Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38683 | |
Entity Registrant Name | GUARDANT HEALTH, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-4139254 | |
Entity Address, Address Line One | 505 Penobscot Dr. | |
Entity Address, City or Town | Redwood City | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94063 | |
City Area Code | 855 | |
Local Phone Number | 698-8887 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.00001 | |
Trading Symbol | GH | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 99,972,386 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001576280 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Current assets: | |||
Cash and cash equivalents | $ 142,945 | $ 143,228 | |
Short-term marketable securities | 870,459 | 379,574 | |
Accounts receivable, net | 36,255 | 47,986 | |
Inventory | 27,731 | 15,181 | |
Prepaid expenses and other current assets, net | 9,898 | 11,389 | |
Total current assets | 1,087,288 | 597,358 | |
Long-term marketable securities | 51,398 | 268,783 | |
Property and equipment, net | 61,882 | 43,668 | |
Right-of-use assets | 36,103 | 29,140 | |
Intangible assets, net | 16,645 | 8,524 | |
Goodwill | 3,290 | 3,290 | |
Capitalized license fees | 50 | 6,890 | |
Other assets, net | 5,453 | 4,882 | |
Total Assets | [1] | 1,262,109 | 962,535 |
Current liabilities: | |||
Accounts payable | 18,281 | 16,197 | |
Accrued compensation | 24,037 | 18,557 | |
Accrued expenses | 22,312 | 25,703 | |
Deferred revenue | 7,337 | 12,277 | |
Total current liabilities | 71,967 | 72,734 | |
Long-term operating lease liabilities | 39,682 | 33,256 | |
Obligation related to royalty | 0 | 6,880 | |
Other long-term liabilities | 1,856 | 1,672 | |
Total Liabilities | [1] | 113,505 | 114,542 |
Redeemable noncontrolling interest | 56,400 | 49,600 | |
Stockholders’ equity: | |||
Common stock, par value of $0.00001 per share; 350,000,000 shares authorized as of September 30, 2020 and December 31, 2019; 99,897,188 and 94,261,414 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 1 | 1 | |
Additional paid-in capital | 1,601,188 | 1,150,090 | |
Accumulated other comprehensive income | 3,862 | 1,111 | |
Accumulated deficit | (512,847) | (352,809) | |
Total Stockholders’ Equity | 1,092,204 | 798,393 | |
Total Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity | $ 1,262,109 | $ 962,535 | |
[1] | As of September 30, 2020 and December 31, 2019, this balance includes $37.7 million and $45.1 million of assets, respectively, that can be used only to settle obligations of the consolidated variable interest entity (“VIE”) and VIE’s subsidiaries, and $4.6 million and $5.7 million of liabilities of the consolidated VIE and VIE’s subsidiaries, respectively, for which their creditors do not have recourse to the general credit of the Company. See Note 3, Investment in Joint Venture . |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Common stock, par value (in usd per share) | $ 0.00001 | $ 0.00001 | |
Common stock, shares authorized (in shares) | 350,000,000 | 350,000,000 | |
Common stock, shares outstanding (in shares) | 99,897,188 | 94,261,414 | |
Common stock, shares issued (in shares) | 99,897,188 | 94,261,414 | |
Assets | [1] | $ 1,262,109 | $ 962,535 |
Liabilities | [1] | 113,505 | 114,542 |
Variable Interest Entity | |||
Assets | 37,700 | 45,100 | |
Liabilities | $ 4,600 | $ 5,700 | |
[1] | As of September 30, 2020 and December 31, 2019, this balance includes $37.7 million and $45.1 million of assets, respectively, that can be used only to settle obligations of the consolidated variable interest entity (“VIE”) and VIE’s subsidiaries, and $4.6 million and $5.7 million of liabilities of the consolidated VIE and VIE’s subsidiaries, respectively, for which their creditors do not have recourse to the general credit of the Company. See Note 3, Investment in Joint Venture . |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Precision oncology testing | $ 60,384 | $ 52,147 | $ 171,621 | $ 123,048 |
Development services and other | 14,185 | 8,701 | 36,793 | 28,430 |
Total revenue | 74,569 | 60,848 | 208,414 | 151,478 |
Costs and operating expenses: | ||||
Cost of precision oncology testing | 16,699 | 16,578 | 52,699 | 42,251 |
Cost of development services and other | 4,488 | 1,936 | 11,429 | 6,631 |
Research and development expense | 36,245 | 24,569 | 109,580 | 60,417 |
Sales and marketing expense | 25,095 | 18,802 | 75,225 | 56,048 |
General and administrative expense | 66,294 | 16,440 | 123,265 | 42,540 |
Total costs and operating expenses | 148,821 | 78,325 | 372,198 | 207,887 |
Loss from operations | (74,252) | (17,477) | (163,784) | (56,409) |
Interest income | 2,313 | 4,286 | 8,271 | 9,870 |
Interest expense | (8) | (280) | (30) | (860) |
Other income (expense), net | 345 | 179 | 2,421 | 275 |
Loss before provision for income taxes | (71,602) | (13,292) | (153,122) | (47,124) |
Provision for (benefit from) income taxes | 68 | (202) | 116 | (1,383) |
Net loss | (71,670) | (13,090) | (153,238) | (45,741) |
Adjustment of redeemable noncontrolling interest | (6,000) | 300 | (6,800) | (4,700) |
Net loss attributable to Guardant Health, Inc. common stockholders | $ (77,670) | $ (12,790) | $ (160,038) | $ (50,441) |
Net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted (in usd per share) | $ (0.78) | $ (0.14) | $ (1.66) | $ (0.56) |
Weighted-average shares used in computing net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted (in shares) | 99,554 | 93,303 | 96,659 | 89,452 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (71,670) | $ (13,090) | $ (153,238) | $ (45,741) |
Other comprehensive income (loss), net of tax impact: | ||||
Unrealized gain (loss) on available-for-sale securities | (1,721) | (282) | 2,512 | 1,055 |
Foreign currency translation adjustments | 191 | 47 | 239 | 137 |
Other comprehensive income (loss) | (1,530) | (235) | 2,751 | 1,192 |
Comprehensive loss | (73,200) | (13,325) | (150,487) | (44,549) |
Comprehensive income (loss) attributable to redeemable noncontrolling interest | (6,000) | 300 | (6,800) | (4,700) |
Comprehensive loss attributable to Guardant Health, Inc. | $ (79,200) | $ (13,025) | $ (157,287) | $ (49,249) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders’ Equity (unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Redeemable Noncontrolling Interest | Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment |
Beginning balance at Dec. 31, 2018 | $ 41,800 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Adjustment of redeemable noncontrolling interest | $ (4,700) | 4,700 | $ (4,700) | ||||||
Ending balance at Sep. 30, 2019 | 46,500 | ||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 85,832,454 | ||||||||
Beginning balance at Dec. 31, 2018 | 483,152 | $ 1 | $ 764,033 | $ (83) | (280,799) | ||||
Beginning balance (Topic 606 adoption) at Dec. 31, 2018 | $ 4,907 | $ 4,907 | |||||||
Beginning balance (ASU 2018-07 adoption) at Dec. 31, 2018 | $ 1,266 | $ (1,266) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock in public offering, net of offering costs (in shares) | 5,175,000 | ||||||||
Issuance of common stock in public offering, net of offering costs | 349,709 | 349,709 | |||||||
Issuance of common stock upon exercise of stock options (in shares) | 2,627,486 | ||||||||
Issuance of common stock upon exercise of stock options | 9,795 | 9,795 | |||||||
Vesting of restricted stock units (in shares) | 5,545 | ||||||||
Vesting of common stock exercised early | 82 | 82 | |||||||
Common stock issued under employee stock purchase plan (in shares) | 212,905 | ||||||||
Common stock issued under employee stock purchase plan | 5,118 | 5,118 | |||||||
Stock-based compensation | 11,882 | 11,882 | |||||||
Other comprehensive loss | 1,192 | 1,192 | |||||||
Net loss | (45,741) | (45,741) | |||||||
Ending balance (in shares) at Sep. 30, 2019 | 93,853,390 | ||||||||
Ending balance at Sep. 30, 2019 | 815,396 | $ 1 | 1,141,885 | 1,109 | (327,599) | ||||
Beginning balance at Jun. 30, 2019 | 46,800 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Adjustment of redeemable noncontrolling interest | 300 | (300) | 300 | ||||||
Ending balance at Sep. 30, 2019 | 46,500 | ||||||||
Beginning balance (in shares) at Jun. 30, 2019 | 92,806,252 | ||||||||
Beginning balance at Jun. 30, 2019 | 815,474 | $ 1 | 1,128,938 | 1,344 | (314,809) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock upon exercise of stock options (in shares) | 949,496 | ||||||||
Issuance of common stock upon exercise of stock options | 4,265 | 4,265 | |||||||
Vesting of restricted stock units (in shares) | 4,439 | ||||||||
Vesting of common stock exercised early | 13 | 13 | |||||||
Common stock issued under employee stock purchase plan (in shares) | 93,203 | ||||||||
Common stock issued under employee stock purchase plan | 3,185 | 3,185 | |||||||
Stock-based compensation | 5,484 | 5,484 | |||||||
Other comprehensive loss | (235) | (235) | |||||||
Net loss | (13,090) | (13,090) | |||||||
Ending balance (in shares) at Sep. 30, 2019 | 93,853,390 | ||||||||
Ending balance at Sep. 30, 2019 | 815,396 | $ 1 | 1,141,885 | 1,109 | (327,599) | ||||
Beginning balance at Dec. 31, 2019 | 49,600 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Adjustment of redeemable noncontrolling interest | (6,800) | 6,800 | (6,800) | ||||||
Ending balance at Sep. 30, 2020 | 56,400 | ||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 94,261,414 | ||||||||
Beginning balance at Dec. 31, 2019 | 798,393 | $ 1 | 1,150,090 | 1,111 | (352,809) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock in public offering, net of offering costs (in shares) | 4,312,500 | ||||||||
Issuance of common stock in public offering, net of offering costs | $ 354,600 | 354,600 | |||||||
Issuance of common stock upon exercise of stock options (in shares) | 1,188,519 | 1,188,519 | |||||||
Issuance of common stock upon exercise of stock options | $ 7,399 | 7,399 | |||||||
Vesting of restricted stock units (in shares) | 76,591 | ||||||||
Vesting of common stock exercised early | 39 | 39 | |||||||
Common stock issued under employee stock purchase plan (in shares) | 58,164 | ||||||||
Common stock issued under employee stock purchase plan | 3,956 | 3,956 | |||||||
Taxes paid related to net share settlement of restricted stock units | (2,247) | (2,247) | |||||||
Stock-based compensation | 87,351 | 87,351 | |||||||
Other comprehensive loss | 2,751 | 2,751 | |||||||
Net loss | (153,238) | (153,238) | |||||||
Ending balance (in shares) at Sep. 30, 2020 | 99,897,188 | ||||||||
Ending balance at Sep. 30, 2020 | 1,092,204 | $ 1 | 1,601,188 | 3,862 | (512,847) | ||||
Beginning balance at Jun. 30, 2020 | 50,400 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Adjustment of redeemable noncontrolling interest | (6,000) | 6,000 | (6,000) | ||||||
Ending balance at Sep. 30, 2020 | $ 56,400 | ||||||||
Beginning balance (in shares) at Jun. 30, 2020 | 99,312,237 | ||||||||
Beginning balance at Jun. 30, 2020 | 1,114,589 | $ 1 | 1,544,373 | 5,392 | (435,177) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock upon exercise of stock options (in shares) | 533,962 | ||||||||
Issuance of common stock upon exercise of stock options | 3,851 | 3,851 | |||||||
Vesting of restricted stock units (in shares) | 50,989 | ||||||||
Vesting of common stock exercised early | 13 | 13 | |||||||
Taxes paid related to net share settlement of restricted stock units | (2,247) | (2,247) | |||||||
Stock-based compensation | 55,198 | 55,198 | |||||||
Other comprehensive loss | (1,530) | (1,530) | |||||||
Net loss | (71,670) | (71,670) | |||||||
Ending balance (in shares) at Sep. 30, 2020 | 99,897,188 | ||||||||
Ending balance at Sep. 30, 2020 | $ 1,092,204 | $ 1 | $ 1,601,188 | $ 3,862 | $ (512,847) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders’ Equity (unaudited) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Adjustments to additional paid in capital, stock issued, issuance costs | $ 1,130 | $ 723 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (153,238) | $ (45,741) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 11,462 | 7,963 |
Non-cash operating lease costs | 3,349 | 2,865 |
Charge of in-process research and development costs with no alternative future use | 8,500 | 0 |
Unrealized translation gains (loss) on obligation related to royalty | 0 | (330) |
Re-valuation of contingent consideration | (120) | 0 |
Non-cash stock-based compensation | 87,351 | 11,882 |
Amortization of premium (discount) on marketable securities | 1,636 | (1,953) |
Benefit from income tax differences | 0 | (1,235) |
Credit loss adjustment and others | 8,056 | 0 |
Changes in operating assets and liabilities, net of effect of acquisition: | ||
Accounts receivable, net | 11,581 | 908 |
Inventory | (12,550) | (5,624) |
Prepaid expenses and other current assets | 491 | (453) |
Other assets | (7,571) | (1,043) |
Accounts payable | 846 | 426 |
Accrued compensation | 5,480 | 11,618 |
Accrued expenses and other liabilities | (1,514) | 6,368 |
Operating lease liabilities | (3,523) | 600 |
Deferred revenue | (4,940) | (3,043) |
Net cash used in operating activities | (44,704) | (16,792) |
INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (580,172) | (542,468) |
Maturity of marketable securities | 307,548 | 223,064 |
Business acquisition, net of cash acquired | 0 | (7,328) |
Purchases of property and equipment | (28,891) | (11,628) |
Purchase of intangible assets and capitalized license obligations | (17,886) | (2,568) |
Net cash used in investing activities | (319,401) | (340,928) |
FINANCING ACTIVITIES: | ||
Payments made on royalty obligations | 0 | (228) |
Payments made on finance lease obligations | (125) | (79) |
Proceeds from issuance of common stock upon exercise of stock options | 7,399 | 9,795 |
Proceeds from issuances of common stock under employee stock purchase plan | 3,956 | 5,118 |
Taxes paid related to net share settlement of restricted stock units | (2,247) | 0 |
Proceeds from public offering, net of underwriting discounts and commissions | 355,730 | 350,432 |
Payment of offering costs related to public offering | (1,130) | (811) |
Net cash provided by financing activities | 363,583 | 364,227 |
Net effect of foreign exchange rate changes on cash and cash equivalents | 239 | 137 |
Net increase in cash and cash equivalents | (283) | 6,644 |
Cash and cash equivalents—Beginning of period | 143,228 | 140,544 |
Cash and cash equivalents—End of period | 142,945 | 147,188 |
Supplemental Disclosures of Cash Flow Information: | ||
Operating lease liabilities arising from obtaining right-of-use assets | 10,463 | 9,701 |
Supplemental Disclosures of Noncash Investing and Financing Activities: | ||
Purchases of property and equipment included in accounts payable and accrued expenses | 4,301 | 6,418 |
Initial fair value of contingent consideration at acquisition date | $ 0 | $ 1,065 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of BusinessGuardant Health, Inc. (the “Company”) is a leading precision oncology company focused on helping conquer cancer globally through use of its proprietary blood tests, vast data sets and advanced analytics. The key to conquering cancer is unprecedented access to its molecular information throughout all stages of the disease, which the Company enables by a routine blood draw, or liquid biopsy. The Guardant Health Oncology Platform is designed to leverage the Company’s capabilities in technology, clinical development, regulatory and reimbursement to drive commercial adoption, accelerate drug development, improve patient clinical outcomes and lower healthcare costs. In pursuit of its goal to manage cancer across all stages of the disease, the Company has launched its Guardant360 and GuardantOMNI liquid biopsy-based tests for advanced stage cancer and is developing tests from its LUNAR program which aims to address the needs of early stage cancer patients with neoadjuvant and adjuvant treatment selection, cancer survivors with surveillance, and asymptomatic individuals eligible for cancer screening and individuals at a higher risk for developing cancer with early detection and is developing tests from its LUNAR program which aims to address the needs of early stage cancer patients with neoadjuvant and adjuvant treatment selection, cancer survivors with surveillance, and asymptomatic individuals eligible for cancer screening and individuals at a higher risk for developing cancer with early detection. Using data collected from the Company's Guardant360 tests, the Company has also developed GuardantINFORM platform to further accelerate precision oncology drug development by biopharmaceutical companies by offering them an in-silico research platform to further unlock insights into tumor evolution and treatment resistance across various biomarker-driven cancers. The Company was incorporated in Delaware in December 2011 and is headquartered in Redwood City, California. In May 2018, the Company formed and capitalized Guardant Health AMEA, Inc. (the “Joint Venture”) in the United States with an affiliate of SoftBank Vision Fund (AIV M1) L.P. (“SoftBank”). Under the terms of the joint venture agreement, the Company held a 50% ownership interest in the Joint Venture. As of September 30, 2020, the Joint Venture has subsidiaries in Singapore and Japan (see Note 3, Investment in Joint Venture |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed consolidated financial statements include the accounts of Guardant Health, Inc. and its consolidated Joint Venture. Other stockholders’ interests in the Joint Venture are shown in the condensed consolidated financial statements as redeemable noncontrolling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The Company believes that its existing cash and cash equivalents and marketable securities as of September 30, 2020 will be sufficient to allow the Company to fund its current operating plan through at least a period of one year after the date the accompanying condensed consolidated financial statements are issued. As the Company continues to incur losses, its transition to profitability is dependent upon a level of revenues adequate to support the Company’s cost structure. If the Company’s transition to profitability is not consistent with its current operating plan, the Company may have to seek additional capital. Use of Estimates The preparation of condensed consolidated financial statements in conformity with 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 condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Estimates are used in several areas including, but not limited to, estimation of variable consideration, estimation of credit losses, standalone selling price allocation included in contracts with multiple performance obligations, the fair value of assets acquired and liabilities assumed for business combinations, goodwill and identifiable intangible assets, stock-based compensation, contingencies, certain inputs into the provision for (benefit from) income taxes, including related reserves, valuation of redeemable noncontrolling interest, 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. The extent to which the COVID-19 pandemic will ultimately impact the Company’s business, results of operations, financial conditions, or cash flows is highly uncertain and difficult to predict because it will depend on many factors that are outside the Company’s control, such as the duration, scope and severity of the pandemic, steps required or mandated by governments to mitigate the impact of the pandemic, and whether COVID-19 can be effectively prevented, detected, contained and treated, particularly in the markets where the Company operates. Unaudited Interim Condensed Financial Statements The accompanying condensed consolidated balance sheet as of September 30, 2020, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019, the condensed consolidated statements of redeemable noncontrolling interest and stockholders’ equity for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019, and the related interim condensed consolidated disclosures are unaudited. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring accruals that the Company believes are necessary to fairly state the financial position and the results of the Company’s operations and cash flows for interim periods in accordance with GAAP. 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 condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Foreign Currency Translation The functional currency of the subsidiaries of the consolidated Joint Venture is the local currency. The assets and liabilities of the subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date, with the resulting translation adjustments recorded to a separate component of accumulated other comprehensive loss within stockholders’ equity. Income and expense accounts are translated at average exchange rates during the period. Foreign currency transaction gains and losses resulting from transactions denominated in a currency other than the functional currency are recognized in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2020 and 2019, foreign currency translation adjustment was immaterial. Concentration of Risk The Company is subject to credit risk from its portfolio of cash equivalents held at one commercial bank and investments in marketable securities. The Company limits its exposure to credit losses by investing in money market funds through a U.S. bank with high credit ratings. The Company’s cash may consist of deposits held with banks that may at times exceed federally insured limits, however, its exposure to credit risk in the event of default by the financial institution is limited to the extent of amounts recorded on the condensed consolidated balance sheets. The Company performs evaluations of the relative credit standing of these financial institutions to limit the amount of credit exposure. The Company also invests in investment-grade debt instruments and has policy limits for the amount it can invest in any one type of security, except for securities issued or guaranteed by the U.S. government. The goals of the Company’s investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk; liquidity of investments sufficient to meet cash flow requirements; and a competitive after-tax rate of return. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, investment type and issuer, as a result, the Company is not exposed to any significant concentrations of credit risk from these financial instruments. The Company is subject to credit risk from its accounts receivable. The majority of the Company’s accounts receivable arises from the provision of precision oncology services in the United States and are primarily with biopharmaceutical companies with high credit ratings. The Company has not experienced any material losses related to receivables from individual customers, or groups of customers. The Company does not require collateral. Accounts receivable are recorded at the invoiced amount. A significant customer is a biopharmaceutical customer or a clinical testing payer that represents 10% or more of the Company’s total revenue or accounts receivable balance. Revenue attributable to each significant customer, including its affiliated entities, as a percentage of the Company’s total revenue, for the respective period, and accounts receivable balance attributable to each significant customers, including its affiliated entities, as a percentage of the Company’s total accounts receivable balance, at the respective condensed consolidated balance sheet date, are as follows: Revenue Accounts Receivable, Net Three Months Ended September 30, Nine Months Ended September 30, September 30, 2020 December 31, 2019 2020 2019 2020 2019 (unaudited) (unaudited) Customer A * 21 % 11 % 27 % 11 % 40 % Customer B 28 % 19 % 24 % 15 % * * Customer C * * * * * 10 % Customer D * * * * 10 % * Customer E * * * * 13 % * * less than 10% The Company is also subject to credit risk from its other receivables and other assets. The Company's other receivables and other assets include payments due from a third-party in relation to the settlement of a patent dispute reached during the three months ended September 30, 2020 for $8.0 million payable over a period of 6 years. The Company has evaluated and recorded a credit loss for the full amount considering the third-party's credit worthiness and lack of collection history. The following table presents the receivable and the related credit loss amounts: Gross Amount Allowance for Credit Losses Net Amount September 30, 2020 December 31, 2019 Three and Nine Months Ended September 30, 2020 September 30, 2020 December 31, 2019 Beginning Balance Additions: Charged to Other Income (Expense), Net Ending Balance (unaudited) (unaudited) (unaudited) (in thousand) Prepaid expenses and other current assets $ 1,000 $ — $ — $ (1,000) $ (1,000) $ — $ — Other assets 7,000 — — (7,000) (7,000) — $ — Accounts Receivable, Net Accounts receivable represent valid claims against biopharmaceutical companies, research institutes and international distributors. The Company evaluates the collectability of its accounts receivable based on historical collection trends, the financial condition of payment partners, and external market factors and provides for an allowance for potential credit losses based on management’s best estimate of the amount of probable credit losses. As of September 30, 2020 and December 31, 2019, the Company had no allowance for credit losses related to its accounts receivable. Asset Acquisition If an acquisition of an asset or group of assets does not meet the definition of a business, the transaction is accounted for as an asset acquisition rather than a business combination. An asset acquisition does not result in the recognition of goodwill and transaction costs are capitalized as part of the cost of the asset or group of assets acquired. The total consideration is allocated to the various intangible assets acquired on a relative fair value basis. Transaction costs associated with the asset acquisition are capitalized. Cash paid in connection of purchase of in-process research and development technology in an asset acquisition is presented within the investing section of the condensed consolidated statement of cash flows. Goodwill and Intangible Assets, net Intangible assets related to in-process research and development costs (“IPR&D”) are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. Prior to completion of the research and development efforts, the assets are considered indefinite-lived. During this period, the assets will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill and IPR&D are not amortized but are tested for impairment at least annually during the fourth fiscal quarter, or if circumstances indicate their value may no longer be recoverable. The Company continues to operate in one segment, which is considered to be the sole reporting unit and, therefore, goodwill was tested for impairment at the enterprise level. As of September 30, 2020, there has been no impairment of goodwill. Intangible assets are carried at cost, net of accumulated amortization. The Company does not have intangible assets with indefinite useful lives other than goodwill and the acquired IPR&D. Amortization is recorded on a straight-line basis over the intangible asset's useful life, which is approximately 6-12 years. Leases The Company determines if an arrangement contains a lease at inception. Operating lease right-of-use (“ROU”) assets and operating leases liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. 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 or receivable. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities, as the Company's leases generally do not provide an implicit rate. Lease terms may include options to extend or terminate when the Company is reasonably certain the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company also has lease arrangements with lease and non-lease components. The Company elected the practical expedient not to separate non-lease components from lease components for the Company’s facility leases. The Company also elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for leases with terms of 12 months or less. Revenue Recognition The Company derives revenue from the provision of precision oncology testing services provided to its ordering physicians and biopharmaceutical customers, as well as from biopharmaceutical research and development services provided to its biopharmaceutical customers. Precision oncology testing services include genomic profiling and the delivery of other genomic information derived from the Company’s platform. Development services and other include companion diagnostic development, clinical trial setup, monitoring and maintenance, information solutions and laboratory services, and other miscellaneous revenue streams. The Company currently receives payments from third-party commercial and governmental payers, certain hospitals and oncology centers and individual patients, as well as biopharmaceutical companies and research institutes. Revenues are recognized when control of services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. ASC 606 provides for a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation. Precision oncology testing The Company recognizes revenue from the sale of its precision oncology tests for clinical customers, including certain hospitals, cancer centers, other institutions and patients, at the time results of the test are reported to physicians. Most precision oncology tests requested by clinical customers are sold without a written agreement; however, the Company determines an implied contract exists with its clinical customers. The Company identifies each sale of its liquid biopsy test to clinical customer as a single performance obligation. With the exception of certain limited contracted arrangements with insurance carriers and other institutions where the transaction price is fixed, a stated contract price does not exist and the transaction price for each implied contract with clinical customers represents variable consideration. The Company estimates the variable consideration under the portfolio approach and considers the historical reimbursement data from third-party commercial and governmental payers and patients, as well as known or anticipated reimbursement trends not reflected in the historical data. The Company monitors the estimated amount to be collected in the portfolio at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Both the estimate and any subsequent revision contain uncertainty and require the use of significant judgment in the estimation of the variable consideration and application of the constraint for such variable consideration. The Company analyzes its actual cash collections over the expected reimbursement period and compares it with the estimated variable consideration for each portfolio and any difference is recognized as an adjustment to estimated revenue after the expected reimbursement period, subject to assessment of the risk of future revenue reversal. For the three months ended September 30, 2020 and 2019, the Company recorded $11.4 million and $10.9 million as revenue, respectively, resulting from cash collections over the expected reimbursement period exceeding the estimated variable consideration related to samples processed in previous periods, including revenue received from successful appeals of reimbursement denials. For the nine months ended September 30, 2020 and 2019, the Company recorded $21.9 million and $15.5 million as revenue, respectively, resulting from cash collections over the expected reimbursement period exceeding the estimated variable consideration related to samples processed in previous periods, including revenue received from successful appeals of reimbursement denials. Revenue from sales of precision oncology tests to biopharmaceutical customers are based on a negotiated price per test or on the basis of an agreement to provide certain testing volume over a defined period. The Company identifies its promise to transfer a series of distinct liquid biopsy tests to biopharmaceutical customers as a single performance obligation. Precision oncology tests to biopharmaceutical customers are generally billed at a fixed price for each test performed. For agreements involving testing volume to be satisfied over a defined period, revenue is recognized over time based on the number of tests performed as the performance obligation is satisfied over time. Results of the Company’s precision oncology services are delivered electronically, and as such there are no shipping or handling fees incurred by the Company or billed to customers. Development services and other The Company performs development services for its biopharmaceutical customers utilizing its precision oncology information platform. Development services and other typically represent a single performance obligation as the Company performs a significant integration service, such as analytical validation and regulatory submissions. The individual promises are not separately identifiable from other promises in the contracts and, therefore, are not distinct. However, under certain contracts, a biopharmaceutical customer may engage the Company for multiple distinct development services which are both capable of being distinct and separately identifiable from other promises in the contracts and, therefore, distinct performance obligations. The Company collaborates with pharmaceutical companies in the development of new drugs. As part of these collaborations, the Company provides services related to regulatory filings to support companion diagnostic device submissions for the Company’s liquid biopsy panels. Under these collaborations, the Company generates revenue from achievement of milestones, as well as provision of on-going support. For development services performed, the Company is compensated through a combination of an upfront fee and performance-based, non-refundable regulatory and other developmental milestone payments. The transaction price of the Company's development services contracts typically represents variable consideration. Application of the constraint for variable consideration to milestone payments is an area that requires significant judgment. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be managed to achieve the respective milestone and the level of effort and investment required to achieve the respective milestone. In making this assessment, the Company considers its historical experience with similar milestones, the degree of complexity and uncertainty associated with each milestone, and whether achievement of the milestone is dependent on parties other than the Company. The constraint for variable consideration is applied such that it is probable a significant reversal of revenue will not occur when the uncertainty associated with the contingency is resolved. Application of the constraint for variable consideration is updated at each reporting period as a revision to the estimated transaction price. The Company recognizes development services revenue over the period in which biopharmaceutical research and development services are provided. Specifically, the Company recognizes revenue using an input method to measure progress, utilizing costs incurred to-date relative to total expected costs as its measure of progress. The Company assesses the changes to the total expected cost estimates as well as any incremental fees negotiated resulting from changes to the scope of the original contract in determining the revenue recognition at each reporting period. The Company revised and increased its total estimated costs relating to one of the development services contracts during the nine months ended September 30, 2020. Had the Company included such additional costs in the original estimated costs, revenues for the nine months ended September 30, 2019 would have been lower by $3.5 million. For development of new products or services under these arrangements, costs incurred before technological feasibility is reached are included as research and development expenses in the Company’s condensed consolidated statements of operations, while costs incurred thereafter are recorded as cost of development services. The Company also has other miscellaneous revenue streams such as Guardant-19 screening in connection with the outbreak of COVID-19, referral fees, maintenance and kits fulfillment related revenues. Contracts with multiple performance obligations Contracts with biopharmaceutical customers may include multiple distinct performance obligations, such as provision of precision oncology testing, biopharmaceutical research and development services, and clinical trial enrollment assistance, among others. The Company evaluates the terms and conditions included within its contracts with biopharmaceutical customers to ensure appropriate revenue recognition, including whether services are considered distinct performance obligations that should be accounted for separately versus together. The Company first identifies material promises, in contrast to immaterial promises or administrative tasks, under the contract, and then evaluates whether these promises are both capable of being distinct and distinct within the context of the contract. In assessing whether a promised service is capable of being distinct, the Company considers whether the customer could benefit from the service either on its own or together with other resources that are readily available to the customer, including factors such as the research, development, and commercialization capabilities of a third- party as well as the availability of the associated expertise in the general marketplace. In assessing whether a promised service is distinct within the context of the contract, the Company considers whether it provides a significant integration of the services, whether the services significantly modify or customize one another, or whether the services are highly interdependent or interrelated. For contracts with multiple performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines standalone selling price by considering the historical selling price of these performance obligations in similar transactions as well as other factors, including, but not limited to, the price that customers in the market would be willing to pay, competitive pricing of other vendors, industry publications and current pricing practices, and expected costs of satisfying each performance obligation plus appropriate margin. Contract assets Contract assets consists primarily of: i) precision oncology testing revenues to clinical customers that are recognized upon delivery of the test results prior to cash collection; and ii) development services revenues to biopharmaceutical customers that are recognized upon the achievement of performance-based milestones but prior to the establishment of billing rights. Contract assets are relieved when the Company receives payments from clinical customers, or when it invoices the biopharmaceutical customers when milestones are achieved, thereby reclassifying the balances from contract assets to accounts receivable. Contract assets are presented under accounts receivable, net and other assets, net on the Company’s condensed consolidated balance sheets. As of September 30, 2020, the Company had contract assets of $13.4 million of which $0.2 million was recorded in other assets, net. As of December 31, 2019, the Company had contract assets of $6.2 million of which $1.0 million was recorded in other assets. Deferred revenue Deferred revenue, which is a contract liability, consists primarily of payments received in advance of revenue recognition from contracts with customers. For example, development services contracts with biopharmaceutical customers often contain upfront payments which results in the recording of deferred revenue to the extent cash is received prior to the Company's performance of the related services. Contract liabilities are relieved as the Company performs its obligations under the contract and revenue is consequently recognized. As of September 30, 2020 and December 31, 2019, the deferred revenue balance was $7.3 million and $12.3 million, respectively, which included $2.2 million and $4.8 million, respectively, related to collaboration development efforts with pharmaceutical companies to be recognized as the Company performs research and development services in the future periods. Revenue recognized in the nine months ended September 30, 2020 that was included in the deferred revenue balance as of December 31, 2019 was $8.8 million, which primarily represented revenue from provision of development services under the collaboration agreements with biopharmaceutical customers. Transaction price allocated to the remaining performance obligations Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenues in future periods. The Company expects to recognize substantially all of the remaining transaction price in the next 12 months. Costs of Precision Oncology Testing Cost of precision oncology testing generally consists of cost of materials, direct labor including bonus, benefit and stock-based compensation, equipment and infrastructure expenses associated with processing liquid biopsy test samples (including sample accessioning, library preparation, sequencing, quality control analyses and shipping charges to transport blood samples), freight, curation of test results for physicians and license fees due to third parties. Infrastructure expenses include depreciation of laboratory equipment, rent costs, amortization of leasehold improvements and information technology costs. Costs associated with performing the Company’s tests are recorded as the tests are performed regardless of whether revenue was recognized with respect to that test. Royalties for licensed technology calculated as a percentage of revenues generated using the associated technology are recorded as expense at the time the related revenues are recognized. One-time royalty payments related to signing of license agreements or other milestones, such as issuance of new patents, are amortized to expense over the expected useful life of the applicable patent rights. Cost of Development Services and Other Cost of development service and other primarily includes costs incurred for the performance of development services requested by the Company’s biopharmaceutical customers and other. For development of new products, costs incurred before technological feasibility has been achieved are reported as research and development expenses, while costs incurred thereafter are reported as cost of development services. Research and Development Expenses Research and development expenses are comprised of costs incurred to develop technology and include compensation and benefits, reagents and supplies used in research and development laboratory work, infrastructure expenses, including allocated facility occupancy and information technology costs, contract services and other outside costs. Stock-Based Compensation Stock-based compensation related to stock options granted to the Company’s and the Joint Venture's employees, directors and nonemployees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. Compensation expense for stock options with performance metrics is calculated based upon expected achievement of the metrics specified in the grant. Starting January 1, 2019, upon adoption of Accounting Standards Update (“ASU”) 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting, the fair value of stock options issued to nonemployee consultants is determined as of the grant date, and compensation expense is being recognized over the period that the related services are rendered. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options and stock purchase rights granted under its 2018 Employee Stock Purchase Plan and under the Joint Venture's 2020 Equity Incentive Plan. The Black-Scholes option-pricing model requires assumptions to be made related to the expected term of an award, expected volatility, risk-free rate and expected dividend yield. The board of directors of the Joint Venture has determined the fair value of common stock of the Joint Venture. Forfeitures are accounted for as they occur. For market-based restricted stock units, the Company derives the requisite service period using the Monte Carlo simulation model and the related compensation expense is recognized over the derived service period using an accelerated attribution model commencing on the grant date. Stock-based compensation expense will be recorded regardless of whether the market conditions are achieved or not. If the related market condition is achieved earlier than its estimated derived service period, the stock-based compensation expense will be accelerated, and a cumulative catch-up expense will be recorded during the period in which the market condition is met. The Company accounts for restricted stock units issued to employees based on the grant date fair value which is determined based on the closing market price of the common stock on the date of grant. The expense is recognized in the Company’s condensed consolidated statement of operations on a straight-line basis over the requisite vesting or service period. Net Loss Per Share Attributable to Common Stockholders The Company calculates basic net loss per share attributable to common stockholders by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period determined |
Investment in Joint Venture
Investment in Joint Venture | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Joint Venture | Investment in Joint Venture Variable Interest Entity (“VIE”) In May 2018, the Company and an affiliate of SoftBank formed and capitalized the Joint Venture for the sale, marketing and distribution of the Company’s tests in all areas worldwide, outside of North America, Central America, South America, the United Kingdom, all other member states of the European Union as of May 9, 2017, Iceland, Norway, Switzerland and Turkey. The Company expects to rely on the Joint Venture to accelerate commercialization of its products in Asia, the Middle East and Africa, with an initial focus on Japan. Under the terms of the joint venture agreement, the Company paid $9.0 million for 40,000 shares of common stock, or 50% ownership interest, of the Joint Venture, and the affiliate of SoftBank contributed $41.0 million for 40,000 shares of common stock, or the other 50% ownership interest, of the Joint Venture. In June 2020, an amended and restated certificate of incorporation of the Joint Venture, as approved by the board of directors of the Joint Venture, was filed with the Secretary of State of the State of Delaware. The amended and restated certificate of incorporation, among other things, increased the number of authorized shares of common stock to 89,000,000 shares consisting of 80,000,000 shares of Class A common stock and 9,000,000 shares of Class B (non-voting) common stock; and authorized 80,000,000 shares of Series A preferred stock. Pursuant to the amended and restated certificate of incorporation, each share of common stock held by the Company and the affiliate of SoftBank was reclassified and exchanged for 1,000 shares of Series A preferred stock. As a result, each of the Company and the affiliate of SoftBank held 40,000,000 shares of Series A preferred stock. The holders of Series A preferred stock are entitled to receive dividends at the rate of $0.05 per share if and when declared by the board of directors of the Joint Venture. In June 2020, the board of directors of the Joint Venture authorized the adoption of the Joint Venture’s 2020 Equity Incentive Plan pursuant to which 4,595,555 shares of Class B common stock have been reserved for issuance. As of September 30, 2020, no shares of Class A and Class B common stock have been issued and outstanding and 80,000,000 shares of Series A preferred stock have been issued and outstanding. Under the terms of the joint venture agreement, neither party is obligated to make any further capital contribution, in cash or otherwise, to the Joint Venture. The Joint Venture is deemed to be a variable interest entity (“VIE”) and the Company has been identified as the VIE’s primary beneficiary. As the primary beneficiary, the Company has consolidated the financial position, results of operations and cash flows of the Joint Venture in its financial statements and all intercompany balances have been eliminated in consolidation. As of September 30, 2020 and December 31, 2019, the Joint Venture had total assets of approximately $37.7 million and $45.1 million, respectively, which were primarily comprised of cash, property and equipment, right-of-use assets and security deposits. Although the Company consolidates the Joint Venture, the legal structure of the Joint Venture limits the recourse that its creditors will have over the Company’s general credit or assets. Similarly, the assets held in the Joint Venture can be used only to settle obligations of the Joint Venture. As of September 30, 2020 and December 31, 2019, the Company has not provided financial or other support to the Joint Venture that was not previously contracted or required. Put-call arrangements The joint venture agreement includes a put-call arrangement with respect to the shares of the Joint Venture held by SoftBank and its affiliates. Under certain specified circumstances and on terms specified in the joint venture agreement, including timely written notice, SoftBank has the right to cause the Company to purchase all shares of the Joint Venture held by SoftBank and its affiliates (the “put right”), and the Company has a right to purchase all such shares (the “call right”). Each of the Company and SoftBank may exercise its respective put-call rights for the Company to purchase all shares of the Joint Venture held by SoftBank in the event of (i) certain material disagreements relating to the Joint Venture or its business that may seriously affect the ability of the Joint Venture to perform its obligations under the joint venture agreement or may otherwise seriously impair the ability of the Joint Venture to conduct its business in an effective matter, other than one relating to the Joint Venture’s business plan or to factual matters that may be capable of expert determination; (ii) the effectiveness of the Company’s initial public offering, a change in control of the Company, the seventh anniversary of the formation of the Joint Venture, or each subsequent anniversary of each of the foregoing events; or (iii) a material breach of the joint venture agreement by the other party that goes unremedied within 20 business days. Unless the shares of the Joint Venture are publicly traded and listed on a nationally recognized stock exchange, the purchase price per share of the Joint Venture in these situations will be determined by a third-party valuation firm on the assumption that the sale is on an arm’s-length basis on the date of the put or call notice. The third-party valuation firm may evaluate a range of factors and employ assumptions that are subjective in nature, which could result in the fair value of SoftBank’s interests in the Joint Venture being determined to be materially different from what has been recorded in the Company’s condensed consolidated financial statements. In the event the Company exercises its call right, the fair value of the Joint Venture will be deemed to be no less than an amount that yields a 20% internal rate of return on each tranche of capital invested by SoftBank and its affiliates in the Joint Venture, taking into account all proceeds received by SoftBank and its affiliates arising from their shares through such date. In the event SoftBank exercises its put right and the fair value of the Joint Venture is determined to be greater than 40% of the fair value of the Company, the Company will only be required to purchase the number of shares of the Joint Venture held by SoftBank and its affiliates having an aggregate value equal to the product of 40% of the Company's fair value and the pro rata portion of the outstanding shares of the Joint Venture held by SoftBank and its affiliates. The Company may pay the purchase price for the shares of the Joint Venture in cash, in shares of its capital stock (which may be a non-voting security with senior preferences to all other classes of its equity or, if its common stock is publicly traded on a national exchange, its common stock), or in a combination thereof. In the event the Company exercises the call right, SoftBank will choose the form of consideration. In the event SoftBank exercises the put right, the Company will choose the form of consideration. The noncontrolling interest held by SoftBank contains embedded put-call redemption features that are not solely within the Company’s control and has been classified outside of permanent equity in the consolidated balance sheets. The put-call feature embedded in the redeemable noncontrolling interest do not currently require bifurcation as it does not meet the definition of a derivative and is considered to be clearly and closely related to the redeemable noncontrolling interest. The noncontrolling interest is considered probable of becoming redeemable as SoftBank has the option to exercise its put right to sell its equity ownership in the Joint Venture to the Company on or after the seventh anniversary of the formation of the Joint Venture, on each subsequent anniversary of the Company’s initial public offering (the “IPO”) and under certain other circumstances. The Company elected to recognize the change in redemption value immediately as they occur as if the put-call redemption feature were exercisable at the end of the reporting period. The carrying value of the redeemable noncontrolling interest is first adjusted for the earnings or losses attributable to the redeemable noncontrolling interest based on the percentage of the economic or ownership interest retained in the consolidated VIE by the noncontrolling parties, and then adjusted to equal to its redemption amount, or the fair value of the noncontrolling interest held by SoftBank, as if the redemption were to occur at the end of the reporting date. |
Condensed Consolidated Balanc_3
Condensed Consolidated Balance Sheet Components | 9 Months Ended |
Sep. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Condensed Consolidated Balance Sheet Components | Condensed Consolidated Balance Sheet Components Property and Equipment, Net Property and equipment, net consist of the following: September 30, 2020 December 31, 2019 (unaudited) (in thousands) Machinery and equipment $ 37,954 $ 29,119 Leasehold improvements 33,480 21,031 Computer hardware 10,129 6,296 Construction in progress 7,465 6,354 Furniture and fixtures 3,182 1,962 Computer software 1,027 829 Property and equipment, gross $ 93,237 $ 65,591 Less: accumulated depreciation (31,355) (21,923) Property and equipment, net $ 61,882 $ 43,668 Depreciation expense related to property and equipment was $3.8 million and $2.5 million for the three months ended September 30, 2020 and 2019, respectively, and $10.0 million and $6.8 million for the nine months ended September 30, 2020 and 2019, respectively. Accrued Expenses Accrued expenses consist of the following: September 30, 2020 December 31, 2019 (unaudited) (in thousands) Operating lease liabilities $ 7,438 $ 7,140 Accrued tax liabilities 3,751 3,050 Accrued professional services 2,475 3,464 Accrued clinical trials and studies 2,489 2,029 Accrued legal expenses 1,808 1,046 Purchases of property and equipment included in accrued expenses 668 2,424 Accrued royalty obligations 321 1,564 Others 3,362 4,986 Total accrued expenses $ 22,312 $ 25,703 |
Fair Value Measurements, Cash E
Fair Value Measurements, Cash Equivalents and Marketable Securities | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Cash Equivalents and Marketable Securities | Fair Value Measurements, Cash Equivalents and Marketable Securities Financial instruments consist of cash equivalents, marketable securities, accounts receivable, net, prepaid expenses and other current assets, net, accounts payable and accrued expenses. Cash equivalents and marketable securities are stated at fair value. Prepaid expenses and other current assets, net, accounts payable and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Fair value is defined as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements were as follows: September 30, 2020 Fair Value Level 1 Level 2 Level 3 (unaudited) (in thousands) Financial Assets: Money market funds $ 18,104 $ 18,104 $ — $ — Total cash equivalents $ 18,104 $ 18,104 $ — $ — U.S. government debt securities $ 870,459 $ — $ 870,459 $ — Total short-term marketable securities $ 870,459 $ — $ 870,459 $ — U.S. government debt securities $ 51,398 $ — $ 51,398 $ — Total long-term marketable securities $ 51,398 $ — $ 51,398 $ — Total $ 939,961 $ 18,104 $ 921,857 $ — Financial Liabilities: Contingent consideration $ 1,245 $ — $ — $ 1,245 Total $ 1,245 $ — $ — $ 1,245 December 31, 2019 Fair Value Level 1 Level 2 Level 3 (in thousands) Financial Assets: Money market funds $ 10,734 $ 10,734 $ — $ — Total cash equivalents $ 10,734 $ 10,734 $ — $ — Corporate bonds $ 16,690 $ — $ 16,690 $ — U.S. government debt securities 362,884 — 362,884 — Total short-term marketable securities $ 379,574 $ — $ 379,574 $ — U.S. government debt securities $ 268,783 $ — $ 268,783 $ — Total long-term marketable securities $ 268,783 $ — $ 268,783 $ — Total $ 659,091 $ 10,734 $ 648,357 $ — Financial Liabilities: Contingent consideration $ 1,365 $ — $ — $ 1,365 Total $ 1,365 $ — $ — $ 1,365 The Company measures the fair value of money market funds based on quoted prices in active markets for identical securities. Corporate bonds, U.S. government debt securities and U.S. government agency bonds are valued taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads; benchmark securities; prepayment/default projections based on historical data and other observable inputs. The following table summarizes the activities for the Level 3 financial instruments for the three and nine months ended September 30, 2020 and 2019: Redeemable Noncontrolling Interest Contingent Consideration Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 2020 2019 2020 2019 (unaudited) (in thousands) Fair value — beginning of period $ 50,400 $ 46,800 $ 49,600 $ 41,800 $ 1,175 $ 1,065 $ 1,365 $ — Initial valuation on the date of acquisition — — — — — — — 1,065 Increase (decrease) in fair value 7,407 260 10,566 6,204 70 — (120) — Net loss for the period (1,407) (560) (3,766) (1,504) — — — — Fair value — end of period $ 56,400 $ 46,500 $ 56,400 $ 46,500 $ 1,245 $ 1,065 $ 1,245 $ 1,065 As of September 30, 2020 and December 31, 2019, contingent consideration liability of $1.2 million and $1.4 million, respectively, was recorded within other long-term liabilities on the condensed consolidated balance sheets. Cash Equivalents and Marketable Securities The following tables summarizes the Company’s cash equivalents and marketable securities’ amortized costs, gross unrealized gains, gross unrealized losses and estimated fair values by significant investment category: September 30, 2020 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value (unaudited) (in thousands) Money market fund $ 18,104 $ — $ — $ 18,104 U.S. government debt securities 917,954 3,903 — 921,857 Total $ 936,058 $ 3,903 $ — $ 939,961 December 31, 2019 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value (in thousands) Money market fund $ 10,734 $ — $ — $ 10,734 Corporate bond 16,679 11 — 16,690 U.S. government debt securities 630,283 1,423 (39) 631,667 Total $ 657,696 $ 1,434 $ (39) $ 659,091 There have been no material realized gains or losses on marketable securities for the periods presented. None of the Company’s investments in marketable securities has been in an unrealized loss position for more than one year. The Company determined that it did have the ability and intent to hold all marketable securities that have been in a continuous loss position until maturity or recovery, thus there has been no recognition of credit losses in the three and nine months ended September 30, 2020 and 2019, respectively. The maturities of the Company’s long-term marketable securities range from 1.0 to 1.2 years as of September 30, 2020. |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net and Goodwill | Intangible Assets, Net and Goodwill The following table presents details of purchased intangible assets as of September 30, 2020 and December 31, 2019: September 30, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining Weighted Average Useful Life (unaudited) (in thousands) (in years) Intangible assets subject to amortization: Acquired license $ 11,886 $ (1,088) $ 10,798 10.0 Non-compete agreements and other covenant rights 5,100 (853) 4,247 5.2 Total intangible assets subject to amortization 16,986 (1,941) 15,045 Intangible assets not subject to amortization: IPR&D 1,600 — 1,600 Goodwill 3,290 — 3,290 Total purchased intangible assets $ 21,876 $ (1,941) $ 19,935 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining Weighted Average Useful Life (in thousands) (in years) Intangible assets subject to amortization: Acquired license $ 5,100 $ (373) $ 4,727 9.5 Non-compete agreements 2,500 (303) 2,197 5.5 Total intangible assets subject to amortization 7,600 (676) 6,924 Intangible assets not subject to amortization: IPR&D 1,600 — 1,600 Goodwill 3,290 — 3,290 Total purchased intangible assets $ 12,490 $ (676) $ 11,814 Amortization of finite-lived intangible assets was $0.5 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $1.3 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively. The following table summarizes estimated future amortization expense of finite-lived intangible assets: Year Ending December 31, (unaudited) (in thousands) Remainder of 2020 $ 491 2021 1,947 2022 1,947 2023 1,947 2024 1,953 2025 and thereafter 6,760 Total $ 15,045 |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition Patent License Acquisition In January 2017, the Company entered into a license agreement with a biotechnology company, KeyGene N.V. (“KeyGene”). An arbitration was initiated between the parties in 2018. In March 2020, the Company and KeyGene entered into a settlement and patent license agreement (the “SPLA”) to resolve the dispute and to acquire an extended worldwide non-exclusive license to certain patent rights with respect to KeyGene’s Next Generation Sequencing technologies along with certain covenant rights and research and development technology for a one-time payment of $18.5 million, ending all future royalty obligations to KeyGene. This transaction was accounted for as an asset acquisition as the purchase did not meet the definition of a business. The total consideration, including $0.6 million of certain capitalizable transaction costs, was allocated to various components of the SPLA. The Company allocated $9.4 million to the patent and covenant rights granted under the SPLA, which have useful lives in the range of 6-12 years. The Company allocated $8.5 million to IPR&D technology, which have no alternative future use and was included in research and development expenses for the nine months ended September 30, 2020. The remaining $1.2 million was allocated to the settlement of the prior dispute between the parties and was included in general and administrative expenses for the nine months ended September 30, 2020. Amortization of capitalized license fees relating to the January 2017 license agreement was nil and immaterial for the three and nine months ended September 30, 2020, respectively. Amortization of capitalized license fees relating to the January 2017 license agreement was $0.2 million and $0.7 million for the three and nine months ended September 30, 2019, respectively. Acquisition of Bellwether Bio In April 2019, the Company purchased all of the outstanding shares of Bellwether Bio, Inc. (“Bellwether Bio”), a privately-held company developing a method for early blood-based cancer detection. The Company accounted for the acquisition as a business combination. The total purchase consideration was $8.7 million, which consisted of i) $7.6 million in cash paid upon closing; and ii) future contingent consideration liability with a fair value of $1.1 million on the acquisition date. The contingent consideration is subject to the achievement of certain commercialization milestones with a maximum payout amount of $10.0 million. The Company will also pay additional earn-out consideration of up to $10.0 million subject to the achievement of certain commercialization milestones and the continued provision of services to the Company by certain former employees and consultants of Bellwether Bio. The contingent consideration and earn-out consideration may be paid, at the Company’s election, in cash or in the Company’s common stock. As of September 30, 2020, the Company did not believe the earn-out consideration is probable to be achieved, and therefore, did not record any compensation expense. The following table summarizes the allocation of the total consideration to the estimated fair values of assets acquired and liabilities assumed: Amount (in thousands) Cash $ 521 Identified intangible assets 6,700 Goodwill 3,289 Net liabilities assumed (1,802) Total $ 8,708 The following table presents details of the identified intangible assets acquired from the Bellwether Bio acquisition: Fair Value Estimated Useful Life (in thousands) Acquired license $ 5,100 10 years IPR&D 1,600 * Total $ 6,700 * IPR&D assets are not subject to amortization. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into various operating lease agreements for office space, with remaining terms ranging from 1-12 years some of which include one or more options to renew. As leases approach maturity, the Company considers various factors such as market conditions and the terms of any renewal options that may exist to determine whether it will renew the lease, as such, the Company does not include renewal options in its lease terms for calculating its lease liability, as the renewal options allow it to maintain operational flexibility and the Company is not reasonably certain it will exercise these renewal options at the time of the lease commencement. Operating lease expense was immaterial for the three months ended September 30, 2020 due to a one-time non-recurring adjustment made for the accounting for leasehold improvements. Lease expense for the three months ended September 30, 2019 was $1.2 million, and $3.3 million and $2.9 million for the nine months ended September 30, 2020 and 2019, respectively, which includes both lease and non-lease components (primarily common area maintenance charges and property taxes). September 30, 2020 December 31, 2019 (unaudited) Weighted-average remaining lease term (in years) 5.9 6.4 Weighted-average discount rate 8.17 % 7.77 % The following table summarizes our future principal contractual obligations for operating lease commitments as of September 30, 2020: Year Ending December 31, (unaudited) (in thousands) Remainder of 2020 $ 1,049 2021 9,759 2022 9,886 2023 10,547 2024 10,792 2025 and thereafter 18,350 Total operating lease payments $ 60,383 Less: Imputed Interest (13,263) Total operating lease liabilities $ 47,120 In July 2020, the Company entered into two facility lease agreements for terms ranging from 8-12 years. One of the lease agreements provides an option to renew the lease term for an additional ten years. As of September 30, 2020, the Company has additional future minimum lease payments relating to these two lease agreements that have not yet commenced amounting to $239.5 million. The Company anticipates to take possession of these facilities in the first fiscal quarter of 2021. Finance leases are not material to the Company's condensed consolidated financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings In addition to commitments and obligations incurred in the ordinary course of business, from time to time the Company may be subject to a variety of claims and legal proceedings, including claims from customers and vendors, pending and potential legal actions for damages, governmental investigations and other matters. For example, we have received, and may in the future continue to receive letters, claims or complaints from others alleging false advertising, patent infringement, violation of employment practices and trademark infringement. We have also instituted, and may in the future institute, additional legal proceedings to enforce our rights and seek remedies, such as monetary damages, injunctive relief and declaratory relief. We cannot predict the results of any such disputes, and despite the potential outcomes, the existence thereof may have an adverse material impact on us because of diversion of management time and attention as well as the financial costs related to resolving such disputes. The Company and its affiliates are parties to the legal claims and proceedings described below. The Company is vigorously defending itself against those claims and in those proceedings. Significant developments in those matters are described below. If the Company is unsuccessful in defending, or if it determines to settle, any of these matters, it may be required to pay substantial sums, be subject to injunction and/or be forced to change how it operates its business, which could have a material adverse impact on its financial position or results of operations. Unless otherwise stated, the Company is unable to reasonably estimate the loss or a range of possible loss for the matters described below. Often, it is not reasonably possible for the Company to determine that a loss is probable for a claim, or to reasonably estimate the amount of loss or a range of loss, because of the limited information available and the potential effects of future events and decisions by third parties, such as courts and regulators, that will determine the ultimate resolution of the claim. Many of the matters described are at preliminary stages, raise novel theories of liability or seek an indeterminate amount of damages. It is not uncommon for claims to be resolved over a number of years. The Company reviews loss contingencies at least quarterly to determine whether the loss probability has changed and whether it can make a reasonable estimate of the possible loss or range of loss. When the Company determines that a loss from a claim is probable and reasonably estimable, it records a liability in the amount of its estimate for the ultimate loss. The Company also provides disclosure when it is reasonably possible that a loss may be incurred or when it is reasonably possible that the amount of a loss will exceed its recorded liability. Patent Disputes In November 2017, the Company filed a lawsuit against Foundation Medicine, Inc. (“Foundation Medicine”) in the United States District Court for the District of Delaware. The Company has alleged that Foundation Medicine has infringed four of the Company’s digital sequencing technology patents. Foundation Medicine has asserted counterclaims of patent invalidity, unenforceability under the doctrine of inequitable conduct, and non-infringement. The parties are seeking damages, injunctive relief and attorneys’ fees. Discovery in the lawsuit has closed, and a number of pre-trial motions were filed in September and October 2020. The trial is presently continued pending resolution by the District Court of the pre-trial motions. Foundation Medicine also filed six petitions for inter partes review with the PTAB, challenging the patentability of all four of the patents asserted by the Company. The PTAB denied institution of inter partes review for four of the six petitions filed by Foundation Medicine and instituted inter partes review for the remaining two petitions. The Company plans to vigorously defend its patent rights during such PTAB actions. At this time, the Company cannot reasonably ascertain the likelihood that any of the remaining challenged patents will be found to be invalid or unenforceable. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company’s common stockholders are entitled to dividends if and when declared by the Company’s Board of Directors (the “Board of Directors”). As of September 30, 2020 and December 31, 2019, no dividends on common stock had been declared by the Board of Directors. The Company’s common stock has been reserved for the following potential future issuances: September 30, 2020 December 31, 2019 (unaudited) Shares underlying outstanding stock options 3,356,774 4,494,889 Shares underlying unvested restricted stock units 949,276 496,131 Shares available for issuance under the 2018 Incentive Award Plan 2,397,256 2,726,225 Shares available for issuance under the 2018 Employee Stock Purchase Plan 1,574,367 689,917 Total 8,277,673 8,407,162 Follow-on Public Offering In June 2020, the Company completed an underwritten public offering, in which it issued and sold 4,312,500 shares of its common stock at a price of $84.00 per share. The Company received net proceeds of $354.6 million after deducting underwriting discounts and commissions and offering expenses payable by the Company. In May 2019, the Company completed an underwritten public offering, in which it issued and sold 5,175,000 shares of its common stock at a price of $71.00 per share. The Company received net proceeds of $349.7 million after deducting underwriting discounts and commissions and offering expenses payable by the Company. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Option Activity A summary of the Company’s stock option activity under the 2012 Stock Plan (as amended and restated, the “2012 Plan”) and the 2018 Incentive Award Plan (the “2018 Plan”) and related information is as follows: Options Outstanding Shares Shares Subject to Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (unaudited) (in thousands) Balance as of December 31, 2019 2,726,225 4,494,889 $ 10.90 7.7 $ 306,392 2018 Plan annual increase (1) 3,689,000 — Granted (114,472) 114,472 78.15 Exercised — (1,188,519) 6.23 Canceled 17,387 (64,068) 9.09 Restricted stock units granted (601,451) — — Restricted stock units canceled 71,715 — — Market-based restricted stock units granted (3,391,148) — — Balance as of September 30, 2020 2,397,256 3,356,774 $ 14.89 7.2 $ 325,246 Vested and Exercisable as of September 30, 2020 1,826,533 $ 7.59 6.7 $ 190,313 (1) Effective as of January 1, 2020, an additional 3,689,000 shares of common stock became available for issuance under the 2018 Plan, as a result of the operation of an automatic annual increase provision therein. Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The total intrinsic value of the options exercised was $46.8 million and $75.3 million for the three months ended September 30, 2020 and 2019, respectively, and $97.1 million and $191.7 million for the nine months ended September 30, 2020 and 2019, respectively. The weighted-average grant date fair value of options granted was $49.73 and $55.16 per share for the three months ended September 30, 2020 and 2019, respectively, and $46.85 and $53.02 per share for the nine months ended September 30, 2020 and 2019, respectively. Future stock-based compensation for unvested options as of September 30, 2020 was $21.0 million, which is expected to be recognized over a weighted-average period of 2.5 years. Restricted Stock Units A summary of the Company’s restricted stock unit activity excluding the market-based restricted stock units under the 2012 Plan and the 2018 Plan and related information is as follows: Restricted Stock Units Outstanding Weighted-Average Grant Date Fair Value (unaudited) Balance as of December 31, 2019 496,131 $ 82.08 Granted 601,451 90.11 Vested and released (76,591) 86.35 Canceled (71,715) 81.09 Balance as of September 30, 2020 949,276 $ 86.90 Future stock-based compensation for unvested restricted stock units as of September 30, 2020 was $77.1 million, which is expected to be recognized over a weighted-average period of 3.4 years. Market-based Restricted Stock Units On May 26, 2020, the Board of Directors approved and granted 1,695,574 market-based restricted stock units (“MSUs”) under the 2018 Plan to each of the Company's Chief Executive Officer and the Company's President and Chief Operating Officer, which is subject to the achievement of market-based share price goals established by the Board of Directors. The MSUs consist of three separate tranches and the vesting of each tranche is subject to the Company's common stock closing price being maintained at or above a predetermined share price goal for a period of 30 consecutive calendar days. The share price goal can be met any time during the seven-year performance period from the date of grant. Upon vesting, the MSUs must be held for a period of six Tranche Price Goal Number of RSUs Tranche 1 $120 per share 565,192 Tranche 2 $150 per share 565,191 Tranche 3 $200 per share 565,191 The grant date fair values of the MSUs were determined using a Monte Carlo valuation model for each tranche. The related stock-based compensation expense for each tranche is recognized based on an accelerated attribution method over the estimated derived service period. If the related share price goal is achieved earlier than its expected derived service period, the stock-based compensation expense will be recognized as a cumulative catch-up expense from the grant date to that point in time in achieving the share price goal. The derived service period is the median duration of the successful stock price paths to meet the price goal for each tranche as simulated in the Monte Carlo valuation model. The Monte Carlo valuation model uses assumptions such as volatility, risk-free interest rate, cost of equity and dividend estimated for the performance period of the MSU. The weighted average grant date fair value of the MSUs was $67.00 and the weighted average derived service period was estimated to be in the range of 0.83 – 2.07 years. For the three and nine months ended September 30, 2020, stock-based compensation for the MSUs was $46.8 million and $65.1 million, respectively, which was recorded in general and administrative expenses in our condensed consolidated statement of operations. Future stock-based compensation for unvested MSUs as of September 30, 2020 was $162.1 million, which is expected to be recognized over a weighted-average period of 1.1 years. In the event of a change in control, a qualifying termination, death, disability or the share price goal occurring earlier than the estimated derived service period, the stock-based compensation relating to these MSUs could be accelerated. Any MSUs that remain unvested at the end of the seven-year performance period will automatically be forfeited and terminated without further consideration. AMEA 2020 Equity Incentive Plan In August 2020, the board of directors of the Joint Venture approved its 2020 Equity Incentive Plan (the “AMEA 2020 Plan”), under which the Joint Venture may grant equity incentive awards such as stock options, restricted stock, restricted stock units, stock appreciation rights and cash-based awards to its employees and non-employees. Stock options granted may be either incentive stock options or nonstatutory stock options. Incentive stock options may be granted only to employees of the Joint Venture or its affiliates. Nonstatutory stock options may be granted to employees, directors and non-employee consultants. Stock options may be granted at an exercise price of not less than the fair market value of the Joint Venture's common stock on the date of grant, determined by the board of directors of the Joint Venture. Options generally vest over 4 years and expire as determined by the board of directors of the Joint Venture, provided that the term of options may not exceed 10 years from the date of grant. For individuals holding more than 10% of the total combined voting power of all classes of stock of the Joint Venture, the exercise price of an option will not be less than 110% of the fair market value of the Joint Venture's common stock on the date of grant, and the term of the option will not exceed 5 years. A total of 4,595,555 shares of the Joint Venture's Class B common stock are initially reserved for issuance under the AMEA 2020 Plan, and the number of shares may be increased in accordance with the terms of the AMEA 2020 Plan. A summary of the Joint Venture's stock option activity under the AMEA 2020 Plan and related information is as follows: Options Outstanding Shares Shares Subject to Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (unaudited) (in thousands) Balance as of December 31, 2019 — — $ — 0.0 $ — Shares authorized 4,595,555 — — Granted (3,902,224) 3,902,224 0.58 Balance as of September 30, 2020 693,331 3,902,224 $ 0.58 9.9 $ — Vested and Exercisable as of September 30, 2020 1,687,382 $ 0.58 9.9 $ — The weighted-average grant date fair value of options granted was $0.33 per share for the three and nine months ended September 30, 2020. Future stock-based compensation for unvested options as of September 30, 2020 was $0.7 million, which is expected to be recognized over a weighted-average period of 2.4 years. Stock-Based Compensation Expense The following table presents the effect of employee and non-employee related stock-based compensation expense including the Joint Venture: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) (in thousands) Cost of precision oncology testing $ 428 $ 266 $ 1,138 $ 562 Research and development expense 2,369 2,066 7,355 4,704 Sales and marketing expense 2,320 1,458 6,285 2,930 General and administrative expense 50,081 1,694 72,573 3,686 Total stock-based compensation expense $ 55,198 $ 5,484 $ 87,351 $ 11,882 Valuation of Stock Options The grant date fair value of stock options was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions including the Joint Venture: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) Expected term (in years) 5.95 – 6.04 6.03 – 6.08 5.50 – 6.10 5.50 – 6.22 Expected volatility 63.6% – 68.4% 63.2% – 64.6% 63.6% – 73.3% 63.2% – 68.3% Risk-free interest rate 0.3% – 0.4% 1.6% – 1.9% 0.3% – 1.6% 1.6% – 2.7% Expected dividend yield —% —% —% —% 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 common stock of the Company and the Joint Venture, 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 The fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the Nasdaq Global Select Market. The grant date fair value of the Joint Venture's common stock has been determined by the board of directors of the Joint Venture. The grant date fair value of the Joint Venture’s common stock was determined using valuation methodologies which utilize 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. In determining the fair value of the Joint Venture’s common stock, the methodologies used to estimate the enterprise value of the Joint Venture were performed using methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation . Expected Term The expected term represents the period that the options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company has concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term. Expected Volatility Prior to the commencement of trading of the Company’s common stock on the Nasdaq Global Select Market on October 4, 2018 in connection with the IPO, there was no active trading market for the Company's common stock. Due to limited historical data for the trading of the Company’s common stock, expected volatility is estimated based on the average volatility for comparable publicly traded peer group companies in the same industry plus the Company's expected volatility for the available periods. The comparable companies are chosen based on their similar size, stage in the life cycle or area of specialty. The Joint Venture derived the expected volatility from the average historical volatility over a period approximately equal to the expected term of comparable publicly traded companies within its peer group that were deemed to be representative of future stock price trends as the Joint Venture does not have any trading history for its common stock. The Joint Venture will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Risk-Free Interest Rate The risk-free interest rate is based on the U.S. Treasury rate, with maturities similar to the expected term of the stock options. Expected Dividend Yield The Company and the Joint Venture does not anticipate paying any dividends in the foreseeable future and, therefore, uses an expected dividend yield of zero. Valuation of MSUs The estimated fair value of the MSUs was determined using a Monte Carlo simulation model. The valuation assumptions used were substantially consistent with the assumption used to value stock options with the exception of the following: Expected Volatility Due to limited historical data for the trading of the Company’s common stock, expected volatility is estimated based on the average volatility for comparable publicly traded peer group companies and implied volatility of publicly traded options in the same industry plus the Company's expected volatility for the available periods. The comparable companies are chosen based on their similar size, stage in the life cycle or area of specialty. Expected Term The expected term represents the derived service period for the respective tranches which has been estimated using the Monte Carlo simulation model. Risky Rate The risky rate represents the Company's cost of equity. Discount for Lack of Marketability The discount for lack of marketability represents the discount applied for post vest term restrictions and has been derived using the Monte Carlo simulation model. The following assumptions were used to calculate the stock-based compensation for MSUs: a weighted-average expected term of 0.83 – 2.07 years; expected volatility of 65.5%; a risk-free interest rate of 0.53%; a zero dividend yield; a risky rate (cost of equity) of 16%; and a discount for post-vesting restrictions of 10.4% – 14.5%. 2018 Employee Stock Purchase Plan In September 2018, the Company’s Board of Directors adopted and its stockholders approved the 2018 Employee Stock Purchase Plan (the “ESPP”). A total of 922,250 shares of common stock were initially reserved for issuance under the ESPP. Effective as of January 1, 2020, an additional 942,614 shares of common stock became available for issuance under the ESPP, as a result of the operation of an automatic annual increase provision therein. Subject to any plan limitations, the ESPP allows eligible employees to contribute, normally through payroll deductions, up to 10% of their earnings for the purchase of the Company’s common stock at a discounted price per share. The price at which common stock is purchased under the ESPP is equal to 85% of the fair market value of the Company’s common stock on the first or last day of the offering period, whichever is lower. The initial offering period ran from October 2, 2018 to January 31, 2019, the second offering period ran from February 1, 2019 to July 31, 2019, and the third offering period began on August 1, 2019 and ran to November 14, 2019. For subsequent years starting with 2020, the ESPP provides for separate six-month offering periods beginning on May 15 and November 15 of each year. Shares of common stock purchased under the ESPP were nil and 93,203 for the three months ended September 30, 2020 and 2019, respectively, and 58,164 and 212,905 for the nine months ended September 30, 2020 and 2019, respectively. The total compensation expense related to the ESPP was $0.7 million and $0.8 million for the three months ended September 30, 2020 and 2019, respectively, and $2.3 million and $1.8 million for the nine months ended September 30, 2020 and 2019, respectively. The fair value of the stock purchase right granted under the ESPP was estimated on the first day of each offering period using the Black-Scholes option pricing model. The valuation assumptions used were substantially consistent with the assumption used to value stock options with the exception of the expected term which was based on the term of each purchase period. No ESPP shares were granted for the three months ended September 30, 2020. The grant date fair value of the stock purchase right granted under the ESPP was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions: Three Months Ended Nine Months Ended 2020 2019 (unaudited) Expected term (in years) 0.3 0.5 0.3 – 0.5 Expected volatility 60.3% 73.2% 60.2% – 60.3% Risk-free interest rate 2.1% 0.2% 2.1% – 2.5% Expected dividend yield —% —% —% As of September 30, 2020, the unrecognized stock-based compensation expense related to the ESPP was $0.4 million, which is expected to be recognized over the remaining term of the offering period of 0.1 years. Liabilities for Early Exercise of Employee Options The Company allowed certain stock option holders to exercise unvested options to purchase shares of the Company’s common stock. Shares received from such early exercises are subject to repurchase in the event of the optionee’s employment termination, at the original issuance price, until the options are fully vested. As of September 30, 2020 and December 31, 2019, 15,681 shares and 23,981 shares of common stock were subject to repurchase at weighted-average price of $4.66 per share. As of September 30, 2020 and December 31, 2019, the cash proceeds received for unvested shares of common stock of $0.1 million and $0.1 million, respectively, was recorded within other long-term liabilities on the condensed consolidated balance sheet, respectively. The shares issued pursuant to unvested options have been included in shares issued and outstanding on the condensed |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Guardant Health, Inc. Common Stockholders | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Guardant Health, Inc. Common Stockholders | Net Loss Per Share Attributable to Guardant Health, Inc. Common Stockholders The following table sets forth the computation of the basic and diluted net loss per share attributable to Guardant Health, Inc. common stockholders: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) (in thousands, except per share data) Net loss $ (71,670) $ (13,090) $ (153,238) $ (45,741) Adjustment of redeemable noncontrolling interest (6,000) 300 (6,800) (4,700) Net loss attributable to Guardant Health, Inc. common stockholders, basic and diluted $ (77,670) $ (12,790) $ (160,038) $ (50,441) Net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted $ (0.78) $ (0.14) $ (1.66) $ (0.56) Weighted-average shares used in computing net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted 99,554 93,303 96,659 89,452 Since the Company was in a loss position for all periods presented, basic net loss per share attributable to Guardant Health, Inc. common stockholders is the same as diluted net loss per share attributable to Guardant Health, Inc. common stockholders, 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 Guardant Health, Inc. common stockholders for the periods presented as they had an anti-dilutive effect: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) (in thousands) Stock options issued and outstanding (1) 3,662 5,353 4,021 6,390 Restricted stock units 650 338 563 179 MSUs 3,391 — 1,577 — ESPP obligation 38 42 39 62 Common stock subject to repurchase 17 28 20 33 Total 7,758 5,761 6,220 6,664 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax expense for the three and nine months ended September 30, 2020 was determined based upon estimates of the Company’s effective income tax rates in various jurisdictions. The difference between the Company’s effective income tax rate and the U.S. federal statutory rate is primarily attributable to state income taxes, foreign income taxes, the effect of certain permanent differences, and full valuation allowance against net deferred tax assets. The income tax expense for the three and nine months ended September 30, 2020 relates primarily to state minimum income tax and income tax on the Company’s earnings in foreign jurisdictions. The benefit from income taxes for |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The following table sets forth the Company’s revenue by geographic areas based on the customers’ locations: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) (in thousands) United States $ 65,613 $ 54,675 $ 191,648 $ 134,917 International (1) 8,956 6,173 16,766 16,561 Total revenue $ 74,569 $ 60,848 $ 208,414 $ 151,478 (1) No single country outside of the United States accounted for more than 10% of total revenue during the three and nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and December 31, 2019, substantially all of the Company’s long-lived assets and right-of-use assets are located in the United States. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As discussed in Note 3, Investment in Joint Venture , the Company and an affiliate of SoftBank formed and capitalized the Joint Venture to accelerate commercialization of its products in Asia, the Middle East and Africa, with an initial focus on Japan. The Company has consolidated the financial position, results of operations and cash flows of the Joint Venture in its financial statements and all intercompany balances have been eliminated in consolidation. The Company and its subsidiaries may, in the ordinary course of business, have transactions with unaffiliated companies of which certain of the Company’s directors are directors and/or executive officers. The Company believes that such transactions are on the same terms generally offered by such other companies to other entities in comparable transactions. The Company does not consider the amounts involved in such transactions to be material in relation to its businesses, the businesses of such other companies or the interests of the directors involved. Revenue from an entity affiliated with a member of the Company's Board of Directors was $0.5 million and $0.8 million for the three months ended September 30, 2020 and 2019, and $2.0 million and $1.7 million for the nine months ended September 30, 2020 and 2019. As of September 30, 2020 and December 31, 2019, the Company has accounts receivable from this entity of $1.9 million and $0.9 million, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn November 4, 2020, the Compensation Committee of the Company's Board of Directors approved a total of 546,572 stock awards comprising of performance-based and time-based restricted stock units which have a grant date fair value of approximately $62.0 million. The performance-based restricted stock units consist of financial and operational metrics to be met over a performance period of 4 years and an additional service period requirement of 6 months after the performance metrics are met. The time-based restricted stock units will cliff vest after a period of 4 years. These equity awards are expected to be expensed over a period of approximately 4 years subject to meeting the performance metrics and service requirements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed consolidated financial statements include the accounts of Guardant Health, Inc. and its consolidated Joint Venture. Other stockholders’ interests in the Joint Venture are shown in the condensed consolidated financial statements as redeemable noncontrolling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The Company believes that its existing cash and cash equivalents and marketable securities as of September 30, 2020 will be sufficient to allow the Company to fund its current operating plan through at least a period of one year after the date the accompanying condensed consolidated financial statements are issued. As the Company continues to incur losses, its transition to profitability is dependent upon a level of revenues adequate to support the Company’s cost structure. If the Company’s transition to profitability is not consistent with its current operating plan, the Company may have to seek additional capital. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with 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 condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Estimates are used in several areas including, but not limited to, estimation of variable consideration, estimation of credit losses, standalone selling price allocation included in contracts with multiple performance obligations, the fair value of assets acquired and liabilities assumed for business combinations, goodwill and identifiable intangible assets, stock-based compensation, contingencies, certain inputs into the provision for (benefit from) income taxes, |
Unaudited Interim Condensed Financial Statements | Unaudited Interim Condensed Financial Statements The accompanying condensed consolidated balance sheet as of September 30, 2020, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019, the condensed consolidated statements of redeemable noncontrolling interest and stockholders’ equity for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019, and the related interim condensed consolidated disclosures are unaudited. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring accruals that the Company believes are necessary to fairly state the financial position and the results of the Company’s operations and cash flows for interim periods in accordance with GAAP. 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 condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Foreign Currency Translation | Foreign Currency TranslationThe functional currency of the subsidiaries of the consolidated Joint Venture is the local currency. The assets and liabilities of the subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date, with the resulting translation adjustments recorded to a separate component of accumulated other comprehensive loss within stockholders’ equity. Income and expense accounts are translated at average exchange rates during the period. Foreign currency transaction gains and losses resulting from transactions denominated in a currency other than the functional currency are recognized in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2020 and 2019, foreign currency translation adjustment was immaterial. |
Concentration of Risk | Concentration of Risk The Company is subject to credit risk from its portfolio of cash equivalents held at one commercial bank and investments in marketable securities. The Company limits its exposure to credit losses by investing in money market funds through a U.S. bank with high credit ratings. The Company’s cash may consist of deposits held with banks that may at times exceed federally insured limits, however, its exposure to credit risk in the event of default by the financial institution is limited to the extent of amounts recorded on the condensed consolidated balance sheets. The Company performs evaluations of the relative credit standing of these financial institutions to limit the amount of credit exposure. The Company also invests in investment-grade debt instruments and has policy limits for the amount it can invest in any one type of security, except for securities issued or guaranteed by the U.S. government. The goals of the Company’s investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk; liquidity of investments sufficient to meet cash flow requirements; and a competitive after-tax rate of return. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, investment type and issuer, as a result, the Company is not exposed to any significant concentrations of credit risk from these financial instruments. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable represent valid claims against biopharmaceutical companies, research institutes and international distributors. The Company evaluates the collectability of its accounts receivable based on historical collection trends, the financial condition of payment partners, and external market factors and provides for an allowance for potential credit losses based on management’s best estimate of the amount of probable credit losses. As of September 30, 2020 and December 31, 2019, the Company had no allowance for credit losses related to its accounts receivable. |
Asset Acquisition | Asset Acquisition If an acquisition of an asset or group of assets does not meet the definition of a business, the transaction is accounted for as an asset acquisition rather than a business combination. An asset acquisition does not result in the recognition of goodwill and transaction costs are capitalized as part of the cost of the asset or group of assets acquired. The total |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net Intangible assets related to in-process research and development costs (“IPR&D”) are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. Prior to completion of the research and development efforts, the assets are considered indefinite-lived. During this period, the assets will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities. Goodwill and IPR&D are not amortized but are tested for impairment at least annually during the fourth fiscal quarter, or if circumstances indicate their value may no longer be recoverable. The Company continues to operate in one segment, which is considered to be the sole reporting unit and, therefore, goodwill was tested for impairment at the enterprise level. As of September 30, 2020, there has been no impairment of goodwill. Intangible assets are carried at cost, net of accumulated amortization. The Company does not have intangible assets with indefinite useful lives other than goodwill and the acquired IPR&D. Amortization is recorded on a straight-line basis over the intangible asset's useful life, which is approximately 6-12 years. |
Leases | Leases The Company determines if an arrangement contains a lease at inception. Operating lease right-of-use (“ROU”) assets and operating leases liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. 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 or receivable. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities, as the Company's leases generally do not provide an implicit rate. Lease terms may include options to extend or terminate when the Company is reasonably certain the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company also has lease arrangements with lease and non-lease components. The Company elected the practical expedient not to separate non-lease components from lease components for the Company’s facility leases. The Company also elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for leases with terms of 12 months or less. |
Revenue Recognition | Revenue Recognition The Company derives revenue from the provision of precision oncology testing services provided to its ordering physicians and biopharmaceutical customers, as well as from biopharmaceutical research and development services provided to its biopharmaceutical customers. Precision oncology testing services include genomic profiling and the delivery of other genomic information derived from the Company’s platform. Development services and other include companion diagnostic development, clinical trial setup, monitoring and maintenance, information solutions and laboratory services, and other miscellaneous revenue streams. The Company currently receives payments from third-party commercial and governmental payers, certain hospitals and oncology centers and individual patients, as well as biopharmaceutical companies and research institutes. Revenues are recognized when control of services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. ASC 606 provides for a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation. Precision oncology testing The Company recognizes revenue from the sale of its precision oncology tests for clinical customers, including certain hospitals, cancer centers, other institutions and patients, at the time results of the test are reported to physicians. Most precision oncology tests requested by clinical customers are sold without a written agreement; however, the Company determines an implied contract exists with its clinical customers. The Company identifies each sale of its liquid biopsy test to clinical customer as a single performance obligation. With the exception of certain limited contracted arrangements with insurance carriers and other institutions where the transaction price is fixed, a stated contract price does not exist and the transaction price for each implied contract with clinical customers represents variable consideration. The Company estimates the variable consideration under the portfolio approach and considers the historical reimbursement data from third-party commercial and governmental payers and patients, as well as known or anticipated reimbursement trends not reflected in the historical data. The Company monitors the estimated amount to be collected in the portfolio at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Both the estimate and any subsequent revision contain uncertainty and require the use of significant judgment in the estimation of the variable consideration and application of the constraint for such variable consideration. The Company analyzes its actual cash collections over the expected reimbursement period and compares it with the estimated variable consideration for each portfolio and any difference is recognized as an adjustment to estimated revenue after the expected reimbursement period, subject to assessment of the risk of future revenue reversal. For the three months ended September 30, 2020 and 2019, the Company recorded $11.4 million and $10.9 million as revenue, respectively, resulting from cash collections over the expected reimbursement period exceeding the estimated variable consideration related to samples processed in previous periods, including revenue received from successful appeals of reimbursement denials. For the nine months ended September 30, 2020 and 2019, the Company recorded $21.9 million and $15.5 million as revenue, respectively, resulting from cash collections over the expected reimbursement period exceeding the estimated variable consideration related to samples processed in previous periods, including revenue received from successful appeals of reimbursement denials. Revenue from sales of precision oncology tests to biopharmaceutical customers are based on a negotiated price per test or on the basis of an agreement to provide certain testing volume over a defined period. The Company identifies its promise to transfer a series of distinct liquid biopsy tests to biopharmaceutical customers as a single performance obligation. Precision oncology tests to biopharmaceutical customers are generally billed at a fixed price for each test performed. For agreements involving testing volume to be satisfied over a defined period, revenue is recognized over time based on the number of tests performed as the performance obligation is satisfied over time. Results of the Company’s precision oncology services are delivered electronically, and as such there are no shipping or handling fees incurred by the Company or billed to customers. Development services and other The Company performs development services for its biopharmaceutical customers utilizing its precision oncology information platform. Development services and other typically represent a single performance obligation as the Company performs a significant integration service, such as analytical validation and regulatory submissions. The individual promises are not separately identifiable from other promises in the contracts and, therefore, are not distinct. However, under certain contracts, a biopharmaceutical customer may engage the Company for multiple distinct development services which are both capable of being distinct and separately identifiable from other promises in the contracts and, therefore, distinct performance obligations. The Company collaborates with pharmaceutical companies in the development of new drugs. As part of these collaborations, the Company provides services related to regulatory filings to support companion diagnostic device submissions for the Company’s liquid biopsy panels. Under these collaborations, the Company generates revenue from achievement of milestones, as well as provision of on-going support. For development services performed, the Company is compensated through a combination of an upfront fee and performance-based, non-refundable regulatory and other developmental milestone payments. The transaction price of the Company's development services contracts typically represents variable consideration. Application of the constraint for variable consideration to milestone payments is an area that requires significant judgment. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be managed to achieve the respective milestone and the level of effort and investment required to achieve the respective milestone. In making this assessment, the Company considers its historical experience with similar milestones, the degree of complexity and uncertainty associated with each milestone, and whether achievement of the milestone is dependent on parties other than the Company. The constraint for variable consideration is applied such that it is probable a significant reversal of revenue will not occur when the uncertainty associated with the contingency is resolved. Application of the constraint for variable consideration is updated at each reporting period as a revision to the estimated transaction price. The Company recognizes development services revenue over the period in which biopharmaceutical research and development services are provided. Specifically, the Company recognizes revenue using an input method to measure progress, utilizing costs incurred to-date relative to total expected costs as its measure of progress. The Company assesses the changes to the total expected cost estimates as well as any incremental fees negotiated resulting from changes to the scope of the original contract in determining the revenue recognition at each reporting period. The Company revised and increased its total estimated costs relating to one of the development services contracts during the nine months ended September 30, 2020. Had the Company included such additional costs in the original estimated costs, revenues for the nine months ended September 30, 2019 would have been lower by $3.5 million. For development of new products or services under these arrangements, costs incurred before technological feasibility is reached are included as research and development expenses in the Company’s condensed consolidated statements of operations, while costs incurred thereafter are recorded as cost of development services. The Company also has other miscellaneous revenue streams such as Guardant-19 screening in connection with the outbreak of COVID-19, referral fees, maintenance and kits fulfillment related revenues. Contracts with multiple performance obligations Contracts with biopharmaceutical customers may include multiple distinct performance obligations, such as provision of precision oncology testing, biopharmaceutical research and development services, and clinical trial enrollment assistance, among others. The Company evaluates the terms and conditions included within its contracts with biopharmaceutical customers to ensure appropriate revenue recognition, including whether services are considered distinct performance obligations that should be accounted for separately versus together. The Company first identifies material promises, in contrast to immaterial promises or administrative tasks, under the contract, and then evaluates whether these promises are both capable of being distinct and distinct within the context of the contract. In assessing whether a promised service is capable of being distinct, the Company considers whether the customer could benefit from the service either on its own or together with other resources that are readily available to the customer, including factors such as the research, development, and commercialization capabilities of a third- party as well as the availability of the associated expertise in the general marketplace. In assessing whether a promised service is distinct within the context of the contract, the Company considers whether it provides a significant integration of the services, whether the services significantly modify or customize one another, or whether the services are highly interdependent or interrelated. For contracts with multiple performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines standalone selling price by considering the historical selling price of these performance obligations in similar transactions as well as other factors, including, but not limited to, the price that customers in the market would be willing to pay, competitive pricing of other vendors, industry publications and current pricing practices, and expected costs of satisfying each performance obligation plus appropriate margin. Contract assets Contract assets consists primarily of: i) precision oncology testing revenues to clinical customers that are recognized upon delivery of the test results prior to cash collection; and ii) development services revenues to biopharmaceutical customers that are recognized upon the achievement of performance-based milestones but prior to the establishment of billing rights. Contract assets are relieved when the Company receives payments from clinical customers, or when it invoices the biopharmaceutical customers when milestones are achieved, thereby reclassifying the balances from contract assets to accounts receivable. Contract assets are presented under accounts receivable, net and other assets, net on the Company’s condensed consolidated balance sheets. As of September 30, 2020, the Company had contract assets of $13.4 million of which $0.2 million was recorded in other assets, net. As of December 31, 2019, the Company had contract assets of $6.2 million of which $1.0 million was recorded in other assets. Deferred revenue Deferred revenue, which is a contract liability, consists primarily of payments received in advance of revenue recognition from contracts with customers. For example, development services contracts with biopharmaceutical customers often contain upfront payments which results in the recording of deferred revenue to the extent cash is received prior to the Company's performance of the related services. Contract liabilities are relieved as the Company performs its obligations under the contract and revenue is consequently recognized. As of September 30, 2020 and December 31, 2019, the deferred revenue balance was $7.3 million and $12.3 million, respectively, which included $2.2 million and $4.8 million, respectively, related to collaboration development efforts with pharmaceutical companies to be recognized as the Company performs research and development services in the future periods. Revenue recognized in the nine months ended September 30, 2020 that was included in the deferred revenue balance as of December 31, 2019 was $8.8 million, which primarily represented revenue from provision of development services under the collaboration agreements with biopharmaceutical customers. Transaction price allocated to the remaining performance obligations Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenues in future periods. The Company expects to recognize substantially all of the remaining transaction price in the next 12 months. |
Costs of Precision Oncology Testing | Costs of Precision Oncology Testing Cost of precision oncology testing generally consists of cost of materials, direct labor including bonus, benefit and stock-based compensation, equipment and infrastructure expenses associated with processing liquid biopsy test samples (including sample accessioning, library preparation, sequencing, quality control analyses and shipping charges to transport blood samples), freight, curation of test results for physicians and license fees due to third parties. Infrastructure expenses include depreciation of laboratory equipment, rent costs, amortization of leasehold improvements and information technology costs. Costs associated with performing the Company’s tests are recorded as the tests are performed regardless of whether revenue was recognized with respect to that test. Royalties for licensed technology calculated as a percentage of revenues generated using the associated technology are recorded as expense at the time the related revenues are recognized. One-time royalty payments related to signing of license agreements or other milestones, such as issuance of new patents, are amortized to expense over the expected useful life of the applicable patent rights. |
Cost of Development Services and Others | Cost of Development Services and Other Cost of development service and other primarily includes costs incurred for the performance of development services requested by the Company’s biopharmaceutical customers and other. For development of new products, costs incurred before technological feasibility has been achieved are reported as research and development expenses, while costs incurred thereafter are reported as cost of development services. Research and Development Expenses Research and development expenses are comprised of costs incurred to develop technology and include compensation and benefits, reagents and supplies used in research and development laboratory work, infrastructure expenses, including allocated facility occupancy and information technology costs, contract services and other outside costs. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation related to stock options granted to the Company’s and the Joint Venture's employees, directors and nonemployees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. Compensation expense for stock options with performance metrics is calculated based upon expected achievement of the metrics specified in the grant. Starting January 1, 2019, upon adoption of Accounting Standards Update (“ASU”) 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting, the fair value of stock options issued to nonemployee consultants is determined as of the grant date, and compensation expense is being recognized over the period that the related services are rendered. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options and stock purchase rights granted under its 2018 Employee Stock Purchase Plan and under the Joint Venture's 2020 Equity Incentive Plan. The Black-Scholes option-pricing model requires assumptions to be made related to the expected term of an award, expected volatility, risk-free rate and expected dividend yield. The board of directors of the Joint Venture has determined the fair value of common stock of the Joint Venture. Forfeitures are accounted for as they occur. For market-based restricted stock units, the Company derives the requisite service period using the Monte Carlo simulation model and the related compensation expense is recognized over the derived service period using an accelerated attribution model commencing on the grant date. Stock-based compensation expense will be recorded regardless of whether the market conditions are achieved or not. If the related market condition is achieved earlier than its estimated derived service period, the stock-based compensation expense will be accelerated, and a cumulative catch-up expense will be recorded during the period in which the market condition is met. |
Net Loss Per Share Attributable to Common Shareholders | Net Loss Per Share Attributable to Common Stockholders The Company calculates basic net loss per share attributable to common stockholders by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders 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, 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 stockholders as their effect is anti-dilutive. |
Accounting Pronouncements Adopted | Accounting Pronouncements Adopted Financial Instruments In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) , in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to certain available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes result in earlier recognition of credit losses. The Company adopted ASU 2016-13 using the modified retrospective approach as of January 1, 2020. The cumulative effect upon adoption was not material to the Company’s condensed consolidated financial statements. The Company will continue to monitor the developments pertaining to the recent coronavirus (COVID-19) pandemic and its impact on expected credit losses. Goodwill In January 2017, the FASB issued ASU 2017-04 , Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment which eliminates Step 2 from the goodwill impairment test and instead requires entities to perform its annual or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount . The Company adopted this new standard on January 1, 2020. The adoption of this standard did not have a significant impact to the Company’s condensed consolidated financial statements. Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates, adds and modifies certain disclosure requirements for fair value measurements in ASC 820, Fair Value Measuremen t, as part of its disclosure framework project. The Company adopted this new guidance on January 1, 2020. The adoption of this standard did not have a significant impact on the Company’s condensed consolidated financial statements. Cloud Computing Arrangements In August 2018, the FASB issued ASU 2018-15— Intangibles-Goodwill and Other-Internal—Use Software (Subtopic 350-40) : Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC Topic 350, Intangibles—Goodwill and Other , to determine which implementation costs to capitalize as assets or expense as incurred. The Company adopted this new standard on January 1, 2020 on a prospective basis. The adoption of this standard did not have a significant impact on the Company’s condensed consolidated financial statements. Collaborative Arrangements In November 2018, the FASB issued ASU 2018-18 - Collaborative Arrangements (ASC 808) to clarify that certain transactions between participants in a collaborative arrangement should be accounted for under R evenue from contracts with customers (Topic ASC 606) when the counterparty is a customer. The Company adopted this new standard on January 1, 2020. The adoption of this standard did not have a significant impact to the Company’s condensed consolidated financial statements. Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company early adopted this new standard on January 1, 2020.The adoption of this standard did not have a significant impact to the Company’s condensed consolidated financial statements. Under prior GAAP, the Company historically allocated income tax benefit to continuing operations and an offsetting income tax expense to other comprehensive income under the applicable exception to ASC Topic 740. The new standard eliminates this exception and the Company will now determine the tax effect of pre-tax income or loss from continuing operations without regard to the tax effect of other items. The Company applied the new intraperiod tax allocation guidance prospectively in the period of adoption. |
Fair Value Measurements | Financial instruments consist of cash equivalents, marketable securities, accounts receivable, net, prepaid expenses and other current assets, net, accounts payable and accrued expenses. Cash equivalents and marketable securities are stated at fair value. Prepaid expenses and other current assets, net, accounts payable and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Fair value is defined as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Revenue attributable to each significant customer, including its affiliated entities, as a percentage of the Company’s total revenue, for the respective period, and accounts receivable balance attributable to each significant customers, including its affiliated entities, as a percentage of the Company’s total accounts receivable balance, at the respective condensed consolidated balance sheet date, are as follows: Revenue Accounts Receivable, Net Three Months Ended September 30, Nine Months Ended September 30, September 30, 2020 December 31, 2019 2020 2019 2020 2019 (unaudited) (unaudited) Customer A * 21 % 11 % 27 % 11 % 40 % Customer B 28 % 19 % 24 % 15 % * * Customer C * * * * * 10 % Customer D * * * * 10 % * Customer E * * * * 13 % * * less than 10% |
Schedule of Contractual Receivables and Related Credit Loss | The following table presents the receivable and the related credit loss amounts: Gross Amount Allowance for Credit Losses Net Amount September 30, 2020 December 31, 2019 Three and Nine Months Ended September 30, 2020 September 30, 2020 December 31, 2019 Beginning Balance Additions: Charged to Other Income (Expense), Net Ending Balance (unaudited) (unaudited) (unaudited) (in thousand) Prepaid expenses and other current assets $ 1,000 $ — $ — $ (1,000) $ (1,000) $ — $ — Other assets 7,000 — — (7,000) (7,000) — $ — |
Condensed Consolidated Balanc_4
Condensed Consolidated Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment, net consist of the following: September 30, 2020 December 31, 2019 (unaudited) (in thousands) Machinery and equipment $ 37,954 $ 29,119 Leasehold improvements 33,480 21,031 Computer hardware 10,129 6,296 Construction in progress 7,465 6,354 Furniture and fixtures 3,182 1,962 Computer software 1,027 829 Property and equipment, gross $ 93,237 $ 65,591 Less: accumulated depreciation (31,355) (21,923) Property and equipment, net $ 61,882 $ 43,668 |
Schedule of Accrued Liabilities | Accrued expenses consist of the following: September 30, 2020 December 31, 2019 (unaudited) (in thousands) Operating lease liabilities $ 7,438 $ 7,140 Accrued tax liabilities 3,751 3,050 Accrued professional services 2,475 3,464 Accrued clinical trials and studies 2,489 2,029 Accrued legal expenses 1,808 1,046 Purchases of property and equipment included in accrued expenses 668 2,424 Accrued royalty obligations 321 1,564 Others 3,362 4,986 Total accrued expenses $ 22,312 $ 25,703 |
Fair Value Measurements, Cash_2
Fair Value Measurements, Cash Equivalents and Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements, Recurring and Nonrecurring | The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements were as follows: September 30, 2020 Fair Value Level 1 Level 2 Level 3 (unaudited) (in thousands) Financial Assets: Money market funds $ 18,104 $ 18,104 $ — $ — Total cash equivalents $ 18,104 $ 18,104 $ — $ — U.S. government debt securities $ 870,459 $ — $ 870,459 $ — Total short-term marketable securities $ 870,459 $ — $ 870,459 $ — U.S. government debt securities $ 51,398 $ — $ 51,398 $ — Total long-term marketable securities $ 51,398 $ — $ 51,398 $ — Total $ 939,961 $ 18,104 $ 921,857 $ — Financial Liabilities: Contingent consideration $ 1,245 $ — $ — $ 1,245 Total $ 1,245 $ — $ — $ 1,245 December 31, 2019 Fair Value Level 1 Level 2 Level 3 (in thousands) Financial Assets: Money market funds $ 10,734 $ 10,734 $ — $ — Total cash equivalents $ 10,734 $ 10,734 $ — $ — Corporate bonds $ 16,690 $ — $ 16,690 $ — U.S. government debt securities 362,884 — 362,884 — Total short-term marketable securities $ 379,574 $ — $ 379,574 $ — U.S. government debt securities $ 268,783 $ — $ 268,783 $ — Total long-term marketable securities $ 268,783 $ — $ 268,783 $ — Total $ 659,091 $ 10,734 $ 648,357 $ — Financial Liabilities: Contingent consideration $ 1,365 $ — $ — $ 1,365 Total $ 1,365 $ — $ — $ 1,365 |
Schedule of Level 3 Activity | The following table summarizes the activities for the Level 3 financial instruments for the three and nine months ended September 30, 2020 and 2019: Redeemable Noncontrolling Interest Contingent Consideration Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 2020 2019 2020 2019 (unaudited) (in thousands) Fair value — beginning of period $ 50,400 $ 46,800 $ 49,600 $ 41,800 $ 1,175 $ 1,065 $ 1,365 $ — Initial valuation on the date of acquisition — — — — — — — 1,065 Increase (decrease) in fair value 7,407 260 10,566 6,204 70 — (120) — Net loss for the period (1,407) (560) (3,766) (1,504) — — — — Fair value — end of period $ 56,400 $ 46,500 $ 56,400 $ 46,500 $ 1,245 $ 1,065 $ 1,245 $ 1,065 |
Schedule of Debt Securities, Available-for-sale | The following tables summarizes the Company’s cash equivalents and marketable securities’ amortized costs, gross unrealized gains, gross unrealized losses and estimated fair values by significant investment category: September 30, 2020 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value (unaudited) (in thousands) Money market fund $ 18,104 $ — $ — $ 18,104 U.S. government debt securities 917,954 3,903 — 921,857 Total $ 936,058 $ 3,903 $ — $ 939,961 December 31, 2019 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value (in thousands) Money market fund $ 10,734 $ — $ — $ 10,734 Corporate bond 16,679 11 — 16,690 U.S. government debt securities 630,283 1,423 (39) 631,667 Total $ 657,696 $ 1,434 $ (39) $ 659,091 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table presents details of purchased intangible assets as of September 30, 2020 and December 31, 2019: September 30, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining Weighted Average Useful Life (unaudited) (in thousands) (in years) Intangible assets subject to amortization: Acquired license $ 11,886 $ (1,088) $ 10,798 10.0 Non-compete agreements and other covenant rights 5,100 (853) 4,247 5.2 Total intangible assets subject to amortization 16,986 (1,941) 15,045 Intangible assets not subject to amortization: IPR&D 1,600 — 1,600 Goodwill 3,290 — 3,290 Total purchased intangible assets $ 21,876 $ (1,941) $ 19,935 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining Weighted Average Useful Life (in thousands) (in years) Intangible assets subject to amortization: Acquired license $ 5,100 $ (373) $ 4,727 9.5 Non-compete agreements 2,500 (303) 2,197 5.5 Total intangible assets subject to amortization 7,600 (676) 6,924 Intangible assets not subject to amortization: IPR&D 1,600 — 1,600 Goodwill 3,290 — 3,290 Total purchased intangible assets $ 12,490 $ (676) $ 11,814 |
Schedule of Indefinite-Lived Intangible Assets | The following table presents details of purchased intangible assets as of September 30, 2020 and December 31, 2019: September 30, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining Weighted Average Useful Life (unaudited) (in thousands) (in years) Intangible assets subject to amortization: Acquired license $ 11,886 $ (1,088) $ 10,798 10.0 Non-compete agreements and other covenant rights 5,100 (853) 4,247 5.2 Total intangible assets subject to amortization 16,986 (1,941) 15,045 Intangible assets not subject to amortization: IPR&D 1,600 — 1,600 Goodwill 3,290 — 3,290 Total purchased intangible assets $ 21,876 $ (1,941) $ 19,935 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Remaining Weighted Average Useful Life (in thousands) (in years) Intangible assets subject to amortization: Acquired license $ 5,100 $ (373) $ 4,727 9.5 Non-compete agreements 2,500 (303) 2,197 5.5 Total intangible assets subject to amortization 7,600 (676) 6,924 Intangible assets not subject to amortization: IPR&D 1,600 — 1,600 Goodwill 3,290 — 3,290 Total purchased intangible assets $ 12,490 $ (676) $ 11,814 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table summarizes estimated future amortization expense of finite-lived intangible assets: Year Ending December 31, (unaudited) (in thousands) Remainder of 2020 $ 491 2021 1,947 2022 1,947 2023 1,947 2024 1,953 2025 and thereafter 6,760 Total $ 15,045 |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the total consideration to the estimated fair values of assets acquired and liabilities assumed: Amount (in thousands) Cash $ 521 Identified intangible assets 6,700 Goodwill 3,289 Net liabilities assumed (1,802) Total $ 8,708 |
Schedule of Intangible Assets Acquired | The following table presents details of the identified intangible assets acquired from the Bellwether Bio acquisition: Fair Value Estimated Useful Life (in thousands) Acquired license $ 5,100 10 years IPR&D 1,600 * Total $ 6,700 * IPR&D assets are not subject to amortization. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease Information | September 30, 2020 December 31, 2019 (unaudited) Weighted-average remaining lease term (in years) 5.9 6.4 Weighted-average discount rate 8.17 % 7.77 % |
Schedule of Operating Lease Liability Maturities | The following table summarizes our future principal contractual obligations for operating lease commitments as of September 30, 2020: Year Ending December 31, (unaudited) (in thousands) Remainder of 2020 $ 1,049 2021 9,759 2022 9,886 2023 10,547 2024 10,792 2025 and thereafter 18,350 Total operating lease payments $ 60,383 Less: Imputed Interest (13,263) Total operating lease liabilities $ 47,120 |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Stock by Class | The Company’s common stock has been reserved for the following potential future issuances: September 30, 2020 December 31, 2019 (unaudited) Shares underlying outstanding stock options 3,356,774 4,494,889 Shares underlying unvested restricted stock units 949,276 496,131 Shares available for issuance under the 2018 Incentive Award Plan 2,397,256 2,726,225 Shares available for issuance under the 2018 Employee Stock Purchase Plan 1,574,367 689,917 Total 8,277,673 8,407,162 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s stock option activity under the 2012 Stock Plan (as amended and restated, the “2012 Plan”) and the 2018 Incentive Award Plan (the “2018 Plan”) and related information is as follows: Options Outstanding Shares Shares Subject to Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (unaudited) (in thousands) Balance as of December 31, 2019 2,726,225 4,494,889 $ 10.90 7.7 $ 306,392 2018 Plan annual increase (1) 3,689,000 — Granted (114,472) 114,472 78.15 Exercised — (1,188,519) 6.23 Canceled 17,387 (64,068) 9.09 Restricted stock units granted (601,451) — — Restricted stock units canceled 71,715 — — Market-based restricted stock units granted (3,391,148) — — Balance as of September 30, 2020 2,397,256 3,356,774 $ 14.89 7.2 $ 325,246 Vested and Exercisable as of September 30, 2020 1,826,533 $ 7.59 6.7 $ 190,313 (1) Effective as of January 1, 2020, an additional 3,689,000 shares of common stock became available for issuance under the 2018 Plan, as a result of the operation of an automatic annual increase provision therein. A summary of the Joint Venture's stock option activity under the AMEA 2020 Plan and related information is as follows: Options Outstanding Shares Shares Subject to Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (unaudited) (in thousands) Balance as of December 31, 2019 — — $ — 0.0 $ — Shares authorized 4,595,555 — — Granted (3,902,224) 3,902,224 0.58 Balance as of September 30, 2020 693,331 3,902,224 $ 0.58 9.9 $ — Vested and Exercisable as of September 30, 2020 1,687,382 $ 0.58 9.9 $ — |
Schedule of Restricted Stock Activity | A summary of the Company’s restricted stock unit activity excluding the market-based restricted stock units under the 2012 Plan and the 2018 Plan and related information is as follows: Restricted Stock Units Outstanding Weighted-Average Grant Date Fair Value (unaudited) Balance as of December 31, 2019 496,131 $ 82.08 Granted 601,451 90.11 Vested and released (76,591) 86.35 Canceled (71,715) 81.09 Balance as of September 30, 2020 949,276 $ 86.90 |
Schedule of Performance-based Restricted Stock Units Vesting Conditions | The following table presents additional information relating to each MSU award: Tranche Price Goal Number of RSUs Tranche 1 $120 per share 565,192 Tranche 2 $150 per share 565,191 Tranche 3 $200 per share 565,191 |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | The following table presents the effect of employee and non-employee related stock-based compensation expense including the Joint Venture: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) (in thousands) Cost of precision oncology testing $ 428 $ 266 $ 1,138 $ 562 Research and development expense 2,369 2,066 7,355 4,704 Sales and marketing expense 2,320 1,458 6,285 2,930 General and administrative expense 50,081 1,694 72,573 3,686 Total stock-based compensation expense $ 55,198 $ 5,484 $ 87,351 $ 11,882 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The grant date fair value of stock options was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions including the Joint Venture: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) Expected term (in years) 5.95 – 6.04 6.03 – 6.08 5.50 – 6.10 5.50 – 6.22 Expected volatility 63.6% – 68.4% 63.2% – 64.6% 63.6% – 73.3% 63.2% – 68.3% Risk-free interest rate 0.3% – 0.4% 1.6% – 1.9% 0.3% – 1.6% 1.6% – 2.7% Expected dividend yield —% —% —% —% Three Months Ended Nine Months Ended 2020 2019 (unaudited) Expected term (in years) 0.3 0.5 0.3 – 0.5 Expected volatility 60.3% 73.2% 60.2% – 60.3% Risk-free interest rate 2.1% 0.2% 2.1% – 2.5% Expected dividend yield —% —% —% |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Guardant Health, Inc. Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of the basic and diluted net loss per share attributable to Guardant Health, Inc. common stockholders: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) (in thousands, except per share data) Net loss $ (71,670) $ (13,090) $ (153,238) $ (45,741) Adjustment of redeemable noncontrolling interest (6,000) 300 (6,800) (4,700) Net loss attributable to Guardant Health, Inc. common stockholders, basic and diluted $ (77,670) $ (12,790) $ (160,038) $ (50,441) Net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted $ (0.78) $ (0.14) $ (1.66) $ (0.56) Weighted-average shares used in computing net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted 99,554 93,303 96,659 89,452 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following weighted-average common stock equivalents were excluded from the calculation of diluted net loss per share attributable to Guardant Health, Inc. common stockholders for the periods presented as they had an anti-dilutive effect: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) (in thousands) Stock options issued and outstanding (1) 3,662 5,353 4,021 6,390 Restricted stock units 650 338 563 179 MSUs 3,391 — 1,577 — ESPP obligation 38 42 39 62 Common stock subject to repurchase 17 28 20 33 Total 7,758 5,761 6,220 6,664 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table sets forth the Company’s revenue by geographic areas based on the customers’ locations: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (unaudited) (in thousands) United States $ 65,613 $ 54,675 $ 191,648 $ 134,917 International (1) 8,956 6,173 16,766 16,561 Total revenue $ 74,569 $ 60,848 $ 208,414 $ 151,478 (1) No single country outside of the United States accounted for more than 10% of total revenue during the three and nine months ended September 30, 2020 and 2019, respectively. |
Description of Business (Detail
Description of Business (Details) | May 31, 2018 |
Guardant Health AMEA, Inc | |
Subsidiary, Sale of Stock [Line Items] | |
Ownership interest in joint venture | 50.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Allowance for credit losses | $ 0 | $ 0 | $ 0 | ||
Number of operating segments | segment | 1 | ||||
Impairment of goodwill | 0 | $ 0 | |||
Revenue from cash collections exceeding estimated variable consideration | 11,400,000 | $ 10,900,000 | 21,900,000 | $ 15,500,000 | |
Change in estimate of development services revenue | $ 3,500,000 | ||||
Unbilled receivables | 13,400,000 | 13,400,000 | 6,200,000 | ||
Deferred revenue | 7,300,000 | 7,300,000 | 12,300,000 | ||
Deferred revenue recognized | 8,800,000 | ||||
Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Deferred revenue | 2,200,000 | 2,200,000 | 4,800,000 | ||
Other Assets | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Unbilled receivables | $ 200,000 | $ 200,000 | $ 1,000,000 | ||
Minimum | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Useful life (years) | 6 years | ||||
Maximum | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Useful life (years) | 12 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Concentration Risk (Details) - Credit Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Customer A | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 21.00% | 11.00% | 27.00% | ||
Customer A | Accounts Receivable, Net | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 11.00% | 40.00% | |||
Customer B | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 28.00% | 19.00% | 24.00% | 15.00% | |
Customer C | Accounts Receivable, Net | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | ||||
Customer D | Accounts Receivable, Net | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | ||||
Customer E | Accounts Receivable, Net | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 13.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Receivable and Related Credit Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Other receivables and other assets due from a third-party | $ 8,000 | $ 8,000 | |
Other receivables and other assets, term | 6 years | ||
Financing receivable, gross amount, current | 1,000 | $ 1,000 | $ 0 |
Financing receivable, net amount, noncurrent | 7,000 | 7,000 | 0 |
Allowance for Credit Losses | |||
Beginning balance, financing receivable, allowance for credit loss, current | 0 | 0 | |
Additions: charged to other income (expense), net, allowance for credit loss, current | (1,000) | (1,000) | |
Ending balance, financing receivable, allowance for credit loss, current | (1,000) | (1,000) | |
Beginning balance, financing receivable, allowance for credit loss, noncurrent | 0 | 0 | |
Additions: charged to other income (expense), net, allowance for credit loss, noncurrent | (7,000) | (7,000) | |
Ending balance, financing receivable, allowance for credit loss, noncurrent | (7,000) | (7,000) | |
Financing receivable, net amount, current | 0 | 0 | 0 |
Financing receivable, net amount, noncurrent | $ 0 | $ 0 | $ 0 |
Investment in Joint Venture (De
Investment in Joint Venture (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||
May 31, 2018 | Sep. 30, 2020 | Dec. 31, 2019 | ||
Schedule of Equity Method Investments [Line Items] | ||||
Common stock, shares authorized (in shares) | 350,000,000 | 350,000,000 | ||
Common stock, shares reserved for future issuance (in shares) | 8,277,673 | 8,407,162 | ||
Common stock, shares issued (in shares) | 99,897,188 | 94,261,414 | ||
Common stock, shares outstanding (in shares) | 99,897,188 | 94,261,414 | ||
Assets | [1] | $ 1,262,109 | $ 962,535 | |
Threshold percentage of fair value that is no less than internal rate of return | 20.00% | |||
Fair value of joint venture threshold | 40.00% | |||
Variable Interest Entity | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Assets | $ 37,700 | $ 45,100 | ||
Guardant Health AMEA, Inc | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Payments to acquire interest in joint venture | $ 9,000 | |||
Equity method investment, shares purchased (in shares) | 40,000 | |||
Equity method investment, ownership percentage | 50.00% | |||
Common stock, shares authorized (in shares) | 89,000,000 | |||
Guardant Health AMEA, Inc | Class A | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Common stock, shares authorized (in shares) | 80,000,000 | |||
Common stock, shares issued (in shares) | 0 | |||
Common stock, shares outstanding (in shares) | 0 | |||
Guardant Health AMEA, Inc | Class B | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Common stock, shares authorized (in shares) | 9,000,000 | |||
Common stock, shares issued (in shares) | 0 | |||
Common stock, shares outstanding (in shares) | 0 | |||
Guardant Health AMEA, Inc | Series A | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 80,000,000 | |||
Preferred stock issued (in shares) | 80,000,000 | |||
Preferred stock dividend rate (in usd per share) | $ 0.05 | |||
Preferred stock outstanding (in shares) | 80,000,000 | |||
Guardant Health AMEA, Inc | Series A | SoftBank | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Preferred stock issued (in shares) | 40,000,000 | |||
Guardant Health AMEA, Inc | Series A | Guardant Health, Inc. | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Preferred stock issued (in shares) | 40,000,000 | |||
Guardant Health AMEA, Inc | SoftBank | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, shares purchased (in shares) | 40,000 | |||
Equity method investment, ownership percentage | 50.00% | |||
Redeemable noncontrolling interest, redemption value | $ 41,000 | |||
Guardant Health AMEA, Inc | SoftBank | Series A | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Common stock reclassified and converted into preferred stock (in shares) | 1,000 | |||
[1] | As of September 30, 2020 and December 31, 2019, this balance includes $37.7 million and $45.1 million of assets, respectively, that can be used only to settle obligations of the consolidated variable interest entity (“VIE”) and VIE’s subsidiaries, and $4.6 million and $5.7 million of liabilities of the consolidated VIE and VIE’s subsidiaries, respectively, for which their creditors do not have recourse to the general credit of the Company. See Note 3, Investment in Joint Venture . |
Condensed Consolidated Balanc_5
Condensed Consolidated Balance Sheet Components - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 93,237 | $ 65,591 |
Less: accumulated depreciation | (31,355) | (21,923) |
Property and equipment, net | 61,882 | 43,668 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 37,954 | 29,119 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 33,480 | 21,031 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,129 | 6,296 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,465 | 6,354 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,182 | 1,962 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,027 | $ 829 |
Condensed Consolidated Balanc_6
Condensed Consolidated Balance Sheet Components - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Depreciation and amortization expense | $ 3.8 | $ 2.5 | $ 10 | $ 6.8 |
Condensed Consolidated Balanc_7
Condensed Consolidated Balance Sheet Components - Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Operating lease liabilities | $ 7,438 | $ 7,140 |
Accrued tax liabilities | 3,751 | 3,050 |
Accrued professional services | 2,475 | 3,464 |
Accrued clinical trials and studies | 2,489 | 2,029 |
Accrued legal expenses | 1,808 | 1,046 |
Purchases of property and equipment included in accrued expenses | 668 | 2,424 |
Accrued royalty obligations | 321 | 1,564 |
Others | 3,362 | 4,986 |
Total accrued expenses | $ 22,312 | $ 25,703 |
Fair Value Measurements, Cash_3
Fair Value Measurements, Cash Equivalents and Marketable Securities - Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Initial fair value of contingent consideration at acquisition date | $ 0 | $ 1,065 | |
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 18,104 | $ 10,734 | |
Debt securities, short-term | 870,459 | 379,574 | |
Debt securities, long-term | 51,398 | 268,783 | |
Total assets | 939,961 | 659,091 | |
Initial fair value of contingent consideration at acquisition date | 1,245 | 1,365 | |
Financial and nonfinancial liabilities, fair value disclosure | 1,245 | 1,365 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 18,104 | 10,734 | |
Debt securities, short-term | 0 | 0 | |
Debt securities, long-term | 0 | 0 | |
Total assets | 18,104 | 10,734 | |
Initial fair value of contingent consideration at acquisition date | 0 | 0 | |
Financial and nonfinancial liabilities, fair value disclosure | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 0 | 0 | |
Debt securities, short-term | 870,459 | 379,574 | |
Debt securities, long-term | 51,398 | 268,783 | |
Total assets | 921,857 | 648,357 | |
Initial fair value of contingent consideration at acquisition date | 0 | 0 | |
Financial and nonfinancial liabilities, fair value disclosure | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 0 | 0 | |
Debt securities, short-term | 0 | 0 | |
Debt securities, long-term | 0 | 0 | |
Total assets | 0 | 0 | |
Initial fair value of contingent consideration at acquisition date | 1,245 | 1,365 | |
Financial and nonfinancial liabilities, fair value disclosure | 1,245 | 1,365 | |
Fair Value, Measurements, Recurring | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities, short-term | 16,690 | ||
Fair Value, Measurements, Recurring | Corporate bonds | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities, short-term | 0 | ||
Fair Value, Measurements, Recurring | Corporate bonds | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities, short-term | 16,690 | ||
Fair Value, Measurements, Recurring | Corporate bonds | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities, short-term | 0 | ||
Fair Value, Measurements, Recurring | U.S. government debt securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities, short-term | 870,459 | 362,884 | |
Debt securities, long-term | 51,398 | 268,783 | |
Fair Value, Measurements, Recurring | U.S. government debt securities | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities, short-term | 0 | 0 | |
Debt securities, long-term | 0 | 0 | |
Fair Value, Measurements, Recurring | U.S. government debt securities | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities, short-term | 870,459 | 362,884 | |
Debt securities, long-term | 51,398 | 268,783 | |
Fair Value, Measurements, Recurring | U.S. government debt securities | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities, short-term | 0 | 0 | |
Debt securities, long-term | 0 | 0 | |
Fair Value, Measurements, Recurring | Money market funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 18,104 | 10,734 | |
Fair Value, Measurements, Recurring | Money market funds | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 18,104 | 10,734 | |
Fair Value, Measurements, Recurring | Money market funds | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 0 | 0 | |
Fair Value, Measurements, Recurring | Money market funds | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | $ 0 | $ 0 |
Fair Value Measurements, Cash_4
Fair Value Measurements, Cash Equivalents and Marketable Securities - Activity In Level 3 Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Initial fair value of contingent consideration at acquisition date | $ 0 | $ 1,065 | $ 0 | $ 1,065 | ||||
Fair Value, Measurements, Recurring | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Initial fair value of contingent consideration at acquisition date | 1,245 | 1,245 | $ 1,365 | |||||
Fair Value, Measurements, Recurring | Level 3 | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Initial fair value of contingent consideration at acquisition date | 1,245 | 1,245 | 1,365 | |||||
Redeemable Noncontrolling Interest | Fair Value, Measurements, Recurring | Level 3 | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Fair value — beginning of period | 50,400 | 46,800 | 49,600 | 41,800 | ||||
Initial fair value of contingent consideration at acquisition date | $ 0 | 0 | $ 0 | $ 0 | ||||
Increase (decrease) in fair value | 7,407 | 260 | 10,566 | 6,204 | ||||
Net loss for the period | (1,407) | (560) | (3,766) | (1,504) | ||||
Fair value — end of period | 56,400 | 46,500 | 56,400 | 46,500 | ||||
Contingent Consideration | Fair Value, Measurements, Recurring | Level 3 | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Fair value — beginning of period | 1,175 | 1,065 | 1,365 | 0 | ||||
Initial fair value of contingent consideration at acquisition date | $ 0 | $ 0 | $ 0 | $ 1,065 | ||||
Increase (decrease) in fair value | 70 | 0 | (120) | 0 | ||||
Net loss for the period | 0 | 0 | 0 | 0 | ||||
Fair value — end of period | $ 1,245 | $ 1,065 | $ 1,245 | $ 1,065 |
Fair Value Measurements, Cash_5
Fair Value Measurements, Cash Equivalents and Marketable Securities - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent liability from business acquisition | $ 0 | $ 1,065 | |
Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Maturity period (years) | 1 year | ||
Maximum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Maturity period (years) | 1 year 2 months 12 days | ||
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent liability from business acquisition | $ 1,245 | $ 1,365 | |
Level 3 | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent liability from business acquisition | $ 1,245 | $ 1,365 |
Fair Value Measurements, Cash_6
Fair Value Measurements, Cash Equivalents and Marketable Securities - Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | $ 142,945 | $ 143,228 |
Amortized cost, cash and cash equivalents and debt securities available-for-sale | 936,058 | 657,696 |
Gross Unrealized Gain | 3,903 | 1,434 |
Gross Unrealized Loss | 0 | (39) |
Cash, cash equivalents and debt securities, fair value | 939,961 | 659,091 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | 18,104 | 10,734 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated fair value, cash and cash equivalents | 18,104 | 10,734 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost, debt securities, available-for-sale | 16,679 | |
Gross Unrealized Gain | 11 | |
Gross Unrealized Loss | 0 | |
Estimated fair value, debt securities | 16,690 | |
U.S. government debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost, debt securities, available-for-sale | 917,954 | 630,283 |
Gross Unrealized Gain | 3,903 | 1,423 |
Gross Unrealized Loss | 0 | (39) |
Estimated fair value, debt securities | $ 921,857 | $ 631,667 |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill - Schedule of Intangible Assets by Class (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, gross carrying amount | $ 16,986 | $ 7,600 |
Intangible assets subject to amortization, accumulated amortization | (1,941) | (676) |
Intangible assets subject to amortization, net | 15,045 | 6,924 |
Goodwill | 3,290 | 3,290 |
Gross Carrying Amount | 21,876 | 12,490 |
Net Carrying Amount | 19,935 | 11,814 |
IPR&D | ||
Finite-Lived Intangible Assets [Line Items] | ||
IPR&D | 1,600 | 1,600 |
Acquired license | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, gross carrying amount | 11,886 | 5,100 |
Intangible assets subject to amortization, accumulated amortization | (1,088) | (373) |
Intangible assets subject to amortization, net | $ 10,798 | $ 4,727 |
Remaining Weighted Average Useful Life | 10 years | 9 years 6 months |
Non-compete agreements and other covenant rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, gross carrying amount | $ 5,100 | $ 2,500 |
Intangible assets subject to amortization, accumulated amortization | (853) | (303) |
Intangible assets subject to amortization, net | $ 4,247 | $ 2,197 |
Remaining Weighted Average Useful Life | 5 years 2 months 12 days | 5 years 6 months |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 0.5 | $ 0.2 | $ 1.3 | $ 0.4 |
Intangible Assets, Net and Go_5
Intangible Assets, Net and Goodwill - Schedule of Future Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2020 | $ 491 | |
2021 | 1,947 | |
2022 | 1,947 | |
2023 | 1,947 | |
2024 | 1,953 | |
2025 and thereafter | 6,760 | |
Intangible assets subject to amortization, net | $ 15,045 | $ 6,924 |
Acquisition - Patent License Ac
Acquisition - Patent License Acquisition (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets | $ 16,986,000 | $ 16,986,000 | $ 7,600,000 | |||
In process research and development expensed | 8,500,000 | $ 0 | ||||
Amortization of intangible assets | 500,000 | $ 200,000 | $ 1,300,000 | 400,000 | ||
Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Useful life (years) | 6 years | |||||
Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Useful life (years) | 12 years | |||||
Patent and Covenant Rights | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Useful life (years) | 6 years | |||||
Patent and Covenant Rights | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Useful life (years) | 12 years | |||||
Acquired license | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets | 11,886,000 | $ 11,886,000 | $ 5,100,000 | |||
KeyGene Patent License Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Payment in connection with a license agreement | $ 18,500,000 | |||||
Asset acquisition, transaction costs | 600,000 | |||||
In process research and development expensed | 8,500,000 | |||||
Settlement of prior dispute between parties | 1,200,000 | |||||
KeyGene Patent License Acquisition | Patent and Covenant Rights | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets | $ 9,400,000 | |||||
KeyGene Patent License Acquisition | Acquired license | ||||||
Business Acquisition [Line Items] | ||||||
Amortization of intangible assets | $ 0 | $ 200,000 | $ 0 | $ 700,000 |
Acquisition - Acquisition of Be
Acquisition - Acquisition of Bellwether Bio (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Acquisition [Line Items] | |||
Contingent liability from business acquisition | $ 0 | $ 1,065 | |
Bellweather Bio, Inc. | |||
Business Acquisition [Line Items] | |||
Total purchase consideration | $ 8,700 | ||
Cash paid upon closing | 7,600 | ||
Contingent liability from business acquisition | 1,100 | ||
Identified intangible assets | 6,700 | ||
Bellweather Bio, Inc. | Covenants Not To Compete | |||
Business Acquisition [Line Items] | |||
Identified intangible assets | $ 2,500 | ||
Estimated Useful Life | 6 years | ||
Bellweather Bio, Inc. | Commercialization Milestones | |||
Business Acquisition [Line Items] | |||
Maximum contingent liability | $ 10,000 | ||
Bellweather Bio, Inc. | Earn-Out Consideration | |||
Business Acquisition [Line Items] | |||
Maximum contingent liability | $ 10,000 |
Acquisition - Assets Acquired a
Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Apr. 30, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,290 | $ 3,290 | |
Bellweather Bio, Inc. | |||
Business Acquisition [Line Items] | |||
Cash | $ 521 | ||
Identified intangible assets | 6,700 | ||
Goodwill | 3,289 | ||
Net liabilities assumed | (1,802) | ||
Total | $ 8,708 |
Acquisition - Intangible Assets
Acquisition - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Acquired license | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 10 years | 9 years 6 months | |
Bellweather Bio, Inc. | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identified intangible assets | $ 6,700 | ||
Bellweather Bio, Inc. | Acquired license | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identified intangible assets | $ 5,100 | ||
Estimated Useful Life | 10 years | ||
Bellweather Bio, Inc. | IPR&D | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identified intangible assets | $ 1,600 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Jul. 31, 2020USD ($)segment | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | $ 1.2 | $ 3.3 | $ 2.9 | |
Weighted-average estimate lease term | 10 years | |||
Office and laboratory space | ||||
Lessee, Lease, Description [Line Items] | ||||
Number lease agreements, not yet commenced | segment | 2 | |||
Lease agreements not yet commenced | $ 239.5 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term | 1 year | |||
Minimum | Office and laboratory space | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term | 8 years | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term | 12 years | |||
Maximum | Office and laboratory space | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term | 12 years |
Leases - Lease Information (Det
Leases - Lease Information (Details) | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) | 5 years 10 months 24 days | 6 years 4 months 24 days |
Weighted-average discount rate | 8.17% | 7.77% |
Leases - Schedule of Operating
Leases - Schedule of Operating Liability Maturities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
Remainder of 2020 | $ 1,049 |
2021 | 9,759 |
2022 | 9,886 |
2023 | 10,547 |
2024 | 10,792 |
2025 and thereafter | 18,350 |
Total operating lease payments | 60,383 |
Less: Imputed Interest | (13,263) |
Total operating lease liabilities | $ 47,120 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 1 Months Ended | |
Jul. 31, 2018petitionpatent | Nov. 30, 2017patent | |
Other Commitments [Line Items] | ||
Gain contingency, patents allegedly infringed upon, number | patent | 4 | 4 |
Personal Genome Diagnostics, Inc. vs. Guardant Health, Inc. Subsequent Filing | ||
Other Commitments [Line Items] | ||
Number of petitions filed | 6 | |
Number of petitions denied | 4 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | May 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2018 | |
Class of Stock [Line Items] | ||||||
Dividends on common stock | $ 0 | $ 0 | ||||
Common stock, shares reserved for future issuance (in shares) | 8,277,673 | 8,407,162 | ||||
Issuance of common stock in public offering, net of offering costs (in shares) | 4,312,500 | 5,175,000 | ||||
Share price of stock issued (in usd per share) | $ 84 | $ 71 | ||||
Issuance of common stock in public offering, net of offering costs | $ 354,600,000 | $ 349,700,000 | $ 354,600,000 | $ 349,709,000 | ||
Shares underlying outstanding stock options | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares reserved for future issuance (in shares) | 3,356,774 | 4,494,889 | ||||
Shares underlying unvested restricted stock units | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares reserved for future issuance (in shares) | 949,276 | 496,131 | ||||
Shares available for issuance under the 2018 Incentive Award Plan | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares reserved for future issuance (in shares) | 2,397,256 | 2,726,225 | ||||
Shares available for issuance under the 2018 Employee Stock Purchase Plan | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares reserved for future issuance (in shares) | 1,574,367 | 689,917 | 922,250 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Shares Available for Grant | |||
Beginning number of shares, available for grant (in shares) | 2,726,225 | 2,726,225 | |
2018 plan annual increase (in shares) | 3,689,000 | ||
Granted (in shares) | (114,472) | ||
Canceled (in shares) | 17,387 | ||
Ending number of shares, available for grant (in shares) | 2,397,256 | 2,726,225 | |
Shares Subject to Options Outstanding | |||
Beginning number of shares, outstanding (in shares) | 4,494,889 | 4,494,889 | |
Granted (in shares) | 114,472 | ||
Exercised (in shares) | (1,188,519) | ||
Canceled (in shares) | (64,068) | ||
Ending number of shares, outstanding (in shares) | 3,356,774 | 4,494,889 | |
Options vested and exercisable, number of options (in shares) | 1,826,533 | ||
Weighted-Average Exercise Price | |||
Beginning balance of options outstanding (in usd per share) | $ 10.90 | $ 10.90 | |
Granted (in usd per share) | 78.15 | ||
Exercised (in usd per share) | 6.23 | ||
Canceled (in usd per share) | 9.09 | ||
Ending balance of options outstanding (in usd per share) | 14.89 | $ 10.90 | |
Options vested and exercisable, weighted average exercise price per share (in usd per share) | $ 7.59 | ||
Weighted-Average Remaining Contractual Life and Aggregate Intrinsic Value | |||
Options outstanding, weighted average remaining contractual term (in years) | 7 years 8 months 12 days | 7 years 2 months 12 days | |
Options outstanding, aggregate intrinsic value | $ 325,246 | $ 306,392 | |
Options vested and exercisable, weighted average remaining contractual term (in years) | 6 years 8 months 12 days | ||
Options vested and exercisable, aggregate intrinsic value | $ 190,313 | ||
Restricted Stock Units | |||
Shares Available for Grant | |||
Granted (in shares) | (601,451) | ||
Canceled (in shares) | 71,715 | ||
MSUs | |||
Shares Available for Grant | |||
Granted (in shares) | (3,391,148) |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | May 26, 2020 | Jan. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Weighted average grant date fair value, grants in period (in usd per share) | $ 49.73 | $ 55.16 | $ 46.85 | $ 53.02 | ||||
Stock based compensation not recognized, options | $ 21,000 | $ 21,000 | ||||||
Stock based compensation not recognized, period for recognition (years) | 2 years 6 months | |||||||
Total market-based restricted stock units approved and granted | 114,472 | |||||||
Stock-based compensation | $ 55,198 | $ 5,484 | $ 87,351 | $ 11,882 | ||||
Common stock, shares reserved for future issuance (in shares) | 8,277,673 | 8,277,673 | 8,407,162 | |||||
Class B | AMEA 2020 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Weighted average grant date fair value, grants in period (in usd per share) | $ 0.33 | $ 0.33 | ||||||
Stock based compensation not recognized, options | $ 700 | $ 700 | ||||||
Stock based compensation not recognized, period for recognition (years) | 2 years 4 months 24 days | |||||||
Total market-based restricted stock units approved and granted | 3,902,224 | |||||||
Shares authorized (in shares) | 4,595,555 | |||||||
Guardant Health AMEA, Inc | Class B | AMEA 2020 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock, shares reserved for future issuance (in shares) | 4,595,555 | 4,595,555 | ||||||
Guardant Health AMEA, Inc | Class B | AMEA 2020 Plan | Tranche One | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Market-based stock unit vesting period | 4 years | |||||||
Option term, expiration period | 10 years | |||||||
Guardant Health AMEA, Inc | Class B | AMEA 2020 Plan | Tranche Two | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Purchase price of common stock (as a percent of the fair value of common stock) | 110.00% | |||||||
Option term, expiration period | 5 years | |||||||
Threshold percentage for individual's combined voting power triggering five year option term | 10.00% | |||||||
Stock options issued and outstanding | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercises in period, intrinsic value | $ 46,800 | $ 75,300 | $ 97,100 | $ 191,700 | ||||
Common stock, shares reserved for future issuance (in shares) | 3,356,774 | 3,356,774 | 4,494,889 | |||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||
Stock options issued and outstanding | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected volatility | 68.40% | 64.60% | 73.30% | 68.30% | ||||
Risk-free interest rate | 0.40% | 1.90% | 1.60% | 2.70% | ||||
Stock options issued and outstanding | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected volatility | 63.60% | 63.20% | 63.60% | 63.20% | ||||
Risk-free interest rate | 0.30% | 1.60% | 0.30% | 1.60% | ||||
Shares underlying unvested restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock based compensation not recognized, period for recognition (years) | 3 years 4 months 24 days | |||||||
Stock based compensation not recognized, other than options | $ 77,100 | $ 77,100 | ||||||
Common stock, shares reserved for future issuance (in shares) | 949,276 | 949,276 | 496,131 | |||||
ESPP shares granted (in shares) | 601,451 | |||||||
MSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock based compensation not recognized, period for recognition (years) | 1 year 1 month 6 days | |||||||
Stock based compensation not recognized, other than options | $ 162,100 | $ 162,100 | ||||||
Total market-based restricted stock units approved and granted | 3,391,148 | |||||||
Market-based restricted stock share price goal | 30 days | |||||||
Market-based stock unit vesting period | 7 years | |||||||
Weighted average grant date fair value of MSU (in usd per share) | $ 67 | |||||||
Stock-based compensation | 46,800 | $ 65,100 | ||||||
Expected dividend yield | 0.00% | |||||||
Expected volatility | 65.50% | |||||||
Risk-free interest rate | 0.53% | |||||||
Risky rate, cost of equity | 0.16 | |||||||
MSUs | Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total market-based restricted stock units approved and granted | 1,695,574 | |||||||
MSUs | President and Chief Operating Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total market-based restricted stock units approved and granted | 1,695,574 | |||||||
MSUs | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Market-based stock units holding period during vesting | 12 months | |||||||
Weighted-average derivative service period | 2 years 25 days | |||||||
Discount for post-vesting restrictions | 14.50% | |||||||
MSUs | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Market-based stock units holding period during vesting | 6 months | |||||||
Weighted-average derivative service period | 9 months 29 days | |||||||
Discount for post-vesting restrictions | 10.40% | |||||||
Shares available for issuance under the 2018 Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock based compensation not recognized, period for recognition (years) | 1 month 6 days | |||||||
Stock based compensation not recognized, other than options | 400 | $ 400 | ||||||
Stock-based compensation | $ 700 | $ 800 | $ 2,300 | $ 1,800 | ||||
Purchase price of common stock (as a percent of the fair value of common stock) | 85.00% | |||||||
Common stock, shares reserved for future issuance (in shares) | 1,574,367 | 1,574,367 | 689,917 | 922,250 | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |||||
Expected volatility | 60.30% | 73.20% | ||||||
Risk-free interest rate | 2.10% | 0.20% | ||||||
Shares authorized (in shares) | 942,614 | |||||||
Maximum employee subscription rate, ESPP | 10.00% | 10.00% | ||||||
Common stock issued under employee stock purchase plan (in shares) | 0 | 93,203 | 58,164 | 212,905 | ||||
ESPP shares granted (in shares) | 0 | |||||||
Shares available for issuance under the 2018 Employee Stock Purchase Plan | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected volatility | 60.30% | |||||||
Risk-free interest rate | 2.50% | |||||||
Shares available for issuance under the 2018 Employee Stock Purchase Plan | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected volatility | 60.20% | |||||||
Risk-free interest rate | 2.10% | |||||||
Employee Stock Option, Early Exercise | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock subject to repurchase (in shares) | 15,681 | 23,981 | ||||||
Stock subject to repurchase, per share (in usd per share) | $ 4.66 | $ 4.66 | $ 4.66 | |||||
Cash proceeds received for unvested shares | $ 100 | $ 100 | $ 100 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Shares underlying unvested restricted stock units | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Restricted Stock Units Outstanding | |
Beginning unvested balance (in shares) | shares | 496,131 |
Granted (in shares) | shares | 601,451 |
Vested and released (in shares) | shares | (76,591) |
Canceled (in shares) | shares | (71,715) |
Ending unvested balance (in shares) | shares | 949,276 |
Weighted-Average Grant Date Fair Value | |
Beginning balance of options outstanding (in usd per share) | $ / shares | $ 82.08 |
Granted (in usd per share) | $ / shares | 90.11 |
Vested and released (in usd per share) | $ / shares | 86.35 |
Canceled (in usd per share) | $ / shares | 81.09 |
Ending balance of options outstanding (in usd per share) | $ / shares | $ 86.90 |
Stock-Based Compensation - Mark
Stock-Based Compensation - Market-based Restricted Stock Units (Details) - Number of RSUs | 9 Months Ended |
Sep. 30, 2020shares | |
Tranche 1 - $120 per share | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of MSUs (in shares) | 565,192 |
Tranche 2 - $150 per share | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of MSUs (in shares) | 565,191 |
Tranche 3 - $200 per share | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of MSUs (in shares) | 565,191 |
Stock-Based Compensation - AMEA
Stock-Based Compensation - AMEA 2020 Equity Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Shares Available for Grant | |||
Beginning number of shares, available for grant (in shares) | 2,726,225 | 2,726,225 | |
Granted (in shares) | (114,472) | ||
Ending number of shares, available for grant (in shares) | 2,397,256 | 2,726,225 | |
Shares Subject to Options Outstanding | |||
Beginning number of shares, outstanding (in shares) | 4,494,889 | 4,494,889 | |
Granted (in shares) | 114,472 | ||
Ending number of shares, outstanding (in shares) | 3,356,774 | 4,494,889 | |
Weighted-Average Exercise Price | |||
Beginning balance of options outstanding (in usd per share) | $ 10.90 | $ 10.90 | |
Granted (in usd per share) | 78.15 | ||
Ending balance of options outstanding (in usd per share) | $ 14.89 | $ 10.90 | |
Weighted-Average Remaining Contractual Life and Aggregate Intrinsic Value | |||
Options outstanding, weighted average remaining contractual term (in years) | 7 years 8 months 12 days | 7 years 2 months 12 days | |
Options outstanding, aggregate intrinsic value | $ 325,246 | $ 306,392 | |
Options vested and exercisable, number of options (in shares) | 1,826,533 | ||
Options vested and exercisable, weighted average exercise price per share (in usd per share) | $ 7.59 | ||
Options vested and exercisable, weighted average remaining contractual term (in years) | 6 years 8 months 12 days | ||
Options vested and exercisable, aggregate intrinsic value | $ 190,313 | ||
AMEA 2020 Plan | Class B | |||
Shares Available for Grant | |||
Beginning number of shares, available for grant (in shares) | 0 | 0 | |
Shares authorized (in shares) | 4,595,555 | ||
Granted (in shares) | (3,902,224) | ||
Ending number of shares, available for grant (in shares) | 693,331 | 0 | |
Shares Subject to Options Outstanding | |||
Beginning number of shares, outstanding (in shares) | 0 | 0 | |
Granted (in shares) | 3,902,224 | ||
Ending number of shares, outstanding (in shares) | 3,902,224 | 0 | |
Weighted-Average Exercise Price | |||
Beginning balance of options outstanding (in usd per share) | $ 0 | $ 0 | |
Granted (in usd per share) | 0.58 | ||
Ending balance of options outstanding (in usd per share) | $ 0.58 | $ 0 | |
Weighted-Average Remaining Contractual Life and Aggregate Intrinsic Value | |||
Options outstanding, weighted average remaining contractual term (in years) | 9 years 10 months 24 days | 0 years | |
Options outstanding, aggregate intrinsic value | $ 0 | $ 0 | |
Options vested and exercisable, number of options (in shares) | 1,687,382 | ||
Options vested and exercisable, weighted average exercise price per share (in usd per share) | $ 0.58 | ||
Options vested and exercisable, weighted average remaining contractual term (in years) | 9 years 10 months 24 days | ||
Options vested and exercisable, aggregate intrinsic value | $ 0 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 55,198 | $ 5,484 | $ 87,351 | $ 11,882 |
Cost of precision oncology testing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 428 | 266 | 1,138 | 562 |
Research and development expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 2,369 | 2,066 | 7,355 | 4,704 |
Sales and marketing expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 2,320 | 1,458 | 6,285 | 2,930 |
General and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 50,081 | $ 1,694 | $ 72,573 | $ 3,686 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation of Stock Options (Details) - Stock options issued and outstanding | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 5 years 11 months 12 days | 6 years 10 days | 5 years 6 months | 5 years 6 months |
Expected volatility | 63.60% | 63.20% | 63.60% | 63.20% |
Risk-free interest rate | 0.30% | 1.60% | 0.30% | 1.60% |
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 6 years 14 days | 6 years 29 days | 6 years 1 month 6 days | 6 years 2 months 19 days |
Expected volatility | 68.40% | 64.60% | 73.30% | 68.30% |
Risk-free interest rate | 0.40% | 1.90% | 1.60% | 2.70% |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Shares available for issuance under the 2018 Employee Stock Purchase Plan | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 3 months 18 days | 6 months | |
Expected volatility | 60.30% | 73.20% | |
Risk-free interest rate | 2.10% | 0.20% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 3 months 18 days | ||
Expected volatility | 60.20% | ||
Risk-free interest rate | 2.10% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | ||
Expected volatility | 60.30% | ||
Risk-free interest rate | 2.50% |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Guardant Health, Inc. Common Stockholders - Schedule of Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (71,670) | $ (13,090) | $ (153,238) | $ (45,741) |
Adjustment of redeemable noncontrolling interest | (6,000) | 300 | (6,800) | (4,700) |
Net loss attributable to Guardant Health, Inc. common stockholders | $ (77,670) | $ (12,790) | $ (160,038) | $ (50,441) |
Net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted (in usd per share) | $ (0.78) | $ (0.14) | $ (1.66) | $ (0.56) |
Weighted-average shares used in computing net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted (in shares) | 99,554 | 93,303 | 96,659 | 89,452 |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Guardant Health, Inc. Common Stockholders - Schedule of Antidilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 7,758,000 | 5,761,000 | 6,220,000 | 6,664,000 |
Stock options granted (in shares) | 114,472 | |||
AMEA 2020 Plan | Class B | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options granted (in shares) | 3,902,224 | |||
Stock options issued and outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,662,000 | 5,353,000 | 4,021,000 | 6,390,000 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 650,000 | 338,000 | 563,000 | 179,000 |
MSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,391,000 | 0 | 1,577,000 | 0 |
ESPP obligation | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 38,000 | 42,000 | 39,000 | 62,000 |
Common stock subject to repurchase | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 17,000 | 28,000 | 20,000 | 33,000 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Change in deferred tax assets valuation allowance | $ 1.2 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 74,569 | $ 60,848 | $ 208,414 | $ 151,478 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 65,613 | 54,675 | 191,648 | 134,917 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 8,956 | $ 6,173 | $ 16,766 | $ 16,561 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - Affiliated entity - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | $ 0.5 | $ 0.8 | $ 2 | $ 1.7 | ||
Accounts receivable from related parties | $ 1.9 | $ 1.9 | $ 0.9 | |||
Common Stock Sold Under Underwriting Agreement | Subsequent Event | ||||||
Related Party Transaction [Line Items] | ||||||
Sale of common stock by related party (in shares) | 7,700,000 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Subsequent Event | Nov. 04, 2020USD ($)shares |
Performance-based and time-based restricted stock units | |
Subsequent Event [Line Items] | |
Number of shares approved (in share) | shares | 546,572 |
Value of shares approved | $ | $ 62,000,000 |
Vesting period | 4 years |
Performance-based restricted stock units | |
Subsequent Event [Line Items] | |
Performance period | 4 years |
Additional service period requirement | 6 months |
Time-based restricted stock units | |
Subsequent Event [Line Items] | |
Vesting period | 4 years |