Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38984 | |
Entity Registrant Name | CASTLE BIOSCIENCES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0701774 | |
Entity Address, Address Line One | 505 S. Friendswood Drive | |
Entity Address, Address Line Two | Suite 401 | |
Entity Address, City or Town | Friendswood | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77546 | |
City Area Code | 866 | |
Local Phone Number | 788-9007 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | CSTL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,300,343 | |
Entity Central Index Key | 0001447362 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 363,177 | $ 409,852 |
Accounts receivable, net | 18,532 | 12,759 |
Inventory | 2,375 | 2,217 |
Prepaid expenses and other current assets | 5,500 | 4,766 |
Total current assets | 389,584 | 429,594 |
Long-term accounts receivable, net | 1,410 | 1,096 |
Property and equipment, net | 8,866 | 7,102 |
Intangible asset, net | 32,104 | 0 |
Other assets – long-term | 1,728 | 1,536 |
Total assets | 433,692 | 439,328 |
Current Liabilities | ||
Accounts payable | 2,766 | 2,098 |
Accrued compensation | 12,120 | 9,108 |
Medicare advance payment | 2,999 | 6,615 |
Other accrued liabilities | 3,108 | 3,055 |
Total current liabilities | 20,993 | 20,876 |
Noncurrent portion of Medicare advance payment | 0 | 1,735 |
Deferred rent and other liabilities | 986 | 1,026 |
Total liabilities | 21,979 | 23,637 |
Commitments and Contingencies (Note 10) | ||
Stockholders’ Equity | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized as of September 30, 2021 and December 31, 2020; no shares issued and outstanding as of September 30, 2021 and December 31, 2020. | 0 | 0 |
Common stock, $0.001 par value; 200,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 25,286,546 and 24,812,487 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively. | 25 | 25 |
Additional paid-in capital | 499,046 | 478,162 |
Accumulated deficit | (87,358) | (62,496) |
Total stockholders’ equity | 411,713 | 415,691 |
Total liabilities and stockholders’ equity | $ 433,692 | $ 439,328 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 25,286,546 | 24,812,487 |
Common stock, shares outstanding (in shares) | 25,286,546 | 24,812,487 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
NET REVENUES | $ 23,475 | $ 15,217 | $ 69,046 | $ 45,350 |
OPERATING EXPENSES AND OTHER OPERATING LOSS | ||||
Cost of sales (exclusive of amortization of acquired intangible asset) | 4,500 | 2,475 | 11,225 | 7,012 |
Research and development | 7,500 | 3,058 | 20,201 | 8,675 |
Selling, general and administrative | 22,595 | 11,703 | 61,578 | 33,173 |
Amortization of acquired intangible asset | 694 | 0 | 950 | 0 |
Other operating loss | 0 | 1,882 | 0 | 0 |
Total operating expenses | 35,289 | 19,118 | 93,954 | 48,860 |
Operating loss | (11,814) | (3,901) | (24,908) | (3,510) |
Interest income | 23 | 18 | 51 | 354 |
Interest expense | 0 | (706) | 0 | (2,239) |
Loss before income taxes | (11,791) | (4,589) | (24,857) | (5,395) |
Income tax expense | 0 | 0 | 5 | 0 |
Net loss and comprehensive loss | (11,791) | (4,589) | (24,862) | (5,395) |
Net loss and comprehensive loss | $ (11,791) | $ (4,589) | $ (24,862) | $ (5,395) |
Loss per share: | ||||
Basic (in dollars per share) | $ (0.47) | $ (0.23) | $ (0.99) | $ (0.29) |
Diluted (in dollars per share) | $ (0.47) | $ (0.23) | $ (0.99) | $ (0.29) |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 25,287 | 19,936 | 25,072 | 18,290 |
Diluted (in shares) | 25,287 | 19,936 | 25,072 | 18,290 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 17,130,907 | |||
Beginning balance at Dec. 31, 2019 | $ 85,113 | $ 0 | $ 17 | $ 137,308 | $ (52,212) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock compensation expense | 1,577 | 1,577 | |||
Exercise of common stock options (in shares) | 32,602 | ||||
Exercise of common stock options | 71 | 71 | |||
Issuance of common stock under the employee stock purchase plan (in shares) | 39,987 | ||||
Issuance of common stock under the employee stock purchase plan | 603 | 603 | |||
Net income (loss) | 570 | 570 | |||
Ending balance (in shares) at Mar. 31, 2020 | 0 | 17,203,496 | |||
Ending balance at Mar. 31, 2020 | 87,934 | $ 0 | $ 17 | 139,559 | (51,642) |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 17,130,907 | |||
Beginning balance at Dec. 31, 2019 | 85,113 | $ 0 | $ 17 | 137,308 | (52,212) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (5,395) | ||||
Ending balance (in shares) at Sep. 30, 2020 | 0 | 19,844,426 | |||
Ending balance at Sep. 30, 2020 | 166,559 | $ 0 | $ 20 | 224,146 | (57,607) |
Beginning balance (in shares) at Mar. 31, 2020 | 0 | 17,203,496 | |||
Beginning balance at Mar. 31, 2020 | 87,934 | $ 0 | $ 17 | 139,559 | (51,642) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock compensation expense | 1,653 | 1,653 | |||
Exercise of common stock options (in shares) | 170,373 | ||||
Exercise of common stock options | 330 | 330 | |||
Public offering of common stock, net of underwriting discounts, commissions and offering costs (in shares) | 2,000,000 | ||||
Public offering of common stock, net of underwriting discounts, commissions and offering costs | 69,081 | $ 2 | 69,079 | ||
Net income (loss) | (1,376) | (1,376) | |||
Ending balance (in shares) at Jun. 30, 2020 | 0 | 19,373,869 | |||
Ending balance at Jun. 30, 2020 | 157,622 | $ 0 | $ 19 | 210,621 | (53,018) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock compensation expense | 2,118 | 2,118 | |||
Exercise of common stock options (in shares) | 129,090 | ||||
Exercise of common stock options | 292 | $ 1 | 291 | ||
Issuance of common stock under the employee stock purchase plan (in shares) | 41,467 | ||||
Issuance of common stock under the employee stock purchase plan | 693 | 693 | |||
Public offering of common stock, net of underwriting discounts, commissions and offering costs (in shares) | 300,000 | ||||
Public offering of common stock, net of underwriting discounts, commissions and offering costs | 10,423 | 10,423 | |||
Net income (loss) | (4,589) | (4,589) | |||
Ending balance (in shares) at Sep. 30, 2020 | 0 | 19,844,426 | |||
Ending balance at Sep. 30, 2020 | 166,559 | $ 0 | $ 20 | 224,146 | (57,607) |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 24,812,487 | |||
Beginning balance at Dec. 31, 2020 | 415,691 | $ 0 | $ 25 | 478,162 | (62,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock compensation expense | 4,913 | 4,913 | |||
Exercise of common stock options (in shares) | 171,315 | ||||
Exercise of common stock options | 991 | 991 | |||
Issuance of common stock under the employee stock purchase plan (in shares) | 70,711 | ||||
Issuance of common stock under the employee stock purchase plan | 1,233 | 1,233 | |||
Public offering of common stock, adjustment to offering costs | 39 | 39 | |||
Net income (loss) | (4,280) | (4,280) | |||
Ending balance (in shares) at Mar. 31, 2021 | 0 | 25,054,513 | |||
Ending balance at Mar. 31, 2021 | 418,587 | $ 0 | $ 25 | 485,338 | (66,776) |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 24,812,487 | |||
Beginning balance at Dec. 31, 2020 | $ 415,691 | $ 0 | $ 25 | 478,162 | (62,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of common stock options (in shares) | 362,498 | ||||
Net income (loss) | $ (24,862) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 25,286,546 | |||
Ending balance at Sep. 30, 2021 | 411,713 | $ 0 | $ 25 | 499,046 | (87,358) |
Beginning balance (in shares) at Mar. 31, 2021 | 0 | 25,054,513 | |||
Beginning balance at Mar. 31, 2021 | 418,587 | $ 0 | $ 25 | 485,338 | (66,776) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock compensation expense | 4,766 | 4,766 | |||
Exercise of common stock options (in shares) | 109,540 | ||||
Exercise of common stock options | 1,354 | 1,354 | |||
Net income (loss) | (8,791) | (8,791) | |||
Ending balance (in shares) at Jun. 30, 2021 | 0 | 25,164,053 | |||
Ending balance at Jun. 30, 2021 | 415,916 | $ 0 | $ 25 | 491,458 | (75,567) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock compensation expense | 5,210 | 5,210 | |||
Exercise of common stock options (in shares) | 82,756 | ||||
Exercise of common stock options | 1,523 | 1,523 | |||
Issuance of common stock under the employee stock purchase plan (in shares) | 39,737 | ||||
Issuance of common stock under the employee stock purchase plan | 855 | 855 | |||
Net income (loss) | (11,791) | (11,791) | |||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 25,286,546 | |||
Ending balance at Sep. 30, 2021 | $ 411,713 | $ 0 | $ 25 | $ 499,046 | $ (87,358) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
OPERATING ACTIVITIES | ||
Net loss | $ (24,862) | $ (5,395) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 1,956 | 312 |
Stock compensation expense | 14,889 | 5,348 |
Amortization of debt discounts and issuance costs | 0 | 666 |
Other | (99) | 3 |
Change in operating assets and liabilities: | ||
Accounts receivable | (6,087) | 1,855 |
Prepaid expenses and other current assets | (734) | (1,767) |
Inventory | (28) | (442) |
Other assets | (193) | (1,503) |
Accounts payable | 673 | 211 |
Accrued compensation | 3,012 | 575 |
Medicare advance payment | (5,351) | 8,350 |
Other accrued liabilities | 619 | 1,709 |
Deferred rent and other liabilities | 3 | 373 |
Net cash (used in) provided by operating activities | (16,202) | 10,295 |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | (2,590) | (4,162) |
Asset acquisition | (33,184) | 0 |
Proceeds from sale of property and equipment | 6 | 2 |
Net cash used in investing activities | (35,768) | (4,160) |
FINANCING ACTIVITIES | ||
Proceeds from public offering of common stock, net of underwriting discounts, commissions and offering costs | 0 | 79,504 |
Payment of common stock offering costs | (336) | 0 |
Repayments on term debt | 0 | (3,333) |
Proceeds from exercise of common stock options | 3,868 | 692 |
Proceeds from contributions to the employee stock purchase plan | 1,763 | 1,207 |
Net cash provided by financing activities | 5,295 | 78,070 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (46,675) | 84,205 |
Beginning of period | 409,852 | 98,845 |
End of period | 363,177 | 183,050 |
DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accrued purchases of property and equipment | 190 | 32 |
Property and equipment acquired with tenant improvement allowance | $ 54 | $ 714 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Castle Biosciences, Inc. (the ‘‘Company’’, “we”, “us”, or “our”) was incorporated in the state of Delaware on September 12, 2007. We are a commercial-stage dermatological cancer company focused on providing physicians and their patients with personalized, clinically actionable genomic information to make more accurate treatment decisions. We are based in Friendswood, Texas (a suburb of Houston, Texas) and all of our laboratory operations are conducted at our facilities located in Phoenix, Arizona. Impact of COVID-19 Pandemic Since the COVID-19 pandemic began in March 2020, we have maintained uninterrupted business operations with normal turnaround times for delivery of test reports, but have experienced declines in test report volume in certain periods, which we believe is linked to delays and/or cancellations in patient visits in response to COVID-19, resulting in reduced diagnostic biopsies and thus reduced diagnoses of cutaneous melanoma. The extent to which COVID-19 may further impact our business, consolidated results of operations, consolidated financial condition and consolidated cash flows will depend on future developments, which are highly uncertain and cannot be predicted with confidence. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation Our unaudited condensed consolidated financial statements include the accounts of Castle Biosciences, Inc. and a wholly owned subsidiary and have been prepared in conformity with accounting principles generally accepted in the United States of America (‘‘U.S. GAAP’’). All intercompany accounts and transactions have been eliminated in consolidation. Reclassification Certain prior year amounts in our condensed consolidated statements of operations and comprehensive loss have been reclassified to conform to the current year presentation. Specifically, we no longer present gross margin and therefore the cost of sales line is now presented within the operating expenses section of the condensed consolidated statements of operations and comprehensive loss. This reclassification had no impact on operating loss, loss before income taxes, net loss, comprehensive loss or loss per share. Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of September 30, 2021; the condensed consolidated statements of operations and comprehensive loss, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2021 and 2020; and the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our consolidated financial position as of September 30, 2021 and the results of our consolidated operations and our consolidated cash flows for the three and nine months ended September 30, 2021 and 2020. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2021 and 2020 are also unaudited. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period. The balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim consolidated financial statements. These consolidated financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 11, 2021. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include revenue recognition, the valuation of stock-based compensation, assessing future tax exposure and the realization of deferred tax assets, the useful lives and recoverability of long-lived assets, the valuation of acquired intangible assets and contingent liabilities. We base these estimates on historical and anticipated results, trends, and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. We have considered the potential impact of the COVID-19 pandemic on our estimates and assumptions. The extent to which the COVID-19 pandemic may impact our estimates in future periods is uncertain and subject to change. Cash and Cash Equivalents including Concentrations of Credit Risk Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. Our cash equivalents consist of money market funds, which are not insured by the Federal Deposit Insurance Corporation (“FDIC”), that are primarily invested in short-term U.S. government obligations. Cash deposits at financial institutions may exceed the amount of insurance provided by the FDIC. Management believes that we are not exposed to significant credit risk on our cash deposits due to the financial position of the institutions in which deposits are held. We have not experienced any losses on our cash or cash equivalents. Revenue Recognition Revenue is recognized in accordance with Financial Accounting Standards Board (‘‘FASB’’) Accounting Standards Codification (‘‘ASC’’) Topic 606, Revenue from Contracts with Customers (‘‘ASC 606’’). In accordance with ASC 606, we follow a five-step process to recognize revenues: (1) identify the contract with the customer, (2) identify the performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenues when the performance obligations are satisfied. We have determined that we have a contract with the patient when the treating clinician orders the test. Our contracts generally contain a single performance obligation, which is the delivery of the test report, and we satisfy our performance obligation at a point in time upon the delivery of the test report to the treating physician, at which point we can bill for the report. The amount of revenue recognized reflects the amount of consideration to which we expect to be entitled, or the transaction price, and considers the effects of variable consideration. See Note 3 for further details. Accounts Receivable and Allowance for Doubtful Accounts We classify accounts receivable balances that are expected to be paid more than one year from the balance sheet date as non-current assets. The estimated timing of payment utilized as a basis for classification as non-current is determined by analyses of historical payor-specific payment experience, adjusted for known factors that are expected to change the timing of future payments. We accrue an allowance for doubtful accounts against our accounts receivable when it is probable that an account is not collectible, based on write off history, credit risk of specific accounts, aging analysis and other information available on specific accounts. We generally do not perform evaluations of customers’ financial condition and generally do not require collateral. Accounts receivable are written off when all efforts to collect the balance have been exhausted. Historically, our bad debt expense has not been significant. The allowance for doubtful accounts was zero as of September 30, 2021, and December 31, 2020. Adjustments for implicit price concessions attributable to variable consideration, as discussed above, are incorporated into the measurement of the accounts receivable balances and are not part of the allowance for doubtful accounts. Other Operating Loss On April 10, 2020, we received an automatic payment of $1.9 million from the U.S. Department of Health and Human Services (“HHS”) pursuant to the Coronavirus Aid, Relief and Economic Security Act enacted on March 27, 2020, also known as the CARES Act, out of relief funds allocated by HHS to healthcare providers to reimburse healthcare related expenses or lost revenues attributable to COVID-19. This automatic payment was calculated by HHS in proportion to the providers’ share of Medicare fee-for-service reimbursements in 2019 and was applicable to all facilities and providers that received Medicare fee-for-service reimbursements in 2019. In the second quarter of 2020, based on guidance issued by HHS at the time that stated any reasonable method could be used to calculate lost revenues attributable to COVID-19, we concluded it would qualify to retain the relief funds and recognized the funds received as other operating income during the three months ended June 30, 2020. On September 19, 2020, HHS issued a notice of reporting requirements that changed the methodology for determining lost revenues to be based on a patient care operating income metric, as defined by HHS. Due to this change in methodology and uncertainty in its application, we determined that it was no longer reasonably assured of keeping the funds. Therefore, in the three months ended September 30, 2020, we reversed the previously recognized income. However, in the fourth quarter of 2020, a legislative change was enacted affecting the program, under which we concluded it is reasonably assured we will qualify to retain the funds. Accordingly, we recognized the income again in the fourth quarter of 2020. Intangible Asset Our intangible asset consists of acquired developed technology. The intangible asset is considered to be finite-lived and is being amortized on a straight-line basis over its estimated useful life. Accrued Compensation We accrue for liabilities under discretionary employee and executive bonus plans. These estimated compensation liabilities are based on progress against corporate objectives approved by our board of directors, compensation levels of eligible individuals, and target bonus percentage levels. The board of directors reviews and evaluates the performance against these objectives and ultimately determines what discretionary payments are made. We also accrue for liabilities under employee sales incentive bonus plans with accruals based on performance achieved to date compared to established targets. As of September 30, 2021 and December 31, 2020, we accrued $8,999,000 and $7,175,000, respectively, for liabilities associated with these bonus plans. These amounts are classified as current or noncurrent accrued liabilities in the balance sheets based on the expected timing of payment. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Our comprehensive loss was the same as our reported net loss for all periods presented. Accounting Pronouncements Yet to be Adopted We are currently an emerging growth company (“EGC”) within the meaning of the Jumpstart Our Business Startups Act, as amended, (the “JOBS Act”) and have elected to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, as permitted under the JOBS Act. However, because the market value of our common stock held by non-affiliates exceeded $700.0 million as of June 30, 2021, we will cease to be an EGC effective December 31, 2021. As such, upon our loss of status as an EGC, we will no longer be permitted to delay the adoption of new or revised accounting pronouncements, including the accounting pronouncements discussed below. In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes FASB ASC Topic 840, Leases, and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method for finance leases or on a straight-line basis over the term of the lease for operating leases. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. For companies that are not EGCs’, ASU 2016-02 was effective for fiscal years beginning after December 15, 2018. For EGCs, the effective date of the ASU has been deferred to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. However, because we will no longer be an EGC effective December 31, 2021, we will adopt the new standard in the fourth quarter of 2021 using the modified retrospective method, under which we will apply Topic 842 to existing and new leases as of January 1, 2021, but prior periods will not be restated and will continue to be reported under Topic 840 guidance in effect during those periods. We do not expect the adoption of this standard to have a material impact on our consolidated statements of operations and comprehensive loss or our consolidated statements of cash flows, but we expect to recognize right-of-use assets and liabilities for lease obligations associated with our operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (“ASU 2016-13”), which requires the measurement of expected credit losses for financial instruments carried at amortized cost, such as accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For non-EGCs, ASU 2016-13 was effective for fiscal years beginning after December 15, 2019. For EGCs, the effective date of the ASU has been deferred to fiscal years beginning after December 15, 2022, including interim periods in those fiscal years. However, because we will no longer be an EGC effective December 31, 2021, we will adopt the new standard in the fourth quarter of 2021 under the modified retrospective method. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements, given our history of minimal bad debt expense relating to trade accounts receivable. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions to the general principles in Topic 740 and simplifies other areas of the existing guidance. For non-EGCs, ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For EGCs, the standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. However, because we will no longer be an EGC effective December 31, 2021, we will adopt the standard in the fourth quarter of 2021. We do not expect the adoption of ASU 2019-12 to have a material impact to our consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue All of our revenues from contracts with customers are associated with the provision of diagnostic and prognostic cancer testing services. Most of our revenues are attributable to DecisionDx®-Melanoma for cutaneous melanoma. We also provide a test for uveal melanoma, DecisionDx®-UM. We launched a test for patients with cutaneous squamous cell carcinoma, DecisionDx®-SCC in August 2020 and launched a test for use in patients with suspicious pigmented lesions, DecisionDx® DiffDx™-Melanoma in November 2020. We began offering a test for difficult-to-diagnose melanocytic lesions, myPath Melanoma, following an asset acquisition completed in May 2021. Information on the disaggregation of revenues by our significant third-party payors is included under Payor Concentration below. Once we satisfy our performance obligations and bill for the service, the timing of the collection of payments may vary based on the payment practices of the third-party payor and the existence of contractually established reimbursement rates. Most of the payments for our services are made by third-party payors, including Medicare and commercial health insurance carriers. Certain contracts contain a contractual commitment of a reimbursement rate that differs from our list prices. However, absent a positive coverage policy, with or without a contractually committed reimbursement rate, with a commercial carrier or governmental program, our diagnostic tests may or may not be paid by these entities. In addition, patients do not enter into direct agreements with us that commit them to pay any portion of the cost of the tests in the event that their insurance provider declines to reimburse us. We may pursue, on a case-by-case basis, reimbursement from such patients in the form of co-payments and co-insurance, in accordance with the contractual obligations that we have with the insurance carrier or health plan. These situations may result in a delay in the collection of payments. The Medicare claims that are covered by policy under a Local Coverage Determination (‘‘LCD’’) are generally paid at the established rate by our Medicare contractor within 30 days from receipt. Medicare claims that were either submitted to Medicare prior to the LCD coverage commencement date or are not covered by the terms of the LCD but meet the definition of being medically reasonable and necessary pursuant to the controlling Section 1862(a)(1)(A) of the Social Security Act are generally appealed and may ultimately be paid at the first (termed ‘‘redetermination’’), second (termed ‘‘reconsideration’’) or third level of appeal (de novo hearing with an Administrative Law Judge (“ALJ”)). A successful appeal at any of these levels results in payment. In the absence of LCD coverage or contractually established reimbursements rates, we have concluded that our contracts include variable consideration because the amounts paid by Medicare or commercial health insurance carriers may be paid at less than our standard rates or not paid at all, with such differences considered implicit price concessions. Variable consideration attributable to these price concessions is measured at the expected value using the ‘‘most likely amount’’ method under ASC 606. The amounts are determined by historical average collection rates by test type and payor category taking into consideration the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as the judgment and actions of third parties. Such variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. Variable consideration may be constrained and excluded from the transaction price in situations where there is no contractually agreed upon reimbursement coverage or in the absence of a predictable pattern and history of collectability with a payor. Accordingly, in such situations revenues are recognized on the basis of actual cash collections. Variable consideration for Medicare claims that are not covered by an LCD, including those claims subject to approval by an ALJ at an appeal hearing, is deemed to be fully constrained due to factors outside our influence (i.e., judgment or actions of third parties) and the uncertainty of the amount to be received is not expected to be resolved for a long period of time. Variable consideration is evaluated each reporting period and adjustments are recorded as increases or decreases in revenues. Included in revenues for the three months ended September 30, 2021 and 2020 were $(92,000) and $1,450,000, respectively, of net (negative) positive revenue adjustments associated with changes in estimated variable consideration related to performance obligations satisfied in previous periods. Such amounts of variable consideration for the nine months ended September 30, 2021 and 2020 were $4,130,000 and $223,000, respectively. These amounts include (i) adjustments for actual collections versus estimated amounts and (ii) cash collections and the related recognition of revenue in current period for tests delivered in prior periods due to the release of the constraint on variable consideration. Because our contracts with customers have an expected duration of one year or less, we have elected the practical expedient in ASC 606 to not disclose information about our remaining performance obligations. Any incremental costs to obtain contracts are recorded as selling, general and administrative expense as incurred due to the short duration of our contracts. Contract balances consisted of accounts receivable (both current and noncurrent) and the Medicare advance payment (discussed further below) as of September 30, 2021 and December 31, 2020. Medicare Advance Payment On April 16, 2020, we received an advance payment of $8.3 million (the “Advance Payment”) from the Centers for Medicare & Medicaid Services (“CMS”) under its Accelerated and Advance Payment Program, which was expanded to provide increased cash flow to service providers during the COVID-19 pandemic. Recoupment of the Advance Payment commenced in April 2021. For the first eleven months of recoupment, CMS will apply 25% of the Medicare payments otherwise owed to us against the balance of the Advance Payment. After this eleven-month period, CMS will recoup at a rate of 50% of the Medicare payments otherwise owed to us for an additional six months. If the Advance Payment is not fully recovered by CMS after this recoupment period, we will be required to repay any remaining balance. The remaining balance of the Advance Payment is recorded as a current liability on our consolidated balance sheet as of September 30, 2021. Through September 30, 2021, $5,351,000 has been applied against the balance of the Advance Payment. DecisionDx-Melanoma Claims Consolidation In June 2017, we submitted to the Office of Medicare Hearings and Appeals (‘‘OMHA’’) a formal request to participate in a program that OMHA developed with the intent of providing appellants a means to have large volumes of claim disputes adjudicated at an accelerated rate. The program consolidates outstanding claims at the ALJ level and uses a statistical-sampling approach where five ALJs will determine reimbursement results for a sample of claims which are then extrapolated to the universe of claims. The consolidation includes 2,698 DecisionDx-Melanoma claims dating from 2013 through spring 2017. Hearings were held in April 2019 with a supplemental hearing in May 2019. On March 12, 2020, OMHA issued a decision denying payment on all claims in the consolidation. We have filed an appeal to the decision, although no ruling on such appeal has been issued to date. In accordance with ASC 606 and consistent with prior periods, we have not recognized (fully constrained the variable consideration) any revenues attributable to these claims in our consolidated financial statements pending the outcome of this matter. Payor Concentration We rely upon reimbursements from third-party government payors (primarily Medicare) and private-payor insurance companies to collect accounts receivable related to sales of our diagnostic tests. Our significant third-party payors and their related revenues as a percentage of total revenues and accounts receivable balances are as follows: Percentage of Revenues Nine Months Ended Percentage of Accounts Receivable (current) Percentage of Accounts Receivable (non-current) 2021 2020 September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 Medicare 57 % 54 % 26 % 15 % — % — % Medicare Advantage plans 27 % 28 % 37 % 40 % 18 % 25 % BlueCross BlueShield plans 7 % 8 % 22 % 26 % 49 % 44 % |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per share is computed by dividing net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options or purchases under the 2019 Employee Stock Purchase Plan (“ESPP”). The treasury stock method is used to calculate the potential dilutive effect of these common stock equivalents. However, potentially dilutive shares are excluded from the computation of diluted loss per share when their effect is antidilutive. Due to us reporting a net loss for all periods presented, all potentially dilutive securities are antidilutive and are excluded from the computation of diluted loss per share for such periods. The table below provides the weighted-average number of potential common shares associated with outstanding securities not included in our calculation of diluted loss earnings per share for the three and nine months ended September 30, 2021 and 2020 because to do so would be antidilutive (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Stock options and restricted stock units (“RSUs”) 3,369 2,767 3,401 2,732 Common stock warrants — 35 — 35 Employee stock purchase plan 58 101 63 104 Total 3,427 2,903 3,464 2,871 |
Asset Acquisition
Asset Acquisition | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisition | Asset Acquisition On May 28, 2021, we completed the acquisition of all of the equity of Myriad myPath, LLC, a laboratory in Salt Lake City where the myPath Melanoma test for difficult-to-diagnose melanocytic lesions was developed and offered, for a cash purchase price of $32,500,000. Following the completion of the acquisition, we became the sole provider of the myPath Melanoma test. Based on the guidance in ASC 805, Business Combinations , we concluded that substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset and therefore the transaction represents an asset acquisition rather than a business combination. Asset acquisitions are accounted for by allocating the cost of the acquisition, including transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis without recognition of goodwill. We incurred $684,000 of direct transaction costs that were included in the cost of the acquisition. The allocation of the acquisition to individual assets resulted in an intangible asset representing developed technology of $33,054,000 and inventory of $130,000. The intangible asset has an estimated useful life of 12 years and is being amortized on a straight-line basis. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): September 30, 2021 December 31, 2020 Leasehold improvements $ 4,419 $ 1,388 Lab equipment 3,139 2,037 Computer equipment 2,139 1,305 Furniture and fixtures 985 436 Construction in progress 789 3,590 Total 11,471 8,756 Less accumulated depreciation (2,605) (1,654) Property and equipment, net $ 8,866 $ 7,102 Depreciation expense was recorded in the unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of sales (exclusive of amortization of acquired intangible asset) $ 120 $ 85 $ 333 $ 225 Research and development 67 8 175 13 Selling, general and administrative 208 26 498 74 Total $ 395 $ 119 $ 1,006 $ 312 |
Intangible Asset, Net
Intangible Asset, Net | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset, Net | Intangible Asset, Net Our intangible asset, net consists of the following (in thousands) : September 30, 2021 December 31, 2020 Gross carrying value Accumulated amortization Net Gross carrying value Accumulated amortization Net Developed technology $ 33,054 $ (950) $ 32,104 $ — $ — $ — The remaining useful life of the intangible asset was 11.7 years as of September 30, 2021. The estimated future aggregate amortization expense as of September 30, 2021 is as follows (in thousands): Years Ending December 31, 2021 (remainder of year) $ 694 2022 2,753 2023 2,753 2024 2,761 2025 2,753 Thereafter 20,390 Total $ 32,104 |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following (in thousands) : September 30, 2021 December 31, 2020 Accrued service fees $ 1,678 $ 1,543 Payroll tax liabilities 617 276 Clinical studies 431 348 Employee stock purchase plan contributions 211 536 Accrued royalties 116 151 Accrued state income taxes 10 62 Other 45 139 Total $ 3,108 $ 3,055 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The table below provides information, by level within the fair value hierarchy, of our financial assets and financial liabilities that are accounted for at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 (in thousands): As of September 30, 2021 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Total Assets: Money market funds (1) $ 362,462 $ — $ — $ 362,462 As of December 31, 2020 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Total Assets: Money market funds (1) $ 409,480 $ — $ — $ 409,480 (1) Classified as “Cash and cash equivalents” in the condensed consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, we may be involved in legal proceedings arising in the ordinary course of business. We believe there is no threatened litigation or litigation pending that could have, individually or in the aggregate, a material adverse effect on our financial position, results of operations or cash flows. |
Common Stock Offerings
Common Stock Offerings | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Common Stock Offerings | Common Stock OfferingsOn June 29, 2020, we issued and sold 2,000,000 shares of our common stock in a follow-on public offering at a price of $37.00 per share. We received $69,079,000 in net proceeds, after deducting underwriting discounts, commissions and offering costs. In connection with the offering, we granted the underwriters a 30-day option to purchase up to 300,000 additional shares of common stock at the public offering price, less underwriting discounts and commissions. On July 2, 2020, we issued and sold an additional 300,000 shares of common stock pursuant to the underwriters’ exercise in full of their option to purchase additional shares, which resulted in an additional net proceeds to us of $10,425,000. On December 18, 2020, we issued and sold 4,600,000 shares of our common stock in a follow-on public offering, including 600,000 shares associated with the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $58.00 per share. We received $250,201,000 in aggregate net proceeds, after deducting underwriting discounts and commissions and offering costs. |
Stock Incentive Plans and Stock
Stock Incentive Plans and Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans and Stock-Based Compensation | Stock Incentive Plans and Stock-Based Compensation Stock Incentive Plans Effective January 1, 2021, an additional 1,240,624 shares became available under our 2019 Equity Incentive Plan (the “2019 Plan”) pursuant to an automatic annual increase. As of September 30, 2021, 1,441,394 shares remained available for grant under the 2019 Plan. Stock Options Stock option activity under our stock plans for the nine months ended September 30, 2021 is set forth below: Weighted-Average Stock Options Outstanding Exercise Price Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Balance as of December 31, 2020 3,369,502 $ 28.11 Granted 241,600 $ 67.79 Exercised (362,498) $ 10.58 Forfeited/Cancelled (137,873) $ 30.97 Balance as of September 30, 2021 3,110,731 $ 33.11 8.20 $ 104,585 Exercisable at September 30, 2021 (1) 1,068,457 $ 17.58 7.38 $ 52,271 (1) In addition, 24,729 unvested options outstanding at September 30, 2021 may be exercised prior to vesting under an early exercise provision in the stock option award agreement. In the event of such exercise, the shares obtained upon exercise would be restricted and subject to forfeiture prior to vesting. No such exercises have occurred to date. Restricted Stock Units The following table summarizes our RSU activity for the nine months ended September 30, 2021: Restricted Stock Units Outstanding Weighted-Average Grant Date Fair Value Balance as of December 31, 2020 161,477 $ 59.16 Granted 68,208 67.74 Vested — — Forfeited/Cancelled (6,267) 63.56 Balance as of September 30, 2021 223,418 $ 61.66 Employee Stock Purchase Plan The ESPP provides for certain automatic increases in the number of shares of common stock reserved for issuance, which resulted in an additional 248,124 shares becoming available under the ESPP effective January 1, 2021. During the nine months ended September 30, 2021, we issued 110,448 of common stock pursuant to scheduled purchases under the ESPP. As of September 30, 2021, 639,466 shares remained available for issuance under the ESPP. Determining Fair Value - Summary of Assumptions We use the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options: Nine Months Ended 2021 2020 Average expected term (years) 6 6 Expected stock price volatility 66.50% - 68.83% 59.15% - 63.82% Risk-free interest rate 0.51% - 1.09% 0.28% - 1.76% Dividend yield —% —% The following table sets forth assumptions used to determine the fair value of the purchase rights issued under the ESPP: Nine Months Ended 2021 2020 Average expected term (years) 1.2 1.2 Expected stock price volatility 62.17% - 86.50% 56.80% - 100.49% Risk-free interest rate 0.06% - 0.20% 0.12% - 0.95% Dividend yield —% —% The fair value of our common stock is also an assumption used to determine the fair value of stock options and purchase rights under the ESPP. The fair value of our common stock is the closing selling price per share of as reported on the Nasdaq Global Market on the date of grant or other relevant determination date. Previously, because of the limited period of time our stock had been traded in an active market, we calculated expected volatility by using the historical stock prices of a group of similar companies looking back over the estimated life of the option or the ESPP purchase right and averaging the volatilities of these companies. In the third quarter of 2021, we adjusted this calculation to include our own stock price on a relative basis to the peer group in the calculation of expected volatility, as our common stock has now been traded in an active market for more than two years. We use the closing price of our common stock on the date of grant to determine the fair value of RSUs. Stock-Based Compensation Expense Stock-based compensation expense related to stock options, RSUs and the ESPP is included in the statements of operations and comprehensive loss as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of sales (exclusive of amortization of acquired intangible asset) $ 555 $ 268 $ 1,480 $ 674 Research and development 1,135 370 3,266 835 Selling, general and administrative 3,520 1,480 10,143 3,839 Total stock-based compensation expense $ 5,210 $ 2,118 $ 14,889 $ 5,348 For the nine months ended September 30, 2021 and 2020, the weighted-average grant date fair value of options granted was $40.76 and $22.07 per option, respectively, and the weighted-average grant date fair value of the purchase rights granted under the ESPP was $28.23 and $17.43 per share, respectively. As of September 30, 2021, the total unrecognized compensation cost related to outstanding awards was $56,308,000, which is expected to be recognized on a straight-line basis over a weighted- |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 18, 2021, we signed a definitive agreement to acquire Cernostics, Inc (“Cernostics”). Under the terms of the definitive agreement, Cernostics will become our wholly owned subsidiary. At closing, we will pay upfront consideration of approximately $30 million, which may consist entirely of cash or a combination of $20 million in cash and $10 million in shares of our common stock, at our sole discretion. A portion of the upfront cash consideration will be held in escrow for a specified period following the closing to secure post-closing adjustments and indemnification claims, if any. If we choose to pay the $10 million in our common stock, the number of shares issued at the closing will be based on a price per share equal to $65.03. The upfront cash portion of the consideration is subject to a customary post-closing purchase price adjustment mechanism for, among other things, cash, unpaid indebtedness, unpaid transaction expenses and working capital. Under the definitive agreement, we have also agreed to pay up to an additional $50 million in cash or our common stock, at our sole discretion, based on the achievement of certain commercial milestones relating to the year ending December 31, 2022. The closing is subject to delivery of certain financial statements to us by Cernostics, the continued of employment of certain Cernostics personnel and satisfaction of other customary conditions. Among other termination provisions, we and Cernostics each have the right to terminate the definitive agreement, subject to certain conditions and limitations, if the closing has not occurred prior to November 30, 2021, which may be extended for up to 60 days if necessary for Cernostics to provide certain financial statements and/or if more than 5% of the aggregate number of shares of Cernostics capital stock have not waived their appraisal rights. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Our unaudited condensed consolidated financial statements include the accounts of Castle Biosciences, Inc. and a wholly owned subsidiary and have been prepared in conformity with accounting principles generally accepted in the United States of America (‘‘U.S. GAAP’’). All intercompany accounts and transactions have been eliminated in consolidation. Reclassification Certain prior year amounts in our condensed consolidated statements of operations and comprehensive loss have been reclassified to conform to the current year presentation. Specifically, we no longer present gross margin and therefore the cost of sales line is now presented within the operating expenses section of the condensed consolidated statements of operations and comprehensive loss. This reclassification had no impact on operating loss, loss before income taxes, net loss, comprehensive loss or loss per share. Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of September 30, 2021; the condensed consolidated statements of operations and comprehensive loss, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2021 and 2020; and the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our consolidated financial position as of September 30, 2021 and the results of our consolidated operations and our consolidated cash flows for the three and nine months ended September 30, 2021 and 2020. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2021 and 2020 are also unaudited. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period. The balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim consolidated financial statements. These consolidated financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 11, 2021. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include revenue recognition, the valuation of stock-based compensation, assessing future tax exposure and the realization of deferred tax assets, the useful lives and recoverability of long-lived assets, the valuation of acquired intangible assets and contingent liabilities. We base these estimates on historical and anticipated results, trends, and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. We have considered the potential impact of the COVID-19 pandemic on our estimates and assumptions. The extent to which the COVID-19 pandemic may impact our estimates in future periods is uncertain and subject to change. |
Cash and Cash Equivalents including Concentrations of Credit Risk | Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. Our cash equivalents consist of money market funds, which are not insured by the Federal Deposit Insurance Corporation (“FDIC”), that are primarily invested in short-term U.S. government obligations. |
Revenue Recognition | Revenue is recognized in accordance with Financial Accounting Standards Board (‘‘FASB’’) Accounting Standards Codification (‘‘ASC’’) Topic 606, Revenue from Contracts with Customers |
Accounts Receivable | We classify accounts receivable balances that are expected to be paid more than one year from the balance sheet date as non-current assets. The estimated timing of payment utilized as a basis for classification as non-current is determined by analyses of historical payor-specific payment experience, adjusted for known factors that are expected to change the timing of future payments. |
Allowance for Doubtful Accounts | We accrue an allowance for doubtful accounts against our accounts receivable when it is probable that an account is not collectible, based on write off history, credit risk of specific accounts, aging analysis and other information available on specific accounts. We generally do not perform evaluations of customers’ financial condition and generally do not require collateral. Accounts receivable are written off when all efforts to collect the balance have been exhausted. Historically, our bad debt expense has not been significant. The allowance for doubtful accounts was zero as of September 30, 2021, and December 31, 2020. Adjustments for implicit price concessions attributable to variable consideration, as discussed above, are incorporated into the measurement of the accounts receivable balances and are not part of the allowance for doubtful accounts. |
Intangible Asset | Our intangible asset consists of acquired developed technology. The intangible asset is considered to be finite-lived and is being amortized on a straight-line basis over its estimated useful life. |
Accrued Compensation | We accrue for liabilities under discretionary employee and executive bonus plans. These estimated compensation liabilities are based on progress against corporate objectives approved by our board of directors, compensation levels of eligible individuals, and target bonus percentage levels. The board of directors reviews and evaluates the performance against these objectives and ultimately determines what discretionary payments are made. We also accrue for liabilities under employee sales incentive bonus plans with accruals based on performance achieved to date compared to established targets. As of September 30, 2021 and December 31, 2020, we accrued $8,999,000 and $7,175,000, respectively, for liabilities associated with these bonus plans. These amounts are classified as current or noncurrent accrued liabilities in the balance sheets based on the expected timing of payment. |
Comprehensive Loss | Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. |
Accounting Pronouncements Yet to be Adopted | We are currently an emerging growth company (“EGC”) within the meaning of the Jumpstart Our Business Startups Act, as amended, (the “JOBS Act”) and have elected to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, as permitted under the JOBS Act. However, because the market value of our common stock held by non-affiliates exceeded $700.0 million as of June 30, 2021, we will cease to be an EGC effective December 31, 2021. As such, upon our loss of status as an EGC, we will no longer be permitted to delay the adoption of new or revised accounting pronouncements, including the accounting pronouncements discussed below. In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes FASB ASC Topic 840, Leases, and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method for finance leases or on a straight-line basis over the term of the lease for operating leases. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. For companies that are not EGCs’, ASU 2016-02 was effective for fiscal years beginning after December 15, 2018. For EGCs, the effective date of the ASU has been deferred to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. However, because we will no longer be an EGC effective December 31, 2021, we will adopt the new standard in the fourth quarter of 2021 using the modified retrospective method, under which we will apply Topic 842 to existing and new leases as of January 1, 2021, but prior periods will not be restated and will continue to be reported under Topic 840 guidance in effect during those periods. We do not expect the adoption of this standard to have a material impact on our consolidated statements of operations and comprehensive loss or our consolidated statements of cash flows, but we expect to recognize right-of-use assets and liabilities for lease obligations associated with our operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (“ASU 2016-13”), which requires the measurement of expected credit losses for financial instruments carried at amortized cost, such as accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For non-EGCs, ASU 2016-13 was effective for fiscal years beginning after December 15, 2019. For EGCs, the effective date of the ASU has been deferred to fiscal years beginning after December 15, 2022, including interim periods in those fiscal years. However, because we will no longer be an EGC effective December 31, 2021, we will adopt the new standard in the fourth quarter of 2021 under the modified retrospective method. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements, given our history of minimal bad debt expense relating to trade accounts receivable. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions to the general principles in Topic 740 and simplifies other areas of the existing guidance. For non-EGCs, ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For EGCs, the standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. However, because we will no longer be an EGC effective December 31, 2021, we will adopt the standard in the fourth quarter of 2021. We do not expect the adoption of ASU 2019-12 to have a material impact to our consolidated financial statements. |
Revenue - (Tables)
Revenue - (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Our significant third-party payors and their related revenues as a percentage of total revenues and accounts receivable balances are as follows: Percentage of Revenues Nine Months Ended Percentage of Accounts Receivable (current) Percentage of Accounts Receivable (non-current) 2021 2020 September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 Medicare 57 % 54 % 26 % 15 % — % — % Medicare Advantage plans 27 % 28 % 37 % 40 % 18 % 25 % BlueCross BlueShield plans 7 % 8 % 22 % 26 % 49 % 44 % |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The table below provides the weighted-average number of potential common shares associated with outstanding securities not included in our calculation of diluted loss earnings per share for the three and nine months ended September 30, 2021 and 2020 because to do so would be antidilutive (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Stock options and restricted stock units (“RSUs”) 3,369 2,767 3,401 2,732 Common stock warrants — 35 — 35 Employee stock purchase plan 58 101 63 104 Total 3,427 2,903 3,464 2,871 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Property and equipment, net consisted of the following (in thousands): September 30, 2021 December 31, 2020 Leasehold improvements $ 4,419 $ 1,388 Lab equipment 3,139 2,037 Computer equipment 2,139 1,305 Furniture and fixtures 985 436 Construction in progress 789 3,590 Total 11,471 8,756 Less accumulated depreciation (2,605) (1,654) Property and equipment, net $ 8,866 $ 7,102 Depreciation expense was recorded in the unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of sales (exclusive of amortization of acquired intangible asset) $ 120 $ 85 $ 333 $ 225 Research and development 67 8 175 13 Selling, general and administrative 208 26 498 74 Total $ 395 $ 119 $ 1,006 $ 312 |
Intangible Asset, Net (Tables)
Intangible Asset, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Finite-Lived Intangible Assets | Our intangible asset, net consists of the following (in thousands) : September 30, 2021 December 31, 2020 Gross carrying value Accumulated amortization Net Gross carrying value Accumulated amortization Net Developed technology $ 33,054 $ (950) $ 32,104 $ — $ — $ — |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future aggregate amortization expense as of September 30, 2021 is as follows (in thousands): Years Ending December 31, 2021 (remainder of year) $ 694 2022 2,753 2023 2,753 2024 2,761 2025 2,753 Thereafter 20,390 Total $ 32,104 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Other accrued liabilities consisted of the following (in thousands) : September 30, 2021 December 31, 2020 Accrued service fees $ 1,678 $ 1,543 Payroll tax liabilities 617 276 Clinical studies 431 348 Employee stock purchase plan contributions 211 536 Accrued royalties 116 151 Accrued state income taxes 10 62 Other 45 139 Total $ 3,108 $ 3,055 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The table below provides information, by level within the fair value hierarchy, of our financial assets and financial liabilities that are accounted for at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 (in thousands): As of September 30, 2021 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Total Assets: Money market funds (1) $ 362,462 $ — $ — $ 362,462 As of December 31, 2020 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Total Assets: Money market funds (1) $ 409,480 $ — $ — $ 409,480 (1) Classified as “Cash and cash equivalents” in the condensed consolidated balance sheets. |
Stock Incentive Plans and Sto_2
Stock Incentive Plans and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Arrangement on Stock Option Activity | Stock option activity under our stock plans for the nine months ended September 30, 2021 is set forth below: Weighted-Average Stock Options Outstanding Exercise Price Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Balance as of December 31, 2020 3,369,502 $ 28.11 Granted 241,600 $ 67.79 Exercised (362,498) $ 10.58 Forfeited/Cancelled (137,873) $ 30.97 Balance as of September 30, 2021 3,110,731 $ 33.11 8.20 $ 104,585 Exercisable at September 30, 2021 (1) 1,068,457 $ 17.58 7.38 $ 52,271 (1) In addition, 24,729 unvested options outstanding at September 30, 2021 may be exercised prior to vesting under an early exercise provision in the stock option award agreement. In the event of such exercise, the shares obtained upon exercise would be restricted and subject to forfeiture prior to vesting. No such exercises have occurred to date. |
Schedule of Share-based Payment Arrangement on Restricted Stock Units | The following table summarizes our RSU activity for the nine months ended September 30, 2021: Restricted Stock Units Outstanding Weighted-Average Grant Date Fair Value Balance as of December 31, 2020 161,477 $ 59.16 Granted 68,208 67.74 Vested — — Forfeited/Cancelled (6,267) 63.56 Balance as of September 30, 2021 223,418 $ 61.66 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table sets forth the assumptions used to determine the fair value of stock options: Nine Months Ended 2021 2020 Average expected term (years) 6 6 Expected stock price volatility 66.50% - 68.83% 59.15% - 63.82% Risk-free interest rate 0.51% - 1.09% 0.28% - 1.76% Dividend yield —% —% |
Schedule of Share-based Payment Award, ESPP, Valuation Assumptions | The following table sets forth assumptions used to determine the fair value of the purchase rights issued under the ESPP: Nine Months Ended 2021 2020 Average expected term (years) 1.2 1.2 Expected stock price volatility 62.17% - 86.50% 56.80% - 100.49% Risk-free interest rate 0.06% - 0.20% 0.12% - 0.95% Dividend yield —% —% |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense related to stock options, RSUs and the ESPP is included in the statements of operations and comprehensive loss as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of sales (exclusive of amortization of acquired intangible asset) $ 555 $ 268 $ 1,480 $ 674 Research and development 1,135 370 3,266 835 Selling, general and administrative 3,520 1,480 10,143 3,839 Total stock-based compensation expense $ 5,210 $ 2,118 $ 14,889 $ 5,348 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | Apr. 10, 2020 | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | |||
Allowance for doubtful accounts | $ 0 | $ 0 | |
Other operating income, CARES Act | $ 1,900,000 | ||
Accrued bonuses | $ 8,999,000 | $ 7,175,000 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)claim | Sep. 30, 2020USD ($) | Apr. 16, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |||||
Number of days contract with customer is generally paid | 30 days | ||||
Variable consideration adjustments included in revenue | $ (92) | $ 1,450 | $ 4,130 | $ 223 | |
Amount received from CMS under its accelerated and advance payment program | $ 8,300 | ||||
Value applied against balance of the Advance Payment | $ 5,351 | ||||
Number of claims in adjudication process | claim | 2,698 |
Revenue - Payor Concentration (
Revenue - Payor Concentration (Details) - Third-Party Payor Concentration Risk | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Medicare | Percentage of Revenues | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 57.00% | 54.00% | |
Medicare | Percentage of Accounts Receivable (current) | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 26.00% | 15.00% | |
Medicare | Percentage of Accounts Receivable (non-current) | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Medicare Advantage plans | Percentage of Revenues | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 27.00% | 28.00% | |
Medicare Advantage plans | Percentage of Accounts Receivable (current) | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 37.00% | 40.00% | |
Medicare Advantage plans | Percentage of Accounts Receivable (non-current) | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 18.00% | 25.00% | |
BlueCross BlueShield plans | Percentage of Revenues | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 7.00% | 8.00% | |
BlueCross BlueShield plans | Percentage of Accounts Receivable (current) | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 22.00% | 26.00% | |
BlueCross BlueShield plans | Percentage of Accounts Receivable (non-current) | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 49.00% | 44.00% |
Loss Per Share - Schedule of An
Loss Per Share - Schedule of Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 3,427 | 2,903 | 3,464 | 2,871 |
Stock options and restricted stock units (“RSUs”) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 3,369 | 2,767 | 3,401 | 2,732 |
Common stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 35 | 0 | 35 |
Employee stock purchase plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 58 | 101 | 63 | 104 |
Asset Acquisition - Narrative (
Asset Acquisition - Narrative (Details) - Myriad myPath, LLC $ in Thousands | May 28, 2021USD ($) |
Asset Acquisition [Line Items] | |
Payments to acquire productive assets | $ 32,500 |
Asset acquisition, transaction costs | 684 |
Inventory | 130 |
Developed technology | |
Asset Acquisition [Line Items] | |
Intangible assets acquired | $ 33,054 |
Finite-lived intangible asset, useful life | 12 years |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 11,471 | $ 8,756 |
Less accumulated depreciation | (2,605) | (1,654) |
Property and equipment, net | 8,866 | 7,102 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 4,419 | 1,388 |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 3,139 | 2,037 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 2,139 | 1,305 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | 985 | 436 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 789 | $ 3,590 |
Property and Equipment, Net -_2
Property and Equipment, Net - Summary of Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | $ 395 | $ 119 | $ 1,006 | $ 312 |
Cost of sales (exclusive of amortization of acquired intangible asset) | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | 120 | 85 | 333 | 225 |
Research and development | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | 67 | 8 | 175 | 13 |
Selling, general and administrative | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | $ 208 | $ 26 | $ 498 | $ 74 |
Intangible Asset, Net - Summary
Intangible Asset, Net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Net | $ 32,104 | $ 0 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 33,054 | 0 |
Accumulated amortization | (950) | 0 |
Net | $ 32,104 | $ 0 |
Intangible Asset, Net - Narrati
Intangible Asset, Net - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Weighted-average remaining life (Years) | 11 years 8 months 12 days |
Intangible Asset - Future Amort
Intangible Asset - Future Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 (remainder of year) | $ 694 | |
2022 | 2,753 | |
2023 | 2,753 | |
2024 | 2,761 | |
2025 | 2,753 | |
Thereafter | 20,390 | |
Net | $ 32,104 | $ 0 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued service fees | $ 1,678 | $ 1,543 |
Payroll tax liabilities | 617 | 276 |
Clinical studies | 431 | 348 |
Employee stock purchase plan contributions | 211 | 536 |
Accrued royalties | 116 | 151 |
Accrued state income taxes | 10 | 62 |
Other | 45 | 139 |
Total | $ 3,108 | $ 3,055 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities at Fair Value (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 362,462 | $ 409,480 |
Quoted Prices in Active Markets for Identical Items (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 362,462 | 409,480 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 0 | $ 0 |
Common Stock Offerings - Narrat
Common Stock Offerings - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 18, 2020 | Jul. 02, 2020 | Jul. 02, 2020 | Jun. 29, 2020 |
Class of Stock [Line Items] | ||||
Common stock offering price (in dollars per share) | $ 37 | |||
Follow-On Public Offering | ||||
Class of Stock [Line Items] | ||||
Common stock issued and sold (in shares) | 4,600,000 | 300,000 | 2,000,000 | |
Common stock offering price (in dollars per share) | $ 58 | |||
Proceeds from sale of stock | $ 250,201 | $ 10,425 | $ 69,079 | |
Over-Allotment Option | ||||
Class of Stock [Line Items] | ||||
Common stock issued and sold (in shares) | 600,000 | |||
Common stock option period | 30 days | |||
Option to purchase, number of shares (in shares) | 300,000 |
Stock Incentive Plans and Sto_3
Stock Incentive Plans and Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs | $ 56,308 | ||
Unrecognized compensation expense, period for recognition | 2 years 10 months 24 days | ||
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued during period (in shares) | 110,448 | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted, weighted average grant date fair value (in dollars per share) | $ 40.76 | $ 22.07 | |
Stock options with early exercise provision | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding, nonvested (in shares) | 24,729 | ||
2019 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in number of shares authorized for issuance (in shares) | 1,240,624 | ||
Number of shares available for issuance (in shares) | 1,441,394 | ||
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted, weighted average grant date fair value (in dollars per share) | $ 28.23 | $ 17.43 | |
Employee stock purchase plan | Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in number of shares authorized for issuance (in shares) | 248,124 | ||
Number of shares available for issuance (in shares) | 639,466 |
Stock Incentive Plans and Sto_4
Stock Incentive Plans and Stock-Based Compensation - Activity Under Stock Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2021 | |
Stock Options Outstanding | |
Beginning balance (in shares) | 3,369,502 |
Granted (in shares) | 241,600 |
Exercised (in shares) | (362,498) |
Forfeited/Cancelled (in shares) | (137,873) |
Ending balance (in shares) | 3,110,731 |
Options exercisable, number of options (in shares) | 1,068,457 |
Exercise Price | |
Beginning balance (in dollars per share) | $ 28.11 |
Granted (in dollars per share) | 67.79 |
Exercised (in dollars per share) | 10.58 |
Forfeited/Cancelled (in dollars per share) | 30.97 |
Ending balance (in dollars per share) | 33.11 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 17.58 |
Stock Option Activity, Additional Disclosures | |
Options outstanding, weighted average remaining contractual term | 8 years 2 months 12 days |
Options exercisable, weighted average remaining contractual term | 7 years 4 months 17 days |
Options outstanding, aggregate intrinsic value | $ 104,585 |
Options exercisable, aggregate intrinsic value | $ 52,271 |
Stock Incentive Plans and Sto_5
Stock Incentive Plans and Stock-Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Restricted Stock Units Outstanding | |
Beginning Balance (in shares) | shares | 161,477 |
Granted (in shares) | shares | 68,208 |
Vested (in shares) | shares | 0 |
Forfeited/Cancelled (in shares) | shares | (6,267) |
Ending Balance (in shares) | shares | 223,418 |
Weighted-Average Grant Date Fair Value | |
Weighted average grant date fair value at beginning balance (in dollars per share) | $ / shares | $ 59.16 |
Granted (in dollars per share) | $ / shares | 67.74 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited / Cancelled (in dollars per share) | $ / shares | 63.56 |
Weighted average grant date fair value at ending balance (in dollars per share) | $ / shares | $ 61.66 |
Stock Incentive Plans and Sto_6
Stock Incentive Plans and Stock-Based Compensation - Assumptions Used in Fair Value of Stock Options and ESPP (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Employee stock purchase plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average expected term (years) | 1 year 2 months 12 days | 1 year 2 months 12 days |
Expected stock price volatility, minimum | 62.17% | 56.80% |
Expected stock price volatility, maximum | 86.50% | 100.49% |
Risk-free interest rate, minimum | 0.06% | 0.12% |
Risk-free interest rate, maximum | 0.20% | 0.95% |
Dividend yield | 0.00% | 0.00% |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average expected term (years) | 6 years | 6 years |
Expected stock price volatility, minimum | 66.50% | 59.15% |
Expected stock price volatility, maximum | 68.83% | 63.82% |
Risk-free interest rate, minimum | 0.51% | 0.28% |
Risk-free interest rate, maximum | 1.09% | 1.76% |
Dividend yield | 0.00% | 0.00% |
Stock Incentive Plans and Sto_7
Stock Incentive Plans and Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 5,210 | $ 2,118 | $ 14,889 | $ 5,348 |
Cost of sales (exclusive of amortization of acquired intangible asset) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 555 | 268 | 1,480 | 674 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,135 | 370 | 3,266 | 835 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 3,520 | $ 1,480 | $ 10,143 | $ 3,839 |
Subsequent Event - Narrative (D
Subsequent Event - Narrative (Details) - Cernostics, Inc - Subsequent Event $ / shares in Units, $ in Millions | Oct. 18, 2021USD ($)$ / shares |
Subsequent Event [Line Items] | |
Upfront consideration payable, total | $ 30 |
Amount of consideration payable in cash | 20 |
Additional consideration payable based on achievement of certain commercial milestones | $ 50 |
Number of days for optional extension in closing of business combination | 60 days |
Percentage of acquiree's capital stock without waived appraisal rights, maximum threshold | 5.00% |
Common Stock | |
Subsequent Event [Line Items] | |
Amount of consideration payable in common stock | $ 10 |
Share price (in dollars per share) | $ / shares | $ 65.03 |