Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ADPT | |
Entity Registrant Name | ADAPTIVE BIOTECHNOLOGIES CORPORATION | |
Entity Central Index Key | 0001478320 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 126,887,606 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-38957 | |
Entity Tax Identification Number | 27-0907024 | |
Entity Address, Address Line One | 1551 Eastlake Avenue East | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Seattle | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98102 | |
City Area Code | (206) | |
Local Phone Number | 659-0067 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | WA |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 212,688,000 | $ 96,576,000 |
Short-term marketable securities (amortized cost of $340,952 and $479,791, respectively) | 342,485,000 | 480,290,000 |
Accounts receivable, net | 9,382,000 | 12,676,000 |
Inventory | 10,518,000 | 9,069,000 |
Prepaid expenses and other current assets | 9,573,000 | 14,079,000 |
Total current assets | 584,646,000 | 612,690,000 |
Long-term assets | ||
Property and equipment, net | 24,952,000 | 60,355,000 |
Operating lease right-of-use assets | 31,058,000 | |
Long-term marketable securities (amortized cost of $98,847 and $105,263, respectively) | 100,618,000 | 105,435,000 |
Restricted cash | 2,138,000 | 2,138,000 |
Intangible assets, net | 11,504,000 | 11,928,000 |
Goodwill | 118,972,000 | 118,972,000 |
Other assets | 998,000 | 784,000 |
Total assets | 874,886,000 | 912,302,000 |
Current liabilities | ||
Accounts payable | 3,895,000 | 4,453,000 |
Accrued liabilities | 3,804,000 | 4,371,000 |
Accrued compensation and benefits | 4,177,000 | 8,124,000 |
Current portion of deferred rent | 371,000 | |
Current operating lease liabilities | 1,502,000 | |
Current deferred revenue | 64,572,000 | 60,994,000 |
Total current liabilities | 77,950,000 | 78,313,000 |
Long-term liabilities | ||
Deferred rent liability, less current portion | 6,918,000 | |
Operating lease liabilities, less current portion | 36,545,000 | |
Financing obligation | 36,607,000 | |
Deferred revenue, less current portion | 208,828,000 | 219,332,000 |
Other long-term liabilities | 93,000 | |
Total liabilities | 323,323,000 | 341,263,000 |
Commitments and contingencies (Note 9) | ||
Shareholders’ equity | ||
Preferred stock: $0.0001 par value, 10,000,000 shares authorized at March 31, 2020 and December 31, 2019; no shares issued and outstanding at March 31, 2020 and December 31, 2019 | ||
Common stock: $0.0001 par value, 340,000,000 shares authorized at March 31, 2020 and December 31, 2019; 126,621,829 and 125,238,142 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 12,000 | 12,000 |
Additional paid-in capital | 945,026,000 | 935,834,000 |
Accumulated other comprehensive gain | 3,313,000 | 671,000 |
Accumulated deficit | (396,788,000) | (365,478,000) |
Total shareholders’ equity | 551,563,000 | 571,039,000 |
Total liabilities and shareholders’ equity | $ 874,886,000 | $ 912,302,000 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Amortized cost of short-term marketable securities | $ 340,952 | $ 479,791 |
Amortized cost of long-term marketable securities | $ 98,847 | $ 105,263 |
Preferred stock par value | $ 0.0001 | $ 0.0001 |
Preferred stock authorized | 10,000,000 | 10,000,000 |
Preferred stock issued | 0 | 0 |
Preferred stock outstanding | 0 | 0 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock authorized | 340,000,000 | 340,000,000 |
Common stock issued | 126,621,829 | 125,238,142 |
Common stock outstanding | 126,621,829 | 125,238,142 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | ||
Total revenue | $ 20,910,000 | $ 12,666,000 |
Operating expenses | ||
Cost of revenue | 5,343,000 | 4,988,000 |
Research and development | 23,935,000 | 12,483,000 |
Sales and marketing | 14,007,000 | 7,817,000 |
General and administrative | 11,821,000 | 7,004,000 |
Amortization of intangible assets | 424,000 | 419,000 |
Total operating expenses | 55,530,000 | 32,711,000 |
Loss from operations | (34,620,000) | (20,045,000) |
Interest and other income, net | 2,894,000 | 1,659,000 |
Income tax benefit | 323,000 | |
Net loss | (31,403,000) | (18,386,000) |
Fair value adjustment to Series E-1 convertible preferred stock options | (254,000) | |
Net loss attributable to common shareholders | $ (31,403,000) | $ (18,640,000) |
Net loss per share attributable to common shareholders, basic and diluted | $ (0.25) | $ (1.45) |
Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted | 126,058,389 | 12,886,087 |
Sequencing Revenue | ||
Revenue | ||
Total revenue | $ 9,469,000 | $ 6,083,000 |
Development Revenue | ||
Revenue | ||
Total revenue | $ 11,441,000 | $ 6,583,000 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Financial Position [Abstract] | ||
Net loss | $ (31,403) | $ (18,386) |
Change in unrealized gain on investments | 2,642 | 199 |
Comprehensive loss | $ (28,761) | $ (18,187) |
Condensed Statements of Convert
Condensed Statements of Convertible Preferred Stock and Shareholders' (Deficit) Equity (Unaudited) - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive (Loss) Gain | Accumulated Deficit |
Beginning Balance at Dec. 31, 2018 | $ (258,112) | $ 1 | $ 37,902 | $ (107) | $ (295,908) | |
Beginning Balance, Shares at Dec. 31, 2018 | 12,841,536 | |||||
Convertible preferred stock, Beginning Balance at Dec. 31, 2018 | $ 560,858 | |||||
Convertible preferred stock, Beginning Balance, Shares at Dec. 31, 2018 | 92,790,094 | |||||
Issuance of common stock for cash upon exercise of stock options | 33 | 33 | ||||
Issuance of common stock for cash upon exercise of stock options, Shares | 89,000 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value | $ 98 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value, Shares | 233,600 | |||||
Change in redemption value for vested Series E-1 convertible preferred stock options | (254) | $ 254 | (254) | |||
Common stock option share-based compensation | 3,046 | 3,046 | ||||
Other comprehensive income | 199 | 199 | ||||
Net loss | (18,386) | (18,386) | ||||
Convertible preferred stock, Ending Balance at Mar. 31, 2019 | $ 561,210 | |||||
Convertible preferred stock, Ending Balance, Shares at Mar. 31, 2019 | 93,023,694 | |||||
Ending Balance at Mar. 31, 2019 | (273,474) | $ 1 | 40,981 | 92 | (314,548) | |
Ending Balance, Shares at Mar. 31, 2019 | 12,930,536 | |||||
Beginning Balance at Dec. 31, 2019 | 571,039 | $ 12 | 935,834 | 671 | (365,478) | |
Beginning Balance, Shares at Dec. 31, 2019 | 125,238,142 | |||||
Adjustments to accumulated deficit for adoption of guidance on accounting principle | 93 | 93 | ||||
Issuance of common stock for cash upon exercise of stock options | $ 4,517 | 4,517 | ||||
Issuance of common stock for cash upon exercise of stock options, Shares | 1,381,437 | 1,381,437 | ||||
Vesting of restricted stock units | 2,250 | |||||
Common stock option and restricted stock unit share-based compensation | $ 4,675 | 4,675 | ||||
Other comprehensive income | 2,642 | 2,642 | ||||
Net loss | (31,403) | (31,403) | ||||
Convertible preferred stock, Ending Balance, Shares at Mar. 31, 2020 | 0 | |||||
Ending Balance at Mar. 31, 2020 | $ 551,563 | $ 12 | $ 945,026 | $ 3,313 | $ (396,788) | |
Ending Balance, Shares at Mar. 31, 2020 | 126,621,829 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Operating activities | |||
Net loss | $ (31,403,000) | $ (18,386,000) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation expense | 1,554,000 | 1,364,000 | |
Noncash lease expense | 631,000 | ||
Share-based compensation expense | 4,675,000 | 3,046,000 | |
Intangible assets amortization | 424,000 | 419,000 | |
Investment amortization | (556,000) | (618,000) | |
Fair value adjustment of convertible preferred stock warrant | 18,000 | ||
Benefit from income tax | (323,000) | $ 0 | |
Other | 114,000 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 3,278,000 | 741,000 | |
Inventory | (1,449,000) | (17,000) | |
Prepaid expenses and other current assets | 3,526,000 | (3,732,000) | |
Accounts payable and accrued liabilities | (4,603,000) | (377,000) | |
Deferred rent | (235,000) | ||
Operating lease liabilities | (333,000) | ||
Deferred revenue | (6,926,000) | 296,080,000 | |
Other | (215,000) | ||
Net cash (used in) provided by operating activities | (31,606,000) | 278,303,000 | |
Investing activities | |||
Purchases of property and equipment | (2,963,000) | (3,831,000) | |
Purchases of marketable securities | (107,747,000) | (270,860,000) | |
Proceeds from sales and maturities of marketable securities | 253,469,000 | 52,515,000 | |
Net cash provided by (used in) investing activities | 142,759,000 | (222,176,000) | |
Financing activities | |||
Proceeds from exercise of stock options | 4,959,000 | 130,000 | |
Other | (6,000) | ||
Net cash provided by financing activities | 4,959,000 | 124,000 | |
Net increase in cash, cash equivalents and restricted cash | 116,112,000 | 56,251,000 | |
Cash, cash equivalents and restricted cash at beginning of year | 98,714,000 | 55,091,000 | 55,091,000 |
Cash, cash equivalents and restricted cash at end of period | 214,826,000 | 111,342,000 | $ 98,714,000 |
Noncash investing and financing activities | |||
Purchases of equipment included in accounts payable and accrued liabilities | 627,000 | 423,000 | |
Deferred offering costs included in accounts payable and accrued expenses | $ 1,825,000 | ||
Derecognition of lease financing arrangements upon adoption of guidance on accounting for leases | $ 36,607,000 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization Adaptive Biotechnologies Corporation (“we,” “us” or “our”) is a commercial-stage company advancing the field of immune-driven medicine by harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease. We believe the adaptive immune system is nature’s most finely tuned diagnostic and therapeutic for most diseases, but the inability to decode it has prevented the medical community from fully leveraging its capabilities. Our immune medicine platform is the foundation for our expanding suite of products and services. The cornerstone of our immune medicine platform and core immunosequencing product, immunoSEQ, serves as our underlying research and development engine and generates revenue from academic and biopharmaceutical customers. Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the Food and Drug Administration (“FDA”) for the detection and monitoring of minimal residual disease (“MRD”) in patients with select blood cancers. We were incorporated in the State of Washington on September 8, 2009 under the name Adaptive TCR Corporation. On December 21, 2011, we changed our name to Adaptive Biotechnologies Corporation. We are headquartered in Seattle, Washington. Initial Public Offering Our registration statement on Form S-1 related to our initial public offering was declared effective on June 26, 2019, and our common stock began trading on the Nasdaq Global Select Market on June 27, 2019. On July 1, 2019, we completed our initial public offering in which we issued and sold 17,250,000 shares of common stock, including shares issued upon the exercise in full of the underwriters’ over-allotment option, at a public offering price of $20.00 per share. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Basis The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. Estimates are used in several areas including, but not limited to, estimates of progress to date for certain performance obligations and the transaction price for certain contracts with customers, share-based compensation, including the fair value of stock, the provision for income taxes, including related reserves, and goodwill, among others. These estimates generally involve complex issues and require judgments, involve the analysis of historical results and prediction of future trends, can require extended periods of time to resolve and are subject to change from period to period. Actual results may differ materially from management’s estimates. Unaudited Interim Condensed Financial Statements In our opinion, the accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information. These unaudited condensed financial statements include all adjustments necessary to fairly state the financial position and the results of our operations and cash flows for interim periods in accordance with GAAP. All such adjustments are of a normal, recurring nature. Interim-period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying unaudited condensed financial statements should be read in conjunction with our audited financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (“SEC”) on February 26, 2020. Restricted Cash We are required to maintain certain balances under lease arrangements for our property and facility leases. We had restricted cash of $2.1 million as of March 31, 2020 and December 31, 2019. Leases We determine if an arrangement contains a lease at inception. We have operating lease agreements for the laboratory and office facilities that we occupy, as well as server space. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized at the date the underlying asset becomes available for our use and are based on the present value of the future minimum lease payments over the lease term. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. As our leases generally do not provide an implicit interest rate, the present value of our future minimum lease payments is determined using our incremental borrowing rate. This rate is an estimate of the collateralized borrowing rate we would incur on our future lease payments over a similar term and is based on the information available to us at the lease commencement date, or as of January 1, 2020 for commenced leases that existed as of our adoption of the new lease standard, discussed in more detail below. Certain of our leases contain options to extend or terminate the lease; lease terms are adjusted for these options only when it is reasonably certain we will exercise these options. Our lease agreements do not contain residual value guarantees or covenants. We have made a policy election regarding our real estate leases not to separate nonlease components from lease components, to the extent they are fixed. Nonlease components that are not fixed are expensed as incurred as variable lease expense. Our leases for laboratory and office facilities typically include variable nonlease components, such as common-area maintenance costs. We have also elected not to record on the balance sheet a lease that has a lease term of twelve months or less and does not contain a purchase option that we are reasonably certain to exercise. Lease expense is recognized on a straight-line basis over the terms of the leases. Incentives granted under our facilities leases, including rent holidays, are recognized as adjustments to lease expense on a straight-line basis over the terms of the leases. Concentrations We are subject to a concentration of risk from a limited number of suppliers, or in some cases, single suppliers for some of our laboratory instruments and materials. This risk is managed by targeting a quantity of surplus stock. Cash, cash equivalents and marketable securities are financial instruments that potentially subject us to concentrations of credit risk. We invest in money market funds, United States (“U.S.”) government debt securities, U.S. government agency securities, commercial paper and corporate bonds with high-quality accredited financial institutions. Significant customers are those which represent more than 10% of our total revenue or accounts receivable, net balances for the periods and as of each balance sheet date presented, respectively. Revenue from these customers reflects their purchase of our products and services and our collaboration efforts with Genentech. For each significant customer, revenue as a percentage of total revenue for the periods presented and accounts receivable, net as a percentage of total accounts receivable, net as of the periods presented were as follows: Revenue Accounts Receivable, Net Three Months Ended March 31, March 31, December 31, 2020 2019 2020 2019 Customer A *% *% 22.0% 41.8% Customer D * * 13.7 * Genentech, Inc. 54.4 49.8 * * * less than 10% Revenue We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers Overview Our revenue is generated from immunosequencing (“sequencing”) products and services (“sequencing revenue”) and from regulatory or development support services leveraging our immune medicine platform (“development revenue”). When revenue generating contracts have elements of both sequencing revenue and development revenue, we allocate revenue based on the nature of the performance obligation and the allocated transaction price. Sequencing Revenue Sequencing revenue reflects the amounts generated from providing sequencing services and testing through our immunoSEQ and clonoSEQ products and services to our research and clinical customers, respectively. For research customers, contracts typically include an amount billed in advance of services (“upfront”), and subsequent billings as sample results are delivered to the customer. Upfront amounts received are recorded as deferred revenue, which we recognize as revenue upon satisfaction of performance obligations. We have identified two typical performance obligations under the terms of our research service contracts: sequencing services and related data analysis. We recognize revenue for both identified performance obligations as sample results are delivered to the customer. For other research customers who choose to purchase a research use only kit, the kits are sold on a price per kit basis with amounts payable upon delivery of the kit. Payments received are recorded as deferred revenue. For these customers, we have identified one performance obligation: the delivery of sample results. We recognize revenue as the results are delivered to the customer based on a proportion of the estimated samples that can be reported on for each kit. For clinical customers, we derive revenues from providing our clonoSEQ test report to ordering physicians, and we bill and receive payments from medical institutions, commercial and government third-party payors. In these transactions, we have identified one performance obligation: the delivery of a clonoSEQ report. As payment from the respective payors may vary based on the various reimbursement rates and patient responsibilities, we consider the transaction price to be variable and record an estimate of the transaction price, subject to the constraint for variable consideration, as revenue at the time of delivery. The estimate of transaction price is based on historical and expected reimbursement rates with the various payors, which are monitored in subsequent periods and adjusted as necessary based on actual collection experience. In January 2019, clonoSEQ received Medicare coverage aligned with the FDA label and National Comprehensive Cancer Network (“NCCN”) guidelines for longitudinal monitoring in multiple myeloma (“MM”) and B cell acute lymphoblastic leukemia (“ALL”). We bill Medicare for an episode of treatment when we deliver the first eligible test results. This billing contemplates all necessary tests required during a patient’s treatment cycle, which is currently estimated at approximately four tests per patient, including the initial sequence identification test. Revenue is recognized at the time the initial billable test result is delivered and is based upon cumulative tests delivered to date. We estimate the number of tests we expect to deliver over a patient’s treatment cycle based on historical testing frequencies for patients by indication. These estimates are subject to change as we develop more information about utilization over time. Any unrecognized revenue from the initial billable test is recorded as deferred revenue and is recognized as we deliver the remaining tests in a patient’s treatment cycle. Development We derive revenue by providing services through development agreements to biopharmaceutical customers who seek access to our immune medicine platform technologies. We generate revenues from the delivery of professional support activities pertaining to the use of our proprietary immunoSEQ and clonoSEQ services in the development of the respective customers’ initiatives. The transaction price for these contracts may consist of a combination of non-refundable upfront fees, separately priced sequencing fees, progress based milestones and regulatory milestones. The development agreements may include single or multiple performance obligations, depending on the contract. For certain contracts, we may perform services to support the biopharmaceutical customers’ regulatory submission as part of their registrational trials. These services include regulatory support pertaining to our technology intended to be utilized as part of the submission, development of analytical plans for our sequencing data, participation on joint research committees and assistance in completing a regulatory submission. Generally, these services are not distinct within the context of the contract, and they are accounted for as a single performance obligation. When sequencing services are separately priced customer options, we assess if a material right exists and, if not, the customer option to purchase additional sequencing services is not considered part of the contract. Except for any non-refundable upfront fees, the other forms of compensation represent variable consideration. Variable consideration related to progress based and regulatory milestones is estimated using the most likely amount method where variable consideration is constrained until it is probable that a significant reversal of cumulative revenue recognized will not occur. Progress milestones, such as the first sample result delivered or final patient enrollment in a customer trial, are customer dependent and are included in the transaction price when the respective milestone is probable of occurring. Milestone payments that are not within our customers’ control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. Determining whether regulatory milestone payments are probable is an area that requires significant judgment. In making this assessment, we evaluate scientific, clinical, regulatory and other risks that must be managed, as well as the level of effort and investment required to achieve the respective milestone. The primary method used to estimate standalone selling price for performance obligations is the adjusted market assessment approach. Using this approach, we evaluate the market in which we sell our services and estimate the price that a customer in that market would be willing to pay for our services. We recognize revenue using either an input or output measure of progress that faithfully depicts performance on a contract, depending on the contract. The measure used is dependent on the nature of the service to be provided in each contract. Selecting the measure of progress and estimating progress to date requires significant judgment. Net Loss Per Share Attributable to Common Shareholders We calculate basic net loss per share attributable to common shareholders by dividing the net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common shareholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, common stock warrants, stock options, restricted stock units, shares issuable pursuant to the employee stock purchase plan, shares subject to repurchase from early exercised options and contingently issuable shares are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common shareholders, as their effect is anti-dilutive. Prior to the closing of our initial public offering in July 2019 and the conversion of our convertible preferred stock into common stock, we calculated our basic and diluted net loss per share attributable to common shareholders in conformity with the two-class method required for companies with participating securities. We considered our convertible preferred stock to be participating securities. In the event a dividend had been declared or paid on common stock, holders of convertible preferred stock would have been entitled to a share of such dividend in proportion to the holders of common stock on an as-if converted basis. Under the two-class method, basic net loss per share attributable to common shareholders is calculated by dividing the net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Net loss attributable to common shareholders is determined by allocating undistributed earnings between common and preferred shareholders. The net loss attributable to common shareholders was not allocated to the convertible preferred stock under the two-class method, as the convertible preferred stock did not have a contractual obligation to share in our losses. The diluted net loss per share attributable to common shareholders was computed by giving effect to all potential dilutive common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, common stock warrants and stock options were considered common stock equivalents but were excluded from the calculation of diluted net loss per share attributable to common shareholders, as their effect was anti-dilutive. Recently Ad opted In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases , Leases Targeted Improvements Leases In adopting the new standard, we utilized certain practical expedients available. These practical expedients include waiving reassessment of 1) whether any expired or existing contracts are or contain leases; 2) lease classification of expired or existing leases; and 3) initial direct costs for existing leases. We also elected to use hindsight in determining the lease term and in assessing impairment of our right-of-use assets. Furthermore, we have made a policy decision regarding our real estate leases not to separate nonlease components from lease components, to the extent they are fixed. We have also elected not to record on the balance sheet a lease that has a lease term of twelve months or less and does not contain a purchase option that we are reasonably certain to exercise. The standard had a material impact on our unaudited condensed balance sheets but did not have a material impact on our unaudited condensed statements of operations or unaudited condensed statements of cash flows. The most significant impact was the recognition of $33.0 million and $39.7 million of operating lease ROU assets and liabilities, respectively, and the derecognition of a $36.6 million asset and corresponding liability previously recorded pursuant to build-to-suit lease guidance under ASC 840, which resulted in an increase to retained earnings of $0.1 million. The operating lease ROU assets and liabilities recorded at adoption included the derecognition of $7.3 million of deferred rent recognized as of December 31, 2019, as well as a $0.5 million reclassification of tenant incentive receivables previously recognized in the prepaid expenses and other current assets line item on our balance sheet. Refer to Note 8 of the accompanying notes to our unaudited condensed financial statements for additional information regarding leases. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The expected credit losses are recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, and the net carrying value of the financial asset is presented on the unaudited condensed balance sheet. The guidance also amends the previous other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account, limited to the difference between a security’s amortized cost basis and its fair value. Furthermore, the standard update removes the distinction between whether an impairment is temporary or other-than temporary. We adopted the guidance effective January 1, 2020. Given the short - term nature of our accounts receivables, t he adoption as it relates to trade receivables did not have a significant impact on our financial statements. Furthermore, impairment of available-for-sale debt securities as of the adoption date was determined to be due to factors other than credit loss; therefore, a credit allowance was not recognized. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other: Internal-Use Software In December 2019, the FASB issued ASU No. 2019-12, Income Taxes Simplifying the Accounting for Income Taxes |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3. Revenue MRD Development We have entered into agreements with biopharmaceutical customers to further develop and commercialize clonoSEQ and the biopharmaceutical customers’ therapeutics. Under each of the agreements, we received or will receive non-refundable upfront payments and could receive substantial additional payments upon reaching certain progress milestones or achievement of certain regulatory milestones pertaining to the customers’ therapeutic and our clonoSEQ test. Under the contracts, we identify performance obligations, which may include: (1) obligations to provide services supporting the customer’s regulatory submission activities as they relate to our clonoSEQ test; and (2) sequencing services for customer-provided samples for their regulatory submissions. The transaction price allocated to the respective performance obligations is estimated using an adjusted market assessment approach for the regulatory support services and a standalone selling price for the estimated immunosequencing services. At contract inception, we fully constrained any consideration related to the regulatory milestones, as the achievement of such milestones is subject to third-party regulatory approval and the customers’ own submission decision-making. We recognize revenue relating to the sequencing services as sequencing revenue over time using an output method based on the proportion of sample results delivered relative to the total amount of sample results expected to be delivered and when expected to be a faithful depiction of progress. We use the same method to recognize the regulatory support services. When an output method based on the proportion of sample results delivered is not expected to be a faithful depiction of progress, we utilize an input method based on estimates of effort completed using a cost-based model. We recognized $0.4 million and $0.3 million in development revenue related to these contracts during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, in future periods we could receive up to an additional $233.0 million in milestone payments if certain regulatory approvals are obtained by our customers’ therapeutics in connection with MRD data generated from our clonoSEQ test. Genentech Collaboration Agreement In December 2018, we entered into a worldwide collaboration and license agreement (“Genentech Agreement”) with Genentech to leverage our capability to develop cellular therapies in oncology. Subsequent to receipt of regulatory approval in January 2019, we received a non-refundable upfront payment of $300.0 million in February 2019 and may be eligible to receive more than $1.8 billion over time, including payments of up to $75.0 million upon the achievement of specified regulatory milestones, up to $300.0 million upon the achievement of specified development milestones and up to $1,430.0 million upon the achievement of specified commercial milestones. In addition, we are separately able to receive tiered royalties at a rate ranging from the mid-single digits to the mid-teens on aggregate worldwide net sales of products arising from the strategic collaboration, subject to certain reductions, with aggregate minimum floors. Under the agreement, we are pursuing two product development pathways for novel T cell immunotherapies in which Genentech intends to use T cell receptors (“TCRs”) screened by our immune medicine platform to engineer and manufacture cellular medicines: • Shared Products. The shared products will use “off-the-shelf” TCRs identified against cancer antigens shared among patients (“Shared Products”). • Personalized Product. The personalized product will use patient-specific TCRs identified by real-time screening of TCRs against cancer antigens in each patient (“Personalized Product”). Under the terms of the agreement, we granted Genentech exclusive worldwide licenses to develop and commercialize TCR-based cellular therapies in the field of oncology, including licenses to existing shared antigen data packages. Additionally, Genentech has the right to determine which product candidates to further develop for commercialization purposes. We determined that this arrangement meets the criteria set forth in ASC Topic 808, Collaborative Arrangements In applying ASC 606, we identified the following performance obligations at the inception of the agreement: 1. License to utilize on an exclusive basis all TCR-specific platform intellectual property to develop and commercialize any licensed products in the field of oncology. 2. License to utilize all data and information within each shared antigen data package and any other know-how disclosed by us to Genentech in oncology. 3. License to utilize all private antigen TCR product data in connection with research and development activities in the field of use. 4. License to existing shared antigen data packages. 5. Research and development services for shared product development including expansion of shared antigen data packages. 6. Research and development services for private product development. 7. Obligations to participate on various joint research, development and project committees. We determined that none of the licenses, research and development services or obligations to participate on various committees were distinct within the context of the contract, given such rights and activities were highly interrelated and there was substantial additional research and development to further develop the licenses. We considered factors such as the stage of development of the respective existing antigen data packages, the subsequent development that would be required to both identify and submit a potential target for investigational new drug acceptance under both product pathways and the variability in research and development pathways given Genentech’s control of product commercialization. Specifically, under the agreement, Genentech is not required to pursue development or commercialization activities pertaining to both product pathways and may choose to proceed with one or the other, as opposed to both. Accordingly, we determined that all of the identified performance obligations were attributable to one general performance obligation, which is to further the development of our TCR-specific platform, including data packages, and continue to make our TCR identification process available to Genentech to pursue either product pathway. Separately, we have a responsibility to Genentech to enter into a supply and manufacturing agreement for patient specific TCRs as it pertains to any Personalized Product therapeutic. We determined this was an option right of Genentech should they pursue commercialization of a Personalized Product therapy. Because of the uncertainty as a result of the early stage of development, the novel approach of our collaboration with Genentech and our rights to future commercial milestones and royalty payments, we determined that this option right was not a material right that should be accounted for at inception. As such, we will account for the supply and manufacturing agreement when entered into between the parties. We determined the initial transaction price shall be made up of only the $300.0 million upfront, non-refundable payment, as all potential regulatory and development milestone payments were probable of significant revenue reversal given their achievement was highly dependent on factors outside our control. As a result, these payments were fully constrained and were not included in the transaction price as of March 31, 2020. We excluded the commercial milestones and potential royalties from the transaction price, as those items relate predominantly to the license rights granted to Genentech and will be assessed when and if such events occur. As there are potential substantive developments necessary, which Genentech may be able to direct, we determined that we would apply a proportional performance model to recognize revenue for our performance obligation. We measure proportional performance using an input method based on costs incurred relative to the total estimated costs of research and development efforts to pursue both the Shared Product and Personalized Product pathways. We currently expect to recognize the revenue over a period of approximately seven to eight years from the effective date. This estimate of the research and development period considers pursuit options of development activities supporting both the Shared Product and the Personalized Product, but may be reduced or increased based on the various activities as directed by the joint committees, decisions made by Genentech, regulatory feedback or other factors not currently known. We recognized revenue of $10.9 million and $6.3 million during the three months ended March 31, 2020 and 2019, respectively, related to the Genentech Agreement. Costs related to the Genentech Agreement are included in research and development expenses. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value The following tables set forth the fair value of financial assets as of March 31, 2020 and December 31, 2019 that were measured at fair value on a recurring basis (in thousands): March 31, 2020 Level 1 Level 2 Level 3 Total Financial assets Money market funds $ 191,213 $ — $ — $ 191,213 Commercial paper — 58,793 — 58,793 U.S. government debt and agency securities — 368,450 — 368,450 Corporate bonds — 27,860 — 27,860 Total financial assets $ 191,213 $ 455,103 $ — $ 646,316 December 31, 2019 Level 1 Level 2 Level 3 Total Financial assets Money market funds $ 88,683 $ — $ — $ 88,683 Commercial paper — 121,867 — 121,867 U.S. government debt and agency securities — 377,243 — 377,243 Corporate bonds — 86,615 — 86,615 Total financial assets $ 88,683 $ 585,725 $ — $ 674,408 Level 1 securities include highly liquid money market funds, for which we measure the fair value based on quoted prices in active markets for identical assets or liabilities. Level 2 securities consist of U.S. government debt securities, commercial paper and corporate bonds, and are valued based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. Of the March 31, 2020 Level 2 U.S. government debt and agency securities balance, $12.0 million is recorded as cash and cash equivalents on our unaudited condensed balance sheet. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 5. Investments Available-for-sale investments consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Short-term marketable securities Commercial paper $ 58,793 $ — $ — $ 58,793 U.S. government debt and agency securities 266,378 1,532 — 267,910 Corporate bonds 15,781 12 (11 ) 15,782 Total short-term marketable securities $ 340,952 $ 1,544 $ (11 ) $ 342,485 Long-term marketable securities U.S. government debt and agency securities $ 86,861 $ 1,679 $ — $ 88,540 Corporate bonds 11,986 108 (16 ) 12,078 Total long-term marketable securities $ 98,847 $ 1,787 $ (16 ) $ 100,618 December 31, 2019 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Short-term marketable securities Commercial paper $ 121,866 $ — $ — $ 121,866 U.S. government debt and agency securities 285,963 394 (1 ) 286,356 Corporate bonds 71,962 109 (3 ) 72,068 Total short-term marketable securities $ 479,791 $ 503 $ (4 ) $ 480,290 Long-term marketable securities U.S. government debt and agency securities $ 90,750 $ 146 $ (9 ) $ 90,887 Corporate bonds 14,513 35 — 14,548 Total long-term marketable securities $ 105,263 $ 181 $ (9 ) $ 105,435 All the commercial paper, U.S. government debt and agency securities and corporate bonds designated as short-term marketable securities have an effective maturity date that is equal to or less than one year from the respective balance sheet date. Those that are designated as long-term marketable securities have an effective maturity date that is more than one year from the respective balance sheet date. Accrued interest receivable is excluded from the amortized cost and estimated fair value of our marketable securities. Accrued interest receivables of $1.9 million and $2.2 million were presented separately within the prepaid expenses and other current assets line item on our unaudited condensed balance sheets as of March 31, 2020 and December 31, 2019, respectively. We have made an accounting policy election to not measure an allowance for credit losses for accrued interest receivables. The following table presents the gross unrealized holding losses and fair value for investments in an unrealized loss position, and the length of time that individual securities have been in a continuous loss position, as of March 31, 2020 (in thousands): Less Than 12 Months 12 Months Or Greater Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate bonds $ 5,767 $ (27 ) $ — $ — Total available-for-sale securities $ 5,767 $ (27 ) $ — $ — We periodically review our available-for-sale securities to assess for credit impairment. Some of the factors considered in assessing impairment include the extent to which the fair value is less than the amortized cost basis, adverse conditions related to the security, an industry or geographic area, changes to security ratings or sector credit ratings and other relevant market data. As of March 31, 2020, we did not intend, nor were we more likely than not to be required, to sell our available-for-sale investments before the recovery of their amortized cost basis. Based on our assessment, we concluded all impairment as of March 31, 2020 to be due to factors other than credit loss, such as changes in interest rates. A credit allowance was not recognized and the impairment for our available-for-sale securities was recorded in other comprehensive loss. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6 . Goodwill There have been no changes in the carrying amount of goodwill since its recognition in 2015. Intangible assets subject to amortization as of March 31, 2020 and December 31, 2019 consisted of the following (in thousands): March 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired developed technology $ 20,000 $ (8,717 ) $ 11,283 Purchased intellectual property 325 (104 ) 221 Balance at March 31, 2020 $ 20,325 $ (8,821 ) $ 11,504 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired developed technology $ 20,000 $ (8,301 ) $ 11,699 Purchased intellectual property 325 (96 ) 229 Balance at December 31, 2019 $ 20,325 $ (8,397 ) $ 11,928 The developed technology was acquired in connection with our acquisition of Sequenta, Inc. (“Sequenta”) in 2015. The remaining balance of the acquired technology and the purchased intellectual property is expected to be amortized over the next 6.8 years. As of March 31, 2020, expected future amortization expense for intangible assets was as follows (in thousands): 2020 (excluding the three months ended March 31, 2020) $ 1,279 2021 1,699 2022 1,699 2023 1,699 2024 1,703 Thereafter 3,425 Total future amortization expense $ 11,504 |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Deferred Revenue | 7 . Deferred Revenue Deferred revenue by revenue classification as of March 31, 2020 and December 31, 2019 was as follows (in thousands): March 31, 2020 December 31, 2019 Current deferred revenue Sequencing $ 13,565 $ 12,482 Development 51,007 48,512 Total current deferred revenue 64,572 60,994 Non-current deferred revenue Sequencing 1,241 1,459 Development 207,587 217,873 Total non-current deferred revenue 208,828 219,332 Total current and non-current deferred revenue $ 273,400 $ 280,326 Genentech deferred revenue represents $50.0 million and $204.0 million of the current and non-current development deferred revenue balances, respectively, at March 31, 2020 and $48.1 million and $216.8 million of the current and non-current development deferred revenue balances, respectively, at December 31, 2019. In general, we expect that the current amounts will be recognized as revenue within 12 months and the non-current amounts will be recognized as revenue over a period of approximately six to seven years. This period of time represents an estimate of the research and development period to develop cellular therapies in oncology, which may be reduced or increased based on the various development activities. Changes in deferred revenue during the three months ended March 31, 2020 were as follows (in thousands): Deferred revenue balance at December 31, 2019 $ 280,326 Additions to deferred revenue during the period 7,198 Revenue recognized during the period (14,124 ) Deferred revenue balance at March 31, 2020 $ 273,400 As of March 31, 2020, $13.1 million was recognized as revenue that was included in the deferred revenue balance at December 31, 2019. As a result of cancelled customer sequencing contracts, we recognized $0.4 million of sequencing revenue during the three months ended March 31, 2020. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Leases | 8. Leases We have operating lease agreements for the laboratory and office facilities that we occupy in Seattle, Washington and South San Francisco, California, as well as server space. As of March 31, 2020, we were not party to any finance leases. Our leases have remaining terms of 2.1 years to 12.3 years, and include options to extend certain of the leases up to 10.0 years and terminate certain of the leases after 3.0 years. We adjust lease terms for these options only when it is reasonably certain we will exercise these options. As of March 31, 2020, it was reasonably certain that we would exercise our option to terminate one of our leases after 3.0 years. Other information related to our operating leases as of March 31, 2020 was as follows: Weighted-average remaining lease term (in years) 11.16 Weighted-average discount rate 4.5 % The following table reconciles our undiscounted operating lease cash flows to our operating lease liabilities as of March 31, 2020 (in thousands): 2020 (excluding the three months ended March 31, 2020) $ 3,298 2021 5,123 2022 5,074 2023 4,364 2024 4,326 Thereafter 28,771 Total undiscounted lease payments 50,956 Less: Imputed interest rate (11,315 ) Tenant improvement receivables (1,594 ) Total operating lease liabilities $ 38,047 Less: current portion (1,502 ) Operating lease liabilities, less current portion $ 36,545 Operating lease expense was $1.1 million for the three months ended March 31, 2020. Variable lease expense for operating leases was $0.5 million for the three months ended March 31, 2020. Rent expense recognized under ASC 840, inclusive of operating and maintenance costs, was $1.2 million during the three months ended March 31, 2019. Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2020 was $0.8 million, net of $0.3 million of cash received for tenant improvement allowances. Leases Not Yet Commenced In August 2019, we entered into an agreement to rent 100,000 square feet in a to-be-constructed building in Seattle, Washington. In connection with the lease, we entered into a $2.1 million letter of credit with one of our existing financial institutions. Due to our involvement during the construction process of the leased building, we qualified as the deemed owner of the building under build-to-suit lease accounting guidance that proceeded ASC 842. The resulting asset and long-term financing obligation recorded on our balance sheet for the cost of the building was derecognized upon adoption of ASC 842. As of March 31, 2020, we were party to other leases that had not yet commenced pursuant to ASC 842, including a new amendment to our existing lease in South San Francisco, California to rent 19,867 additional square feet, which provides for a $0.6 million tenant improvement allowance. Pursuant to the guidance in ASC 842, these leases will be assessed for classification and a lease liability and corresponding right-of-use asset will be recorded upon lease commencement, which may be delayed due to the impact of the COVID-19 pandemic. Future non-cancellable undiscounted lease payments associated with signed leases that have not yet commenced total $100.1 million, payable over lease terms ranging from 5.2 years to 12.7 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9 . Commitments and Contingencies Legal Proceedings We are subject to claims and assessments from time to time in the ordinary course of business. We will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. We are not currently party to any material legal proceedings. Indemnification Agreements In the ordinary course of business, we may provide indemnification of varying scope and terms to vendors, lessors, customers and other parties with respect to certain matters including, but not limited to, losses arising out of breach of our agreements with them or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with members of our board of directors and certain of our executive officers that will require us to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments that we could be required to make under these indemnification agreements is, in many cases, unlimited. We have not incurred any material costs as a result of such indemnifications and are not currently aware of any indemnification claims. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | 10 . Shareholders’ Convertible Preferred Stock Immediately prior to the completion of our initial public offering on July 1, 2019, 93,039,737 shares of convertible preferred stock then outstanding converted into an equivalent number of shares of common stock. As of March 31, 2020, no shares of convertible preferred stock were outstanding. Preferred Stock We are authorized to issue 10,000,000 shares of preferred stock, par value $0.0001 per share. As of March 31, 2020, no shares of preferred stock were outstanding. Common Stock We are authorized to issue 340,000,000 shares of common stock. Our common stock has a par value of $0.0001, no preferences or privileges and is not redeemable. Holders of our common stock are entitled to one vote for each share of common stock held. The holders of record of outstanding shares of common stock shall be entitled to receive, when, as and if declared, out of funds legally available, such cash and other dividends as may be declared from time to time. As of March 31, 2020, we had 126,621,829 shares of common stock outstanding. We have reserved shares of common stock for the following as of March 31, 2020: Shares issuable upon the exercise of outstanding common stock options and the vesting of outstanding common restricted stock units granted 17,492,204 Shares available for future grant under the 2019 Equity Incentive Plan 19,433,424 Shares available for future grant under the Employee Stock Purchase Plan 2,804,298 Shares to be issued upon exercise of a common stock warrant 56,875 Total shares of common stock reserved for future issuance 39,786,801 Our 2019 Equity Incentive Plan (“2019 Plan”) provides for annual increases in the number of shares that may be issued under the 2019 Plan on January 1, 2020 and on each subsequent January 1, thereafter, by a number of shares equal to the lesser of (a) 5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by our board of directors. Furthermore, our Employee Stock Purchase Plan (“ESPP”) provides for annual increases in the number of shares available for issuance under our ESPP on January 1, 2020 and on each January 1, thereafter, by a number of shares equal to the smallest of (a) 1.0% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the board of directors. On January 1, 2020, our 2019 Plan and ESPP reserves automatically increased by 6,261,907 shares and 1,252,381 shares, respectively. Common In 2014, we issued a warrant to purchase 56,875 shares of Series C convertible preferred stock at an exercise price of $2.64. The warrant is exercisable for a period of seven years from the date of issuance. Immediately prior to and in connection with the completion of our initial public offering on July 1,2019, this convertible preferred stock warrant, which was previously recorded as a financial liability, was converted to a warrant to purchase the same number of shares of common stock. Upon conversion, the financial liability was reclassified to the additional paid-in capital line item on our unaudited condensed balance sheet. The warrant to purchase 56,875 shares of common stock remains outstanding as of March 31, 2020. |
Equity Incentive Plans
Equity Incentive Plans | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Incentive Plans | 1 1 . Equity Incentive Plans Sequenta 2008 Stock Plan, as amended In connection with our acquisition of Sequenta in January 2015, we assumed Sequenta’s Equity Incentive Plan (“2008 Plan”), including all outstanding options and shares available for future issuance under the 2008 Plan, which, prior to the completion of our initial public offering, were all exercisable for Series E-1 convertible preferred stock. Upon completion of our initial public offering in July 2019, the outstanding options are now exercisable for common stock. While no shares are available for future issuance under this plan, the 2008 Plan continues to govern outstanding equity awards granted thereunder. Adaptive 2009 Equity Incentive Plan We adopted an equity incentive plan in 2009 (“2009 Plan”) that provided for the issuance of incentive and nonqualified common stock options and other share-based awards for employees, directors and consultants. Under the 2009 Plan, the option exercise price for incentive and nonqualified stock options were not to be less than the fair market value of our common stock at the date of grant. Options granted under this plan expire no later than ten years from the grant date, and vesting was established at the time of grant. Pursuant to the terms of the 2019 Plan, any shares subject to outstanding options originally granted under the 2009 Plan that terminate, expire or lapse for any reason without the delivery of shares to the holder thereof shall become available for issuance pursuant to awards granted under the 2019 Plan. While no shares are available for future issuance under the 2009 Plan, it continues to govern outstanding equity awards granted thereunder. 2019 Equity Incentive Plan The 2019 Plan was approved by our shareholders on June 13, 2019 and, pursuant to the resolutions adopted by our board of directors, became effective immediately prior to and contingent upon the closing of our initial public offering. The 2019 Plan provides for the issuance of awards in the form of options and other share-based awards for employees, directors and consultants. Under the 2019 Plan, the option exercise price per share shall not be less than the fair market value of a share of stock on the grant date of the option, as defined by the 2019 Plan, unless explicitly qualified under the provisions of Section 409A or Section 424(a) of the Internal Revenue Code of 1986. Additionally, unless otherwise specified, options granted under this plan expire no later than ten years from the grant date, and vesting is established at the time of grant. Except for certain option grants made to non-employee directors, stock options granted under the 2019 Plan generally vest over a four-year Changes in shares available for grant during the three months ended March 31, 2020 were as follows: Shares Available for Grant Shares available for grant at December 31, 2019 15,396,254 2019 Plan reserve increase on January 1, 2020 6,261,907 Options and restricted stock units granted (2,292,847 ) Options and restricted stock units forfeited or cancelled 68,110 Shares available for grant at March 31, 2020 19,433,424 Stock option activity under the 2008 Plan, 2009 Plan and 2019 Plan during the three months ended March 31, 2020 was as follows: Shares Subject to Outstanding Options Weighted- Average Exercise Price per Share Aggregate Intrinsic Value (in thousands) Options outstanding at December 31, 2019 16,646,654 $ 6.14 $ 398,379 Options granted 2,292,847 29.68 Options forfeited or cancelled (68,110 ) 8.63 Options exercised (1,381,437 ) 3.27 Options outstanding at March 31, 2020 17,489,954 $ 9.44 $ 329,432 Options vested and exercisable at March 31, 2020 9,670,591 $ 5.03 $ 220,010 The weighted-average remaining contractual life for options outstanding at March 31, 2020 was 7.2 years. The weighted-average remaining contractual life for vested and exercisable options outstanding at March 31, 2020 was 5.8 years. Of the $5.0 million proceeds from exercise of stock options included on our unaudited condensed statements of cash flows for the three months ended March 31, 2020, $0.5 million related to options exercised prior to but settled in the three months ended March 31, 2020. As of December 31, 2019, 4,500 shares of restricted stock units (“RSUs”), with a weighted-average grant date fair value per share of $41.63, were nonvested and outstanding. We did not grant any shares of RSUs during the three months ended March 31, 2020. During the three months ended March 31, 2020, 2,250 shares of RSUs, with a weighted-average grant date fair value per share of $41.63, vested. As of March 31, 2020, 2,250 shares of RSUs, with a weighted-average grant date fair value per share of $41.63, remained nonvested and outstanding. Fair Value of Options and Grant Date Fair Value of Restricted Stock Units The estimated fair value of options granted during the three months ended March 31, 2020 and 2019 was estimated using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2020 2019 Grant date fair value $17.68 - $31.71 $7.80 Expected term (in years) 5.27 - 6.08 5.27 - 6.08 Risk-free interest rate 0.7% - 1.7% 2.5% Expected volatility 70.5% - 72.1% 64.3% - 65.5% Expected dividend yield — — The weighted-average volatility used in the fair value calculations of options granted during the three months ended March 31, 2020 and 2019 was 70.7% and 64.4%, respectively. The determination of the fair value of stock options on the date of grant using a Black-Scholes option-pricing model is affected by the estimated fair value of our common stock, as well as assumptions regarding a number of variables that are complex, subjective and generally require significant judgment to determine. The valuation assumptions were determined as follows: Fair value of common stock— Prior to the closing of our initial public offering, the grant date fair value of our common stock was determined with input from management using valuation methodologies which utilized certain assumptions, including probability weighting of events, volatility, time to liquidation, a risk-free interest rate and an assumption for a discount for lack of marketability (Level 3 inputs). In determining the fair value of our common stock, the methodologies used to estimate the enterprise value were performed using methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Accounting and Valuation Guide, . For valuations of grants made after the closing of our initial public offering, the fair value of each share of common stock is based on the closing price of our common stock on the date of grant or other relevant determination date, as reported on The Nasdaq Global Select Market. Expected term —The expected term of options granted to employees and non-employee directors is determined using the “simplified” method, as illustrated in ASC Topic 718, , as we do not have sufficient exercise history to determine a better estimate of expected term. Under this approach, the expected term is based on the midpoint between the vesting date and the end of the contractual term of the option. Risk-free interest rate —We utilize a risk-free interest rate in the option valuation model based on U.S. Treasury zero-coupon issues, with remaining terms similar to the expected term of the options. Expected volatility —As we do not have sufficient trading history for our common stock, the expected volatility is based on the historical volatility of our publicly traded industry peers utilizing a period of time consistent with our estimate of the expected term. Expected dividend yield —We do not anticipate paying any cash dividends in the foreseeable future and, therefore, use an expected dividend yield of zero in the option valuation model. The grant date fair value of RSUs granted after the closing of our initial public offering is based on the closing price of our common stock on the date of grant, or other relevant determination date, as reported on The Nasdaq Global Select Market. Share-based compensation expense of $4.7 million and $3.0 million was recognized during the three months ended March 31, 2020 and 2019, respectively. The compensation costs related to stock options and RSUs for the three months ended March 31, 2020 and 2019 are included on our statements of operations as follows (in thousands): Three Months Ended March 31, 2020 2019 Cost of revenue $ 172 $ 130 Research and development 1,544 917 Sales and marketing 1,157 906 General and administration 1,802 1,093 Total share-based compensation expense $ 4,675 $ 3,046 At March 31, 2020, unrecognized share-based compensation expense related to unvested stock options was $71.2 million, which is expected to be recognized over a remaining weighted-average period of 3.3 years. Additionally, at March 31, 2020, unrecognized share-based compensation expense related to unvested RSUs was $0.1 million, which is expected to be recognized over a remaining weighted-average period of 0.2 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The effective tax benefit was $0.3 million for the three months ended March 31, 2020. There was no effective tax benefit for the year ended December 31, 2019. We calculate our tax provision by applying a forecasted Annual Effective Tax Rate (“AETR”) against year-to-date pre-tax loss, and taking into account certain discrete items, primarily related to the exercise activity of stock options, in the quarter in which they occur. We recorded a pre-tax benefit for the three months ended March 31, 2020 because the discrete benefit from option exercises is greater than the year-to-date AETR tax expense. We expect to recognize tax expense on a full year basis, inclusive of discrete items. We file income tax returns in the U.S. federal jurisdiction and various U.S. state jurisdictions. Significant disputes may arise with authorities involving issues of the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and the interpretation of the relevant facts. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes, the ultimate resolution of any tax matters may result in payments greater or less than amounts accrued. Because of net operating loss carryforwards, substantially all tax years since inception remain open to federal and state tax examination. On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) to provide emergency economic stimulus in light of the effects of COVID-19. While the CARES Act provides extensive tax changes, some of the more significant provisions include removing certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act of 2017 (“TCJA”). We are still evaluating the CARES Act, but do not anticipate a significant impact to our income tax provision. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Shareholders | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Shareholders | 1 3 . Net Loss Shareholders Net Loss The following table sets forth the computation of the basic and diluted net loss per share attributable to common shareholders for the three months ended March 31, 2020 and 2019 (in thousands, except share and per share amounts): Three Months Ended March 31, 2020 2019 Net loss $ (31,403 ) $ (18,386 ) Fair value adjustments to redemption value for Series E-1 convertible preferred stock options — (254 ) Net loss attributable to common shareholders, basic and diluted $ (31,403 ) $ (18,640 ) Weighted-average shares used in computing net loss per share 126,058,389 12,886,087 Net loss per share attributable to common shareholders, basic and diluted $ (0.25 ) $ (1.45 ) Since we were in a loss position for all periods presented, basic net loss per share attributable to common shareholders is the same as diluted net loss per share attributable to common shareholders, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. The following weighted-average common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common shareholders for the three months ended March 31, 2020 and 2019, as they had an anti-dilutive effect: Three Months Ended March 31, 2020 2019 Convertible preferred stock (on as if converted basis) — 92,974,578 Stock options issued and outstanding 16,823,569 16,190,831 Unvested restricted stock units 3,618 — Common stock warrants 56,875 55,032 Convertible preferred stock warrants — 56,875 Total 16,884,062 109,277,316 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. Estimates are used in several areas including, but not limited to, estimates of progress to date for certain performance obligations and the transaction price for certain contracts with customers, share-based compensation, including the fair value of stock, the provision for income taxes, including related reserves, and goodwill, among others. These estimates generally involve complex issues and require judgments, involve the analysis of historical results and prediction of future trends, can require extended periods of time to resolve and are subject to change from period to period. Actual results may differ materially from management’s estimates. |
Unaudited Interim Condensed Financial Statements | Unaudited Interim Condensed Financial Statements In our opinion, the accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information. These unaudited condensed financial statements include all adjustments necessary to fairly state the financial position and the results of our operations and cash flows for interim periods in accordance with GAAP. All such adjustments are of a normal, recurring nature. Interim-period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying unaudited condensed financial statements should be read in conjunction with our audited financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (“SEC”) on February 26, 2020. |
Restricted Cash | Restricted Cash We are required to maintain certain balances under lease arrangements for our property and facility leases. We had restricted cash of $2.1 million as of March 31, 2020 and December 31, 2019. |
Leases | Leases We determine if an arrangement contains a lease at inception. We have operating lease agreements for the laboratory and office facilities that we occupy, as well as server space. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized at the date the underlying asset becomes available for our use and are based on the present value of the future minimum lease payments over the lease term. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. As our leases generally do not provide an implicit interest rate, the present value of our future minimum lease payments is determined using our incremental borrowing rate. This rate is an estimate of the collateralized borrowing rate we would incur on our future lease payments over a similar term and is based on the information available to us at the lease commencement date, or as of January 1, 2020 for commenced leases that existed as of our adoption of the new lease standard, discussed in more detail below. Certain of our leases contain options to extend or terminate the lease; lease terms are adjusted for these options only when it is reasonably certain we will exercise these options. Our lease agreements do not contain residual value guarantees or covenants. We have made a policy election regarding our real estate leases not to separate nonlease components from lease components, to the extent they are fixed. Nonlease components that are not fixed are expensed as incurred as variable lease expense. Our leases for laboratory and office facilities typically include variable nonlease components, such as common-area maintenance costs. We have also elected not to record on the balance sheet a lease that has a lease term of twelve months or less and does not contain a purchase option that we are reasonably certain to exercise. Lease expense is recognized on a straight-line basis over the terms of the leases. Incentives granted under our facilities leases, including rent holidays, are recognized as adjustments to lease expense on a straight-line basis over the terms of the leases. |
Concentrations of Risk | Concentrations We are subject to a concentration of risk from a limited number of suppliers, or in some cases, single suppliers for some of our laboratory instruments and materials. This risk is managed by targeting a quantity of surplus stock. Cash, cash equivalents and marketable securities are financial instruments that potentially subject us to concentrations of credit risk. We invest in money market funds, United States (“U.S.”) government debt securities, U.S. government agency securities, commercial paper and corporate bonds with high-quality accredited financial institutions. Significant customers are those which represent more than 10% of our total revenue or accounts receivable, net balances for the periods and as of each balance sheet date presented, respectively. Revenue from these customers reflects their purchase of our products and services and our collaboration efforts with Genentech. For each significant customer, revenue as a percentage of total revenue for the periods presented and accounts receivable, net as a percentage of total accounts receivable, net as of the periods presented were as follows: Revenue Accounts Receivable, Net Three Months Ended March 31, March 31, December 31, 2020 2019 2020 2019 Customer A *% *% 22.0% 41.8% Customer D * * 13.7 * Genentech, Inc. 54.4 49.8 * * * less than 10% |
Revenue Recognition | Revenue We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers Overview Our revenue is generated from immunosequencing (“sequencing”) products and services (“sequencing revenue”) and from regulatory or development support services leveraging our immune medicine platform (“development revenue”). When revenue generating contracts have elements of both sequencing revenue and development revenue, we allocate revenue based on the nature of the performance obligation and the allocated transaction price. Sequencing Revenue Sequencing revenue reflects the amounts generated from providing sequencing services and testing through our immunoSEQ and clonoSEQ products and services to our research and clinical customers, respectively. For research customers, contracts typically include an amount billed in advance of services (“upfront”), and subsequent billings as sample results are delivered to the customer. Upfront amounts received are recorded as deferred revenue, which we recognize as revenue upon satisfaction of performance obligations. We have identified two typical performance obligations under the terms of our research service contracts: sequencing services and related data analysis. We recognize revenue for both identified performance obligations as sample results are delivered to the customer. For other research customers who choose to purchase a research use only kit, the kits are sold on a price per kit basis with amounts payable upon delivery of the kit. Payments received are recorded as deferred revenue. For these customers, we have identified one performance obligation: the delivery of sample results. We recognize revenue as the results are delivered to the customer based on a proportion of the estimated samples that can be reported on for each kit. For clinical customers, we derive revenues from providing our clonoSEQ test report to ordering physicians, and we bill and receive payments from medical institutions, commercial and government third-party payors. In these transactions, we have identified one performance obligation: the delivery of a clonoSEQ report. As payment from the respective payors may vary based on the various reimbursement rates and patient responsibilities, we consider the transaction price to be variable and record an estimate of the transaction price, subject to the constraint for variable consideration, as revenue at the time of delivery. The estimate of transaction price is based on historical and expected reimbursement rates with the various payors, which are monitored in subsequent periods and adjusted as necessary based on actual collection experience. In January 2019, clonoSEQ received Medicare coverage aligned with the FDA label and National Comprehensive Cancer Network (“NCCN”) guidelines for longitudinal monitoring in multiple myeloma (“MM”) and B cell acute lymphoblastic leukemia (“ALL”). We bill Medicare for an episode of treatment when we deliver the first eligible test results. This billing contemplates all necessary tests required during a patient’s treatment cycle, which is currently estimated at approximately four tests per patient, including the initial sequence identification test. Revenue is recognized at the time the initial billable test result is delivered and is based upon cumulative tests delivered to date. We estimate the number of tests we expect to deliver over a patient’s treatment cycle based on historical testing frequencies for patients by indication. These estimates are subject to change as we develop more information about utilization over time. Any unrecognized revenue from the initial billable test is recorded as deferred revenue and is recognized as we deliver the remaining tests in a patient’s treatment cycle. Development We derive revenue by providing services through development agreements to biopharmaceutical customers who seek access to our immune medicine platform technologies. We generate revenues from the delivery of professional support activities pertaining to the use of our proprietary immunoSEQ and clonoSEQ services in the development of the respective customers’ initiatives. The transaction price for these contracts may consist of a combination of non-refundable upfront fees, separately priced sequencing fees, progress based milestones and regulatory milestones. The development agreements may include single or multiple performance obligations, depending on the contract. For certain contracts, we may perform services to support the biopharmaceutical customers’ regulatory submission as part of their registrational trials. These services include regulatory support pertaining to our technology intended to be utilized as part of the submission, development of analytical plans for our sequencing data, participation on joint research committees and assistance in completing a regulatory submission. Generally, these services are not distinct within the context of the contract, and they are accounted for as a single performance obligation. When sequencing services are separately priced customer options, we assess if a material right exists and, if not, the customer option to purchase additional sequencing services is not considered part of the contract. Except for any non-refundable upfront fees, the other forms of compensation represent variable consideration. Variable consideration related to progress based and regulatory milestones is estimated using the most likely amount method where variable consideration is constrained until it is probable that a significant reversal of cumulative revenue recognized will not occur. Progress milestones, such as the first sample result delivered or final patient enrollment in a customer trial, are customer dependent and are included in the transaction price when the respective milestone is probable of occurring. Milestone payments that are not within our customers’ control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. Determining whether regulatory milestone payments are probable is an area that requires significant judgment. In making this assessment, we evaluate scientific, clinical, regulatory and other risks that must be managed, as well as the level of effort and investment required to achieve the respective milestone. The primary method used to estimate standalone selling price for performance obligations is the adjusted market assessment approach. Using this approach, we evaluate the market in which we sell our services and estimate the price that a customer in that market would be willing to pay for our services. We recognize revenue using either an input or output measure of progress that faithfully depicts performance on a contract, depending on the contract. The measure used is dependent on the nature of the service to be provided in each contract. Selecting the measure of progress and estimating progress to date requires significant judgment. |
Net Loss Per Share Attributable to Common Shareholders | Net Loss Per Share Attributable to Common Shareholders We calculate basic net loss per share attributable to common shareholders by dividing the net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common shareholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, common stock warrants, stock options, restricted stock units, shares issuable pursuant to the employee stock purchase plan, shares subject to repurchase from early exercised options and contingently issuable shares are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common shareholders, as their effect is anti-dilutive. Prior to the closing of our initial public offering in July 2019 and the conversion of our convertible preferred stock into common stock, we calculated our basic and diluted net loss per share attributable to common shareholders in conformity with the two-class method required for companies with participating securities. We considered our convertible preferred stock to be participating securities. In the event a dividend had been declared or paid on common stock, holders of convertible preferred stock would have been entitled to a share of such dividend in proportion to the holders of common stock on an as-if converted basis. Under the two-class method, basic net loss per share attributable to common shareholders is calculated by dividing the net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Net loss attributable to common shareholders is determined by allocating undistributed earnings between common and preferred shareholders. The net loss attributable to common shareholders was not allocated to the convertible preferred stock under the two-class method, as the convertible preferred stock did not have a contractual obligation to share in our losses. The diluted net loss per share attributable to common shareholders was computed by giving effect to all potential dilutive common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, common stock warrants and stock options were considered common stock equivalents but were excluded from the calculation of diluted net loss per share attributable to common shareholders, as their effect was anti-dilutive. |
Recently Adopted Accounting Pronouncements | Recently Ad opted In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases , Leases Targeted Improvements Leases In adopting the new standard, we utilized certain practical expedients available. These practical expedients include waiving reassessment of 1) whether any expired or existing contracts are or contain leases; 2) lease classification of expired or existing leases; and 3) initial direct costs for existing leases. We also elected to use hindsight in determining the lease term and in assessing impairment of our right-of-use assets. Furthermore, we have made a policy decision regarding our real estate leases not to separate nonlease components from lease components, to the extent they are fixed. We have also elected not to record on the balance sheet a lease that has a lease term of twelve months or less and does not contain a purchase option that we are reasonably certain to exercise. The standard had a material impact on our unaudited condensed balance sheets but did not have a material impact on our unaudited condensed statements of operations or unaudited condensed statements of cash flows. The most significant impact was the recognition of $33.0 million and $39.7 million of operating lease ROU assets and liabilities, respectively, and the derecognition of a $36.6 million asset and corresponding liability previously recorded pursuant to build-to-suit lease guidance under ASC 840, which resulted in an increase to retained earnings of $0.1 million. The operating lease ROU assets and liabilities recorded at adoption included the derecognition of $7.3 million of deferred rent recognized as of December 31, 2019, as well as a $0.5 million reclassification of tenant incentive receivables previously recognized in the prepaid expenses and other current assets line item on our balance sheet. Refer to Note 8 of the accompanying notes to our unaudited condensed financial statements for additional information regarding leases. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The expected credit losses are recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, and the net carrying value of the financial asset is presented on the unaudited condensed balance sheet. The guidance also amends the previous other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account, limited to the difference between a security’s amortized cost basis and its fair value. Furthermore, the standard update removes the distinction between whether an impairment is temporary or other-than temporary. We adopted the guidance effective January 1, 2020. Given the short - term nature of our accounts receivables, t he adoption as it relates to trade receivables did not have a significant impact on our financial statements. Furthermore, impairment of available-for-sale debt securities as of the adoption date was determined to be due to factors other than credit loss; therefore, a credit allowance was not recognized. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other: Internal-Use Software In December 2019, the FASB issued ASU No. 2019-12, Income Taxes Simplifying the Accounting for Income Taxes |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Concentrations of Risk Percentage | For each significant customer, revenue as a percentage of total revenue for the periods presented and accounts receivable, net as a percentage of total accounts receivable, net as of the periods presented were as follows: Revenue Accounts Receivable, Net Three Months Ended March 31, March 31, December 31, 2020 2019 2020 2019 Customer A *% *% 22.0% 41.8% Customer D * * 13.7 * Genentech, Inc. 54.4 49.8 * * * less than 10% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables set forth the fair value of financial assets as of March 31, 2020 and December 31, 2019 that were measured at fair value on a recurring basis (in thousands): March 31, 2020 Level 1 Level 2 Level 3 Total Financial assets Money market funds $ 191,213 $ — $ — $ 191,213 Commercial paper — 58,793 — 58,793 U.S. government debt and agency securities — 368,450 — 368,450 Corporate bonds — 27,860 — 27,860 Total financial assets $ 191,213 $ 455,103 $ — $ 646,316 December 31, 2019 Level 1 Level 2 Level 3 Total Financial assets Money market funds $ 88,683 $ — $ — $ 88,683 Commercial paper — 121,867 — 121,867 U.S. government debt and agency securities — 377,243 — 377,243 Corporate bonds — 86,615 — 86,615 Total financial assets $ 88,683 $ 585,725 $ — $ 674,408 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Available-for-sale Investments | Available-for-sale investments consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Short-term marketable securities Commercial paper $ 58,793 $ — $ — $ 58,793 U.S. government debt and agency securities 266,378 1,532 — 267,910 Corporate bonds 15,781 12 (11 ) 15,782 Total short-term marketable securities $ 340,952 $ 1,544 $ (11 ) $ 342,485 Long-term marketable securities U.S. government debt and agency securities $ 86,861 $ 1,679 $ — $ 88,540 Corporate bonds 11,986 108 (16 ) 12,078 Total long-term marketable securities $ 98,847 $ 1,787 $ (16 ) $ 100,618 December 31, 2019 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Short-term marketable securities Commercial paper $ 121,866 $ — $ — $ 121,866 U.S. government debt and agency securities 285,963 394 (1 ) 286,356 Corporate bonds 71,962 109 (3 ) 72,068 Total short-term marketable securities $ 479,791 $ 503 $ (4 ) $ 480,290 Long-term marketable securities U.S. government debt and agency securities $ 90,750 $ 146 $ (9 ) $ 90,887 Corporate bonds 14,513 35 — 14,548 Total long-term marketable securities $ 105,263 $ 181 $ (9 ) $ 105,435 |
Schedule of Gross Unrealized Holding Losses and Fair Value for Investments in Unrealized Loss Position | The following table presents the gross unrealized holding losses and fair value for investments in an unrealized loss position, and the length of time that individual securities have been in a continuous loss position, as of March 31, 2020 (in thousands): Less Than 12 Months 12 Months Or Greater Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate bonds $ 5,767 $ (27 ) $ — $ — Total available-for-sale securities $ 5,767 $ (27 ) $ — $ — |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets Subject to Amortization | Intangible assets subject to amortization as of March 31, 2020 and December 31, 2019 consisted of the following (in thousands): March 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired developed technology $ 20,000 $ (8,717 ) $ 11,283 Purchased intellectual property 325 (104 ) 221 Balance at March 31, 2020 $ 20,325 $ (8,821 ) $ 11,504 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired developed technology $ 20,000 $ (8,301 ) $ 11,699 Purchased intellectual property 325 (96 ) 229 Balance at December 31, 2019 $ 20,325 $ (8,397 ) $ 11,928 |
Schedule of Future Amortization Expense for Intangible Assets | As of March 31, 2020, expected future amortization expense for intangible assets was as follows (in thousands): 2020 (excluding the three months ended March 31, 2020) $ 1,279 2021 1,699 2022 1,699 2023 1,699 2024 1,703 Thereafter 3,425 Total future amortization expense $ 11,504 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Deferred Revenue by Revenue Classification | Deferred revenue by revenue classification as of March 31, 2020 and December 31, 2019 was as follows (in thousands): March 31, 2020 December 31, 2019 Current deferred revenue Sequencing $ 13,565 $ 12,482 Development 51,007 48,512 Total current deferred revenue 64,572 60,994 Non-current deferred revenue Sequencing 1,241 1,459 Development 207,587 217,873 Total non-current deferred revenue 208,828 219,332 Total current and non-current deferred revenue $ 273,400 $ 280,326 |
Schedule of Changes in Deferred Revenue | Changes in deferred revenue during the three months ended March 31, 2020 were as follows (in thousands): Deferred revenue balance at December 31, 2019 $ 280,326 Additions to deferred revenue during the period 7,198 Revenue recognized during the period (14,124 ) Deferred revenue balance at March 31, 2020 $ 273,400 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Summary of Oher Information Related to Operating Lease | Other information related to our operating leases as of March 31, 2020 was as follows: Weighted-average remaining lease term (in years) 11.16 Weighted-average discount rate 4.5 % |
Summary of Reconciles Undiscounted Operating Lease Cash Flows | The following table reconciles our undiscounted operating lease cash flows to our operating lease liabilities as of March 31, 2020 (in thousands): 2020 (excluding the three months ended March 31, 2020) $ 3,298 2021 5,123 2022 5,074 2023 4,364 2024 4,326 Thereafter 28,771 Total undiscounted lease payments 50,956 Less: Imputed interest rate (11,315 ) Tenant improvement receivables (1,594 ) Total operating lease liabilities $ 38,047 Less: current portion (1,502 ) Operating lease liabilities, less current portion $ 36,545 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Reserved Shares of Common Stock | We have reserved shares of common stock for the following as of March 31, 2020: Shares issuable upon the exercise of outstanding common stock options and the vesting of outstanding common restricted stock units granted 17,492,204 Shares available for future grant under the 2019 Equity Incentive Plan 19,433,424 Shares available for future grant under the Employee Stock Purchase Plan 2,804,298 Shares to be issued upon exercise of a common stock warrant 56,875 Total shares of common stock reserved for future issuance 39,786,801 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Changes in Shares Available for Grant | Changes in shares available for grant during the three months ended March 31, 2020 were as follows: Shares Available for Grant Shares available for grant at December 31, 2019 15,396,254 2019 Plan reserve increase on January 1, 2020 6,261,907 Options and restricted stock units granted (2,292,847 ) Options and restricted stock units forfeited or cancelled 68,110 Shares available for grant at March 31, 2020 19,433,424 |
Summary of Stock Option Activity Under 2008 Plan 2009 Plan and 2019 Plan | Stock option activity under the 2008 Plan, 2009 Plan and 2019 Plan during the three months ended March 31, 2020 was as follows: Shares Subject to Outstanding Options Weighted- Average Exercise Price per Share Aggregate Intrinsic Value (in thousands) Options outstanding at December 31, 2019 16,646,654 $ 6.14 $ 398,379 Options granted 2,292,847 29.68 Options forfeited or cancelled (68,110 ) 8.63 Options exercised (1,381,437 ) 3.27 Options outstanding at March 31, 2020 17,489,954 $ 9.44 $ 329,432 Options vested and exercisable at March 31, 2020 9,670,591 $ 5.03 $ 220,010 |
Summary of Estimated Fair Value of Options Granted | The estimated fair value of options granted during the three months ended March 31, 2020 and 2019 was estimated using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2020 2019 Grant date fair value $17.68 - $31.71 $7.80 Expected term (in years) 5.27 - 6.08 5.27 - 6.08 Risk-free interest rate 0.7% - 1.7% 2.5% Expected volatility 70.5% - 72.1% 64.3% - 65.5% Expected dividend yield — — |
Summary of Compensation Costs Related to Stock Options and RSUs Included on Statements of Operations | The compensation costs related to stock options and RSUs for the three months ended March 31, 2020 and 2019 are included on our statements of operations as follows (in thousands): Three Months Ended March 31, 2020 2019 Cost of revenue $ 172 $ 130 Research and development 1,544 917 Sales and marketing 1,157 906 General and administration 1,802 1,093 Total share-based compensation expense $ 4,675 $ 3,046 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Shareholders (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Computation of the Basic and Diluted Net Loss Per Share Attributable to Common Shareholders | The following table sets forth the computation of the basic and diluted net loss per share attributable to common shareholders for the three months ended March 31, 2020 and 2019 (in thousands, except share and per share amounts): Three Months Ended March 31, 2020 2019 Net loss $ (31,403 ) $ (18,386 ) Fair value adjustments to redemption value for Series E-1 convertible preferred stock options — (254 ) Net loss attributable to common shareholders, basic and diluted $ (31,403 ) $ (18,640 ) Weighted-average shares used in computing net loss per share 126,058,389 12,886,087 Net loss per share attributable to common shareholders, basic and diluted $ (0.25 ) $ (1.45 ) |
Weighted-Average Common Stock Equivalents were Excluded From Calculation of Diluted Net Loss Per Share Attributable to Common Shareholders | The following weighted-average common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common shareholders for the three months ended March 31, 2020 and 2019, as they had an anti-dilutive effect: Three Months Ended March 31, 2020 2019 Convertible preferred stock (on as if converted basis) — 92,974,578 Stock options issued and outstanding 16,823,569 16,190,831 Unvested restricted stock units 3,618 — Common stock warrants 56,875 55,032 Convertible preferred stock warrants — 56,875 Total 16,884,062 109,277,316 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) - Initial Public Offering | Jul. 01, 2019$ / sharesshares |
Subsidiary Or Equity Method Investee [Line Items] | |
Shares issued | shares | 17,250,000 |
Public offering price | $ / shares | $ 20 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)Performance_Obligation | Dec. 31, 2019USD ($) | |
Significant Accounting Policies [Line Items] | ||
Restricted cash | $ 2,138 | $ 2,138 |
Operating lease right-of-use assets | 31,058 | |
Operating lease liabilities | 38,047 | |
Accumulated deficit | (396,788) | $ (365,478) |
ASU 2016-02 (Topic 842) | ||
Significant Accounting Policies [Line Items] | ||
Operating lease right-of-use assets | 33,000 | |
Operating lease liabilities | 39,700 | |
Derecognition of deferred rent | 7,300 | |
Reclassification of tenant incentive receivables | 500 | |
Derecognized portion of build-to-suit asset | 36,600 | |
Accumulated deficit | $ 100 | |
Sequencing Revenue | ||
Significant Accounting Policies [Line Items] | ||
Number of revenue performance obligations | Performance_Obligation | 2 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Concentrations of Risk Percentage (Details) - Customer Concentration Risk | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | |
Customer A | Accounts Receivable, Net | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 22.00% | 41.80% | |
Customer D | Accounts Receivable, Net | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 13.70% | ||
Genentech, Inc. | Revenue | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 54.40% | 49.80% |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | Mar. 31, 2020 | Feb. 28, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Disaggregation Of Revenue [Line Items] | ||||
Revenue recognized | $ 13,100,000 | $ (14,124,000) | ||
Revenue from collaboration agreement | 20,910,000 | $ 12,666,000 | ||
MRD Development Agreements | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue recognized | 400,000 | 300,000 | ||
MRD Development Agreements | Maximum | ||||
Disaggregation Of Revenue [Line Items] | ||||
Additional milestone payment receivable | 233,000,000 | 233,000,000 | ||
Genentech Collaboration Agreement | ||||
Disaggregation Of Revenue [Line Items] | ||||
Non-refundable upfront payments received | $ 300,000,000 | 300,000,000 | ||
Revenue from collaboration agreement | $ 10,900,000 | $ 6,300,000 | ||
Genentech Collaboration Agreement | Maximum | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue recognition expected period | 8 years | |||
Genentech Collaboration Agreement | Maximum | Regulatory Milestones | ||||
Disaggregation Of Revenue [Line Items] | ||||
Expected revenue through milestone payments | 75,000,000 | $ 75,000,000 | ||
Genentech Collaboration Agreement | Maximum | Development Milestones | ||||
Disaggregation Of Revenue [Line Items] | ||||
Expected revenue through milestone payments | 300,000,000 | 300,000,000 | ||
Genentech Collaboration Agreement | Maximum | Commercial Milestones | ||||
Disaggregation Of Revenue [Line Items] | ||||
Expected revenue through milestone payments | 1,430,000,000 | 1,430,000,000 | ||
Genentech Collaboration Agreement | Minimum | ||||
Disaggregation Of Revenue [Line Items] | ||||
Expected revenue through milestone payments | $ 1,800,000 | $ 1,800,000 | ||
Revenue recognition expected period | 7 years |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring basis - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial assets | ||
Total financial assets | $ 646,316 | $ 674,408 |
Level 1 | ||
Financial assets | ||
Total financial assets | 191,213 | 88,683 |
Level 2 | ||
Financial assets | ||
Total financial assets | 455,103 | 585,725 |
Money Market Funds | ||
Financial assets | ||
Total financial assets | 191,213 | 88,683 |
Money Market Funds | Level 1 | ||
Financial assets | ||
Total financial assets | 191,213 | 88,683 |
Commercial Paper | ||
Financial assets | ||
Total financial assets | 58,793 | 121,867 |
Commercial Paper | Level 2 | ||
Financial assets | ||
Total financial assets | 58,793 | 121,867 |
U.S. Government Debt and Agency Securities | ||
Financial assets | ||
Total financial assets | 368,450 | 377,243 |
U.S. Government Debt and Agency Securities | Level 2 | ||
Financial assets | ||
Total financial assets | 368,450 | 377,243 |
Corporate Bonds | ||
Financial assets | ||
Total financial assets | 27,860 | 86,615 |
Corporate Bonds | Level 2 | ||
Financial assets | ||
Total financial assets | $ 27,860 | $ 86,615 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | Mar. 31, 2020USD ($) |
Level 2 | U.S. Government Debt and Agency Securities | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Cash and cash equivalents | $ 12 |
Investments - Schedule of Avail
Investments - Schedule of Available-for-sale Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Short-Term Marketable Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | $ 340,952 | $ 479,791 |
Unrealized Gain | 1,544 | 503 |
Unrealized Loss | (11) | (4) |
Estimated Fair Value | 342,485 | 480,290 |
Long-Term Marketable Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 98,847 | 105,263 |
Unrealized Gain | 1,787 | 181 |
Unrealized Loss | (16) | (9) |
Estimated Fair Value | 100,618 | 105,435 |
Commercial Paper | Short-Term Marketable Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 58,793 | 121,866 |
Estimated Fair Value | 58,793 | 121,866 |
U.S. Government Debt and Agency Securities | Short-Term Marketable Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 266,378 | 285,963 |
Unrealized Gain | 1,532 | 394 |
Unrealized Loss | (1) | |
Estimated Fair Value | 267,910 | 286,356 |
U.S. Government Debt and Agency Securities | Long-Term Marketable Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 86,861 | 90,750 |
Unrealized Gain | 1,679 | 146 |
Unrealized Loss | (9) | |
Estimated Fair Value | 88,540 | 90,887 |
Corporate Bonds | Short-Term Marketable Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 15,781 | 71,962 |
Unrealized Gain | 12 | 109 |
Unrealized Loss | (11) | (3) |
Estimated Fair Value | 15,782 | 72,068 |
Corporate Bonds | Long-Term Marketable Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 11,986 | 14,513 |
Unrealized Gain | 108 | 35 |
Unrealized Loss | (16) | |
Estimated Fair Value | $ 12,078 | $ 14,548 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Prepaid Expenses and Other Current Assets | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Accrued interest receivable | $ 1.9 | $ 2.2 |
Investments - Schedule of Gross
Investments - Schedule of Gross Unrealized Holding Losses and Fair Value for Investments in Unrealized Loss Position (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Schedule of Available-for-Sale Securities [Line Items] | |
Less than 12 months, Fair value | $ 5,767 |
Less than 12 months, Unrealized loss | (27) |
Corporate Bonds | |
Schedule of Available-for-Sale Securities [Line Items] | |
Less than 12 months, Fair value | 5,767 |
Less than 12 months, Unrealized loss | $ (27) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2015 | |
Goodwill [Line Items] | |||
Goodwill | $ 118,972,000 | $ 118,972,000 | $ 0 |
Purchased Intellectual Property | |||
Goodwill [Line Items] | |||
Amortization period of intangible assets | 6 years 9 months 18 days |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 20,325 | $ 20,325 |
Accumulated Amortization | (8,821) | (8,397) |
Net Carrying Amount | 11,504 | 11,928 |
Acquired Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,000 | 20,000 |
Accumulated Amortization | (8,717) | (8,301) |
Net Carrying Amount | 11,283 | 11,699 |
Purchased Intellectual Property | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 325 | 325 |
Accumulated Amortization | (104) | (96) |
Net Carrying Amount | $ 221 | $ 229 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Future Amortization Expense for Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2020 (excluding the three months ended March 31, 2020) | $ 1,279 | |
2021 | 1,699 | |
2022 | 1,699 | |
2023 | 1,699 | |
2024 | 1,703 | |
Thereafter | 3,425 | |
Net Carrying Amount | $ 11,504 | $ 11,928 |
Deferred Revenue - Schedule of
Deferred Revenue - Schedule of Deferred Revenue by Revenue Classification (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current deferred revenue | ||
Total current deferred revenue | $ 64,572 | $ 60,994 |
Non-current deferred revenue | ||
Total non-current deferred revenue | 208,828 | 219,332 |
Total current and non-current deferred revenue | 273,400 | 280,326 |
Sequencing Revenue | ||
Current deferred revenue | ||
Total current deferred revenue | 13,565 | 12,482 |
Non-current deferred revenue | ||
Total non-current deferred revenue | 1,241 | 1,459 |
Development Revenue | ||
Current deferred revenue | ||
Total current deferred revenue | 51,007 | 48,512 |
Non-current deferred revenue | ||
Total non-current deferred revenue | $ 207,587 | $ 217,873 |
Deferred Revenue - Additional I
Deferred Revenue - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Disaggregation Of Revenue [Line Items] | |||
Current deferred revenue | $ 64,572 | $ 64,572 | $ 60,994 |
Deferred revenue, less current portion | 208,828 | 208,828 | 219,332 |
Revenue recognized | 13,100 | (14,124) | |
Development Revenue | |||
Disaggregation Of Revenue [Line Items] | |||
Current deferred revenue | 51,007 | 51,007 | 48,512 |
Deferred revenue, less current portion | 207,587 | 207,587 | 217,873 |
Development Revenue | Genentech, Inc. | |||
Disaggregation Of Revenue [Line Items] | |||
Current deferred revenue | 50,000 | 50,000 | 48,100 |
Deferred revenue, less current portion | 204,000 | 204,000 | 216,800 |
Sequencing Revenue | |||
Disaggregation Of Revenue [Line Items] | |||
Current deferred revenue | 13,565 | 13,565 | 12,482 |
Deferred revenue, less current portion | $ 1,241 | 1,241 | $ 1,459 |
Revenue recognized | $ 400 |
Deferred Revenue - Additional_2
Deferred Revenue - Additional Information (Details1) - Genentech, Inc. - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-04-01 | Mar. 31, 2020 |
Disaggregation Of Revenue [Line Items] | |
Deferred revenue, expected to be recognized | 12 months |
Minimum | |
Disaggregation Of Revenue [Line Items] | |
Deferred revenue, expected to be recognized | 6 years |
Maximum | |
Disaggregation Of Revenue [Line Items] | |
Deferred revenue, expected to be recognized | 7 years |
Deferred Revenue - Schedule o_2
Deferred Revenue - Schedule of Changes in Deferred Revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2020 |
Revenue From Contract With Customer [Abstract] | ||
Deferred revenue balance at December 31, 2019 | $ 280,326 | |
Additions to deferred revenue during the period | 7,198 | |
Revenue recognized during the period | $ 13,100 | (14,124) |
Deferred revenue balance at March 31, 2020 | $ 273,400 | $ 273,400 |
Leases- Additional Information
Leases- Additional Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020USD ($)ft²Lease | Mar. 31, 2019USD ($) | Aug. 31, 2019USD ($)ft² | |
Lessee Lease Description [Line Items] | |||
Operating lease option to extend | options to extend certain of the leases up to 10.0 years | ||
Lessee, Operating Lease, Existence of Option to Extend | true | ||
Operating lease renewal term | 10 years | ||
Operating lease termination period | 3 years | ||
Number of operating lease terminate | Lease | 1 | ||
Operating lease expense | $ 1.1 | ||
Operating lease variable lease expense | 0.5 | ||
Rent expenses | $ 1.2 | ||
Cash paid for amounts included in measurement of lease liabilities, net of tenant improvement allowances received | 0.8 | ||
Cash received for tenant improvement allowances | $ 0.3 | ||
Number of square feet | ft² | 19,867 | 100,000 | |
Letter of credit | $ 2.1 | ||
Tenant improvement allowance | $ 0.6 | ||
Operating lease, lease not yet commenced lease liability | $ 100.1 | ||
Minimum | |||
Lessee Lease Description [Line Items] | |||
Operating lease remaining lease term | 2 years 1 month 6 days | ||
Operating lease,lease not yet commenced term of contract | 5 years 2 months 12 days | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Operating lease remaining lease term | 12 years 3 months 18 days | ||
Operating lease,lease not yet commenced term of contract | 12 years 8 months 12 days |
Leases- Summary of Oher Informa
Leases- Summary of Oher Information Related to Operating Lease (Details) | Mar. 31, 2020 |
Lessee Disclosure [Abstract] | |
Weighted-average remaining lease term (in years) | 11 years 1 month 28 days |
Weighted-average discount rate | 4.50% |
Leases- Summary of Reconciles U
Leases- Summary of Reconciles Undiscounted Operating Lease Cash Flows (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Lessee Disclosure [Abstract] | |
2020 (excluding the three months ended March 31, 2020) | $ 3,298 |
2021 | 5,123 |
2022 | 5,074 |
2023 | 4,364 |
2024 | 4,326 |
Thereafter | 28,771 |
Total undiscounted lease payments | 50,956 |
Imputed interest rate | (11,315) |
Tenant improvement receivables | (1,594) |
Total operating lease liabilities | 38,047 |
Less: current portion | (1,502) |
Operating lease liabilities, less current portion | $ 36,545 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) | Jan. 01, 2020shares | Jun. 30, 2019shares | Mar. 31, 2020Vote$ / sharesshares | Dec. 31, 2014$ / sharesshares | Dec. 31, 2019$ / sharesshares | Mar. 31, 2019shares | Dec. 31, 2018shares |
Class Of Stock [Line Items] | |||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares outstanding | 0 | 0 | |||||
Common stock authorized | 340,000,000 | 340,000,000 | |||||
Common stock par value | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Common stock voting rights description | Holders of our common stock are entitled to one vote for each share of common stock held | ||||||
Number of vote for each share | Vote | 1 | ||||||
Common stock outstanding | 126,621,829 | 125,238,142 | |||||
Warrants issued to purchase stock | 56,875 | ||||||
Series C Convertible Preferred Stock | |||||||
Class Of Stock [Line Items] | |||||||
Warrants issued to purchase stock | 56,875 | ||||||
Warrant exercisable term | 7 years | ||||||
Weighted-average exercise price of warrants | $ / shares | $ 2.64 | ||||||
Employee Stock Purchase Plan | |||||||
Class Of Stock [Line Items] | |||||||
Increase in share reserve | 1,252,381 | ||||||
Maximum | Employee Stock Purchase Plan | |||||||
Class Of Stock [Line Items] | |||||||
Percentage of annual increases in number of shares | 1.00% | ||||||
2019 Equity Incentive Plan | |||||||
Class Of Stock [Line Items] | |||||||
Increase in share reserve | 6,261,907 | ||||||
2019 Equity Incentive Plan | Maximum | |||||||
Class Of Stock [Line Items] | |||||||
Percentage of annual increases in number of shares | 5.00% | ||||||
Convertible Preferred Stock | |||||||
Class Of Stock [Line Items] | |||||||
Conversion of convertible preferred stock | 93,039,737 | ||||||
Convertible preferred stock outstanding | 0 | 93,023,694 | 92,790,094 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Reserved Shares of Common Stock (Details) | Mar. 31, 2020shares |
Class Of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 39,786,801 |
Exercise of Outstanding Common Stock Options and Vesting of Outstanding Common Restricted Stock Units Granted | |
Class Of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 17,492,204 |
Grant | 2019 Equity Incentive Plan | |
Class Of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 19,433,424 |
Grant | Employee Stock Purchase Plan | |
Class Of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 2,804,298 |
Exercise of Common Stock Warrant | |
Class Of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 56,875 |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted-average remaining contractual life options outstanding | 7 years 2 months 12 days | ||
Weighted-average remaining contractual life vested and exercisable options outstanding | 5 years 9 months 18 days | ||
Proceeds from exercise of stock options | $ 4,959 | $ 130 | |
Proceeds from settlement of stock option exercised in prior periods | $ 500 | ||
Weighted-average volatility | 70.70% | 64.40% | |
Share-based compensation expense | $ 4,675 | $ 3,046 | |
Unrecognized share-based compensation expense related to unvested stock options | $ 71,200 | ||
Unrecognized share-based compensation expense related to unvested stock options, weighted-average period for recognition | 3 years 3 months 18 days | ||
Option Valuation Model | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | ||
Restricted Stock Units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized share-based compensation expense related to unvested stock options, weighted-average period for recognition | 2 months 12 days | ||
Unrecognized share-based compensation expense related to unvested RSUs | $ 100 | ||
Sequenta 2008 Stock Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Shares available for future issuance | 0 | ||
2009 Equity Incentive Plan | Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Shares available for future issuance | 0 | ||
2009 Equity Incentive Plan | Options | Non Employee Directors | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
2009 Equity Incentive Plan | Options | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Option expiration period | 10 years | ||
2019 Equity Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Shares available for future issuance | 19,433,424,000 | 15,396,254,000 | |
2019 Equity Incentive Plan | Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares authorized for issuance | 22,025,259 | ||
2019 Equity Incentive Plan | Options | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Option expiration period | 10 years | ||
2019 Equity Incentive Plan | Restricted Stock Units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation granted shares vested | 2,250 | ||
Weighted-average grant date fair value per share | $ 41.63 | ||
Share-based compensation nonvested and outstanding shares | 2,250 | 4,500 | |
Weighted-average grant date fair value per share nonvested and outstanding | $ 41.63 | $ 41.63 |
Equity Incentive Plans - Summar
Equity Incentive Plans - Summary of Changes in Shares Available for Grant (Details) - 2019 Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2020shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares Available for Grant, Outstanding, Beginning Balance | 15,396,254,000 |
Shares Available for Grant, 2019 Plan reserve increase | 6,261,907,000 |
Shares Available for Grant, Options and restricted stock units granted | (2,292,847,000) |
Shares Available for Grant, Options and restricted stock units forfeited or cancelled | 68,110,000 |
Shares Available for Grant, Outstanding, Ending Balance | 19,433,424,000 |
Equity Incentive Plans - Summ_2
Equity Incentive Plans - Summary of Stock Option Activity Under 2008 Plan 2009 Plan and 2019 Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Shares Subject to Outstanding Options, Options outstanding, Beginning Balance | 16,646,654 | |
Shares Subject to Outstanding Options, Options granted | 2,292,847 | |
Shares Subject to Outstanding Options, Options forfeited or cancelled | (68,110) | |
Shares Subject to Outstanding Options, Options exercised | (1,381,437) | |
Shares Subject to Outstanding Options, Options outstanding, Ending Balance | 17,489,954 | |
Shares Subject to Outstanding Options, Options vested and exercisable | 9,670,591 | |
Weighted Average Exercise Price per Share, Options outstanding, Beginning Balance | $ 6.14 | |
Weighted Average Exercise Price per Share, Options granted | 29.68 | |
Weighted Average Exercise Price per Share, Options forfeited or cancelled | 8.63 | |
Weighted Average Exercise Price per Share, Options exercised | 3.27 | |
Weighted Average Exercise Price per Share, Options outstanding, Ending Balance | 9.44 | |
Weighted Average Exercise Price per Share, Options vested and exercisable | $ 5.03 | |
Aggregate Intrinsic Value, Option outstanding | $ 329,432 | $ 398,379 |
Aggregate Intrinsic Value, Options vested and exercisable | $ 220,010 |
Equity Incentive Plans - Summ_3
Equity Incentive Plans - Summary of Estimated Fair Value of Options Granted (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grant date fair value | $ 7.80 | |
Risk-free interest rate | 2.50% | |
Risk-free interest rate, minimum | 0.70% | |
Risk-free interest rate, maximum | 1.70% | |
Expected volatility, minimum | 70.50% | 64.30% |
Expected volatility, maximum | 72.10% | 65.50% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grant date fair value | $ 17.68 | |
Expected term (in years) | 5 years 3 months 7 days | 5 years 3 months 7 days |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grant date fair value | $ 31.71 | |
Expected term (in years) | 6 years 29 days | 6 years 29 days |
Equity incentive Plans - Summ_4
Equity incentive Plans - Summary of Compensation Costs Related to Stock Options and RSUS Included on Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | $ 4,675 | $ 3,046 |
Cost of Revenue | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | 172 | 130 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | 1,544 | 917 |
Sales and Marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | 1,157 | 906 |
General and Administration | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1,802 | $ 1,093 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax benefit | $ 323,000 | $ 0 |
CARES ACT 2020 aid net operating losses carryforward period | 5 years |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Shareholders - Computation of the Basic and Diluted Net Loss Per Share Attributable to Common Shareholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (31,403) | $ (18,386) |
Fair value adjustments to redemption value for Series E-1 convertible preferred stock options | (254) | |
Net loss attributable to common shareholders | $ (31,403) | $ (18,640) |
Weighted-average shares used in computing net loss per share | 126,058,389 | 12,886,087 |
Net loss per share attributable to common shareholders, basic and diluted | $ (0.25) | $ (1.45) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Shareholders - Weighted-Average Common Stock Equivalents were Excluded From Calculation of Diluted Net Loss Per Share Attributable to Common Shareholders (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities | 16,884,062 | 109,277,316 |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities | 92,974,578 | |
Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities | 16,823,569 | 16,190,831 |
Unvested Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities | 3,618 | |
Common Stock Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities | 56,875 | 55,032 |
Convertible Preferred Stock Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities | 56,875 |