. As a result, on January 1, 2018, the Company recorded a net reduction to accumulated deficit in the amount of $149,000, reflecting the accounting change. Prior to the implementation of this new standard, revenue was recognized when persuasive evidence of an arrangement existed, delivery had occurred and title passed, the price was fixed or determinable, and collectability was 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. Upon expiration of the Program at September 30, 2017, the remaining guarantee liabilities of $1.1 were recognized as sales. There were no guarantee liabilities at December 31, 2018 or 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, 2018, the Company had no trade-in rights reserve balance. At December 31, 2017, there was $65,000, recorded as a trade-in rights reserve in deferred revenue on the accompanying consolidated balance sheet. Revenue Recognition for Arrangements with Multiple Deliverables The Company considers the individual deliverables in its product offering as separate performance obligations. The transaction price is determined based on the consideration expected to be received, based either on the stated value in contractual arrangements or the estimated cash to be collected in non-contracted arrangements. The Company allocates the consideration to the individual performance obligations and recognizes the consideration based on when the performance obligation is satisfied, considering whether or not this occurs at a point in time or over time. Generally, insulin pumps, cartridges, infusion sets and accessories are deemed performance obligations that are satisfied upon delivery, while access to the complementary products, such as the t:connect cloud-based data management application and the Tandem Device Updater, are considered performance obligations satisfied over the four-year warranty period of the insulin pumps. There is no standalone value for these complementary products. Therefore, the Company determines their value by applying the expected cost-plus margin approach and then allocates the residual to the insulin pumps. At December 31, 2018 and 2017, $3.8 million and $2.0 million . 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 consolidated 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, 2018 and December 31, 2017, the warranty reserve was $9.1 million and $5.6 million, respectively. The following table provides a reconciliation of the change in estimated warranty liabilities for the years ended December 31, 2018 and 2017: December 31, (in thousands) 2018 2017 Balance at beginning of the year $ 5,640 $ 5,690 Provision for warranties issued during the period 9,617 5,613 Settlements made during the period (7,797 ) (6,742 ) Increases in warranty estimates 1,678 1,079 Balance at end of the year $ 9,138 $ 5,640 Current portion $ 4,206 $ 2,596 Non-current portion 4,932 3,044 Total $ 9,138 $ 5,640 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 or the 2013 Plan, and shares issued under the Company’s 2013 Employee Stock Purchase Plan, or the 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 interest 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 consolidated Advertising Costs The Company expenses advertising costs as they are incurred. For the years ended December 31, 2018, 2017 and 2016, advertising costs were $0.9 million, $1.1 million, and $0.9 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 consolidated 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 consolidated 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. With the exception of the fourth quarter of 2018, 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. Refer to Note 11. Selected Quarterly Financial Data (Unaudited) 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, 2018 2017 2016 Warrants for common stock 705 — — Common stock options 3,477 — 151 ESPP 4 — 2 4,186 — 153 Accounting Pronouncements Issued and Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases or ASU 2016-02. ASU 2016-02 and its related amendments (collectively referred to as ASC 842). expect that the adoption of this standard will result in a cumulative-effect transition adjustment for the recognition of right-of-use leased assets and corresponding lease liabilities of approximately $12 million on the consolidated balance sheet as of January 1, 2019 related to In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract |
Financial Statement Information
Financial Statement Information | 12 Months Ended |
Dec. 31, 2018 | |
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 the U.S. Government, and financial institutions and corporations with strong credit ratings. The following represents a summary of the estimated fair value of short-term investments at December 31, 2018 and 2017 (in thousands): At December 31, 2018 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities Commercial paper Less than 1 $ 53,559 $ — $ (22 ) $ 53,537 U.S. Treasury securities Less than 1 17,937 — (2 ) 17,935 Corporate debt securities Less than 1 15,718 12 (1 ) 15,729 Total $ 87,214 $ 12 $ (25 ) $ 87,201 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 Accounts Receivable Accounts receivable consisted of the following (in thousands): December 31, 2018 2017 Accounts receivable $ 37,030 $ 22,071 Less allowance for doubtful accounts, and product returns (1,837 ) (1,278 ) Total $ 35,193 $ 20,793 The following table provides a reconciliation of the change in estimated allowance for doubtful accounts for the years ended December 31, 2018, 2017 and 2016 (in thousands): Allowance for Doubtful Accounts Balance at December 31, 2015 $ 221 Provision for doubtful accounts 632 Write-offs and adjustments, net of recoveries (118 ) Balance at December 31, 2016 $ 735 Provision for doubtful accounts 824 Write-offs and adjustments, net of recoveries (524 ) Balance at December 31, 2017 $ 1,035 Provision for doubtful accounts 1,448 Write-offs and adjustments, net of recoveries (646 ) Balance at December 31, 2018 $ 1,837 Inventory Inventory consisted of the following at (in thousands): December 31, 2018 2017 Raw materials $ 6,622 $ 10,328 Work-in-process 2,710 3,812 Finished goods 10,564 12,853 Total $ 19,896 $ 26,993 Property and Equipment Property and equipment consisted of the following at (in thousands): December 31, 2018 2017 Leasehold improvements $ 11,313 $ 13,924 Computer equipment and software 8,745 9,040 Office furniture and equipment 4,415 4,686 Manufacturing and scientific equipment 18,306 17,505 42,779 45,155 Less accumulated depreciation and amortization (25,628 ) (25,524 ) Total $ 17,151 $ 19,631 Depreciation and amortization expense related to property and equipment was $5.5 million, $6.5 million, and $5.2 million for the years ended December 31, 2018, 2017, and 2016, 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, 2018 and 2017 (in thousands): December 31, 2018 2017 Gross amount $ 3,247 $ 3,247 Accumulated amortization (2,117 ) (1,790 ) Total $ 1,130 $ 1,457 Weighted average remaining amortization period (in months) 42 54 Amortization expense related to intangible assets subject to amortization amounted to $0.3 million for each of the years ended December 31, 2018, 2017, and 2016. The amortization expense is recorded in cost of sales in the consolidated statement of operations. The estimated annual amortization is $0.3 million for periods 2019 through 2021, and $0.2 million in 2022. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017, 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, 2018 December 31, 2018 Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 37,373 $ 37,373 $ — $ — Commercial paper 53,537 — 53,537 — U.S. Treasury securities 17,935 17,935 — — Corporate debt securities 15,729 15,729 — Total assets $ 124,574 $ 55,308 $ 69,266 $ — Liabilities Common stock warrants $ 17,926 $ — $ — $ 17,926 Total liabilities $ 17,926 $ — $ — $ 17,926 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 (1) Cash equivalents included money market funds and commercial paper with a maturity of three months or less from the date of purchase. As of December 31, 2017, $13.7 million was included as a component of cash and cash equivalents on the balance sheet, and $10.0 million was classified as restricted cash – long-term. (2) The deferred compensation plan was directed by the Company and structured as a Rabbi Trust for the benefit of certain executives and non-employee directors. The investment assets of the Rabbi Trust were valued using quoted market prices multiplied by the number of shares held in each trust account. The related deferred compensation liability at December 31, 2017 represented the fair value of the investment assets. The Company cancelled the deferred compensation plan in 2017 and all deferred compensation amounts were distributed to participants during the second quarter of 2018. 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, 2018 and 2017. Level 3 liabilities at December 31, 2018 and 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. The Series A warrants have a term of five years and initially provided holders the right to purchase 4,630,000 shares of the Company’s common stock at an exercise price of $3.50 per share. The Series B warrants had a term of six months and initially provided holders the right to purchase 4,630,000 shares of the Company’s common stock at an exercise price of $3.50 per share. The Series A and Series B warrants were initially valued in the aggregate amount of $6.5 million on the date of issuance utilizing a Black-Scholes pricing model. As of December 31, 2018, there were Series A warrants to purchase 510,785 shares of common stock outstanding and no Series B warrants outstanding. The Company reassesses the fair value of the outstanding 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, 2018 and 2017 are presented below: Series A Warrants December 31, 2018 December 31, 2017 Risk-free interest rate 3.0 % 2.2 % Expected dividend yield 0.0 % 0.0 % Expected volatility 78.3 % 63.5 % Expected term (in years) 3.8 4.8 Series B Warrants December 31, 2018 December 31, 2017 Risk-free interest rate N/A 1.4 % Expected dividend yield N/A 0.0 % Expected volatility N/A 80.3 % Expected term (in years) N/A 0.3 The following table presents a summary of changes in fair value of the Company’s total Level 3 financial assets for the years ended December 31, 2018 and 2017: 2018 2017 Balance at beginning of period $ 5,432 $ 6,453 Increase (decrease) in fair value included in change in fair value of common stock warrants 66,494 (1,021 ) Decrease in fair value from warrants exercised during the period (54,000 ) — Balance at end of period $ 17,926 $ 5,432 |
Term Loan Agreement
Term Loan Agreement | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Term Loan Agreement | 5. Term Loan Agreement In August 2018, the Company fully repaid the term loan made by CRG pursuant to the Term Loan Agreement and terminated the agreement. The term loan was collateralized by all assets of the Company. The balance of the outstanding debt at the time of repayment was $82.7 million. The repayment included approximately $1.1 million in accrued interest and $5.0 million in associated financing fees that became due. As a result of the repayment, the Company did not have any borrowings outstanding under the Term Loan Agreement as of December 31, 2018. The Company had aggregate borrowings under the Term Loan Agreement of $82.7 million as of December 31, 2017. Notes payable-long term on the accompanying consolidated balance sheet reflected these aggregate borrowings, offset by a $6.2 million debt discount associated with the financing fees and certain debt issuance costs at December 31, 2017. Such discounts were amortized to interest expense over the term of the loan using the effective interest method. At the time of repayment, the remaining balance of $5.3 million was accelerated and recognized as a loss on extinguishment of debt in the consolidated statement of operations for the year ended, December 31, 2018. Under the Term Loan Agreement, interest was 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 or the PIK Loan to be added to the principal of the loan and subject to accruing interest. Interest-only payments were due quarterly on March 31, June 30, September 30 and December 31 of each year of the interest-only payment period, which would have ended on December 31, 2019. The principal balance was due in full at the end of the term of the loan, which was March 31, 2020, or the Maturity Date. The Company had elected to pay interest in cash at a rate of 11.5% per annum through September 30, 2015. From October 1, 2015 through December 31, 2017, 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, $2.7 million was added to the principal of the loan during that time period, collectively, the PIK Loans. The Company entered into a series of amendments to the Term Loan Agreement in 2016, 2017 and 2018, which included the addition of a financing fee payable at the maturity of the Company’s loans, the issuance of 193,788 ten-year warrants to CRG to purchase shares of the Company’s common stock at an exercise price of $23.50 per share and certain other minimum financing covenants. The financing fee was applicable to the entire aggregate principal amount of borrowings outstanding, including total PIK Loans issued. The Company treated the execution of each of the Third, Fourth and Fifth Amendments 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%. At December 31, 2017, the Company had accrued $4.1 million for the financing fee of 5%, which was subsequently increased to $5.0 million, or 6%, in February 2018. These fees were included in other long-term liabilities and as contra-debt in notes payable-long term on the accompanying consolidated balance sheet. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | 6. Stockholders’ Equity (Deficit) Public Offerings In the first quarter of 2017, the Company completed a registered public offering of 1,850,000 shares of 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 the fourth quarter of 2017, the Company completed the October Financing, pursuant to which it sold 4,630,000 shares of 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. In the first quarter of 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 the third quarter of 2018, the Company completed a public offering of 4,035,085 shares of common stock at a public offering price of $28.50 per share. The gross proceeds to the Company from the offering were $115.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. Stock Plans In September 2006, the Company adopted the Company’s 2006 Stock Incentive Plan, or 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 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 2013 Plan also included an “evergreen” provision, which automatically increased the shares available for issuance January 1 of each year by 4% of common shares outstanding. Accordingly, the shares available for issuance under the 2013 Plan were increased by 404,776 shares and 124,382 shares on January 1, 2018 and 2017, respectively. In June 2018, the Company received approval from its stockholders to increase the number of shares of common stock reserved under the 2013 Plan by 5,500,000 shares, and to remove the evergreen provision. The Company issued 8,603,321 shares of common stock upon the exercise of warrants, and 136,042 shares of common stock upon the exercise of stock options during the year ended December 31, 2018. The Company did not issue any shares of common stock upon the exercise of warrants, and issued 24,406 shares of common stock upon the exercise of stock options during the year ended December 31, 2017. As of December 31, 2018, 969,445 shares were available for future issuance under the 2013 Plan, and options to purchase 5,763,192 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, 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 $ — Granted 4,730,956 $ 20.34 Exercised (136,042 ) $ 7.55 $ 3,953 Canceled/forfeited/expired (162,991 ) $ 45.46 $ 1,466 Outstanding at December 31, 2018 5,763,192 $ 23.61 8.94 $ 116,988 Vested and expected to vest at December 31, 2018 5,643,473 $ 23.73 8.94 $ 114,547 Exercisable at December 31, 2018 1,215,287 $ 43.40 7.34 $ 25,852 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 is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Eligible employees may 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. 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 increased on January 1 of each calendar year, from January 1, 2014 through January 1, 2018, 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. On January 1, 2017 and 2018, the number of shares of common stock reserved for issuance under the ESPP was automatically increased by 101,194 and 31,096 shares respectively. In the years ended December 31, 2018 and 2017, 80,581 shares and 38,929 shares , respectively, were purchased 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. In June 2018, the Company received approval from its stockholders to increase the number of shares reserved for issuance under the ESPP by an additional 2,000,000 shares and to remove the evergreen provision. In the years ended December of our common stock As of December 31, 2018, Stock-Based Compensation. The compensation cost that has been included in the consolidated statement of operations for all stock-based compensation arrangements was as follows (in thousands): Year Ended December 31, 2018 2017 2016 Cost of sales $ 2,581 $ 1,360 $ 1,016 Selling, general & administrative 16,824 10,020 9,360 Research and development 4,331 1,248 1,284 Total $ 23,736 $ 12,628 $ 11,660 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, 2018 and 2017, respectively. There were no stock option grants to non-employees and no expense during the years ended December 31, 2018, 2017 and 2016. At December 31, 2018, the total unamortized stock-based compensation expense of approximately $45.3 million will be recognized over the remaining weighted average vesting term of approximately 1.7 years. The assumptions used in the Black-Scholes option-pricing model are as follows: Stock Option Year Ended December 31, 2018 2017 2016 Weighted average grant date fair value (per share) $ 12.94 $ 2.65 $ 24.30 Risk-free interest rate 2.8 % 2.1 % 1.7 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 71.4 % 60.8 % 57.5 % Expected term (in years) 5.7 5.8 5.8 ESPP Year Ended December 31, 2018 2017 (1) Weighted average grant date fair value (per share) $ 13.48 N/A Risk-free interest rate 2.5 % N/A Expected dividend yield 0.0 % N/A Expected volatility 81.2 % N/A Expected term (in years) 1.25 N/A (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 . 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 were reserved for future issuance at December 31, 2018 (in thousands): Common stock warrants outstanding 804 Stock options issued and outstanding 5,769 Authorized for future option grants 969 Employee stock purchase plan 2,021 9,563 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
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, (1) 2018 2017 2016 Income tax benefit at federal statutory rate $ (25,738 ) $ (24,829 ) $ (28,362 ) State income tax, net of federal benefit (1,649 ) (2,034 ) (2,393 ) Warrants revaluation 13,964 (347 ) — Research and development credits (1,425 ) (480 ) (720 ) Stock-based compensation 1,362 3,214 1,686 Tax Cuts and Jobs Acts — 51,577 — Other 681 138 456 Change in valuation allowance 12,856 (27,231 ) 29,318 Income tax expense (benefit) $ 51 $ 8 $ (15 ) (1) For the year ended December 31, 2018 as a result of the Tax Cuts and Jobs Act, the statutory rate was 21%. For the years ended December 31, 2017 and 2016, the statutory rate was 34%. Significant components of the Company’s net deferred income tax assets at December 31, 2018 and 2017 are shown below (in thousands). A valuation allowance has been recorded to offset the net deferred tax asset as of December 31, 2018 and 2017, as the realization of such assets does not meet the more-likely-than-not threshold. December 31, 2018 2017 Deferred tax assets: Net operating loss (NOL) carryforwards $ 85,761 $ 81,483 Research and development tax credits carryforwards 4,942 3,517 Capitalized research and development expenses 10,759 12,746 Accrued compensation 13,816 8,809 Other 8,238 4,139 Total deferred tax assets 123,516 110,694 Less valuation allowance (123,516 ) (110,694 ) Net deferred tax assets $ — $ — As of December 31, 2018, the Company has accumulated federal, state and foreign NOL carryforwards of approximately $352.7 million, $313.5 million, and $1.1 million, respectively, not considering the annual limitations of Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, as discussed below. The federal and state tax loss carryforwards begin to expire in 2026 and 2019, respectively, unless previously utilized. The remaining California NOL carry forwards of $183.9 million will expire beginning in 2028. The foreign tax loss carryforwards begin to expire in 2038, unless previously utilized. The Company also has federal and California research credit carryforwards of approximately $5.7 million and $6.3 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 consolidated financial statements. ASU 2016-09 is effective for public companies and was adopted by the Company 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 was reversed with the impact recorded to retained earnings which was fully offset by a change to the valuation allowance. Utilization of the Company's net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitations may result in the expiration of net operating loss carryforwards before utilization. The Company has started but has not completed an analysis to determine whether its net operating losses and credits generated through December 31, 2018 are likely to be limited by Section 382. Based on preliminary results of this analysis, the Company anticipates that an ownership change as defined under Section 382 may have occurred in 2018 and that the resulting limitation would significantly reduce the Company’s ability to utilize its net operating loss and credit carryovers before they expire. Additionally, future ownership changes under Section 382 may also limit the Company's ability to fully utilize any remaining tax benefits. The Company's net deferred income tax assets have been fully offset by a valuation allowance. Therefore, any resulting reduction to the Company's net operating loss and credit carryovers once the analysis is complete will be fully offset by a corresponding reduction of the valuation allowance and there would be no impact on the Company's balance sheet, statement of operations, or cash flows. 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. 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, 2018, 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016 Gross unrecognized tax benefits at the beginning of the year $ 8,121 $ 8,167 $ 7,594 Increases related to current year positions 644 411 580 Increases (decreases) related to prior year positions 59 (457 ) (7 ) Gross unrecognized tax benefits at the end of the year $ 8,824 $ 8,121 $ 8,167 As of December 31, 2018, the Company had $7.3 million of unrecognized tax benefits that, if recognized and realized would impact the effective tax rate, subject to the valuation allowance. 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 consolidated balance sheets and has not recognized interest and penalties in the statements of operations for the years ended December 31, 2018 and 2017. The Company does not expect any significant increases or decreases, other than the potential reduction as a result of the Section 382 limitation, to its unrecognized tax benefits within the next 12 months. The Company is subject to taxation in the United States and various other state jurisdictions and, starting with 2018, Canada. For the year ended December 31, 2018, the domestic and foreign components of loss before income taxes were $122.0 million and $1.0 million, respectively. Prior to 2018, the losses were all domestic. 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. In December 2017, the Tax Cuts and Jobs Act, or 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 35% to a 21% flat tax. As a result of the tax rate, in 2017 we recorded a decrease to our deferred tax assets of $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 $1.0 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 Act allows Companies to claim bonus depreciation to accelerate the expensing of the cost of certain qualified property placed in service after September 27, 2017 and before January 1, 2024. The Company recognized a provisional increase in net deferred tax liabilities attributable to the accelerated depreciation for certain assets placed into service after September 27, 2017. Due to the valuation allowance, the provisional adjustments have no impact on income tax expense or income tax payable. 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. In accordance with Staff Accounting Bulletin No. 118, as of December 31, 2018, we have completed our accounting for the tax effects of enactment of the Act and no adjustments to the provisional income tax effects were required. |
Collaborations
Collaborations | 12 Months Ended |
Dec. 31, 2018 | |
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., or 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 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, or 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 recognized as cost of sales and other current liabilities in the period the related t:slim G4 Pump sale is recorded. The Company recorded such marketing fund commitment of $0.1 million and $1.1 million in the years ended December 31, 2018 and 2017, respectively. |
Employee-Benefits
Employee-Benefits | 12 Months Ended |
Dec. 31, 2018 | |
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 month following their date of hire. Unless they affirmatively elect otherwise, employees are automatically enrolled in the plan following 30 days from date of rehire or entry date. 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, 2018 | |
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 regularly assesses the probability and range of possible loss based on the developments in these matters. A liability is recorded in the consolidated financial statements if it is determined that it is probable that a loss has been incurred, and that the amount or range of the loss can be reasonably estimated. Because of the uncertainties related to any pending actions, the Company is currently unable to predict their ultimate outcome, and, with respect to any legal proceeding 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 adverse outcome. At December 31, 2018 and 2017, there were no legal proceedings, disputes, or other claims for which a material loss was considered probable or for which the amount or range of loss was reasonably estimable. Operating leases Under a noncancelable operating lease agreement, or the Existing Operating Lease, the Company leases manufacturing, laboratory and general office spaces in San Diego, California. On December 27, 2017, the Company entered into an amendment to the Existing Operating Lease which terminated the lease with respect to the building located at 11045 Roselle Street as of January 31, 2018, and extended the Existing Operating Lease term for the remaining buildings through May 2022. The building located at 11045 Roselle Street, which primarily housed the Company’s manufacturing and related operations, was replaced by a facility located on Barnes Canyon Road in San Diego, California, collectively, 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 $0.4 million. 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 allowed for a Tenant Improvement Allowance, or the TI 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, or 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, 2018 are as follows (in thousands): 2019 $ 2,743 2020 2,858 2021 2,944 2022 1,644 2023 642 Thereafter — $ 10,831 Not included , which totaled $0.7 million and $0.4 million during the years ended December 31, 2018 and 2017, respectively |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 11. Selected Quarterly Financial Data (Unaudited) The following financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Quarterly financial information for fiscal 2018 and 2017 is presented in the following table, in thousands, except per share data: For the Quarter Ending March 31 June 30 September 30 December 31 2018: Revenue $ 27,277 $ 34,126 $ 46,264 $ 76,199 Gross profit $ 11,404 $ 15,087 $ 21,796 $ 41,535 Operating expenses $ 26,889 $ 29,084 $ 37,505 $ 40,975 Operating income (loss) $ (15,485 ) $ (13,997 ) $ (15,709 ) $ 560 Net income (loss) $ (32,693 ) $ (59,359 ) $ (34,245 ) $ 3,686 Basic net income (loss) per share (1) $ (1.82 ) $ (1.17 ) $ (0.62 ) $ 0.06 Diluted net income (loss) per share (1) $ (1.82 ) $ (1.17 ) $ (0.62 ) $ 0.02 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 ) (1) Net income (loss) per share is computed independently for each quarter and the full year based upon the respective average shares outstanding in each period. Therefore, the sum of the quarterly per-share calculations may not equal the reported annual per share amounts. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | 12. Subsequent Event In January 2019, the Company entered into a lease agreement for 25,332 square feet of additional general administrative office space located at 10935 Vista Sorrento Parkway, San Diego, California. Subject to limited exceptions, the initial lease term is expected to commence on the later of (i) March 1, 2019, or (ii) the date on which the landlord substantially completes certain specified work related to tenant improvements, such date the Commencement Date, and will expire 42 months from the first day of the first full month following the Commencement Date. The Company also has a one-time option to extend the term of the lease for a period of five years by delivering prior written notice to the Landlord in accordance with the terms of the lease. Future minimum payments under the lease, which include reimbursement of certain landlord operating expenses, are approximately $3.5 million. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 that are designed to address large and differentiated needs of the insulin-dependent diabetes market. The Company’s manufacturing and sales activities primarily focus on the t:slim X2 Insulin Delivery System, or t:slim X2, the Company’s flagship pump platform that is capable of remote feature updates and designed to display continuous glucose monitoring, or CGM, sensor information directly on the pump home screen. The Company’s insulin pump products are generally considered durable medical equipment, and have an expected lifespan of at least four years. In addition to selling insulin pumps, the Company sells disposable products that are used together with the pumps and are replaced every few days, including cartridges for storing and delivering insulin, and infusion sets that connect the insulin pump to a user’s body. The Company’s insulin pump products are compatible with the Tandem Device Updater, a Mac The Company began commercial sales of its first product, t:slim, in August 2012 and subsequently commercialized t:flex in May 2015, t:slim G4 in September 2015 and t:slim X2 in October 2016. The t:slim X2 hardware platform now represents 100% of new pump shipments, but the Company will continue to provide ongoing service and support to existing t:slim, t:slim G4 and t:flex customers. In June 2018, the Company received approval by the United States Food and Drug Administration, or FDA, for t:slim X2 with Basal-IQ technology, the Company’s first-generation Automated Insulin Delivery, or AID, algorithm, and commenced commercial sales of this product in August 2018. During the third quarter of 2018, the Company commenced sales of the t:slim X2 in select geographies outside the United States, including The consolidated At December 31, 2018, the Company had $129.0 million in cash and cash equivalents and short-term investments. The Company has incurred operating losses since its inception and, as reflected in the accompanying consolidated financial statements, the Company had an accumulated deficit of $600.1 million as of December 31, 2018. Management believes that cash and cash equivalents and short-term investments on hand will be sufficient to satisfy the Company’s liquidity requirements for at least the next 12 months from the date of this filing. The Company’s ability to execute on its business strategy, meet its future liquidity requirements, and achieve and maintain profitable operations, is dependent on a number of factors, including its ability to continue to gain market acceptance of its products and achieve a level of revenues adequate to support its cost structure, achieve renewal pump sales objectives, develop and launch new products, increase gross profits from higher sales of infusion sets, maximize manufacturing efficiencies, satisfy increasing production requirements, leverage the investments made in its sales, clinical, marketing and customer support organizations and operate its business and manufacture and sell products without infringing third party intellectual property rights. The Company has funded its operations primarily through private and public equity and debt financing. The Company 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. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and include the accounts of Tandem Diabetes Care, Inc. and its wholly owned subsidiary in Canada. All significant intercompany balances and transactions have been eliminated in consolidation. |
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 consolidated |
Reclassifications | Reclassifications Certain reclassifications of prior year amounts related to the presentation of restricted cash on the statement of cash flows have been made to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of the consolidated 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 consolidated financial statements and accompanying notes as of the date of the consolidated 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 discrete financial information is available for evaluation by the chief operating decision-maker, or the CODM in making decisions regarding resource allocation and assessing performance. The Company’s current product offering consists primarily of insulin pumps, disposable cartridges and infusion sets for the storage and delivery of insulin. The Company has viewed its operations and managed its business as one segment . |
Cash Equivalents | 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 as a separate component of stockholders’ equity (deficit) on the consolidated balance sheets. Unrealized gains or losses on trading securities are reported as a component of other income or expense within the consolidated 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 consolidated 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, the Company has not identified any other than temporary declines in fair value of its short-term investments. |
Restricted Cash | Restricted Cash The Company recorded $10.0 million of restricted cash as of December 31, 2017, for the minimum cash balance requirement in connection with the Term Loan Agreement (see Note 5, Term Loan Agreement). Due to the full repayment of the term loan in August 2018, no restricted cash balance was required at December 31, 2018. In January 2018, the Company adopted new guidance from the Financial Accounting Standards Board or the FASB that clarified how entities should classify certain cash receipts and cash payments on the statement of cash flows. As a result, the restricted cash balance that existed in prior periods is included as a component of cash and cash equivalents and restricted cash on the statement of cash flows in the relevant periods presented. |
Accounts Receivable | Accounts Receivable The Company grants credit to various customers in the ordinary 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, review of outstanding invoices, and 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, 2018 2017 Byram Healthcare 15.5 % 17.2 % CCS Medical, Inc. 10.1 % 16.2 % Edgepark Medical Supplies, Inc. N/A 17.7 % The following table summarizes customers who accounted for 10% or more of sales for the periods presented: Year Ended December 31, 2018 2017 2016 Edgepark Medical Supplies, Inc. 19.4 % 21.5 % 18.7 % Byram Healthcare 15.6 % 14.0 % 14.0 % Solara Medical Supplies, Inc. N/A N/A 10.7 % CCS Medical N/A 10.3 % 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 Certain trade-in rights previously offered by the Company pursuant to the Technology Upgrade Program to certain eligible customers were 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. |
Valuation of Inventory | Valuation of Inventory Inventories are valued at the lower of cost or 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 and adjust inventory to its net realizable value, based on quantities on hand and firm purchase commitments, expectations of future use, judgments based on quality control testing data and assessments of the likelihood of scrapping or obsoleting certain inventories based on future demand for its products and market conditions. |
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, less accumulated depreciation. 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, 2018. |
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 is included in other current liabilities on the Company’s consolidated 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. Tax law and rate changes are reflected in income in the period such changes are enacted. 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 includes interest and penalties related to income taxes, including unrecognized tax benefits, within income tax expense. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and the valuation allowance recorded against net deferred tax assets. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. The Company will continue to assess the need for a valuation allowance on its deferred tax assets by evaluating both positive and negative evidence that may exist. Any adjustment to the net deferred tax asset valuation allowance would be recorded in the statement of operations for the period that the adjustment is determined to be required. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions and, starting with 2018, a corporation income tax return in Canada. 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 primarily from sales 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. In January 2018, the Company adopted the Revenue from Contracts with Customers Standard which supersedes existing revenue guidance under U.S. GAAP and International Financial Reporting Standards. Pursuant to the Revenue from Contracts with Customers Standard’s core principle, subsequent to January 1, 2018, the Company recognizes 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. The Company elected to implement this new standard utilizing the modified retrospective method. Under this approach, the Company applied the new standard to all new contracts initiated on or after the effective date, and, for contracts which had remaining obligations as of the effective date, the Company recorded an adjustment to the opening balance of accumulated deficit. The accounting for the significant majority of the Company’s revenues is not impacted by the new guidance. As a result, on January 1, 2018, the Company recorded a net reduction to accumulated deficit in the amount of $149,000, reflecting the accounting change. Prior to the implementation of this new standard, revenue was recognized when persuasive evidence of an arrangement existed, delivery had occurred and title passed, the price was fixed or determinable, and collectability was 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. Upon expiration of the Program at September 30, 2017, the remaining guarantee liabilities of $1.1 were recognized as sales. There were no guarantee liabilities at December 31, 2018 or 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, 2018, the Company had no trade-in rights reserve balance. At December 31, 2017, there was $65,000, recorded as a trade-in rights reserve in deferred revenue on the accompanying consolidated balance sheet. Revenue Recognition for Arrangements with Multiple Deliverables The Company considers the individual deliverables in its product offering as separate performance obligations. The transaction price is determined based on the consideration expected to be received, based either on the stated value in contractual arrangements or the estimated cash to be collected in non-contracted arrangements. The Company allocates the consideration to the individual performance obligations and recognizes the consideration based on when the performance obligation is satisfied, considering whether or not this occurs at a point in time or over time. Generally, insulin pumps, cartridges, infusion sets and accessories are deemed performance obligations that are satisfied upon delivery, while access to the complementary products, such as the t:connect cloud-based data management application and the Tandem Device Updater, are considered performance obligations satisfied over the four-year warranty period of the insulin pumps. There is no standalone value for these complementary products. Therefore, the Company determines their value by applying the expected cost-plus margin approach and then allocates the residual to the insulin pumps. At December 31, 2018 and 2017, $3.8 million and $2.0 million . 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 consolidated 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, 2018 and December 31, 2017, the warranty reserve was $9.1 million and $5.6 million, respectively. The following table provides a reconciliation of the change in estimated warranty liabilities for the years ended December 31, 2018 and 2017: December 31, (in thousands) 2018 2017 Balance at beginning of the year $ 5,640 $ 5,690 Provision for warranties issued during the period 9,617 5,613 Settlements made during the period (7,797 ) (6,742 ) Increases in warranty estimates 1,678 1,079 Balance at end of the year $ 9,138 $ 5,640 Current portion $ 4,206 $ 2,596 Non-current portion 4,932 3,044 Total $ 9,138 $ 5,640 |
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 or the 2013 Plan, and shares issued under the Company’s 2013 Employee Stock Purchase Plan, or the 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 interest 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 consolidated |
Advertising Costs | Advertising Costs The Company expenses advertising costs as they are incurred. For the years ended December 31, 2018, 2017 and 2016, advertising costs were $0.9 million, $1.1 million, and $0.9 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 consolidated 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 consolidated 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. With the exception of the fourth quarter of 2018, 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. Refer to Note 11. Selected Quarterly Financial Data (Unaudited) 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, 2018 2017 2016 Warrants for common stock 705 — — Common stock options 3,477 — 151 ESPP 4 — 2 4,186 — 153 |
Accounting Pronouncements Issued and Not Yet Adopted | Accounting Pronouncements Issued and Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases or ASU 2016-02. ASU 2016-02 and its related amendments (collectively referred to as ASC 842). expect that the adoption of this standard will result in a cumulative-effect transition adjustment for the recognition of right-of-use leased assets and corresponding lease liabilities of approximately $12 million on the consolidated balance sheet as of January 1, 2019 related to In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 Byram Healthcare 15.5 % 17.2 % CCS Medical, Inc. 10.1 % 16.2 % Edgepark Medical Supplies, Inc. N/A 17.7 % The following table summarizes customers who accounted for 10% or more of sales for the periods presented: Year Ended December 31, 2018 2017 2016 Edgepark Medical Supplies, Inc. 19.4 % 21.5 % 18.7 % Byram Healthcare 15.6 % 14.0 % 14.0 % Solara Medical Supplies, Inc. N/A N/A 10.7 % CCS Medical N/A 10.3 % 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, 2018 and 2017: December 31, (in thousands) 2018 2017 Balance at beginning of the year $ 5,640 $ 5,690 Provision for warranties issued during the period 9,617 5,613 Settlements made during the period (7,797 ) (6,742 ) Increases in warranty estimates 1,678 1,079 Balance at end of the year $ 9,138 $ 5,640 Current portion $ 4,206 $ 2,596 Non-current portion 4,932 3,044 Total $ 9,138 $ 5,640 |
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, 2018 2017 2016 Warrants for common stock 705 — — Common stock options 3,477 — 151 ESPP 4 — 2 4,186 — 153 |
Financial Statement Informati_2
Financial Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 (in thousands): At December 31, 2018 Maturity (in years) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Available-for-sale investment securities Commercial paper Less than 1 $ 53,559 $ — $ (22 ) $ 53,537 U.S. Treasury securities Less than 1 17,937 — (2 ) 17,935 Corporate debt securities Less than 1 15,718 12 (1 ) 15,729 Total $ 87,214 $ 12 $ (25 ) $ 87,201 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 |
Summary of Accounts Receivable | Accounts receivable consisted of the following (in thousands): December 31, 2018 2017 Accounts receivable $ 37,030 $ 22,071 Less allowance for doubtful accounts, and product returns (1,837 ) (1,278 ) Total $ 35,193 $ 20,793 |
Reconciliation of Change in Estimated Allowance for Doubtful Accounts | The following table provides a reconciliation of the change in estimated allowance for doubtful accounts for the years ended December 31, 2018, 2017 and 2016 (in thousands): Allowance for Doubtful Accounts Balance at December 31, 2015 $ 221 Provision for doubtful accounts 632 Write-offs and adjustments, net of recoveries (118 ) Balance at December 31, 2016 $ 735 Provision for doubtful accounts 824 Write-offs and adjustments, net of recoveries (524 ) Balance at December 31, 2017 $ 1,035 Provision for doubtful accounts 1,448 Write-offs and adjustments, net of recoveries (646 ) Balance at December 31, 2018 $ 1,837 |
Summary of Inventory | Inventory consisted of the following at (in thousands): December 31, 2018 2017 Raw materials $ 6,622 $ 10,328 Work-in-process 2,710 3,812 Finished goods 10,564 12,853 Total $ 19,896 $ 26,993 |
Summary of Property and Equipment | Property and equipment consisted of the following at (in thousands): December 31, 2018 2017 Leasehold improvements $ 11,313 $ 13,924 Computer equipment and software 8,745 9,040 Office furniture and equipment 4,415 4,686 Manufacturing and scientific equipment 18,306 17,505 42,779 45,155 Less accumulated depreciation and amortization (25,628 ) (25,524 ) Total $ 17,151 $ 19,631 |
Summary of Capitalized Patents | The following represents the capitalized patents at December 31, 2018 and 2017 (in thousands) December 31, 2018 2017 Gross amount $ 3,247 $ 3,247 Accumulated amortization (2,117 ) (1,790 ) Total $ 1,130 $ 1,457 Weighted average remaining amortization period (in months) 42 54 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017, 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, 2018 December 31, 2018 Level 1 Level 2 Level 3 Assets Cash equivalents (1) $ 37,373 $ 37,373 $ — $ — Commercial paper 53,537 — 53,537 — U.S. Treasury securities 17,935 17,935 — — Corporate debt securities 15,729 15,729 — Total assets $ 124,574 $ 55,308 $ 69,266 $ — Liabilities Common stock warrants $ 17,926 $ — $ — $ 17,926 Total liabilities $ 17,926 $ — $ — $ 17,926 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 (1) Cash equivalents included money market funds and commercial paper with a maturity of three months or less from the date of purchase. As of December 31, 2017, $13.7 million was included as a component of cash and cash equivalents on the balance sheet, and $10.0 million was classified as restricted cash – long-term. (2) The deferred compensation plan was directed by the Company and structured as a Rabbi Trust for the benefit of certain executives and non-employee directors. The investment assets of the Rabbi Trust were valued using quoted market prices multiplied by the number of shares held in each trust account. The related deferred compensation liability at December 31, 2017 represented the fair value of the investment assets. The Company cancelled the deferred compensation plan in 2017 and all deferred compensation amounts were distributed to participants during the second quarter of 2018. |
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, 2018 and 2017 are presented below: Series A Warrants December 31, 2018 December 31, 2017 Risk-free interest rate 3.0 % 2.2 % Expected dividend yield 0.0 % 0.0 % Expected volatility 78.3 % 63.5 % Expected term (in years) 3.8 4.8 Series B Warrants December 31, 2018 December 31, 2017 Risk-free interest rate N/A 1.4 % Expected dividend yield N/A 0.0 % Expected volatility N/A 80.3 % Expected term (in years) N/A 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 years ended December 31, 2018 and 2017: 2018 2017 Balance at beginning of period $ 5,432 $ 6,453 Increase (decrease) in fair value included in change in fair value of common stock warrants 66,494 (1,021 ) Decrease in fair value from warrants exercised during the period (54,000 ) — Balance at end of period $ 17,926 $ 5,432 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 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 $ — Granted 4,730,956 $ 20.34 Exercised (136,042 ) $ 7.55 $ 3,953 Canceled/forfeited/expired (162,991 ) $ 45.46 $ 1,466 Outstanding at December 31, 2018 5,763,192 $ 23.61 8.94 $ 116,988 Vested and expected to vest at December 31, 2018 5,643,473 $ 23.73 8.94 $ 114,547 Exercisable at December 31, 2018 1,215,287 $ 43.40 7.34 $ 25,852 |
Summary of Compensation Cost Included in Consolidated Statement of Operations | The compensation cost that has been included in the consolidated statement of operations for all stock-based compensation arrangements was as follows (in thousands): Year Ended December 31, 2018 2017 2016 Cost of sales $ 2,581 $ 1,360 $ 1,016 Selling, general & administrative 16,824 10,020 9,360 Research and development 4,331 1,248 1,284 Total $ 23,736 $ 12,628 $ 11,660 |
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, 2018 2017 2016 Weighted average grant date fair value (per share) $ 12.94 $ 2.65 $ 24.30 Risk-free interest rate 2.8 % 2.1 % 1.7 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 71.4 % 60.8 % 57.5 % Expected term (in years) 5.7 5.8 5.8 ESPP Year Ended December 31, 2018 2017 (1) Weighted average grant date fair value (per share) $ 13.48 N/A Risk-free interest rate 2.5 % N/A Expected dividend yield 0.0 % N/A Expected volatility 81.2 % N/A Expected term (in years) 1.25 N/A |
Schedule of Shares of Common Stock Reserved for Future Issuance | The following shares of common stock were reserved for future issuance at December 31, 2018 (in thousands): Common stock warrants outstanding 804 Stock options issued and outstanding 5,769 Authorized for future option grants 969 Employee stock purchase plan 2,021 9,563 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, (1) 2018 2017 2016 Income tax benefit at federal statutory rate $ (25,738 ) $ (24,829 ) $ (28,362 ) State income tax, net of federal benefit (1,649 ) (2,034 ) (2,393 ) Warrants revaluation 13,964 (347 ) — Research and development credits (1,425 ) (480 ) (720 ) Stock-based compensation 1,362 3,214 1,686 Tax Cuts and Jobs Acts — 51,577 — Other 681 138 456 Change in valuation allowance 12,856 (27,231 ) 29,318 Income tax expense (benefit) $ 51 $ 8 $ (15 ) (1) For the year ended December 31, 2018 as a result of the Tax Cuts and Jobs Act, the statutory rate was 21%. For the years ended December 31, 2017 and 2016, the statutory rate was 34%. |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s net deferred income tax assets at December 31, 2018 and 2017 are shown below (in thousands). A valuation allowance has been recorded to offset the net deferred tax asset as of December 31, 2018 and 2017, as the realization of such assets does not meet the more-likely-than-not threshold. December 31, 2018 2017 Deferred tax assets: Net operating loss (NOL) carryforwards $ 85,761 $ 81,483 Research and development tax credits carryforwards 4,942 3,517 Capitalized research and development expenses 10,759 12,746 Accrued compensation 13,816 8,809 Other 8,238 4,139 Total deferred tax assets 123,516 110,694 Less valuation allowance (123,516 ) (110,694 ) 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, 2018, 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016 Gross unrecognized tax benefits at the beginning of the year $ 8,121 $ 8,167 $ 7,594 Increases related to current year positions 644 411 580 Increases (decreases) related to prior year positions 59 (457 ) (7 ) Gross unrecognized tax benefits at the end of the year $ 8,824 $ 8,121 $ 8,167 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 are as follows (in thousands): 2019 $ 2,743 2020 2,858 2021 2,944 2022 1,644 2023 642 Thereafter — $ 10,831 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The following financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Quarterly financial information for fiscal 2018 and 2017 is presented in the following table, in thousands, except per share data: For the Quarter Ending March 31 June 30 September 30 December 31 2018: Revenue $ 27,277 $ 34,126 $ 46,264 $ 76,199 Gross profit $ 11,404 $ 15,087 $ 21,796 $ 41,535 Operating expenses $ 26,889 $ 29,084 $ 37,505 $ 40,975 Operating income (loss) $ (15,485 ) $ (13,997 ) $ (15,709 ) $ 560 Net income (loss) $ (32,693 ) $ (59,359 ) $ (34,245 ) $ 3,686 Basic net income (loss) per share (1) $ (1.82 ) $ (1.17 ) $ (0.62 ) $ 0.06 Diluted net income (loss) per share (1) $ (1.82 ) $ (1.17 ) $ (0.62 ) $ 0.02 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 ) (1) Net income (loss) per share is computed independently for each quarter and the full year based upon the respective average shares outstanding in each period. Therefore, the sum of the quarterly per-share calculations may not equal the reported annual per share amounts. |
Organization and Basis of Pre_3
Organization and Basis of Presentation - Additional Information (Detail) $ in Thousands | Oct. 09, 2017 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Organization And Basis Of Presentation [Line Items] | |||
Operating losses and accumulated deficit | $ (600,075) | $ (477,613) | |
Cash cash equivalents and short term investments | $ 129,000 | ||
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 | ||
Insulin Pump [Member] | Minimum [Member] | |||
Organization And Basis Of Presentation [Line Items] | |||
Expected life span term | 4 years | ||
T:slim X2 [Member] | |||
Organization And Basis Of Presentation [Line Items] | |||
Percentage of new pump shipments represented by product hardware platform | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017USD ($) | Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of operating segments | Segment | 1 | |||||
Guarantee liabilities recognized as sales | $ 1,100,000 | |||||
Company amortizes patent costs over their estimated useful life | 42 months | 54 months | ||||
Guarantee liabilities in other current liabilities | $ 0 | $ 0 | ||||
Offered period for sales return | 30 days | |||||
Allowance for product returns | $ 300,000 | 200,000 | ||||
Warranty reserve | 9,138,000 | 5,640,000 | $ 5,690,000 | |||
Advertising cost | 900,000 | 1,100,000 | $ 900,000 | |||
Subsequent Event [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Operating lease right-of-use leased assets | $ 12,000,000 | |||||
Operating lease, liability | 12,000,000 | |||||
Other Current Liabilities [Member] | Subsequent Event [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Deferred rent | 1,000,000 | |||||
Deferred Rent Long-term [Member] | Subsequent Event [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Deferred rent | $ 3,800,000 | |||||
Warranty reserves [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Warranty reserve | $ 9,100,000 | 5,600,000 | ||||
Complementary products [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Revenue performance obligations satisfied over period | 4 years | |||||
Deferred revenue | $ 3,800,000 | 2,000,000 | ||||
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 | $ 0 | 65,000 | ||||
ASU 2014-09: Revenue from Contracts with Customers [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Net reduction to accumulated deficit | $ 149,000 | |||||
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 | $ 0 | $ 10,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Customers Accounted for 10% or More (Detail) - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts Receivable [Member] | Byram Healthcare [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 15.50% | 17.20% | |
Accounts Receivable [Member] | Edgepark Medical Supplies, Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 17.70% | ||
Accounts Receivable [Member] | CCS Medical, Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 10.10% | 16.20% | |
Sales Revenue Net [Member] | Byram Healthcare [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 15.60% | 14.00% | 14.00% |
Sales Revenue Net [Member] | Edgepark Medical Supplies, Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 19.40% | 21.50% | 18.70% |
Sales Revenue Net [Member] | CCS Medical, Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 10.30% | ||
Sales Revenue Net [Member] | Solara Medical Supplies, Inc. | |||
Concentration Risk [Line Items] | |||
Customers accounted for 10% or more | 10.70% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Reconciliation of Change in Estimated Warranty Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Movement In Standard And Extended Product Warranty Increase Decrease Roll Forward | ||
Beginning balance | $ 5,640 | $ 5,690 |
Provision for warranties issued during the period | 9,617 | 5,613 |
Settlements made during the period | (7,797) | (6,742) |
Increases in warranty estimates | 1,678 | 1,079 |
Ending balance | 9,138 | 5,640 |
Current portion | 4,206 | 2,596 |
Non-current portion | $ 4,932 | $ 3,044 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Anti-Dilutive Securities (Detail) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 4,186 | 153 |
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 | 705 | |
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 | 3,477 | 151 |
ESPP [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 4 | 2 |
Financial Statement Informati_3
Financial Statement Information - Summary of Estimated Fair Value of Short-Term Investments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Short-term investments, Amortized Cost | $ 87,214 | $ 459 |
Short-term investments, Unrealized Gain | 12 | 20 |
Short-term investments, Unrealized Loss | (25) | |
Short-term investments, Estimated Fair Value | 87,201 | 479 |
Commercial paper [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Amortized Cost | 53,559 | |
Available-for-sale investment securities, Unrealized Loss | (22) | |
Available-for-sale investment securities, Estimated Fair Value | $ 53,537 | |
Commercial paper [Member] | Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Maturity (in years) | 1 year | |
U.S. Treasury securities [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Amortized Cost | $ 17,937 | |
Available-for-sale investment securities, Unrealized Loss | (2) | |
Available-for-sale investment securities, Estimated Fair Value | $ 17,935 | |
U.S. Treasury securities [Member] | Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Maturity (in years) | 1 year | |
Corporate Debt Securities [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Amortized Cost | $ 15,718 | |
Available-for-sale investment securities, Unrealized Gain | 12 | |
Available-for-sale investment securities, Unrealized Loss | (1) | |
Available-for-sale investment securities, Estimated Fair Value | $ 15,729 | |
Corporate Debt Securities [Member] | Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available-for-sale investment securities, Maturity (in years) | 1 year | |
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 | 459 | |
Trading securities, Unrealized Gain | 20 | |
Trading securities, Estimated Fair Value | $ 479 |
Financial Statement Informati_4
Financial Statement Information - Summary of Accounts receivable (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable Net [Abstract] | ||
Accounts receivable | $ 37,030 | $ 22,071 |
Less allowance for doubtful accounts, and product returns | (1,837) | (1,278) |
Total | $ 35,193 | $ 20,793 |
Financial Statement Informati_5
Financial Statement Information - Reconciliation of Change in Estimated Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts | |||
Beginning Balance | $ 1,035 | $ 735 | $ 221 |
Provision for doubtful accounts | 1,448 | 824 | 632 |
Write-offs and adjustments, net of recoveries | (646) | (524) | (118) |
Ending Balance | $ 1,837 | $ 1,035 | $ 735 |
Financial Statement Informati_6
Financial Statement Information - Summary of Inventory (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,622 | $ 10,328 |
Work-in-process | 2,710 | 3,812 |
Finished goods | 10,564 | 12,853 |
Total | $ 19,896 | $ 26,993 |
Financial Statement Informati_7
Financial Statement Information - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 42,779 | $ 45,155 |
Less accumulated depreciation and amortization | (25,628) | (25,524) |
Total property and equipment, net | 17,151 | 19,631 |
Leasehold improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 11,313 | 13,924 |
Computer equipment and software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 8,745 | 9,040 |
Office furniture and equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,415 | 4,686 |
Manufacturing and scientific equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 18,306 | $ 17,505 |
Financial Statement Informati_8
Financial Statement Information - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Balance Sheet Components [Abstract] | |||
Depreciation and amortization expense related to property and equipment | $ 5.5 | $ 6.5 | $ 5.2 |
Amortization expense related to intangible assets | 0.3 | $ 0.3 | $ 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 Informati_9
Financial Statement Information - Summary of Capitalized Patents (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Weighted average remaining amortization period (in months) | 42 months | 54 months |
Patents [Member] | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross amount | $ 3,247 | $ 3,247 |
Accumulated amortization | (2,117) | (1,790) |
Total | $ 1,130 | $ 1,457 |
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) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | $ 124,574 | $ 24,179 |
Total liabilities | 17,926 | 5,911 |
Cash equivalents [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 37,373 | 23,700 |
Mutual funds held for nonqualified deferred compensation plan participants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 479 | |
Commercial paper [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 53,537 | |
U.S. Treasury securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 17,935 | |
Corporate Debt Securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 15,729 | |
Warrants for common stock [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 17,926 | 5,432 |
Deferred compensation [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 479 | |
Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 55,308 | 24,179 |
Total liabilities | 479 | |
Level 1 [Member] | Cash equivalents [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 37,373 | 23,700 |
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 | |
Level 1 [Member] | U.S. Treasury securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 17,935 | |
Level 1 [Member] | Deferred compensation [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 479 | |
Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 69,266 | |
Level 2 [Member] | Commercial paper [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 53,537 | |
Level 2 [Member] | Corporate Debt Securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 15,729 | |
Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 17,926 | 5,432 |
Level 3 [Member] | Warrants for common stock [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | $ 17,926 | $ 5,432 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Restricted cash - long-term | $ 10,000 | |
Cash and cash equivalents | $ 13,700 | $ 41,826 |
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, 2018 | Dec. 31, 2017 | |
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 | $ 6,500,000 |
Series A warrants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Outstanding warrants | 510,785 | |
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 | $ 3.50 |
Public offering period | 5 years | 5 years |
Series B warrants [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Outstanding warrants | 0 | |
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 | $ 6.5 |
Public offering period | 6 months | 6 months |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Assumptions Used to Estimate Fair Values of Common Stock Warrants (Detail) | Dec. 31, 2018 | Dec. 31, 2017 |
Series A warrants [Member] | Risk Free Interest Rate [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Risk-free interest rate | 3 | 2.2 |
Series A warrants [Member] | Expected Dividend Yield [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Risk-free interest rate | 0 | 0 |
Series A warrants [Member] | Expected Volatility [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Risk-free interest rate | 78.3 | 63.5 |
Series A warrants [Member] | Expected Term [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Expected term (in years) | 3 years 9 months 18 days | 4 years 9 months 18 days |
Series B warrants [Member] | Risk Free Interest Rate [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Risk-free interest rate | 1.4 | |
Series B warrants [Member] | Expected Dividend Yield [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Risk-free interest rate | 0 | |
Series B warrants [Member] | Expected Volatility [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Risk-free interest rate | 80.3 | |
Series B warrants [Member] | Expected Term [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
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) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation Calculation Roll Forward | ||
Balance at beginning of period | $ 5,432 | $ 6,453 |
Increase (decrease) in fair value included in change in fair value of common stock warrants | 66,494 | (1,021) |
Decrease in fair value from warrants exercised during the period | (54,000) | |
Balance at end of period | $ 17,926 | $ 5,432 |
Term Loan Agreement - Additiona
Term Loan Agreement - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | 27 Months Ended | ||||||
Feb. 28, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Aug. 31, 2018 | Oct. 01, 2015 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | |||||||||
Accrued interest | $ 2,832,000 | $ 3,930,000 | $ 2,832,000 | $ 2,832,000 | |||||
Debt discount associated with financing fees and debt issuance costs | 1,721,000 | 1,883,000 | $ 274,000 | ||||||
Loss on extinguishment of debt | 5,313,000 | ||||||||
Compounded interest payable | 2.00% | ||||||||
Additional amount borrowed | 1,657,000 | $ 927,000 | 2,700,000 | ||||||
Term Loan Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan outstanding | 82,700,000 | 0 | 82,700,000 | 82,700,000 | $ 82,700,000 | ||||
Accrued interest | 1,100,000 | ||||||||
Associated financing fees | $ 5,000,000 | ||||||||
Debt discount associated with financing fees and debt issuance costs | 6,200,000 | ||||||||
Loss on extinguishment of debt | $ 5,300,000 | ||||||||
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 Term Loan Agreement, interest was 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 or the PIK Loan to be added to the principal of the loan and subject to accruing interest. Interest-only payments were due quarterly on March 31, June 30, September 30 and December 31 of each year of the interest-only payment period, which would have ended on December 31, 2019. | ||||||||
Maturity date for interest-only payment | Dec. 31, 2019 | ||||||||
Maturity date for principal balance | Mar. 31, 2020 | ||||||||
Term Loan Amendments [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Warrants life | 10 years | ||||||||
Warrants issue to purchase common stock | 193,788 | ||||||||
Warrants exercise price | $ 23.50 | ||||||||
Present value of the future cash flows | 10.00% | ||||||||
Accrued back end financing fee | $ 5,000,000 | $ 4,100,000 | $ 4,100,000 | $ 4,100,000 | |||||
Term Loan Amendments [Member] | Other Long Term Liabilities And As Contra-Debt In Notes Payable-Long Term [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayment fee percentage | 6.00% | 5.00% |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) - Additional Information (Detail) - USD ($) | Jan. 02, 2018 | Jan. 01, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2013 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Gross proceeds from secondary public offering | $ 115,000,000 | $ 69,000,000 | $ 16,200,000 | $ 23,100,000 | |||||||||
Common stock reserved for future issuance | 9,563,000 | ||||||||||||
Common stock shares issued | 136,042 | 24,406 | |||||||||||
Options outstanding | 1,331,269 | 5,763,192 | 1,331,269 | 822,265 | |||||||||
Stock-based compensation expenses | $ 23,736,000 | $ 12,628,000 | $ 11,660,000 | ||||||||||
Total stock-based compensation capitalized as part of cost of inventory | 200,000 | 200,000 | |||||||||||
Unamortized compensation expense | $ 45,300,000 | ||||||||||||
Share-based compensation expense remaining weighted average vesting term | 1 year 8 months 12 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 | $ 16,824,000 | $ 10,020,000 | $ 9,360,000 | ||||||||||
Non-employees [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of shares available for grant | 0 | 0 | 0 | ||||||||||
Non-employees [Member] | Selling, general & administrative [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expenses | $ 0 | $ 0 | |||||||||||
Common stock options [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Common stock shares issued | 136,042 | 24,406 | |||||||||||
Vesting period of remaining stock | 3 years | ||||||||||||
Common stock options [Member] | First Anniversary of Vesting Date [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock vested percentage | 25.00% | ||||||||||||
Common Stock [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Common stock shares issued | 136,000 | 24,000 | 15,000 | ||||||||||
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] | Common stock options [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 | 969,445 | 480,900 | |||||||||||
Common shares outstanding | 4.00% | ||||||||||||
Increase in common stock reserve for issuance | 404,776 | 124,382 | |||||||||||
Number of shares of authorized for issuance | 5,500,000 | ||||||||||||
2013 Stock Incentive Plan [Member] | Common stock options [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum term of stock options | 10 years | ||||||||||||
Warrants for common stock [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Common stock shares issued | 8,603,321 | 0 | |||||||||||
Secondary Public Offering [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Shares offered for public offering | 4,035,085 | 34,500,000 | 4,630,000 | 1,850,000 | |||||||||
Shares offering price per share | $ 28.50 | $ 2 | $ 3.50 | $ 12.50 | $ 3.50 | ||||||||
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 | 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 | 4,630,000 | ||||||||||
At The Market Offering Program [Member] | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Gross 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 | 101,194 | 2,000,000 | ||||||||||
Maximum percentage that employee can contribute for purchase of common stock | 15.00% | ||||||||||||
Offering Period | 2 years | ||||||||||||
Purchase Period | four six-month | ||||||||||||
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 | 80,581 | 38,929 | |||||||||||
Common stock reserved for issuance description | The number of shares of common stock reserved for issuance increased on January 1 of each calendar year, from January 1, 2014 through January 1, 2018, 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. | ||||||||||||
Stock-based compensation expenses | $ 2,400,000 | ||||||||||||
Number of shares available for grant | 2,020,626 | ||||||||||||
Expected dividend yield | 0.00% | ||||||||||||
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 (Deficit_3
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders Equity Note [Abstract] | |||
Options, Outstanding at beginning of period | 1,331,269 | 822,265 | |
Options, Granted | 4,730,956 | 615,067 | |
Options, Exercised | (136,042) | (24,406) | |
Options, Canceled/forfeited/expired | (162,991) | (81,657) | |
Options, Outstanding at end of period | 5,763,192 | 1,331,269 | 822,265 |
Options, Vested and expected to vest at December 31, 2018 | 5,643,473 | ||
Options, Exercisable at December 31, 2018 | 1,215,287 | ||
Weighted-Average Exercise Price Per Share, Outstanding at beginning of period | $ 47.11 | $ 84.05 | |
Weighted-Average Exercise Price Per Share, Granted | 20.34 | 4.69 | |
Weighted-Average Exercise Price Per Share, Exercised | 7.55 | 11.06 | |
Weighted-Average Exercise Price Per Share, Canceled/forfeited/expired | 45.46 | 110.21 | |
Weighted-Average Exercise Price Per Share, Outstanding at end of period | 23.61 | $ 47.11 | $ 84.05 |
Weighted-Average Exercise Price Per Share, Vested and expected to vest at December 31, 2018 | 23.73 | ||
Weighted-Average Exercise Price Per Share, Exercisable at December 31, 2018 | $ 43.40 | ||
Weighted-Average Remaining Contractual Life, Outstanding | 8 years 11 months 8 days | 8 years 29 days | 7 years 11 months 1 day |
Weighted-Average Remaining Contractual Life, Vested and expected to vest at December 31, 2018 | 8 years 11 months 8 days | ||
Weighted-Average Remaining Contractual Life, Exercisable at December 31, 2018 | 7 years 4 months 2 days | ||
Aggregate Intrinsic Value, Outstanding at beginning period | $ 116,988 | $ 1,593 | |
Aggregate Intrinsic Value, Exercised | 3,953 | $ 338 | |
Aggregate Intrinsic Value, Canceled/forfeited/expired | 1,466 | ||
Aggregate Intrinsic Value, Vested and expected to vest at December 31, 2018 | 114,547 | ||
Aggregate Intrinsic Value, Exercisable at December 31, 2018 | $ 25,852 |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) - Summary of Compensation Cost Included in Consolidated Statement of Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Compensation cost | $ 23,736 | $ 12,628 | $ 11,660 |
Cost of sales [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Compensation cost | 2,581 | 1,360 | 1,016 |
Selling, general & administrative [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Compensation cost | 16,824 | 10,020 | 9,360 |
Research and development [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Compensation cost | $ 4,331 | $ 1,248 | $ 1,284 |
Stockholders' Equity (Deficit_5
Stockholders' Equity (Deficit) - Schedule of Assumptions Used in Black-Scholes Option-Pricing Model (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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) | $ 12.94 | $ 2.65 | $ 24.30 |
Risk-free interest rate | 2.80% | 2.10% | 1.70% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 71.40% | 60.80% | 57.50% |
Expected term (in years) | 5 years 8 months 12 days | 5 years 9 months 18 days | 5 years 9 months 18 days |
ESPP [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted average grant date fair value (per share) | $ 13.48 | ||
Risk-free interest rate | 2.50% | ||
Expected dividend yield | 0.00% | ||
Expected volatility | 81.20% | ||
Expected term (in years) | 1 year 3 months |
Stockholders' Equity (Deficit_6
Stockholders' Equity (Deficit) - Schedule of Assumptions Used in Black-Scholes Option-Pricing Model (Parenthetical) (Detail) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grants made during period | 4,730,956 | 615,067 |
ESPP [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grants made during period | 0 |
Stockholders' Equity (Deficit_7
Stockholders' Equity (Deficit) - Schedule of Shares of Common Stock Reserved for Future Issuance (Detail) shares in Thousands | Dec. 31, 2018shares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 9,563 |
Warrants for common stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 804 |
Stock options issued and outstanding [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 5,769 |
Authorized for future option grants [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 969 |
Employee stock purchase plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock reserved for future issuance | 2,021 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit at federal statutory rate | $ (25,738) | $ (24,829) | $ (28,362) |
State income tax, net of federal benefit | (1,649) | (2,034) | (2,393) |
Warrants revaluation | 13,964 | (347) | |
Research and development credits | (1,425) | (480) | (720) |
Stock-based compensation | 1,362 | 3,214 | 1,686 |
Tax Cuts and Jobs Acts | 51,577 | ||
Other | 681 | 138 | 456 |
Change in valuation allowance | 12,856 | (27,231) | 29,318 |
Income tax expense (benefit) | $ 51 | $ 8 | $ (15) |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Parenthetical) (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory tax rate | 21.00% | 34.00% | 34.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss (NOL) carryforwards | $ 85,761 | $ 81,483 |
Research and development tax credits carryforwards | 4,942 | 3,517 |
Capitalized research and development expenses | 10,759 | 12,746 |
Accrued compensation | 13,816 | 8,809 |
Other | 8,238 | 4,139 |
Total deferred tax assets | 123,516 | 110,694 |
Less valuation allowance | $ (123,516) | $ (110,694) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Line Items] | ||||
Accumulated federal NOL carryforwards | $ 352,700,000 | |||
Accumulated state NOL carryforwards | 313,500,000 | |||
Accumulated state NOL carryforwards | $ 1,100,000 | |||
Deferred Tax Assets Tax Credit Carryforwards Research Expiration Year | 2,028 | |||
Research credit carryforwards | $ 4,942,000 | $ 3,517,000 | ||
Excess tax benefits for which benefit could not previously be recognized | $ 8,824,000 | 8,121,000 | $ 8,167,000 | $ 7,594,000 |
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. | |||
Unrecognized tax benefits | $ 7,300,000 | |||
Accrual interest and penalties | 0 | $ 0 | ||
Loss before income taxes,domestic | (122,000,000) | |||
Loss before income taxes, foreign | $ (1,000,000) | |||
U.S. federal statutory tax rate | 21.00% | 34.00% | 34.00% | |
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 | |||
Minimum [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income tax Realization | 50.00% | |||
Maximum [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
U.S. federal statutory tax rate | 35.00% | |||
ASU 2016-09 [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Excess tax benefits for which benefit could not previously be recognized | $ 1,800,000 | |||
California [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Remaining NOL carry forwards amount | $ 183,900,000 | |||
NOL carry forwards expiration year | 2,028 | |||
Federal [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Tax credit carryforward, expiration date | 2,026 | |||
Research credit carryforwards | $ 5,700,000 | |||
State and Local [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Tax credit carryforward, expiration date | 2,019 | |||
Foreign [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Tax credit carryforward, expiration date | 2,038 | |||
California [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Research credit carryforwards | $ 6,300,000 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Gross unrecognized tax benefits at the beginning of the year | $ 8,121 | $ 8,167 | $ 7,594 |
Increases related to current year positions | 644 | 411 | 580 |
Increases (decreases) related to prior year positions | 59 | (457) | (7) |
Gross unrecognized tax benefits at the end of the year | $ 8,824 | $ 8,121 | $ 8,167 |
Collaborations - Additional Inf
Collaborations - Additional Information (Detail) - DexCom Agreement [Member] $ in Millions | 12 Months Ended | 36 Months Ended | |
Dec. 31, 2018USD ($)$ / IntegratedSystem | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Licensing fees paid | $ 3 | ||
Commit for incremental marketing activities | $ / IntegratedSystem | 100 | ||
Marketing fund commitment amount | $ 0.1 | $ 1.1 |
Employee-Benefits - Additional
Employee-Benefits - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
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 $0.4 million. | |||
Early termination payment | $ 400,000 | |||
Unsecured standby letter of credit | $ 300,000 | |||
Lease agreement expiration period | Jul. 15, 2022 | |||
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 2017 | $ 400,000 | |||
Tl Rent 2018 | 700,000 | |||
Tl Rent 2019 | 700,000 | |||
Tl Rent 2020 | 700,000 | |||
Tl Rent 2021 | 700,000 | |||
Tl Rent 2022 | 700,000 | |||
Tl Rent 2023 | 700,000 | |||
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 | 4,800,000 | 5,600,000 | ||
Rent expense | $ 2,600,000 | $ 3,500,000 | $ 3,100,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Payments Under Noncancelable Operating Leases (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,019 | $ 2,743 |
2,020 | 2,858 |
2,021 | 2,944 |
2,022 | 1,644 |
2,023 | 642 |
Total | $ 10,831 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Revenue | $ 76,199 | $ 46,264 | $ 34,126 | $ 27,277 | $ 40,294 | $ 27,003 | $ 21,327 | $ 18,977 | $ 183,866 | $ 107,601 | $ 84,248 | |||||
Gross profit | 41,535 | 21,796 | 15,087 | 11,404 | 17,468 | 11,873 | 8,001 | 6,753 | 89,822 | 44,094 | 23,592 | |||||
Operating expenses | 40,975 | 37,505 | 29,084 | 26,889 | 27,050 | 25,039 | 26,970 | 27,979 | 134,453 | 107,038 | 101,643 | |||||
Operating income (loss) | 560 | (15,709) | (13,997) | (15,485) | (9,583) | (13,166) | (18,969) | (21,226) | (44,631) | (62,944) | (78,051) | |||||
Net loss | $ 3,686 | $ (34,245) | $ (59,359) | $ (32,693) | $ (11,406) | $ (16,034) | $ (21,801) | $ (23,792) | $ (122,611) | $ (73,033) | $ (83,447) | |||||
Basic net income (loss) per share | [1] | $ 0.06 | $ (0.62) | $ (1.17) | $ (1.82) | |||||||||||
Diluted net income (loss) per share | [1] | $ 0.02 | $ (0.62) | $ (1.17) | $ (1.82) | |||||||||||
Basic and diluted net loss per share | $ (1.23) | [1] | $ (3.09) | [1] | $ (4.36) | [1] | $ (7.46) | [1] | $ (2.55) | $ (12.87) | $ (27.30) | |||||
[1] | Net income (loss) per share is computed independently for each quarter and the full year based upon the respective average shares outstanding in each period. Therefore, the sum of the quarterly per-share calculations may not equal the reported annual per share amounts. |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jan. 31, 2019USD ($)ft² | Dec. 31, 2018USD ($) | |
Subsequent Event [Line Items] | ||
Future minimum payments under lease including reimbursement of certain landlord operating expenses | $ 10,831 | |
10935 Vista Sorrento Parkway, San Diego, California [Member] | ||
Subsequent Event [Line Items] | ||
Lease term description | Subject to limited exceptions, the initial lease term is expected to commence on the later of (i) March 1, 2019, or (ii) the date on which the landlord substantially completes certain specified work related to tenant improvements, such date the Commencement Date, and will expire 42 months from the first day of the first full month following the Commencement Date. | |
Subsequent Event [Member] | 10935 Vista Sorrento Parkway, San Diego, California [Member] | ||
Subsequent Event [Line Items] | ||
General administrative office space leased | ft² | 25,332 | |
Operating lease maturity period | 42 months | |
Period of extended lease term | 5 years | |
Future minimum payments under lease including reimbursement of certain landlord operating expenses | $ 3,500 |