Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | PROGENITY, INC. | |
Entity Central Index Key | 0001580063 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 46,548,035 | |
Entity File Number | 001-39334 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3950390 | |
Entity Address, Address Line One | 4330 La Jolla Village Drive | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92122 | |
City Area Code | 855 | |
Local Phone Number | 293-2639 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | PROG | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 113,613 | $ 33,042 |
Accounts receivable, net | 14,382 | 22,189 |
Inventory | 10,246 | 10,937 |
Income tax receivable | 15,596 | 634 |
Prepaid expenses and other current assets | 6,130 | 7,846 |
Total current assets | 159,967 | 74,648 |
Property and equipment, net | 15,725 | 15,891 |
Other assets | 198 | 198 |
Goodwill | 6,219 | 6,219 |
Other intangible assets, net | 4,307 | 4,771 |
Total assets | 186,416 | 101,727 |
Current liabilities: | ||
Accounts payable | 15,679 | 15,754 |
Accrued expenses and other current liabilities | 78,410 | 83,615 |
Current portion of mortgages payable | 247 | 241 |
Current portion of capital lease obligations | 516 | 727 |
Total current liabilities | 94,852 | 100,337 |
Capital lease obligations, net of current portion | 156 | 358 |
Mortgages payable, net of current portion | 2,950 | 3,081 |
Note payable to related party, net of unamortized discount of $5,930 and $6,034 as of June 30, 2020 and December 31, 2019, respectively | 69,071 | 68,966 |
Other long-term liabilities | 36,547 | 12,859 |
Total liabilities | 203,576 | 185,601 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock – $0.001 par value. 350,000,000 and 300,000,000 shares authorized as of June 30, 2020 and December 31, 2019, respectively; 50,022,606 and 8,451,415 shares issued as of June 30, 2020 and December 31, 2019, respectively; 46,548,035 and 4,976,843 shares outstanding as of June 30, 2020 and December 31, 2019, respectively | 50 | 9 |
Additional paid-in capital | 420,242 | 283,260 |
Accumulated deficit | (418,681) | (348,478) |
Treasury stock – at cost; 3,474,572 shares of common stock as of June 30, 2020 and December 31, 2019 | (18,771) | (18,771) |
Total stockholders' deficit | (17,160) | (83,874) |
Total liabilities and stockholders' deficit | $ 186,416 | 101,727 |
Series A Preferred Stock | ||
Stockholders' deficit: | ||
Preferred Stock | 4 | |
Series B Preferred Stock | ||
Stockholders' deficit: | ||
Preferred Stock | $ 102 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Note payable, unamortized discount | $ 5,930 | $ 6,034 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 350,000,000 | 300,000,000 |
Common stock, shares issued | 50,022,606 | 8,451,415 |
Common stock, shares outstanding | 46,548,035 | 4,976,843 |
Preferred stock, shares authorized | 10,000,000 | 130,155,000 |
Treasury stock, at cost shares | 3,474,572 | 3,474,572 |
Series A Preferred Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 0 | 4,120,000 |
Preferred stock, shares issued | 0 | 4,120,000 |
Preferred stock, shares outstanding | 0 | 4,120,000 |
Series B Preferred Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 0 | 126,035,000 |
Preferred stock, shares issued | 0 | 101,867,405 |
Preferred stock, shares outstanding | 0 | 101,867,405 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 17,266 | $ 57,230 | $ 34,094 | $ 104,737 |
Cost of sales | 21,835 | 26,113 | 48,405 | 50,534 |
Gross profit (loss) | (4,569) | 31,117 | (14,311) | 54,203 |
Operating expenses: | ||||
Research and development | 12,234 | 16,463 | 23,474 | 31,711 |
Selling and marketing | 12,736 | 14,680 | 27,172 | 30,247 |
General and administrative | 17,181 | 14,272 | 34,289 | 28,550 |
Total operating expenses | 42,151 | 45,415 | 84,935 | 90,508 |
Loss from operations | (46,720) | (14,298) | (99,246) | (36,305) |
Interest expense | (2,507) | (2,282) | (4,809) | (4,551) |
Interest and other income (expense), net | (3,556) | 171 | (3,576) | 428 |
Loss before income taxes | (52,783) | (16,409) | (107,631) | (40,428) |
Income tax benefit | (37,696) | |||
Net loss | (52,783) | (16,409) | (69,935) | (40,428) |
Dividend paid to preferred stockholders | (268) | (268) | (3,652) | |
Net loss attributable to common stockholders | $ (53,051) | $ (16,409) | $ (70,203) | $ (44,080) |
Net loss per share attributable to common stockholders, basic and diluted | $ (6.11) | $ (3.34) | $ (10.26) | $ (9.16) |
Weighted average number of shares outstanding used in calculating net loss per share attributable to common stockholders, basic and diluted | 8,687,250 | 4,915,485 | 6,840,321 | 4,811,143 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands | Total | Initial Public Offering | Cumulative effect, period of adoption, adjustment | Common Stock | Common StockInitial Public Offering | Preferred StockSeries A and A-1 Preferred Stock | Preferred StockSeries B Preferred Stock | Additional Paid-In Capital | Additional Paid-In CapitalInitial Public Offering | Accumulated Deficit | Accumulated DeficitCumulative effect, period of adoption, adjustment | Treasury Stock |
Beginning Balance at Dec. 31, 2018 | $ (36,968) | $ 8 | $ 6 | $ 14 | $ 124,244 | $ (142,469) | $ (18,771) | |||||
Beginning Balance, shares at Dec. 31, 2018 | 8,112,581 | 5,620,000 | 14,164,306 | (3,474,572) | ||||||||
Issuance of common stock upon exercise of options | 322 | 322 | ||||||||||
Issuance of common stock upon exercise, shares | 268,549 | |||||||||||
Stock-based compensation expense | 555 | 555 | ||||||||||
Dividends paid | (4,500) | (4,500) | ||||||||||
Net loss | (24,019) | (24,019) | ||||||||||
Ending Balance at Mar. 31, 2019 | (40,944) | $ 23,666 | $ 8 | $ 6 | $ 14 | 125,121 | (147,322) | $ 23,666 | $ (18,771) | |||
Ending Balance, shares at Mar. 31, 2019 | 8,381,130 | 5,620,000 | 14,164,306 | (3,474,572) | ||||||||
Beginning Balance at Dec. 31, 2018 | (36,968) | $ 8 | $ 6 | $ 14 | 124,244 | (142,469) | $ (18,771) | |||||
Beginning Balance, shares at Dec. 31, 2018 | 8,112,581 | 5,620,000 | 14,164,306 | (3,474,572) | ||||||||
Net loss | (40,428) | |||||||||||
Ending Balance at Jun. 30, 2019 | (56,636) | $ 8 | $ 6 | $ 14 | 125,838 | (163,731) | $ (18,771) | |||||
Ending Balance, shares at Jun. 30, 2019 | 8,397,066 | 5,620,000 | 14,164,306 | (3,474,572) | ||||||||
Beginning Balance at Mar. 31, 2019 | (40,944) | $ 23,666 | $ 8 | $ 6 | $ 14 | 125,121 | (147,322) | $ 23,666 | $ (18,771) | |||
Beginning Balance, shares at Mar. 31, 2019 | 8,381,130 | 5,620,000 | 14,164,306 | (3,474,572) | ||||||||
Issuance of common stock upon exercise of options | 120 | 120 | ||||||||||
Issuance of common stock upon exercise, shares | 15,936 | |||||||||||
Stock-based compensation expense | 597 | 597 | ||||||||||
Net loss | (16,409) | (16,409) | ||||||||||
Ending Balance at Jun. 30, 2019 | (56,636) | $ 8 | $ 6 | $ 14 | 125,838 | (163,731) | $ (18,771) | |||||
Ending Balance, shares at Jun. 30, 2019 | 8,397,066 | 5,620,000 | 14,164,306 | (3,474,572) | ||||||||
Beginning Balance at Dec. 31, 2019 | (83,874) | $ 9 | $ 4 | $ 102 | 283,260 | (348,478) | $ (18,771) | |||||
Beginning Balance, shares at Dec. 31, 2019 | 8,451,415 | 4,120,000 | 101,867,405 | (3,474,572) | ||||||||
Issuance of common stock upon exercise of options | 103 | 103 | ||||||||||
Issuance of common stock upon exercise, shares | 56,729 | |||||||||||
Issuance of stock, net | 14,072 | $ 6 | 14,066 | |||||||||
Issuance of stock, net, shares | 6,033,796 | |||||||||||
Stock-based compensation expense | 2,057 | 2,057 | ||||||||||
Net loss | (17,152) | (17,152) | ||||||||||
Ending Balance at Mar. 31, 2020 | (84,794) | $ 9 | $ 4 | $ 108 | 299,486 | (365,630) | $ (18,771) | |||||
Ending Balance, shares at Mar. 31, 2020 | 8,508,144 | 4,120,000 | 107,901,201 | (3,474,572) | ||||||||
Beginning Balance at Dec. 31, 2019 | $ (83,874) | $ 9 | $ 4 | $ 102 | 283,260 | (348,478) | $ (18,771) | |||||
Beginning Balance, shares at Dec. 31, 2019 | 8,451,415 | 4,120,000 | 101,867,405 | (3,474,572) | ||||||||
Issuance of common stock upon exercise, shares | 77,609 | |||||||||||
Net loss | $ (69,935) | |||||||||||
Ending Balance at Jun. 30, 2020 | (17,160) | $ 50 | 420,242 | (418,681) | $ (18,771) | |||||||
Ending Balance, shares at Jun. 30, 2020 | 50,022,606 | (3,474,572) | ||||||||||
Beginning Balance at Mar. 31, 2020 | (84,794) | $ 9 | $ 4 | $ 108 | 299,486 | (365,630) | $ (18,771) | |||||
Beginning Balance, shares at Mar. 31, 2020 | 8,508,144 | 4,120,000 | 107,901,201 | (3,474,572) | ||||||||
Issuance of common stock upon exercise of options | 45 | 45 | ||||||||||
Issuance of common stock upon exercise, shares | 20,880 | |||||||||||
Issuance of stock, net | 9,933 | $ 88,665 | $ 7 | $ 4 | 9,929 | $ 88,658 | ||||||
Issuance of stock, net, shares | 6,666,667 | 4,444,444 | ||||||||||
Automatic conversion of preferred stock | $ 33 | $ (4) | $ (112) | 83 | ||||||||
Automatic conversion of preferred stock, shares | 33,443,562 | (4,120,000) | (112,345,645) | |||||||||
Issuance of common stock upon conversion of debt | 18,750 | $ 1 | 18,749 | |||||||||
Issuance of common stock upon conversion of debt, shares | 1,250,000 | |||||||||||
Issuance of Stock Purchase Warrants | 268 | (268) | ||||||||||
Issuance of common stock upon vesting of restricted stock unit awards, shares | 133,353 | |||||||||||
Stock-based compensation expense | 3,024 | 3,024 | ||||||||||
Net loss | (52,783) | (52,783) | ||||||||||
Ending Balance at Jun. 30, 2020 | $ (17,160) | $ 50 | $ 420,242 | $ (418,681) | $ (18,771) | |||||||
Ending Balance, shares at Jun. 30, 2020 | 50,022,606 | (3,474,572) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Activities: | ||
Net loss | $ (69,935) | $ (40,428) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Non-cash revenue reserve | 23,729 | 513 |
Depreciation and amortization | 2,501 | 2,303 |
Stock-based compensation expense | 5,081 | 1,152 |
Loss on extinguishment of convertible note | 3,401 | |
Amortization of debt discount | 1,330 | 802 |
Inventory write-down | 7 | 64 |
Loss on disposal of property and equipment | 18 | |
Change in fair value of derivative liability | 126 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 7,808 | (3,565) |
Inventory | 685 | (2,494) |
Income tax receivable | (14,961) | 5,795 |
Prepaid expenses and other current assets | 674 | (3,680) |
Other assets | (62) | |
Accounts payables | 380 | 3,011 |
Accrued expenses and other liabilities | (5,879) | (805) |
Other long-term liabilities | 632 | (132) |
Net cash used in operating activities | (44,403) | (37,526) |
Investing Activities: | ||
Purchases of property and equipment | (1,627) | (1,753) |
Purchases of short-term investments | (11,214) | |
Proceeds from sale of short-term investments | 31,414 | |
Proceeds from sale of equity method investment | 50 | |
Net cash (used in) provided by investing activities | (1,627) | 18,497 |
Financing Activities: | ||
Proceeds from issuance of common stock, net | 90,937 | 442 |
Proceeds from issuance of Series B Preferred Stock, net | 21,307 | |
Proceeds from issuance of convertible note, net | 14,895 | |
Dividends paid | (4,500) | |
Principal payments on mortgages payable | (125) | (114) |
Principal payments on capital lease obligations | (413) | (599) |
Net cash provided by (used in) financing activities | 126,601 | (4,771) |
Net increase (decrease) in cash and cash equivalents | 80,571 | (23,800) |
Cash and cash equivalents at beginning of period | 33,042 | 49,005 |
Cash and cash equivalents at end of period | 113,613 | 25,205 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,901 | 3,749 |
Cash paid for income taxes | 54 | 6 |
Supplemental schedule of non-cash investing and financing activities: | ||
Conversion of convertible note | 18,750 | |
Issuance of preferred stock in settlement of interest payable | 2,698 | |
Equity offering costs incurred but not paid | 2,133 | |
Issuance of stock options in settlement of accrued bonuses | 754 | |
Purchases of property and equipment in accounts payable | $ 262 | 395 |
Capital lease obligations | $ 76 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Progenity, Inc. (the “Company” or “Progenity”), a Delaware corporation, commenced operations in 2010 with its corporate office located in San Diego, California. Progenity’s primary operations include a licensed Clinical License Improvement Amendment and College of American Pathologists certified laboratory located in Michigan specializing in the molecular testing markets serving women’s health providers in the obstetric, gynecological, fertility, and maternal fetal medicine specialty areas in the United States. The Company has expertise in the national reference laboratory, clinical genetics, laboratory molecular testing, and biotechnology markets. Distribution is managed by a dedicated women’s health physician sales force and a field operations team who support all logistical functions in receiving clinical samples to the laboratory for analysis. The Company’s core business is focused on the prenatal carrier screening and noninvasive prenatal test market, targeting preconception planning, and routine pregnancy management for genetic disease risk assessment. Through its affiliation with Mattison Pathology, LLP (“Mattison”), a Texas limited liability partnership doing business as Avero Diagnostics (“Avero”), located in Lubbock and Dallas, Texas, the Company’s operations have expanded to provide anatomic and molecular pathology testing products in the United States. On June 10, 2020, the Company amended its certificate of incorporation to reflect a one-for-6.178 reverse stock split of the Company’s common stock. The par value and the number of authorized shares of common stock were not adjusted as a result of the reverse stock split. All issued and outstanding shares of common stock and related per share amounts contained in the accompanying condensed consolidated financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. The reverse stock split resulted in an adjustment to the respective Series A and B preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. On June 23, 2020, the Company completed the initial public offering of its common stock (the “IPO”). In the IPO, the Company issued and sold 6,666,667 shares of its common stock, at a price to the public of $15.00 per share. The Company received approximately $88.7 million in net proceeds, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. In connection with the IPO, on June 23, 2020, all outstanding Series A and B preferred stock and the outstanding convertible promissory note converted into shares of common stock and the outstanding warrant to purchase shares of convertible preferred stock became exercisable for shares of common stock. Liquidity As of June 30, 2020, the Company had cash and cash equivalents of $113.6 million and an accumulated deficit of $418.7 million. For the six months ended June 30, 2020, the Company reported a net loss of $69.9 million and cash used in operating activities of $44.4 million. The Company’s primary sources of capital have historically been the sale of common stock, or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of our research programs or patent portfolios ur ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. Uncertainties Related to the COVID-19 Pandemic In March 2020, the World Health Organization declared the novel coronavirus disease (“COVID-19”) a pandemic. The COVID‑19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. The Company has been materially and negatively affected by the COVID-19 pandemic; however, the extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected time frame, will depend on future developments, including the duration and spread of the pandemic and related restrictions on travel and transports, all of which are uncertain and cannot be predicted. The Company could be negatively affected by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains. An extended period of global supply chain and economic disruption could materially affect the Company’s business, results of operations, access to sources of liquidity and financial condition. The estimates used for, but not limited to, determining the amount to be collected for accounts receivable, fair value of long-lived assets, and fair value of goodwill could be impacted by the pandemic. While the full impact of COVID-19 is unknown at this time, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. 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”) fo r interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. he Company’s final prospectus filed with the Securities and Exchange Commission on June 22, 2020 Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of June 30, 2020, the statements of operations and the statements of stockholders’ deficit for the three and six months ended June 30, 2020 and 2019 and the statements of cash flows for the six months ended June 30, 2020 and 2019 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary for the fair statement of the Company’s financial position as of June 30, 2020, and the results of its operations and its cash flows for the three and six months ended June 30, 2020 and 2019. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2020 and 2019 are also unaudited. The results for the three and six months ended June 30, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period, particularly in light of the COVID-19 pandemic and its impact on domestic and global economies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the estimate of variable consideration in connection with the recognition of revenue, the valuation of Series B preferred stock, the valuation of stock options, the valuation of goodwill and intangible assets, accrual for reimbursement claims and settlements, assessing future tax exposure and the realization of deferred tax assets, the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. Operating Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker or decision-making group in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment. All revenues are attributable to U.S.-based operations and all assets are held in the United States. Revenue Recognition Revenue is recognized in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers Revenue is primarily derived from providing molecular testing products, which are reimbursed through arrangements with third-party payors, laboratory distribution partners, and amounts from individual patients. Third-party payors include commercial payors, such as health insurance companies, health maintenance organizations and government health benefit programs, such as Medicare and Medicaid. The Company’s contracts generally contain a single performance obligation, which is the delivery of the test results, and the Company satisfies its performance obligation at a point in time upon the delivery of the results, which then triggers the billing for the product. The amount of revenue recognized reflects the amount of consideration the Company expects to be entitled to (the “transaction price”) and considers the effects of variable consideration. Revenue is recognized when control of the promised product is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products. The Company applies the following practical expedients and exemptions: • Incremental costs incurred to obtain a contract are expensed as incurred because the related amortization period would have been one year or less. The costs are included in selling and marketing expenses. • No adjustments to amounts of promised consideration are made for the effects of a significant financing component because the Company expects, at contract inception, that the period between the transfer of a promised good or service and customer payment for that good or service will be one year or less. Payor Concentration The Company relies upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues are as follows: Percentage of Accounts Receivable June 30, 2020 December 31, 2019 Blue Shield of Texas 12.7 % 0.1 % Government Health Benefits Programs 24.4 % 16.7 % Aetna 6.2 % 6.0 % Anthem 6.5 % 0.5 % United Healthcare 8.3 % 31.5 % Percentage of Revenue Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Blue Shield of Texas 41.9 % 12.7 % 42.2 % 14.5 % Government Health Benefits Programs(1) (14.4 )% 14.5 % (26.6 )% 16.2 % Aetna 13.8 % 7.6 % 12.9 % 7.6 % Anthem 14.0 % 4.8 % 12.1 % 6.4 % United Healthcare 4.8 % 40.1 % 4.4 % 31.3 % ____________ (1) The negative amounts presented in the percentage of revenues include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three and six months ended June 30, 2020. Revenue recognized consider the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements, as described in Notes 4 and 9. Accounts Receivable Accounts receivable is recorded at the transaction price and considers the effects of variable consideration. The total consideration the Company expects to collect is an estimate and may be fixed or variable. Variable consideration includes reimbursement from third-party payors, laboratory distribution partners, and amounts from individual patients, and is adjusted for disallowed cases, discounts, and refunds using the expected value approach. The Company monitors these estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of preferred stock to be participating securities as the holders of such stock are entitled to receive non-cumulative dividends on an as-converted basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of preferred stock do not have a contractual obligation to share in the Company’s losses. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net loss attributable to common stockholders is calculated by adjusting net loss with dividends to preferred stockholders, if any. As the Company has reported net losses for all periods presented, all potentially dilutive securities are antidilutive and, accordingly, basic net loss per share equals diluted net loss per share. Comprehensive Loss The Company did not have any other comprehensive income or loss for any of the periods presented, and therefore comprehensive loss was the same as the Company’s net loss. Recent Accounting Pronouncements Adopted In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Accounting for Income Taxes In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases (Topic 840) Leases (Topic 842): Effective Dates In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses Codification Improvements to Topic 326, Financing Instruments–Credit Losses In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entity | 3. Variable Interest Entity In June 2015, the Company entered into a series of agreements with Avero. The Company entered into a purchase agreement to acquire certain assets from Mattison used in the operations of Avero. The purchase agreement was accounted for under the acquisition method in accordance with the provisions of ASC Topic 805, Business Combinations The Company also entered into a management services arrangement that authorizes the Company to perform the management services in the manner that it deems reasonably appropriate to meet the day-to-day business needs of Avero. The Company’s management services include funding ongoing operational needs, directing activities related to contract negotiation, billing, human resources, and legal and administrative matters and processes, among others. In exchange for the management services provided, the Company is entitled to receive an annual management fee equal to the amount of the net operating income of Avero. The term of the agreement with Avero is 10 years, subject to automatic renewals. The agreement can be terminated by either party with a 90-day notice before the end of the term. Through the management services arrangement with Avero, the Company has (1) the power to direct the activities of Avero that most significantly impact its economic performance, and (2) the obligation to absorb losses of Avero or the right to receive benefits from Avero that could potentially be significant to Avero. Based on these determinations, the Company has determined that Avero is a variable interest entity and that the Company is the primary beneficiary. The Company does not own any equity interest in Avero; however, as these agreements provide the Company the controlling financial interest in Avero, the Company consolidates Avero’s balances and activities within its consolidated financial statements. In December 2018, Avero entered into a settlement agreement with Cigna (the “Cigna settlement obligation”) whereby Avero agreed to pay an aggregate amount of $12.0 million with an upfront payment of $6.0 million and the remaining $6.0 million to be paid over 24 months, beginning in February 2019. The Company guaranteed the $12.0 million Cigna settlement obligation. The Company provided financial support to Avero in the amount of $0.8 million and $1.5 million during the three and six months ended June 30, 2020, respectively, and $0.8 million and $1.5 million during the three and six months ended June 30, 2019, respectively, related to the Cigna settlement obligation (see Note 9). The Company did not provide any additional financial support to Avero during the three or six months ended June 30, 2020 and 2019, other than the Cigna settlement obligation and agreed upon management services. The following table presents the assets and liabilities of Avero that are included in the Company’s condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, in thousands. The creditors of Avero have no recourse to the general credit of the Company, with the exception of $1.8 million and $1.9 million in mortgage payable guaranteed by the Company as of June 30, 2020 and December 31, 2019, respectively (see Note 8), and $1.5 million and $3.0 million in remaining Cigna settlement obligation guaranteed by the Company as of June 30, 2020 and December 31, 2019, respectively. The assets and liabilities exclude intercompany balances that eliminate in consolidation: June 30, 2020 December 31, 2019 Assets of Avero that can only be used to settle obligations of Avero Cash and cash equivalents $ 636 $ 1,837 Accounts receivable, net 3,580 4,269 Inventory 2,221 2,572 Prepaid expenses and other current assets 1,268 1,181 Property and equipment, net 5,527 5,586 Other assets 30 30 Goodwill 6,219 6,219 Other intangible assets, net 4,307 4,771 Total assets of Avero that can only be used to settle obligations of Avero $ 23,788 $ 26,465 Liabilities of Avero Accounts payable $ 2,123 $ 2,450 Accrued expenses and other accrued liabilities 4,409 5,630 Current portion of capital lease obligations 45 59 Current portion of mortgage payable 177 173 Capital lease obligations, net of current portion 27 50 Mortgage payable, net of current portion 1,638 1,733 Other long-term liabilities 468 467 Total liabilities of Avero $ 8,887 $ 10,562 |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenues | 4. Revenues Revenue is derived from contracts with healthcare insurers, government payors, laboratory partners and patients in connection with sales of prenatal genetic, anatomic or molecular pathology tests. The Company enters into contracts with healthcare insurers related to tests provided to patients who have health insurance coverage. Insurance carriers are considered third-party payors on behalf of the patients, and the patients who receive genetic, anatomic or molecular pathology test products are considered the customers. Tests may be billed to insurance carriers, patients, or a combination of insurance carriers and patients. The Company also sells tests to laboratory partners, which are also considered to be customers. The Company’s test volumes began to decrease in the second half of March 2020 as a result of the COVID-19 pandemic spreading in the United States and resulting limitations and reordering of priorities across the U.S. healthcare system. The Company expects test volumes to continue to be adversely affected by COVID-19 and cannot predict when volumes will return to normal. In accordance with ASC 606, a performance obligation represents a promise in a contract to transfer a distinct good or service to a customer and the consideration should be allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied. The Company has evaluated its contracts with healthcare insurers, government payors, laboratory partners and patients and identified a single performance obligation in those contracts, the delivery of a test result. The Company satisfies its performance obligation at a point in time upon the delivery of the test result, at which point the Company can bill for its products. The amount of revenue recognized reflects the transaction price and considers the effects of variable consideration, which is discussed below. Once the Company satisfies its performance obligations upon delivery of a test result and bills for the product, the timing of the collection of payments may vary based on the payment practices of the third-party payor. The Company bills patients directly for co-pays and deductibles that they are responsible for and also bills patients directly in cases where the customer does not have insurance. The Company has established an accrual for refunds of payments previously made by healthcare insurers based on historical experience and executed settlement agreements with healthcare insurers. The refunds are accounted for as reductions in revenues in the statement of operations as an element of variable consideration. For example, during the three months ended June 30, 2020, the Company accrued $10.3 million for refunds to government payors related to reimbursement for the Company’s Preparent expanded carrier screening tests during 2019 and early 2020. In the United States, the American Medical Association (“AMA”) generally assigns specific billing codes for laboratory tests under a coding system known as Current Procedure Terminology (“CPT”), which we and our ordering healthcare providers must use to bill and receive for our molecular tests. The transaction price is an estimate and may be fixed or variable. Variable consideration includes reimbursement from healthcare insurers, government payors, and patients and is adjusted for estimates of disallowed cases, discounts, and refunds using the expected value approach. Tests billed to healthcare insurers and directly to patients can take up to six months to collect and the Company may be paid less than the full amount billed or not paid at all. For insurance carriers and government payors, management utilizes the expected value method using a portfolio of relevant historical data for payors with similar reimbursement characteristics. The portfolio estimate is developed using historical reimbursement data from payors and patients, as well as known current reimbursement trends not reflected in the historical data. Such variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. The Company monitors these estimates at each reporting period based on actual cash collections and the status of settlement agreements with third-party payors, in order to assess whether a revision to the estimate is required. Both the initial estimate and any subsequent revision to the estimate contain uncertainty and require the use of judgment in the estimation of the transaction price and application of the constraint for variable consideration. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect revenue and earnings in the period such variances become known. The consideration expected from laboratory partners is generally a fixed amount. The Company periodically updates its estimate of the variable consideration recognized for previously delivered performance obligations. These updates resulted in a reduction of $6.1 million and $18.9 million of revenue reported for the three and six months ended June 30, 2020, respectively, and an increase of $15.1 million and $15.5 million of revenue reported for the three and six months ended June 30, 2019, respectively. These amounts included (i) adjustments for actual collections versus estimated variable consideration as of the beginning of the reporting period and (ii) cash collections and the related recognition of revenue in the current period for tests delivered in prior periods due to the release of the constraint on variable consideration, offset by (iii) reductions in revenue for the accrual for reimbursement claims and settlements described in Note 9. Disaggregation of Revenues The following table shows a further disaggregation of revenues by payor type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Commercial third-party payors $ 18,030 $ 48,040 $ 39,592 $ 85,793 Government health benefit programs(1) (2,922 ) 8,310 (9,065 ) 16,945 Patient/laboratory distribution partners 2,158 880 3,567 1,999 Total revenues $ 17,266 $ 57,230 $ 34,094 $ 104,737 ____________ (1) The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three and six months ended June 30, 2020. Revenue recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements. |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Components | 5. Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): June 30, 2020 December 31, 2019 Prepaid expenses $ 6,000 $ 6,476 Other current assets 130 1,370 Total $ 6,130 $ 7,846 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): June 30, 2020 December 31, 2019 Computers and software $ 13,699 $ 13,913 Building and leasehold improvements 9,466 9,491 Laboratory equipment 6,242 5,580 Furniture, fixtures, and office equipment 1,663 1,633 Construction in progress 1,635 1,493 Land 1,091 1,091 Total property and equipment 33,796 33,201 Less accumulated depreciation and amortization (18,071 ) (17,310 ) Property and equipment, net $ 15,725 $ 15,891 Capital leases included in property and equipment, net consisted of the following (in thousands): June 30, 2020 December 31, 2019 Capital leases $ 2,520 $ 3,692 Less accumulated depreciation and amortization (1,731 ) (2,239 ) Capital leases included in property and equipment, net $ 789 $ 1,453 Depreciation expense was $1.0 million and $2.0 million for the three and six months ended June 30, 2020, respectively, and $0.9 million and $1.8 million for the three and six months ended June 30, 2019, respectively. Intangible Assets, Net Intangible assets, net consisted of the following (in thousands): June 30, 2020 Cost Accumulated amortization Net Payor relationships $ 7,230 $ (3,675 ) $ 3,555 Trade names 1,410 (717 ) 693 Noncompete agreements 384 (325 ) 59 Intangible assets, net $ 9,024 $ (4,717 ) $ 4,307 December 31, 2019 Cost Accumulated amortization Net Payor relationships $ 7,230 $ (3,314 ) $ 3,916 Trade names 1,410 (646 ) 764 Noncompete agreements 384 (293 ) 91 Intangible assets, net $ 9,024 $ (4,253 ) $ 4,771 Amortization expense of intangible assets was $0.2 million and $0.5 million for the three and six months ended June 30, 2020, respectively, and $0.2 million and $0.5 million for the three and six months ended June 30, 2019, respectively. The future amortization of intangible assets at June 30, 2020 was (in thousands): Year ending December 31, Remainder of 2020 $ 464 2021 891 2022 864 2023 864 2024 864 Thereafter 360 Total future minimum lease payments $ 4,307 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2020 December 31, 2019 Accrual for reimbursement claims and settlements, current $ 56,763 $ 60,386 Commission and bonus 6,494 6,357 Vacation and payroll benefits 7,352 5,506 Accrued professional services 3,648 5,322 Other 4,153 6,044 Total $ 78,410 $ 83,615 Other Long-term Liabilities Other long-term liabilities consisted of the following (in thousands): June 30, 2020 December 31, 2019 Accrual for reimbursement claims and settlements, net of current portion $ 35,400 $ 12,205 Other 1,147 654 Total $ 36,547 $ 12,859 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements The Company's financial assets and liabilities carried at fair value are comprised of investment assets that include money market funds. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is summarized as follows: Level 1 - Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access. Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves. Level 3 - Inputs that are unobservable data points that are not corroborated by market data. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Quoted Prices for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2020 Money market funds(1) $ 105,173 $ — $ — December 31, 2019 Money market funds(1) $ 24,432 $ — $ — ____________ (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. The Company’s policy is to recognize transfers between levels at the end of the reporting period. There were no significant transfers between Level 1 and Level 2 during the three and six months ended June 30, 2020 and 2019. Fair Value of Financial Instruments The carrying value of the Company’s accounts receivable, income tax receivable, accounts payable, and accrued expenses and other current liabilities are considered to be representative of their respective fair values because of their short-term nature. The carrying value of the Company’s mortgages payable approximates their estimated fair value because the instruments bear interest at rates and have terms that are comparable to those available to the Company for similar loan instruments at June 30, 2020 and December 31, 2019. The carrying value of the Company’s note payable to a related party does not approximate its fair value because the instrument bears interest at a rate that is not comparable to those available to the Company for a similar loan instrument at June 30, 2020 and December 31, 2019. The carrying value and the fair value of the Company’s term loan (the “2017 Term Loan”) was $75.0 million and $78.1 million, respectively, at June 30, 2020, and $75.0 million and $79.8 million, respectively, at December 31, 2019. The carrying value of the 2017 Term Loan is presented on the accompanying condensed consolidated balance sheets net of discount on the note and debt issuance cost. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. Related Party Transactions On October 27, 2017, the Company entered into a Credit and Security Agreement and a Series B Convertible Preferred Stock Purchase Agreement with a private equity firm (the “2017 Transaction”). The 2017 Transaction provided for the 2017 Term Loan, the issuance of Series B Preferred Stock (the “Series B Preferred Stock”), and the issuance of a warrant to purchase Series B Preferred Stock (the “Series B Preferred Stock Purchase Warrant”). The 2017 Term Loan accrues interest at a rate per annum equal to 9.5% and is due October 27, 2022. The 2017 Term Loan contains customary covenants, including a requirement to maintain a minimum unrestricted cash balance at all times of at least $5.0 million. The Company is in compliance with the 2017 Term Loan covenants. The 2017 Term Loan is secured by all tangible and intangible property and assets of the Company, with the exception of its intellectual property. The total proceeds of $124.2 million from the 2017 Transaction were allocated to the 2017 Term Loan, Series B Preferred Stock, and the Series B Preferred Stock Purchase Warrant based on the relative fair value of the term loan, equity, and warrant issued. As a result, the Company allocated proceeds of $65.7 million to the 2017 Term Loan. As the proceeds allocated to the 2017 Term Loan are lower than the stated loan amount of $75.0 million, the resulting $9.3 million discount is amortized as interest expense using the effective interest method over the term of the loan. As of both June 30, 2020 and December 31, 2019, the outstanding unpaid principal under the 2017 Term Loan was $75.0 million. The unamortized discount on the 2017 Term Loan was $5.9 million and $6.0 million as of June 30, 2020 and December 31, 2019, respectively. During the three months ended June 30, 2020 and 2019, the Company recognized interest expense on the 2017 Term Loan of $2.5 million and $2.2 million, inclusive of $0.7 million and $0.4 million of discount amortization for the three months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2020 and 2019, the Company recognized interest expense on the 2017 Term Loan of $4.7 million and $4.4 million, inclusive of $1.1 million and $0.8 million of discount amortization for the six months ended June 30, 2020 and 2019, respectively. In connection with the IPO, on June 18, 2020, the Series B Preferred Stock Purchase Warrant became exercisable for 400,160 shares of common stock . On March 31, 2020, the Company entered into the First Amendment to the Credit Agreement (the “Credit Agreement Amendment”), with the collateral agent and lender party thereto, providing for the payment of interest due and payable as of March 31, 2020 in shares of Series B Preferred Stock, and further providing for the payment of interest due and payable as of June 30, 2020 in shares of our Series B Preferred Stock in the event the IPO has not been consummated by such date. Pursuant to the Credit Agreement Amendment, the Company concurrently entered into a Series B Preferred Stock Subscription Agreement (the “Subscription Agreement”), with the lender, which provided for the issuance of 967,130 shares of Series B Preferred Stock at a subscription price of $2.25 per share, as payment for interest due and payable as of March 31, 2020 and all applicable fees as set forth in the Credit Agreement Amendment . On May 8, 2020, the Company entered into an unsecured convertible promissory note (the “Note”) with an existing investor pursuant to a note purchase agreement, in an aggregate principal amount of $15.0 million, with an annual interest rate of 8.0% and a maturity date of May 8, 2022. The Note was convertible into (i) common stock upon an initial public offering at the lesser of the conversion price then in effect and a conversion price equal to 80% of the public offering price (or, if not a “qualified IPO” as defined in the Company’s certificate of incorporation, at the election of a majority of the holders), (ii) on the maturity date or at the election of a majority of the holders, Series B preferred stock at an initial conversion price of $13.90 per share subject to certain adjustments, or (iii) at the election of a majority of the holders, shares of another class of equity securities issued by the Company in a future financing at 80% of the price per share of such class of equity securities issued in such offering. Interest under the Note was not generally payable except that if the Note is not converted pursuant to its terms on or prior to the maturity date and there are not sufficient authorized and unissued shares of Series B preferred stock for issuance upon the conversion of the Note on the maturity date, then the Company is required to pay all outstanding principal and any accrued and unpaid interest under the Note in cash. If the holders of the Note have not elected to convert the Note prior to, or in connection with, any sale transaction or a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, then, upon any such sale transaction or liquidation, dissolution or winding up of the Company, the Company would have been required to pay in cash the outstanding principal balance of the Note, together with accrued and unpaid interest thereon, plus a make whole premium of 50% of the aggregate principal amount (less accrued and unpaid interest). The Company evaluated the economic features embedded in the Note and identified features that were required to be bifurcated and accounted for separately as a derivative. Accordingly, a derivative liability of $3.6 million was recorded on the issuance date of the Note and $3.8 million was subsequently reclassified to equity representing the fair value of the derivative liability on the date of extinguishment. The change in the fair value of the derivative liability of $0.2 million is included in interest and other income (expense), net in the accompanying condensed consolidated statements of operations. In June 2020, in connection with completion of the IPO, the Note was converted into 1,250,000 shares of common stock and all obligations under the Note were extinguished. Upon the conversion, the Company recorded a $3.6 million loss on extinguishment of the debt, which represented the difference between the carrying value of the Note and the derivative liability and the fair value of the shares of common stock issued to the Note holder of $3.4 million combined with amortization of the related debt discount of $0.2 million. The loss on extinguishment of debt was included in the interest and other income (expense), net in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2020. |
Mortgages Payable
Mortgages Payable | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Mortgages Payable | 8. Mortgages Payable In January 2014, the Company executed a mortgage with Comerica Bank for $1.8 million for the purpose of acquiring property located in Ann Arbor, Michigan, which is used for laboratory testing and research purposes. The mortgage matures in 2024 and requires monthly principal and interest payments at a fixed interest rate of 2.94% plus a floating rate at LIBOR. As of each of June 30, 2020 and December 31, 2019, the outstanding balance of this mortgage was $1.4 million. The Company also has a mortgage with American Bank of Commerce (originally executed in February 2008) outstanding on Avero’s property located in Lubbock, Texas, which is used primarily for laboratory testing. The mortgage matures in 2029 and requires monthly principal and interest payments at an interest rate of 4.25%. As of June 30, 2020 and December 31, 2019, the outstanding balance of this mortgage was $1.8 million and $1.9 million, respectively. As of June 30, 2020, the minimum principal payments under the mortgages payable were as follows (in thousands): Year ending December 31, Minimum Mortgages Payable Payments Obligations Remainder of 2020 $ 122 2021 253 2022 265 2023 277 2024 1,323 Thereafter 957 Total future minimum payments 3,197 Less current portion of mortgages payable (247 ) Mortgages payable, net of current portion $ 2,950 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Operating Leases The Company has entered into various noncancelable operating lease agreements, primarily for office space, laboratory space, and vehicles, which expire over the next two to four years. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease. Rent expense for operating leases was $2.0 million and $4.2 million, for the three and six months ended June 30, 2020, respectively, and $2.2 million and $4.3 million, respectively, for the three and six months ended June 30, 2019. As of June 30, 2020, net minimum payments under the non-cancelable operating leases were as follows (in thousands): Year ending December 31, Minimum Operating Lease Payments Remainder of 2020 $ 3,927 2021 5,148 2022 2,911 2023 996 2024 and thereafter 38 Total future minimum lease payments $ 13,020 Capital Leases The Company has entered into various capital lease agreements, primarily for equipment. The outstanding leases have a weighted average imputed interest rate of 5.98% per annum. As of June 30, 2020, the future minimum payments under the capital leases were as follows (in thousands): Year ending December 31, Minimum Capital Lease Payments Remainder of 2020 $ 331 2021 324 2022 and thereafter 47 Total minimum lease payments 702 Less amounts representing interest (30 ) Present value of minim capital lease payments 672 Less current portion of capital lease obligations (516 ) Capital lease obligations, net of current portion $ 156 Contingencies The Company, in the ordinary course of its business, can be involved in lawsuits, threats of litigation, and audit and investigative demands from third parties. While management is unable to predict the exact outcome of such matters, it is management’s current belief, that any potential liabilities resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations. The regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a provider of services to patients covered under government and commercial payor programs, post payment review audits, and other forms of reviews and investigations are routine. The Company believes it complies in all material respects with the statutes, regulations, and other requirements applicable to its laboratory operations. Federal Investigations In April 2018, the Company received a civil investigative demand from an Assistant U.S. Attorney (“AUSA”) for the Southern District of New York (“SDNY”) and a Health Insurance Portability and Accountability Act subpoena issued by an AUSA for the Southern District of California (“SDCA”). In May 2018, the Company received a subpoena from the State of New York Medicaid Fraud Control Unit. Since that time, the Company has cooperated with federal civil and criminal investigations, and state civil investigations, regarding discontinued legacy billing practices for its non-invasive prenatal testing and microdeletion tests and the provision of alleged kickbacks or inducements to physicians and patients. The civil investigations also include inquiries about the Company’s laboratory licenses, its enrollment in state Medicaid programs, and the laboratories that performed testing for the Company. On March 31, 2020, the Company reached an agreement on the monetary terms with the U.S. Department of Justice (the “DOJ”) and the State of New York (with the State of New York Attorney General representing or facilitating the interests of all States participating in the settlement (collectively, the “State AGs”)) with respect to relevant government health benefit programs to resolve all of the government’s outstanding civil and criminal investigations, including the investigations by the AUSA for the SDCA and the AUSA for SDNY, as well as the investigation by the State AGs. The terms of this agreement in principle contemplate that the Company will enter into a civil settlement agreement providing that the Company will pay $49.0 million in the aggregate over a five-year period, structured as follows: $8.0 million upon entering into the settlement; $4.0 million in December 2020; $5.0 million in December 2021; $7.0 million in December 2022; $8.0 million in December 2023; $9.0 million in December 2024; and $8.0 million in December 2025 for a release of the civil claims and that the Company will enter into a non-prosecution agreement to resolve all criminal allegations. On July 21, 2020 and July 23, 2020, the Company entered into agreements with certain governmental agencies to resolve, with respect to such agencies, all of such agencies’ outstanding civil, and where applicable criminal, investigations described above. Specifically, the Company has entered into: • a civil settlement agreement, effective July 23, 2020, with the DOJ through the AUSA for SDNY, and on behalf of the Office of Inspector General of the Department of Health and Human Services (the “OIG”), and with the relator named therein (the “SDNY Civil Settlement Agreement”); • a civil settlement agreement, effective July 23, 2020, with the DOJ through the AUSA for SDCA, and on behalf of the Defense Health Agency, the Tricare Program and the Office of Personnel Management, which administers the Federal Employees Health Benefits Program (the “SDCA Civil Settlement Agreement”); • a non-prosecution agreement, effective July 21, 2020, with the AUSA for SDCA (the “Non-Prosecution Agreement”); and • a corporate integrity agreement, effective July 21, 2020, with the OIG (the “Corporate Integrity Agreement” and, together with the SDNY Civil Settlement Agreement, the SDCA Civil Settlement Agreement, and the Non-Prosecution Agreement, the “Agreements”). The financial terms of the Agreements are substantially the same as the agreement on the monetary terms. SDNY Civil Settlement Agreement The SDNY Civil Settlement Agreement requires the Company to pay a settlement amount of approximately $19.4 million, which includes approximately $9.7 million designated as restitution to the U.S. federal government. The settlement amount is payable in six installments as follows: • approximately $9.1 million within 14 business days of July 23, 2020; • approximately $1.6 million on or before December 31, 2020; • approximately $2.0 million on or before December 31, 2021; • approximately $2.8 million on or before December 31, 2022; • approximately $3.2 million on or before December 31, 2023; and • approximately $0.8 million on or before December 31, 2024. The amounts payable to the government, other than the initial $9.1 million payment, will be subject to interest at a rate of 1.25% per annum, and any or all amounts may be paid earlier at the option of the Company. Furthermore, the Company has agreed that, if during calendar years 2020 through 2023, and so long as amounts payable to the government remain unpaid, the Company receives any civil settlement, damages awards, or tax refunds, to the extent that the amounts exceed $5.0 million in a calendar year, it will pay 26% of the amount received in such civil settlement, damages award, or tax refunds as an accelerated payment on the scheduled amounts set forth above, first as a dollar-for-dollar acceleration of the scheduled payment due in December 2025 and then as an accelerated payment of the scheduled payments due in each prior year, up to a maximum total acceleration of $4.2 million. As previously reported, during the three months ended March 31, 2020, the Company recorded a discrete tax benefit of $37.7 million related to the net operating loss carryback provisions available under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) for taxes paid by the Company in years 2013, 2014, 2015 and 2017 (the “CARES Act Tax Benefit”). In June 2020, the Company received a tax benefit payment of approximately $22.7 million for a portion of the CARES Act Tax Benefit, and because this tax refund was received prior to the effective date of the SDNY Civil Settlement Agreement, pursuant to the Company’s agreement with the government on monetary terms, the payment to be made within 14 business days of July 23, 2020, includes an added payment of approximately $5.9 million and the SDNY Civil Settlement Agreement reflects a corresponding reduction in the previously agreed upon payment term and subsequent payment amounts. In addition, if the Company receives the remaining payment in full for the CARES Act Tax Benefit, the Company will pay an accelerated payment to the government under the SDNY Civil Settlement Agreement of approximately $3.9 million. Additionally, under the SDNY Civil Settlement Agreement, the U.S. federal government and the relator agreed to dismiss all civil claims asserted by the relator under the qui tam SDCA Civil Settlement Agreement The SDCA Civil Settlement Agreement requires the Company to pay a settlement amount of approximately $16.4 million, which includes approximately $10.0 million designated as restitution to the U.S. federal government. The settlement amount is payable in six installments as follows: • approximately $7.7 million within ten days of July 21, 2020; • approximately $1.3 million on or before December 31, 2020; • approximately $1.7 million on or before December 31, 2021; • approximately $2.3 million on or before December 31, 2022; • approximately $2.7 million on or before December 31, 2023; and • approximately $0.7 million on or before December 31, 2024. The amounts payable to the government, other than the initial $7.7 million payment, will be subject to interest at a rate of 1.25% per annum, and any or all amounts may be paid earlier at the option of the Company. On July 21, 2020, the Company issued a promissory note to the U.S. federal government for the full settlement amount in connection with the SDCA Civil Settlement Agreement (the “Promissory Note”). The Promissory Note contains customary events of default and related acceleration of payment provisions. In addition, the Promissory Note provides, among other terms, that, if during calendar years 2020 through 2023, and so long as amounts payable to the government remain unpaid, the Company receives any civil settlement, damages awards, or tax refunds, to the extent that the amounts exceed $5.0 million in a calendar year, it will pay 22% of the amount received in such civil settlement, damages award, or tax refunds as an accelerated payment on the scheduled amounts set forth above, first as a dollar-for-dollar acceleration of the scheduled payment due in December 2024 and then as an accelerated payment of the scheduled payments due in each prior year, up to a maximum total acceleration of approximately $3.4 million. Because the Company received a tax benefit payment of approximately $22.7 million for a portion of the CARES Act Tax Benefit in June 2020 and because this tax refund was received prior to the effective date of the Promissory Note, the payment to be made within ten days of July 21, 2020 includes an added payment of $4.9 million, and the Promissory Note reflects a corresponding reduction in the previously agreed upon payment term and subsequent payment amounts. In addition, if the Company receives the remaining payment in full for the CARES Act Tax Benefit, the Company will pay an accelerated payment to the government under the SDCA Civil Settlement Agreement of approximately $3.3 million. Non-Prosecution Agreement Effective July 21, 2020, the Company entered into the Non-Prosecution Agreement, pursuant to which the Company agreed with the DOJ to (i) pay the restitution provided for under the SDCA Civil Settlement Agreement, (ii) not commit any felonies, (iii) continue to implement a compliance and ethics program designed to prevent and detect violations of applicable fraud and kickback laws throughout its operations and (iv) fulfill certain other disclosure, reporting and cooperation obligations. The DOJ agreed that it will not prosecute the Company for any conduct described in the Non-Prosecution Agreement provided that the Company performs its obligations under the Non-Prosecution Agreement during the period from July 21, 2020 through July 21, 2021. The Non-Prosecution Agreement provides that the DOJ may unilaterally, upon notice to the Company, extend the term of the agreement in 6-month increments, for a maximum total term of 24 months (that is, two 6-month extensions). Corporate Integrity Agreement In connection with the resolution of the investigated matters, and in exchange for the OIG’s agreement not to exercise its authority to permissively exclude the Company from participating in federal healthcare programs, effective July 21, 2020, the Company entered into a five-year Corporate Integrity Agreement with the OIG. The Corporate Integrity Agreement requires, among other matters, that the Company maintain a Compliance Officer, a Compliance Committee, board review and oversight of certain federal healthcare compliance matters, compliance programs, and disclosure programs; provide management certifications and compliance training and education; engage an independent review organization to conduct claims and arrangements reviews; and implement a risk assessment and internal review process. State Settlement Agreements In addition, the Company has negotiated a resolution of claims by various participating states (the “States”) with respect to the investigated matters. The Company expects the States to complete their respective settlement approval processes two to six weeks following the date that this Quarterly Report is filed, after which the Company expects to separately enter into settlement agreements to resolve the outstanding state claims with the State of New York and each of the other participating states (collectively, the “State Settlement Agreements”). The agreement on the monetary terms with the States includes an aggregate payment of approximately $13.2 million to the States over a five year period pursuant to the collective settlements, for a total payment by the Company of $49.0 million (plus interest) payable under the Agreements and the State Settlement Agreements to settle the investigated matters. The State Settlement Agreements are expected to include acceleration provisions similar to the SDNY Civil Settlement Agreement and the SDCA Civil Settlement Agreements described below upon the Company’s receipt of civil settlements, damages awards, and tax refunds, with the amount of acceleration and timing subject to such receipts. Settlement Accruals As of December 31, 2019, the Company had accrued an aggregate of $35.8 million associated with a potential settlement with the DOJ and the participating State AGs within accrued expenses and other current liabilities and as a reduction of revenue as reflected on the consolidated balance sheet of the Company as of December 31, 2019 and consolidated statement of operations for the year ended December 31, 2019. In addition, in the quarter ended March 31, 2020, the Company accrued an additional $13.2 million with respect to the total amount to be paid under the agreement in principle to the DOJ and the participating State AGs, and additional amounts for related costs as of and for the quarterly period ended March 31, 2020. Furthermore, in connection with recording a discrete tax benefit of $37.7 million related to the net operating loss (“NOL”) carryback provisions available under the CARES Act legislation, the Company has agreed with the government that, if during calendar years 2020 through 2023, and as long as amounts payable to the government remain unpaid, it receives any civil settlement, damages awards, or tax refunds, to the extent that the amounts exceed $5.0 million in a calendar year, the Company will pay 65% of the amount received in such civil settlement, damages award, or tax refunds as an accelerated payment on the scheduled amounts set forth above, first as a dollar-for-dollar acceleration of the scheduled payment due in December 2025 and then as an accelerated payment of the scheduled payments due in each prior year, up to a maximum total acceleration of $24.96 million. During the three months ended March 31, 2020, we recorded a discrete tax benefit of $37.7 million related to the NOL carryback provisions available under the CARES Act legislation, and if fully paid, the Company expects that the total accelerated payments to the government will be $24.5 million. As of June 30, 2020, the Company’s accrual consists of $19.7 million in accrued expenses and other current liabilities and $29.3 million in other long-term liabilities. Until the final State Settlement Agreements are approved and signed by the States, there can be no assurance that the amount we have accrued will be sufficient to cover our obligations relating to this matter. Our obligations could also increase, potentially materially, depending on a number of factors including whether or not the agreement on the monetary terms with the States is finalized, whether an individual State or States opt out of the settlement prior to approval in order to pursue a separate action or resolution, the terms of the final approved agreements and the parties to the settlement Payor Settlement Agreements On June 21, 2018, the Company received a letter from Cigna alleging damages related to contract terms. On December 5, 2018, Cigna and the Company entered into a settlement agreement whereby Avero agreed to pay an aggregate amount of $12.0 million with an upfront payment of $6.0 million and the remaining $6.0 million to be paid over 24 months. For the year ended December 31, 2018, the Company recorded a charge of $12.0 million associated with this claim in its consolidated statements of operations as a reduction to revenue. As of June 30, 2020, the remaining settlement accrual related to Cigna is $1.5 million in accrued expenses and other current liabilities. On June 25, 2018, the Company received a letter from Aetna’s external legal counsel that included various allegations relating to the Company’s past practices. In November 2019, the Company and Aetna entered into a settlement agreement for $15.0 million, to be paid in installment payments through December 2020. During the year ended December 31, 2018, the Company recorded a charge of $15.0 million associated with this claim in its consolidated statements of operations as a reduction to revenue. As of June 30, 2020, the Company’s accrual consists of $7.5 million in accrued expenses and other current liabilities. On October 18, 2018, the Company received a letter from UnitedHealth Group that included various allegations relating to the Company’s past practices. On September 30, 2019, the Company entered into a settlement agreement with United HealthCare Services, Inc. and UnitedHealthcare Insurance Company (“United”) in which the Company agreed to pay an aggregate amount of $30.0 million. The settlement is to be paid with an upfront payment of $2.0 million, and the remaining balance to be paid every six months starting December 31, 2019, with the first two installment payments of $5.0 million each, and $6.0 million each thereafter. As of June 30, 2020, the remaining settlement accrual related to United is $23.0 million consisting of $17.0 million in accrued expenses and other current liabilities and $6.0 million in other long-term liabilities. Payor Recoveries As noted above, the regulations governing government reimbursement programs (e.g., Medicaid, Tricare, and Medicare) and commercial payor reimbursement programs are complex and may be subject to interpretation. As a provider of services to patients covered under government and commercial payor programs, post payment review audits, and other forms of reviews and investigations are routine. If a third-party payor successfully challenges that payment to the Company for prior testing was in breach of contract or otherwise contrary to policy or law, they may recoup payment. The Company may also decide to negotiate and settle with a third-party payor in order to resolve an allegation of overpayment. In the ordinary course of business, the Company addresses and evaluates a number of such claims from payors. While management is unable to predict the exact outcome of any such claims, it is management’s current belief, that any potential liabilities resulting from these contingencies, individually or in the aggregate, could have a material impact on the Company’s financial position and results of operations. In connection with the third-party review of the Company’s coding and billing processes described in Note 4, which identified that the Company had not effectively transitioned to the implementation of the new CPT code for reimbursement for the Company’s Preparent expanded carrier screening tests during 2019 and early 2020, the Company reviewed its reimbursement from commercial payors for these tests over the same time period. The Company may need to engage with payors in order to determine if any amounts could be subject to recovery or recoupment, as it is customarily done with commercial payors. Any amounts subject to recovery or recoupment will depend on the interpretation of widely variable payor medical and billing policies. The Company will not know if any overpayments exist until it completes this engagement with individual commercial payors. If negotiations with payors result in claims or conclusions that overpayments have been made, this could have a material impact on the Company’s financial results and position. The Company is unable to predict the outcome of this matter and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from any unfavorable outcome related to this matter. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Common Stock Pursuant to the Company’s eighth amended and restated certificate of incorporation, which went into effect immediately prior to the completion of the IPO, the Company is authorized to issue 350 million shares of common stock and 10 million shares of undesignated preferred stock On June 18, 2020, the Company completed its IPO. In the IPO, the Company issued and sold 6,666,667 shares of its common stock, at a price to the public of $15.00 per share. The Company received approximately $88.7 million in net proceeds, after deducting $ 7.0 in 4.3 in Treasury Stock In June 2014, the Company authorized an Equity Repurchase Program for Key Employees (the “Repurchase Program”). The Repurchase Program allowed the Company to repurchase for cash a portion of the common stock equity interests of certain employees, provided that (i) no more than 25% of the equity interest of any employee was repurchased under the Repurchase Program, (ii) the purchase price paid for each share of common stock equaled the most recent appraisal valuation of the Company’s common stock, and (iii) the aggregate repurchases did not exceed the lesser of (a) equity interest representing, in the aggregate, 0.8 million shares of common stock, (b) a purchase price, in the aggregate, of more than $6.0 million, and (c) the maximum repurchases permitted under the General Corporation Law of the State of Delaware. In addition, it was the Company’s practice to require individuals exercising stock options to hold the shares received upon exercising for a reasonable period of time in order for the holder to be exposed to the economic risks and rewards of share ownership prior to participating in the Repurchase Program. A reasonable period of time was defined as a period of at least six months and that covered at least two common stock appraisal valuations. The Repurchase Program has been discontinued. Convertible Preferred Stock As of December 31, 2019, the Company had outstanding Series A Preferred Stock and Series B Preferred Stock. The Company recorded the preferred stock at fair value on the dates of issuance net of issuance costs. On August 27, 2019, the Company issued 9,090,910 shares of Series B Preferred Stock at an issuance price of $2.75 per share for an aggregate consideration of $25.0 million (the “August 2019 Financing”) pursuant to a Series B Preferred Stock Purchase Agreement with a private equity firm. In addition, the Company amended the Series B Preferred Stock Purchase Warrant dated October 27, 2017 to increase the Series B Preferred Stock underlying the Series B Preferred Stock Purchase Warrant from 1,416,431 shares to 1,818,182 shares and adjust the exercise price to $2.75 per share. The $25.0 million of proceeds from the August 2019 Financing were allocated among the newly issued Series B Preferred Stock shares and additional shares of Series B Preferred Stock Purchase Warrant based on their relative fair values. In connection with the August 2019 Financing, the Board of Directors and stockholders approved a 1.28-for-1 stock split for the Company’s Series B Preferred Stock and Series B Preferred Stock Purchase Warrant issued and outstanding prior to the August 2019 Financing, which was effected on August 27, 2019 pursuant to an amendment to the amended and restated certificate of incorporation. The conversion price of the Series B Preferred Stock and exercise price of the outstanding Series B Preferred Stock Purchase Warrant was lowered from $3.53 to $2.75 per share. As a result, the Company issued 4,017,512 additional shares of Series B Preferred Stock as a stock dividend to the preferred stockholders, which was recorded as a $13.1 million increase to accumulated deficit in the consolidated statements of stockholders’ deficit during the year ended December 31, 2019. On August 27, 2019, the Company entered into an Exchange Agreement with holders of Series A-1 Preferred Stock (the “Exchange Agreement”) pursuant to which the outstanding 1,500,000 shares of Series A-1 Preferred Stock were exchanged for 35,664,240 shares of Series B Preferred Stock. The exchange ratio was 1.2 to 1 on as-if converted to 4,810,651 shares of common stock that the Series A-1 Preferred Stock can be converted to, based on the conversion rate of 3.2 to 1. The Company determined that such exchange constituted a modification to the Series A-1 Preferred Stock. Accordingly, the increase comparing the fair value of the Series B Preferred Stock with the fair value of the Series A-1 Preferred Stock represented a dividend to the preferred stockholders of approximately $27.6 million, which was recorded as an increase to accumulated deficit in the consolidated statements of stockholders’ deficit during the year ended December 31, 2019. On November 12, 2019, the Company entered into a Series B Preferred Stock Purchase Agreement (the “November Series B Preferred Stock Purchase Agreement”) with a private equity firm and received $25.0 million (the “November 2019 Financing”) in exchange for the issuance of 11,111,111 shares of Series B Preferred Stock at $2.25 per share. In connection with the November 2019 Financing, the Board of Directors and stockholders approved a 1.22-for-1 stock split for the Company’s Series B Preferred Stock and Series B Preferred Stock Purchase Warrant issued and outstanding prior to the November 2019 Financing. The conversion price of the Series B Preferred Stock and exercise price of the outstanding Series B Preferred Stock Purchase Warrant was lowered from $2.75 to $2.25 per share. As a result, the Company issued 13,985,993 additional shares of Series B Preferred Stock and adjusted the Series B Preferred Stock Purchase Warrant to purchase up to 2,222,222 shares of Series B Preferred Stock. The issuance of additional shares represented a stock dividend to the preferred stockholders, which was recorded as a $36.4 million increase to accumulated deficit in the consolidated statements of stockholders’ deficit during the year ended December 31, 2019. In connection with the November 2019 Financing, the Company amended the certificate of incorporation. Following the amendment, there are no authorized or outstanding shares of Series A-1 Preferred Stock. On November 22, 2019, the Company completed an additional equity financing pursuant to the November Series B Preferred Stock Purchase Agreement with certain existing, accredited investors for an aggregate of $6.1 million in exchange for the issuance of an aggregate of 2,722,222 shares of Series B Preferred Stock at $2.25 per share. On December 19, 2019, the Company completed an additional equity financing pursuant to the November Series B Preferred Stock Purchase Agreement with the same private equity firm as the November 2019 Financing for $25.0 million in exchange for the issuance of 11,111,111 million shares of Series B Preferred Stock at $2.25 per share. In February 2020, the Company issued and sold an aggregate of 5,066,666 shares of Series B Preferred Stock at a purchase price of $2.25 per share to existing investors in exchange for aggregate consideration of approximately $11.4 million. On March 31, 2020, in connection with the Credit Agreement Amendment, which provides for the payment of interest due and payable as of March 31, 2020 and June 30, 2020 (only in the event the IPO has not been consummated by such date) in shares of Series B Preferred Stock, the Company issued an aggregate of 967,130 shares of Series B Preferred Stock at a subscription price of $2.25 per share to existing investors as payment for interest due and payable as of March 31, 2020 and all applicable fees. On April 3, 2020, the Company issued and sold an aggregate of 4,444,444 shares of its Series B Preferred Stock at a purchase price of $2.25 per share to existing investors in exchange for aggregate consideration of approximately $10.0 million in cash. The fair value of the preferred stock was estimated using a hybrid between a probability-weighted expected return method (“PWERM”) and option pricing model (“OPM”), estimating the probability weighted value across multiple scenarios, while using an OPM to estimate the allocation of value within one or more of these scenarios. Under a PWERM, the value of the Company’s various classes of stock was estimated based upon an analysis of future values for the Company assuming various future outcomes, including two IPO scenarios and one scenario contemplating the continued operation of the Company as a privately held enterprise. Guideline public company multiples were used to value the Company under its various scenarios. Share value for each class of stock was based upon the probability-weighted present value of expected future share values, considering each of these possible future outcomes, as well as the rights of each share class. The significant unobservable inputs into the valuation model used to estimate the fair value of the preferred stock include the timing of potential events (primarily the IPO) and their probability of occurring, the selection of guideline public company multiples, a discount for the lack of marketability of the common stock, and the discount rate used to calculate the present value of the estimated equity value allocated to each share class. Preferred stock outstanding as of December 31, 2019 consisted of the following (in thousands, except share and per share data): December 31, 2019 Shares Authorized Shares Issued and Outstanding Per Share Price at Issuance Aggregate Liquidation Preference Series A 4,120,000 4,120,000 $ 0.48543 $ 2,000 Series B 126,035,000 101,867,405 2.25000 229,202 Total preferred stock 130,155,000 105,987,405 $ 231,202 In connection with the IPO, on June 18, 2020, all outstanding Series A Preferred Stock and Series B Preferred Stock converted into 33,443,562 shares of common stock, including the issuance of 2,045,522 shares of common stock pursuant to an adjustment in the conversion rate of all of our shares of Series B Preferred Stock outstanding immediately prior to the IPO. Upon conversion of the convertible preferred stock, the Company reclassified their carrying value to common stock and additional paid-in capital. Common Stock Reserved for Future Issuance The Company reserved shares of common stock, on an as-if-converted basis, for future issuance as follows: June 30, 2020 December 31, 2019 Series A Preferred Stock — 13,213,254 Series B Preferred Stock — 16,488,731 Series B Preferred Stock Purchase Warrant — 359,699 Common stock warrant 400,160 — Restricted stock units outstanding 1,095,095 322,608 Outstanding options to purchase common stock 3,848,838 2,561,866 Available for future issuance under equity incentive plan 4,393,376 1,717,817 Total 9,737,469 34,663,975 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 11. Stock-Based Compensation In February 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”), with 0.7 million shares available for future grant. Upon adoption of the 2018 Plan, no new stock options or awards are issuable under the Second Amended and Restated 2012 Stock Plan (the “2012 Plan”) or the 2015 Consultant Stock Plan (the “2015 Plan”). The 2018 Plan is the successor to and continuation of the 2012 Plan, as amended, and the 2015 Plan, and is administered with either stock options or restricted stock units. The 2018 Plan also provides for other types of equity to issue awards, which at this time the Company does not plan to utilize. The 2018 Plan was amended in March 2019 with 1.1 million shares available for future grant. In December 2019, the Company adopted the Second Amended and Restated 2018 Equity Incentive Plan, which increased the number of shares available for future grant to 2.7 million shares. On March 4, 2020, the Board of Directors adopted the Third Amended and Restated 2018 Equity Incentive Plan (the “2018 Third Amended Plan”), which increased the number of shares available for future grant to a total of 7.6 million shares and was approved by stockholders on March 5, 2020. The Board of Directors administers the plans. In January 2020, the Board of Directors approved the modification of the exercise price of certain outstanding stock options under the existing incentive plans. As a result of this modification, an additional stock-based compensation expense of $0.9 million is being recognized over the remaining vesting period for the unvested stock options. Activity under the 2012 Plan, the 2015 Plan, and the 2018 Third Amended Plan for the six months ended June 30, 2020, is set forth below (in thousands, except share and per share data): Stock Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Balance at December 31, 2019 2,561,866 $ 9.01 Options granted 1,520,900 10.56 Options exercised (77,609 ) 1.90 Options forfeited/cancelled (156,319 ) 12.15 Balance at June 30, 2020 3,848,838 $ 8.33 7.02 $ 7,316 Vested and expected to vest at June 30, 2020 3,568,553 $ 8.16 6.83 $ 7,316 Vested and exercisable at June 30, 2020 2,067,251 $ 6.36 4.87 $ 7,316 As of June 30, 2020, the number of shares available for grant under the 2018 Third Amended Plan was 4,393,376. The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options granted during the six months ended June 30, 2020: Six Months Ended June 30, 2020 Risk-free interest rate 0.8% - 1.7% Expected volatility 57.0% - 71.0% Expected dividend yield — Expected life (years) 4.0 - 6.3 years The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cost of sales $ 210 $ 53 $ 438 $ 102 Research and development 850 206 1,512 382 Selling and marketing 512 129 885 251 General and administrative 1,452 209 2,246 417 Total stock-based compensation expense $ 3,024 $ 597 $ 5,081 $ 1,152 The weighted-average grant date fair value of options granted during the six months ended June 30, 2020 and 2019 was $6.78 per option and $7.50 per option, respectively. At June 30, 2020 and December 31, 2019, there was $10.3 million and $4.1 million, respectively, unrecognized compensation cost related to unvested stock options, which are expected to be recognized over a remaining weighted average vesting period of 3.24 years and 2.69 years, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The Company calculates its interim income tax provision in accordance with ASC Topic 270, Interim Reporting Accounting for Income Taxes On March 27, 2020, the CARES Act was enacted. The CARES Act includes several significant provisions for corporations, including those pertaining to net operating loss (“NOL”) carryforwards, interest deductions and payroll tax benefits. Corporate taxpayers may carryback NOLs originating during 2018 through 2020 for up to five years. During the first quarter of 2020, we recorded a discrete tax benefit of $37.7 million related to the NOL carryback provisions available under the CARES Act legislation corresponding to anticipated tax refunds applicable to taxable years 2013, 2014, 2015, and 2017. If any tax refund is received that is more than $5.0 million in a single year, along with other civil settlements, damages awards, and tax refunds, we have agreed to pay 65% of all such amounts received to accelerate payments to the government in connection with our government settlement (see Note 9). During the three months ended June 30, 2020, we received a tax refund of $22.7 million related to the NOL carryback provisions available under the CARES Act. The Company’s NOL carryforwards and research and expenditure credit carryforwards may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions if the Company experiences an ownership change within the meaning of such Code sections. In general, an ownership change, as defined by Sections 382 and 383 of the Code, occurs when there is a 50 percentage points or more shift in ownership, consisting of shareholders owning more than 5% in the Company, occurring within a three-year testing period. Upon preparation of a formal Section 382 study, any reduction in NOLs and tax attribute carryforwards will not impact tax expense as per the Company’s maintenance of a full valuation allowance. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 13. Net Loss Per Share Net loss per share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options, as well as from the possible conversion of the Company’s preferred stock and exercise of the outstanding warrant. The treasury stock and if-converted methods are used to calculate the potential dilutive effect of these common stock equivalents. However, potentially dilutive shares are excluded from the computation of diluted loss per share when their effect is antidilutive. Due to the Company reporting a net loss attributable to common stockholders for all periods presented, all potentially dilutive securities were antidilutive and have been excluded from the computation of diluted loss per share. The table below provides potentially dilutive securities in equivalent common shares not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive: June 30, 2020 June 30, 2019 Options to purchase common stock 3,848,838 2,636,721 Restricted stock units 1,095,095 313,785 Common stock warrant 400,160 — Series A Preferred Stock — 13,213,254 Series A-1 Preferred Stock — 4,810,649 Series B Preferred Stock — 2,292,700 Series B Preferred Stock Purchase Warrant — 229,270 Total 5,344,093 23,496,379 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 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”) fo r interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. he Company’s final prospectus filed with the Securities and Exchange Commission on June 22, 2020 |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of June 30, 2020, the statements of operations and the statements of stockholders’ deficit for the three and six months ended June 30, 2020 and 2019 and the statements of cash flows for the six months ended June 30, 2020 and 2019 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, that are necessary for the fair statement of the Company’s financial position as of June 30, 2020, and the results of its operations and its cash flows for the three and six months ended June 30, 2020 and 2019. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2020 and 2019 are also unaudited. The results for the three and six months ended June 30, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period, particularly in light of the COVID-19 pandemic and its impact on domestic and global economies |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the estimate of variable consideration in connection with the recognition of revenue, the valuation of Series B preferred stock, the valuation of stock options, the valuation of goodwill and intangible assets, accrual for reimbursement claims and settlements, assessing future tax exposure and the realization of deferred tax assets, the useful lives and the recoverability of property and equipment. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. |
Operating Segments | Operating Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker or decision-making group in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment. All revenues are attributable to U.S.-based operations and all assets are held in the United States. |
Revenue Recognition | Revenue Recognition Revenue is recognized in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers Revenue is primarily derived from providing molecular testing products, which are reimbursed through arrangements with third-party payors, laboratory distribution partners, and amounts from individual patients. Third-party payors include commercial payors, such as health insurance companies, health maintenance organizations and government health benefit programs, such as Medicare and Medicaid. The Company’s contracts generally contain a single performance obligation, which is the delivery of the test results, and the Company satisfies its performance obligation at a point in time upon the delivery of the results, which then triggers the billing for the product. The amount of revenue recognized reflects the amount of consideration the Company expects to be entitled to (the “transaction price”) and considers the effects of variable consideration. Revenue is recognized when control of the promised product is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products. The Company applies the following practical expedients and exemptions: • Incremental costs incurred to obtain a contract are expensed as incurred because the related amortization period would have been one year or less. The costs are included in selling and marketing expenses. • No adjustments to amounts of promised consideration are made for the effects of a significant financing component because the Company expects, at contract inception, that the period between the transfer of a promised good or service and customer payment for that good or service will be one year or less. |
Payor Concentration | Payor Concentration The Company relies upon reimbursements from third-party government payors and private-payor insurance companies to collect accounts receivable. The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues are as follows: Percentage of Accounts Receivable June 30, 2020 December 31, 2019 Blue Shield of Texas 12.7 % 0.1 % Government Health Benefits Programs 24.4 % 16.7 % Aetna 6.2 % 6.0 % Anthem 6.5 % 0.5 % United Healthcare 8.3 % 31.5 % Percentage of Revenue Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Blue Shield of Texas 41.9 % 12.7 % 42.2 % 14.5 % Government Health Benefits Programs(1) (14.4 )% 14.5 % (26.6 )% 16.2 % Aetna 13.8 % 7.6 % 12.9 % 7.6 % Anthem 14.0 % 4.8 % 12.1 % 6.4 % United Healthcare 4.8 % 40.1 % 4.4 % 31.3 % ____________ (1) The negative amounts presented in the percentage of revenues include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three and six months ended June 30, 2020. Revenue recognized consider the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements, as described in Notes 4 and 9. |
Accounts Receivable | Accounts Receivable Accounts receivable is recorded at the transaction price and considers the effects of variable consideration. The total consideration the Company expects to collect is an estimate and may be fixed or variable. Variable consideration includes reimbursement from third-party payors, laboratory distribution partners, and amounts from individual patients, and is adjusted for disallowed cases, discounts, and refunds using the expected value approach. The Company monitors these estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. |
Net Loss Per Share | Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of preferred stock to be participating securities as the holders of such stock are entitled to receive non-cumulative dividends on an as-converted basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of preferred stock do not have a contractual obligation to share in the Company’s losses. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net loss attributable to common stockholders is calculated by adjusting net loss with dividends to preferred stockholders, if any. As the Company has reported net losses for all periods presented, all potentially dilutive securities are antidilutive and, accordingly, basic net loss per share equals diluted net loss per share. |
Comprehensive Loss | Comprehensive Loss The Company did not have any other comprehensive income or loss for any of the periods presented, and therefore comprehensive loss was the same as the Company’s net loss. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Accounting for Income Taxes In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases (Topic 840) Leases (Topic 842): Effective Dates In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses Codification Improvements to Topic 326, Financing Instruments–Credit Losses In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Accounts Receivable Balances and Revenues as Percentage of Total Accounts Receivable Balances and Revenues | The Company’s significant third-party payors and their related accounts receivable balances and revenues as a percentage of total accounts receivable balances and revenues are as follows: Percentage of Accounts Receivable June 30, 2020 December 31, 2019 Blue Shield of Texas 12.7 % 0.1 % Government Health Benefits Programs 24.4 % 16.7 % Aetna 6.2 % 6.0 % Anthem 6.5 % 0.5 % United Healthcare 8.3 % 31.5 % Percentage of Revenue Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Blue Shield of Texas 41.9 % 12.7 % 42.2 % 14.5 % Government Health Benefits Programs(1) (14.4 )% 14.5 % (26.6 )% 16.2 % Aetna 13.8 % 7.6 % 12.9 % 7.6 % Anthem 14.0 % 4.8 % 12.1 % 6.4 % United Healthcare 4.8 % 40.1 % 4.4 % 31.3 % ____________ (1) The negative amounts presented in the percentage of revenues include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three and six months ended June 30, 2020. Revenue recognized consider the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements, as described in Notes 4 and 9. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entities [Abstract] | |
Schedule of Assets and Liabilities | The following table presents the assets and liabilities of Avero that are included in the Company’s condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, in thousands. The creditors of Avero have no recourse to the general credit of the Company, with the exception of $1.8 million and $1.9 million in mortgage payable guaranteed by the Company as of June 30, 2020 and December 31, 2019, respectively (see Note 8), and $1.5 million and $3.0 million in remaining Cigna settlement obligation guaranteed by the Company as of June 30, 2020 and December 31, 2019, respectively. The assets and liabilities exclude intercompany balances that eliminate in consolidation: June 30, 2020 December 31, 2019 Assets of Avero that can only be used to settle obligations of Avero Cash and cash equivalents $ 636 $ 1,837 Accounts receivable, net 3,580 4,269 Inventory 2,221 2,572 Prepaid expenses and other current assets 1,268 1,181 Property and equipment, net 5,527 5,586 Other assets 30 30 Goodwill 6,219 6,219 Other intangible assets, net 4,307 4,771 Total assets of Avero that can only be used to settle obligations of Avero $ 23,788 $ 26,465 Liabilities of Avero Accounts payable $ 2,123 $ 2,450 Accrued expenses and other accrued liabilities 4,409 5,630 Current portion of capital lease obligations 45 59 Current portion of mortgage payable 177 173 Capital lease obligations, net of current portion 27 50 Mortgage payable, net of current portion 1,638 1,733 Other long-term liabilities 468 467 Total liabilities of Avero $ 8,887 $ 10,562 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregation of Revenues by Payor | The following table shows a further disaggregation of revenues by payor type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Commercial third-party payors $ 18,030 $ 48,040 $ 39,592 $ 85,793 Government health benefit programs(1) (2,922 ) 8,310 (9,065 ) 16,945 Patient/laboratory distribution partners 2,158 880 3,567 1,999 Total revenues $ 17,266 $ 57,230 $ 34,094 $ 104,737 ____________ (1) The revenue amounts include accruals for reimbursement claims and settlements included in the estimates of variable consideration recorded during the three and six months ended June 30, 2020. Revenue recognized reflect the effects of variable consideration, and include adjustments for estimates of disallowed cases, discounts, and refunds. The variable consideration includes reductions in revenues for the accrual for reimbursement claims and settlements. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): June 30, 2020 December 31, 2019 Prepaid expenses $ 6,000 $ 6,476 Other current assets 130 1,370 Total $ 6,130 $ 7,846 |
Summary of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): June 30, 2020 December 31, 2019 Computers and software $ 13,699 $ 13,913 Building and leasehold improvements 9,466 9,491 Laboratory equipment 6,242 5,580 Furniture, fixtures, and office equipment 1,663 1,633 Construction in progress 1,635 1,493 Land 1,091 1,091 Total property and equipment 33,796 33,201 Less accumulated depreciation and amortization (18,071 ) (17,310 ) Property and equipment, net $ 15,725 $ 15,891 |
Summary of Capital Leases Included in Property and Equipment, Net | Capital leases included in property and equipment, net consisted of the following (in thousands): June 30, 2020 December 31, 2019 Capital leases $ 2,520 $ 3,692 Less accumulated depreciation and amortization (1,731 ) (2,239 ) Capital leases included in property and equipment, net $ 789 $ 1,453 |
Summary of Intangible Assets, Net | Intangible assets, net consisted of the following (in thousands): June 30, 2020 Cost Accumulated amortization Net Payor relationships $ 7,230 $ (3,675 ) $ 3,555 Trade names 1,410 (717 ) 693 Noncompete agreements 384 (325 ) 59 Intangible assets, net $ 9,024 $ (4,717 ) $ 4,307 December 31, 2019 Cost Accumulated amortization Net Payor relationships $ 7,230 $ (3,314 ) $ 3,916 Trade names 1,410 (646 ) 764 Noncompete agreements 384 (293 ) 91 Intangible assets, net $ 9,024 $ (4,253 ) $ 4,771 |
Summary of Future Amortization of Intangible Assets | The future amortization of intangible assets at June 30, 2020 was (in thousands): Year ending December 31, Remainder of 2020 $ 464 2021 891 2022 864 2023 864 2024 864 Thereafter 360 Total future minimum lease payments $ 4,307 |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2020 December 31, 2019 Accrual for reimbursement claims and settlements, current $ 56,763 $ 60,386 Commission and bonus 6,494 6,357 Vacation and payroll benefits 7,352 5,506 Accrued professional services 3,648 5,322 Other 4,153 6,044 Total $ 78,410 $ 83,615 |
Summary of Other Long-term Liabilities | Other long-term liabilities consisted of the following (in thousands): June 30, 2020 December 31, 2019 Accrual for reimbursement claims and settlements, net of current portion $ 35,400 $ 12,205 Other 1,147 654 Total $ 36,547 $ 12,859 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Quoted Prices for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2020 Money market funds(1) $ 105,173 $ — $ — December 31, 2019 Money market funds(1) $ 24,432 $ — $ — ____________ (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. |
Mortgages Payable (Tables)
Mortgages Payable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Minimum Principal Payments | As of June 30, 2020, the minimum principal payments under the mortgages payable were as follows (in thousands): Year ending December 31, Minimum Mortgages Payable Payments Obligations Remainder of 2020 $ 122 2021 253 2022 265 2023 277 2024 1,323 Thereafter 957 Total future minimum payments 3,197 Less current portion of mortgages payable (247 ) Mortgages payable, net of current portion $ 2,950 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases | As of June 30, 2020, net minimum payments under the non-cancelable operating leases were as follows (in thousands): Year ending December 31, Minimum Operating Lease Payments Remainder of 2020 $ 3,927 2021 5,148 2022 2,911 2023 996 2024 and thereafter 38 Total future minimum lease payments $ 13,020 |
Schedule of Future Minimum Payments Under Capital Leases | As of June 30, 2020, the future minimum payments under the capital leases were as follows (in thousands): Year ending December 31, Minimum Capital Lease Payments Remainder of 2020 $ 331 2021 324 2022 and thereafter 47 Total minimum lease payments 702 Less amounts representing interest (30 ) Present value of minim capital lease payments 672 Less current portion of capital lease obligations (516 ) Capital lease obligations, net of current portion $ 156 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Schedule of Preferred Stock Shares Authorized, Shares Issued and Outstanding, Per Share Price and Liquidation Preference | Preferred stock outstanding as of December 31, 2019 consisted of the following (in thousands, except share and per share data): December 31, 2019 Shares Authorized Shares Issued and Outstanding Per Share Price at Issuance Aggregate Liquidation Preference Series A 4,120,000 4,120,000 $ 0.48543 $ 2,000 Series B 126,035,000 101,867,405 2.25000 229,202 Total preferred stock 130,155,000 105,987,405 $ 231,202 |
Schedule of Reserved Shares of Common Stock, On An As-if-converted Basis, for Future Issuance | The Company reserved shares of common stock, on an as-if-converted basis, for future issuance as follows: June 30, 2020 December 31, 2019 Series A Preferred Stock — 13,213,254 Series B Preferred Stock — 16,488,731 Series B Preferred Stock Purchase Warrant — 359,699 Common stock warrant 400,160 — Restricted stock units outstanding 1,095,095 322,608 Outstanding options to purchase common stock 3,848,838 2,561,866 Available for future issuance under equity incentive plan 4,393,376 1,717,817 Total 9,737,469 34,663,975 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Options Activity under Plans | Activity under the 2012 Plan, the 2015 Plan, and the 2018 Third Amended Plan for the six months ended June 30, 2020, is set forth below (in thousands, except share and per share data): Stock Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Balance at December 31, 2019 2,561,866 $ 9.01 Options granted 1,520,900 10.56 Options exercised (77,609 ) 1.90 Options forfeited/cancelled (156,319 ) 12.15 Balance at June 30, 2020 3,848,838 $ 8.33 7.02 $ 7,316 Vested and expected to vest at June 30, 2020 3,568,553 $ 8.16 6.83 $ 7,316 Vested and exercisable at June 30, 2020 2,067,251 $ 6.36 4.87 $ 7,316 |
Summary of Assumptions used to Determine Fair Value of Stock Options Granted | The following table sets forth the assumptions used to determine the fair value of stock options granted during the six months ended June 30, 2020: Six Months Ended June 30, 2020 Risk-free interest rate 0.8% - 1.7% Expected volatility 57.0% - 71.0% Expected dividend yield — Expected life (years) 4.0 - 6.3 years |
Schedule of Stock-based Compensation Expense | The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cost of sales $ 210 $ 53 $ 438 $ 102 Research and development 850 206 1,512 382 Selling and marketing 512 129 885 251 General and administrative 1,452 209 2,246 417 Total stock-based compensation expense $ 3,024 $ 597 $ 5,081 $ 1,152 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share | The table below provides potentially dilutive securities in equivalent common shares not included in the Company’s calculation of diluted loss per share because to do so would be antidilutive: June 30, 2020 June 30, 2019 Options to purchase common stock 3,848,838 2,636,721 Restricted stock units 1,095,095 313,785 Common stock warrant 400,160 — Series A Preferred Stock — 13,213,254 Series A-1 Preferred Stock — 4,810,649 Series B Preferred Stock — 2,292,700 Series B Preferred Stock Purchase Warrant — 229,270 Total 5,344,093 23,496,379 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) $ / shares in Units, $ in Thousands | Jun. 23, 2020USD ($)$ / sharesshares | Jun. 18, 2020USD ($)$ / sharesshares | Jun. 10, 2020 | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||
Description of stock split | On June 10, 2020, the Company amended its certificate of incorporation to reflect a one-for-6.178 reverse stock split of the Company’s common stock. | |||||||||
Stock split conversion ratio | 0.162 | |||||||||
Proceeds from issuance of common stock, net | $ 90,937 | $ 442 | ||||||||
Cash and cash equivalents | $ 113,613 | 113,613 | $ 33,042 | |||||||
Accumulated deficit | (418,681) | (418,681) | $ (348,478) | |||||||
Net loss | (52,783) | $ (17,152) | $ (16,409) | $ (24,019) | (69,935) | (40,428) | ||||
Cash used in operating activities | (44,403) | $ (37,526) | ||||||||
Mortgages | ||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||
Outstanding balance | 3,200 | 3,200 | ||||||||
Private Equity Firm | 2017 Term Loan | ||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||
Outstanding balance | $ 75,000 | $ 75,000 | ||||||||
IPO | Common Stock | ||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||
Common stock issued and sold | shares | 6,666,667 | 6,666,667 | ||||||||
Share issued price per share | $ / shares | $ 15 | $ 15 | ||||||||
Proceeds from issuance of common stock, net | $ 88,700 | $ 88,700 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2020Segment | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of operating segment | 1 |
Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Amortization period | 1 year |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Accounts Receivable Balances and Revenues as Percentage of Total Accounts Receivable Balances and Revenues (Details) - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Blue Shield of Texas | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Percentage of accounts receivable | 12.70% | 0.10% | |||
Blue Shield of Texas | Revenue | |||||
Concentration Risk [Line Items] | |||||
Percentage of revenues | 41.90% | 12.70% | 42.20% | 14.50% | |
Government Health Benefits Programs | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Percentage of accounts receivable | 24.40% | 16.70% | |||
Government Health Benefits Programs | Revenue | |||||
Concentration Risk [Line Items] | |||||
Percentage of revenues | (14.40%) | 14.50% | (26.60%) | 16.20% | |
Aetna | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Percentage of accounts receivable | 6.20% | 6.00% | |||
Aetna | Revenue | |||||
Concentration Risk [Line Items] | |||||
Percentage of revenues | 13.80% | 7.60% | 12.90% | 7.60% | |
Anthem | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Percentage of accounts receivable | 6.50% | 0.50% | |||
Anthem | Revenue | |||||
Concentration Risk [Line Items] | |||||
Percentage of revenues | 14.00% | 4.80% | 12.10% | 6.40% | |
United Healthcare | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Percentage of accounts receivable | 8.30% | 31.50% | |||
United Healthcare | Revenue | |||||
Concentration Risk [Line Items] | |||||
Percentage of revenues | 4.80% | 40.10% | 4.40% | 31.30% |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 05, 2018 | |
Variable Interest Entity [Line Items] | ||||||||
Liabilities | $ 203,576,000 | $ 203,576,000 | $ 185,601,000 | |||||
Remaining settlement obligation of mortgage loan | 1,500,000 | 1,500,000 | 3,000,000 | |||||
Cigna Settlement Obligation | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Settlement of obligations guaranteed | $ 12,000,000 | |||||||
Avero | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Term of agreement | 10 years | |||||||
Financial support for obligation settlement | 800,000 | 1,500,000 | ||||||
Liabilities | 8,887,000 | 8,887,000 | 10,562,000 | |||||
Mortgage payable | 1,800,000 | 1,800,000 | 1,900,000 | |||||
Avero | Recourse | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Liabilities | $ 0 | $ 0 | $ 0 | |||||
Avero | Cigna Settlement Obligation | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Litigation settlement amount agreed to pay to other party | $ 12,000,000 | |||||||
Litigation settlement upfront payment | 6,000,000 | |||||||
Remaining settlement amount | $ 6,000,000 | |||||||
Financial support for obligation settlement | $ 800,000 | $ 1,500,000 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 113,613 | $ 33,042 |
Accounts receivable, net | 14,382 | 22,189 |
Inventory | 10,246 | 10,937 |
Prepaid expenses and other current assets | 6,130 | 7,846 |
Property and equipment, net | 15,725 | 15,891 |
Other assets | 198 | 198 |
Goodwill | 6,219 | 6,219 |
Other intangible assets, net | 4,307 | 4,771 |
Total assets | 186,416 | 101,727 |
Liabilities of Avero | ||
Accounts payable | 15,679 | 15,754 |
Current portion of capital lease obligations | 516 | 727 |
Current portion of mortgages payable | 247 | 241 |
Capital lease obligations, net of current portion | 156 | 358 |
Mortgages payable, net of current portion | 2,950 | 3,081 |
Other long-term liabilities | 36,547 | 12,859 |
Total liabilities | 203,576 | 185,601 |
Avero | ||
Assets | ||
Cash and cash equivalents | 636 | 1,837 |
Accounts receivable, net | 3,580 | 4,269 |
Inventory | 2,221 | 2,572 |
Prepaid expenses and other current assets | 1,268 | 1,181 |
Property and equipment, net | 5,527 | 5,586 |
Other assets | 30 | 30 |
Goodwill | 6,219 | 6,219 |
Other intangible assets, net | 4,307 | 4,771 |
Total assets | 23,788 | 26,465 |
Liabilities of Avero | ||
Accounts payable | 2,123 | 2,450 |
Accrued expenses and other accrued liabilities | 4,409 | 5,630 |
Current portion of capital lease obligations | 45 | 59 |
Current portion of mortgages payable | 177 | 173 |
Capital lease obligations, net of current portion | 27 | 50 |
Mortgages payable, net of current portion | 1,638 | 1,733 |
Other long-term liabilities | 468 | 467 |
Total liabilities | $ 8,887 | $ 10,562 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 18 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |||||
Amount of reimbursement overpayment received from government payors | $ 10.3 | ||||
Accrued refunds to government payors | $ 10.3 | $ 10.3 | $ 10.3 | ||
Period of deadline to report and return overpayment to government programs from the time overpayments determined and quantified | 60 days | ||||
Performance obligations resulted in increase (decrease) of revenue | $ (6.1) | $ 15.1 | $ (18.9) | $ 15.5 |
Revenues - Summary of Disaggreg
Revenues - Summary of Disaggregation of Revenues by Payor (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenues | $ 17,266 | $ 57,230 | $ 34,094 | $ 104,737 |
Commercial Third-party Payors | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues | 18,030 | 48,040 | 39,592 | 85,793 |
Government Health Benefit Programs | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues | (2,922) | 8,310 | (9,065) | 16,945 |
Patient/Laboratory Distribution Partners | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenues | $ 2,158 | $ 880 | $ 3,567 | $ 1,999 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Prepaid expenses | $ 6,000 | $ 6,476 |
Other current assets | 130 | 1,370 |
Total | $ 6,130 | $ 7,846 |
Balance Sheet Components - Su_2
Balance Sheet Components - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 33,796 | $ 33,201 |
Less accumulated depreciation and amortization | (18,071) | (17,310) |
Property and equipment, net | 15,725 | 15,891 |
Computers and Software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 13,699 | 13,913 |
Building and Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 9,466 | 9,491 |
Laboratory Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 6,242 | 5,580 |
Furniture, Fixtures, and Office Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 1,663 | 1,633 |
Construction in Progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 1,635 | 1,493 |
Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 1,091 | $ 1,091 |
Balance Sheet Components - Su_3
Balance Sheet Components - Summary of Capital Leases Included in Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Capital leases | $ 2,520 | $ 3,692 |
Less accumulated depreciation and amortization | (1,731) | (2,239) |
Capital leases included in property and equipment, net | $ 789 | $ 1,453 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||
Depreciation expense | $ 1 | $ 0.9 | $ 2 | $ 1.8 |
Amortization expense of intangible assets | $ 0.2 | $ 0.2 | $ 0.5 | $ 0.5 |
Balance Sheet Components - Su_4
Balance Sheet Components - Summary of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 9,024 | $ 9,024 |
Accumulated amortization | (4,717) | (4,253) |
Net | 4,307 | 4,771 |
Payor Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 7,230 | 7,230 |
Accumulated amortization | (3,675) | (3,314) |
Net | 3,555 | 3,916 |
Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 1,410 | 1,410 |
Accumulated amortization | (717) | (646) |
Net | 693 | 764 |
Noncompete Agreements [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 384 | 384 |
Accumulated amortization | (325) | (293) |
Net | $ 59 | $ 91 |
Balance Sheet Components - Su_5
Balance Sheet Components - Summary of Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Remainder of 2020 | $ 464 | |
2021 | 891 | |
2022 | 864 | |
2023 | 864 | |
2024 | 864 | |
Thereafter | 360 | |
Net | $ 4,307 | $ 4,771 |
Balance Sheet Components - Su_6
Balance Sheet Components - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Accrual for reimbursement claims and settlements, current | $ 56,763 | $ 60,386 |
Commission and bonus | 6,494 | 6,357 |
Vacation and payroll benefits | 7,352 | 5,506 |
Accrued professional services | 3,648 | 5,322 |
Other | 4,153 | 6,044 |
Total | $ 78,410 | $ 83,615 |
Balance Sheet Components - Su_7
Balance Sheet Components - Summary of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Accrual for reimbursement claims and settlements, net of current portion | $ 35,400 | $ 12,205 |
Other | 1,147 | 654 |
Total | $ 36,547 | $ 12,859 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value on Recurring Basis | Quoted Prices for Identical Assets (Level 1) | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets at fair value | $ 105,173 | $ 24,432 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Transfer of assets from level 1 to level 2 | $ 0 | $ 0 | |
Transfer of assets from level 2 to level 1 | 0 | $ 0 | |
2017 Term Loan | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Carrying value of term loan | 75,000,000 | $ 75,000,000 | |
Fair value of term loan | $ 78,100,000 | $ 79,800,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | May 08, 2020 | Oct. 27, 2017 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 18, 2020 | Apr. 03, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |||||||||||||
Debt discount amortization | $ 1,330,000 | $ 802,000 | |||||||||||
Unamortized discount | $ 5,930,000 | $ 5,930,000 | $ 5,930,000 | 5,930,000 | $ 6,034,000 | ||||||||
Interest expense | 2,507,000 | $ 2,282,000 | 4,809,000 | 4,551,000 | |||||||||
Change in fair value of derivative liability | (126,000) | ||||||||||||
Loss on extinguishment of debt | 3,401,000 | ||||||||||||
Unsecured Convertible Promissory Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Debt instrument, maturity date | May 8, 2022 | ||||||||||||
Loan amount | $ 15,000,000 | ||||||||||||
Debt discount amortization | 200,000 | ||||||||||||
Debt instrument, annual interest rate | 8.00% | ||||||||||||
Conversion price percentage on IPO price | 80.00% | ||||||||||||
Percentage of premium on aggregate principal amount | 50.00% | ||||||||||||
Derivative liability, fair value | $ 3,600,000 | 3,800,000 | 3,800,000 | $ 3,800,000 | $ 3,800,000 | ||||||||
Fair value of common shares issued | 3,400,000 | ||||||||||||
Unsecured Convertible Promissory Note | Interest and Other Income (Expense), Net | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Change in fair value of derivative liability | $ 200,000 | ||||||||||||
Loss on extinguishment of debt | $ 3,600,000 | ||||||||||||
IPO | Unsecured Convertible Promissory Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Number of shares on debt conversion | 1,250,000 | ||||||||||||
Series B Preferred Stock | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | 0 | 4,444,444 | 5,066,666 | 101,867,405 | ||||||
Shares issued, price per share | $ 2.25 | ||||||||||||
Series B Preferred Stock | Unsecured Convertible Promissory Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Convertible conversion price | $ 13.90 | ||||||||||||
Percentage of price per share | 80.00% | ||||||||||||
Series B Preferred Stock Purchase Warrant | Common Stock | IPO | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Warrants exercisable | 400,160 | ||||||||||||
2017 Term Loan | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Term loan | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | ||||||||
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Loan amount | $ 75,000,000 | ||||||||||||
Debt discount amortization | $ 9,300,000 | ||||||||||||
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm | 2017 Term Loan | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Debt instrument, interest rate per annum | 9.50% | ||||||||||||
Debt instrument, maturity date | Oct. 27, 2022 | ||||||||||||
Debt instrument, covenant description | The 2017 Term Loan contains customary covenants, including a requirement to maintain a minimum unrestricted cash balance at all times of at least $5.0 million. The Company is in compliance with the 2017 Term Loan covenants. The 2017 Term Loan is secured by all tangible and intangible property and assets of the Company, with the exception of its intellectual property. | ||||||||||||
Proceeds from term loan | $ 65,700,000 | ||||||||||||
Debt discount amortization | 700,000 | 400,000 | $ 1,100,000 | 800,000 | |||||||||
Term loan | 75,000,000 | 75,000,000 | 75,000,000 | 75,000,000 | 75,000,000 | ||||||||
Unamortized discount | $ 5,900,000 | $ 5,900,000 | 5,900,000 | 5,900,000 | $ 6,000,000 | ||||||||
Interest expense | $ 2,500,000 | $ 2,200,000 | $ 4,700,000 | $ 4,400,000 | |||||||||
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm | 2017 Term Loan | Series B Preferred Stock | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Proceeds from term loan, preferred stock and preferred stock purchase warrant | 124,200,000 | ||||||||||||
Credit and Security Agreement and Series B Convertible Preferred Stock Purchase Agreement with Private Equity Firm | 2017 Term Loan | Minimum | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Unrestricted cash | $ 5,000,000 | ||||||||||||
Subscription Agreement with Lender | Series B Preferred Stock | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Preferred stock, shares issued | 967,130 | ||||||||||||
Shares issued, price per share | $ 2.25 |
Mortgages Payable - Additional
Mortgages Payable - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | Jan. 31, 2014 | |
Comerica Bank | |||
Debt Instrument [Line Items] | |||
Mortgages Payable | $ 1.8 | ||
Outstanding balance | $ 1.4 | $ 1.4 | |
Mortgage maturity year | 2024 | ||
Comerica Bank | LIBOR | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.94% | ||
American Bank of Commerce | |||
Debt Instrument [Line Items] | |||
Outstanding balance | $ 1.8 | $ 1.9 | |
Interest rate | 4.25% | ||
Mortgage maturity year | 2029 |
Mortgages Payable - Schedule of
Mortgages Payable - Schedule of Minimum Principal Payments (Details) - Mortgages $ in Thousands | Jun. 30, 2020USD ($) |
Debt Instrument [Line Items] | |
Remainder of 2020 | $ 122 |
2021 | 253 |
2022 | 265 |
2023 | 277 |
2024 | 1,323 |
Thereafter | 957 |
Total future minimum payments | 3,197 |
Less current portion of mortgages payable | (247) |
Mortgages payable, net of current portion | $ 2,950 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Jul. 23, 2020 | Jul. 21, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 05, 2018 | Oct. 18, 2018 | Jun. 25, 2018 |
Commitment and Contingencies [Line Items] | |||||||||||||
Rent expense for operating leases | $ 2,000,000 | $ 2,200,000 | $ 4,200,000 | $ 4,300,000 | |||||||||
Weighted average imputed interest rate | 5.98% | 5.98% | 5.98% | ||||||||||
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act | 65.00% | 65.00% | |||||||||||
Acceleration scheduled payment due period | 2025-12 | ||||||||||||
Maximum acceleration amount | $ 24,960,000 | ||||||||||||
Income tax discrete benefit related to net operating loss, CARES Act | $ 37,700,000 | 37,700,000 | |||||||||||
Accelerated payments | $ 24,500,000 | $ 24,500,000 | 24,500,000 | ||||||||||
Accrual settlement amount | 13,200,000 | $ 35,800,000 | |||||||||||
Accrued Expenses And Other Current Liabilities | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Remaining accrual balance | 19,700,000 | 19,700,000 | 19,700,000 | ||||||||||
Other Long Term Liabilities | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Remaining accrual balance | 29,300,000 | 29,300,000 | $ 29,300,000 | ||||||||||
Cigna Settlement Obligation | Avero | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Litigation settlement agreement date | December 5, 2018 | ||||||||||||
Litigation settlement amount agreed to pay to other party | $ 12,000,000 | ||||||||||||
Litigation settlement upfront payment | 6,000,000 | ||||||||||||
Remaining settlement amount | $ 6,000,000 | ||||||||||||
Litigation settlement reduction of revenue | $ 12,000,000 | ||||||||||||
Cigna Settlement Obligation | Accrued Expenses And Other Current Liabilities | Avero | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Remaining accrual balance | 1,500,000 | 1,500,000 | $ 1,500,000 | ||||||||||
Aetna Settlement Agreement | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Litigation settlement agreement date | November 2019 | ||||||||||||
Litigation settlement amount agreed to pay to other party | $ 15,000,000 | ||||||||||||
Litigation settlement reduction of revenue | $ 15,000,000 | ||||||||||||
Aetna Settlement Agreement | Accrued Expenses And Other Current Liabilities | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Remaining accrual balance | 7,500,000 | 7,500,000 | $ 7,500,000 | ||||||||||
United Health Group Settlement Agreement | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Remaining accrual balance | 23,000,000 | 23,000,000 | $ 23,000,000 | ||||||||||
Litigation settlement agreement date | September 30, 2019 | ||||||||||||
Litigation settlement amount agreed to pay to other party | $ 30,000,000 | ||||||||||||
Litigation settlement upfront payment | $ 2,000,000 | ||||||||||||
Litigation settlement amount for first two installments | 5,000,000 | 5,000,000 | $ 5,000,000 | ||||||||||
Litigation settlement amount for remaining installments | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||||
United Health Group Settlement Agreement | Accrued Expenses And Other Current Liabilities | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Remaining accrual balance | 17,000,000 | 17,000,000 | 17,000,000 | ||||||||||
United Health Group Settlement Agreement | Other Long Term Liabilities | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Remaining accrual balance | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||||
Civil Settlement Agreement | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Contractual obligation | 49,000,000 | ||||||||||||
Initial payment amount | 8,000,000 | ||||||||||||
Contractual obligation in December 2020 | 4,000,000 | ||||||||||||
Contractual obligation in December 2021 | 5,000,000 | ||||||||||||
Contractual obligation in December 2022 | 7,000,000 | ||||||||||||
Contractual obligation in December 2023 | 8,000,000 | ||||||||||||
Contractual obligation in December 2024 | 9,000,000 | ||||||||||||
Contractual obligation in December 2025 | 8,000,000 | ||||||||||||
SDNY Civil Settlement Agreement | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Income tax discrete benefit related to net operating loss, CARES Act | 22,700,000 | 37,700,000 | |||||||||||
SDNY Civil Settlement Agreement | Subsequent Event | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Contractual obligation | $ 19,400,000 | ||||||||||||
Initial payment amount | 9,100,000 | ||||||||||||
Contractual obligation in December 2020 | 1,600,000 | ||||||||||||
Contractual obligation in December 2021 | 2,000,000 | ||||||||||||
Contractual obligation in December 2022 | 2,800,000 | ||||||||||||
Contractual obligation in December 2023 | 3,200,000 | ||||||||||||
Contractual obligation in December 2024 | 800,000 | ||||||||||||
Contractual obligation other than initial payment amount payable to government | $ 9,100,000 | ||||||||||||
Interest rate | 1.25% | ||||||||||||
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act | 26.00% | ||||||||||||
Acceleration scheduled payment due period | 2025-12 | ||||||||||||
Maximum acceleration amount | $ 4,200,000 | ||||||||||||
Additional contractual obligation payable | 5,900,000 | ||||||||||||
Accelerated payments | 3,900,000 | ||||||||||||
SDNY Civil Settlement Agreement | Subsequent Event | U.S. Federal Government | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Contractual obligation | 9,700,000 | ||||||||||||
SDCA Civil Settlement Agreement | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Income tax discrete benefit related to net operating loss, CARES Act | 22,700,000 | ||||||||||||
SDCA Civil Settlement Agreement | Subsequent Event | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Contractual obligation | $ 16,400,000 | ||||||||||||
Initial payment amount | 7,700,000 | ||||||||||||
Contractual obligation in December 2020 | 1,300,000 | ||||||||||||
Contractual obligation in December 2021 | 1,700,000 | ||||||||||||
Contractual obligation in December 2022 | 2,300,000 | ||||||||||||
Contractual obligation in December 2023 | 2,700,000 | ||||||||||||
Contractual obligation in December 2024 | 700,000 | ||||||||||||
Contractual obligation other than initial payment amount payable to government | $ 7,700,000 | ||||||||||||
Interest rate | 1.25% | ||||||||||||
Income taxes percentage of payments related to civil settlement damages awards and tax refund, CARES Act | 22.00% | ||||||||||||
Acceleration scheduled payment due period | 2024-12 | ||||||||||||
Maximum acceleration amount | $ 3,400,000 | ||||||||||||
Additional contractual obligation payable | 4,900,000 | ||||||||||||
Accelerated payments | 3,300,000 | ||||||||||||
SDCA Civil Settlement Agreement | Subsequent Event | U.S. Federal Government | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Contractual obligation | $ 10,000,000 | ||||||||||||
Non-Prosecution Agreement | Subsequent Event | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Maximum extension of term of agreement | 24 months | ||||||||||||
State Settlement Agreements | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Contractual obligation | 13,200,000 | 13,200,000 | 13,200,000 | ||||||||||
Contractual obligation plus interest | $ 49,000,000 | $ 49,000,000 | $ 49,000,000 | ||||||||||
Minimum | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Noncancelable operating lease term | 2 years | 2 years | 2 years | ||||||||||
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act | $ 5,000,000 | $ 5,000,000 | |||||||||||
Minimum | SDNY Civil Settlement Agreement | Subsequent Event | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act | $ 5,000,000 | ||||||||||||
Minimum | SDCA Civil Settlement Agreement | Subsequent Event | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Income taxes civil settlement damages awards and tax refund amount in single year, CARES Act | $ 5,000,000 | ||||||||||||
Maximum | |||||||||||||
Commitment and Contingencies [Line Items] | |||||||||||||
Noncancelable operating lease term | 4 years | 4 years | 4 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Net Minimum Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Remainder of 2020 | $ 3,927 |
2021 | 5,148 |
2022 | 2,911 |
2023 | 996 |
2024 and thereafter | 38 |
Total future minimum lease payments | $ 13,020 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Payments Under Capital Leases (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Remainder of 2020 | $ 331 |
2021 | 324 |
2022 and thereafter | 47 |
Total minimum lease payments | 702 |
Less amounts representing interest | (30) |
Present value of minim capital lease payments | 672 |
Less current portion of capital lease obligations | (516) |
Capital lease obligations, net of current portion | $ 156 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | Jun. 23, 2020USD ($)$ / sharesshares | Jun. 18, 2020USD ($)$ / sharesshares | Jun. 10, 2020 | Apr. 03, 2020USD ($)$ / sharesshares | Dec. 19, 2019USD ($)$ / sharesshares | Nov. 22, 2019USD ($)$ / sharesshares | Nov. 12, 2019USD ($)$ / sharesshares | Aug. 27, 2019USD ($)$ / sharesshares | Feb. 29, 2020USD ($)$ / sharesshares | Jun. 30, 2014USD ($)Appraisalshares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($)Vote$ / sharesshares | Jun. 30, 2019USD ($)shares | Dec. 31, 2019USD ($)shares | Mar. 31, 2020$ / sharesshares | Mar. 31, 2019shares | Dec. 31, 2018shares | Oct. 27, 2017shares |
Class Of Stock [Line Items] | ||||||||||||||||||
Common stock authorized to issue | 350,000,000 | 350,000,000 | 300,000,000 | |||||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 130,155,000 | |||||||||||||||
Number of vote per share of common stock held | Vote | 1 | |||||||||||||||||
Proceeds from issuance of common stock, net | $ | $ 90,937 | $ 442 | ||||||||||||||||
Deferred offering costs | $ | $ 1,100 | |||||||||||||||||
Stock repurchased during period | 3,474,572 | 3,474,572 | 3,474,572 | |||||||||||||||
Stock value repurchased during period | $ | $ 18,771 | $ 18,771 | $ 18,771 | |||||||||||||||
Stock split | 0.162 | |||||||||||||||||
Accumulated deficit | $ | $ 418,681 | 418,681 | 348,478 | |||||||||||||||
Amount received in exchange for issuance of shares of preferred stock | $ | $ 21,307 | |||||||||||||||||
August 2019 Financing | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Preferred stock dividends, shares | 4,017,512 | |||||||||||||||||
Increase in accumulated deficit | $ | 13,100 | |||||||||||||||||
Exchange Agreement | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Exchange ratio of shares | 3.20% | |||||||||||||||||
Accumulated deficit | $ | 27,600 | |||||||||||||||||
November Series B Preferred Stock Purchase Agreement | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Increase in accumulated deficit | $ | $ 36,400 | |||||||||||||||||
Series B Preferred Stock Purchase Warrant | August 2019 Financing | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Preferred stock, shares issued | 9,090,910 | |||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.75 | |||||||||||||||||
Consideration paid | $ | $ 25,000 | |||||||||||||||||
Amended underlying preferred stock purchase warrant | 1,416,431 | 1,818,182 | ||||||||||||||||
Series B Preferred Stock | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Preferred stock, shares authorized | 0 | 0 | 126,035,000 | |||||||||||||||
Preferred stock, shares issued | 4,444,444 | 5,066,666 | 0 | 0 | 101,867,405 | |||||||||||||
Shares issued, price per share | $ / shares | $ 2.25 | |||||||||||||||||
Consideration paid | $ | $ 102 | |||||||||||||||||
Amount received in exchange for issuance of shares of preferred stock | $ | $ 10,000 | $ 11,400 | ||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.25 | |||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | 101,867,405 | |||||||||||||||
Series B Preferred Stock | August 2019 Financing | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Stock split | 1.28 | |||||||||||||||||
Stock split, description | 1.28-for-1 | |||||||||||||||||
Series B Preferred Stock | Exchange Agreement | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Number of shares issued on conversion/exchange | 35,664,240 | |||||||||||||||||
Series B Preferred Stock | November Series B Preferred Stock Purchase Agreement | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Preferred stock, shares issued | 11,111,111 | |||||||||||||||||
Amount received in exchange for issuance of shares of preferred stock | $ | $ 25,000 | |||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.25 | |||||||||||||||||
Additional shares of preferred stock issued | 13,985,993 | |||||||||||||||||
Series B Preferred Stock | November Series B Preferred Stock Purchase Agreement | Series B Preferred Stock Purchase Warrant Issued and Outstanding | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Stock split | 1.22 | |||||||||||||||||
Stock split, description | 1.22-for-1 stock split | |||||||||||||||||
Conversion price and exercise price of preferred stock and preferred stock purchase warrants | $ / shares | $ 2.75 | |||||||||||||||||
Reduction in conversion price and exercise price of preferred stock and preferred stock purchase warrants | $ / shares | $ 2.25 | |||||||||||||||||
Adjusted preferred stock purchase warrant to purchase shares of preferred stock | 2,222,222 | |||||||||||||||||
Series B Preferred Stock | Additional Equity Financing | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Preferred stock, shares issued | 11,111,111 | 2,722,222 | ||||||||||||||||
Amount received in exchange for issuance of shares of preferred stock | $ | $ 25,000 | $ 6,100 | ||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.25 | $ 2.25 | ||||||||||||||||
Series B Preferred Stock | Credit Agreement Amendment | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Preferred stock, shares issued | 967,130 | |||||||||||||||||
Shares issued, price per share | $ / shares | $ 2.25 | |||||||||||||||||
Series A-1 Preferred Stock | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Preferred stock, shares authorized | 0 | |||||||||||||||||
Preferred stock, shares outstanding | 0 | |||||||||||||||||
Series A-1 Preferred Stock | Exchange Agreement | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Shares outstanding | 1,500,000 | |||||||||||||||||
Exchange ratio of shares | 1.20% | |||||||||||||||||
Minimum | August 2019 Financing | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Convertible conversion and exercise price | $ / shares | $ 2.75 | $ 2.75 | ||||||||||||||||
Maximum | August 2019 Financing | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Convertible conversion and exercise price | $ / shares | $ 3.53 | $ 3.53 | ||||||||||||||||
Repurchase Program | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Percentage of equity interest repurchased by certain employee | 25.00% | |||||||||||||||||
Stock repurchased during period | 800,000 | |||||||||||||||||
Stock value repurchased during period | $ | $ 6,000 | |||||||||||||||||
Repurchase Program | Minimum | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Reasonable period of time to hold the shares under the program | 6 years | |||||||||||||||||
Number of common stock appraisal valuations covered | Appraisal | 2 | |||||||||||||||||
Common Stock | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Shares outstanding | 50,022,606 | 50,022,606 | 8,397,066 | 8,451,415 | 8,508,144 | 8,381,130 | 8,112,581 | |||||||||||
Number of shares issued on conversion/exchange | 33,443,562 | 1,250,000 | ||||||||||||||||
Number of shares issued to an adjustment in the conversion rate | 2,045,522 | |||||||||||||||||
Common Stock | Exchange Agreement | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Number of shares issued on conversion/exchange | 4,810,651 | |||||||||||||||||
IPO | Common Stock | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Common stock issued and sold | 6,666,667 | 6,666,667 | ||||||||||||||||
Shares issued, price per share | $ / shares | $ 15 | $ 15 | ||||||||||||||||
Proceeds from issuance of common stock, net | $ | $ 88,700 | $ 88,700 | ||||||||||||||||
Underwriting discounts and commissions | $ | 7,000 | |||||||||||||||||
Other offering expenses | $ | $ 4,300 | |||||||||||||||||
IPO | Common Stock | Series B Preferred Stock Purchase Warrant | ||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||
Adjusted preferred stock purchase warrant to purchase shares of preferred stock | 400,160 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Preferred Stock Shares Authorized, Shares Issued and Outstanding, Per Share Price and Liquidation Preference (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Class Of Stock [Line Items] | ||
Shares Authorized | 10,000,000 | 130,155,000 |
Shares Issued and Outstanding | 105,987,405 | |
Aggregate Liquidation Preference | $ 231,202 | |
Series A | ||
Class Of Stock [Line Items] | ||
Shares Authorized | 0 | 4,120,000 |
Shares Issued and Outstanding | 4,120,000 | |
Per Share Price at Issuance | $ 0.48543 | |
Aggregate Liquidation Preference | $ 2,000 | |
Series B | ||
Class Of Stock [Line Items] | ||
Shares Authorized | 0 | 126,035,000 |
Shares Issued and Outstanding | 101,867,405 | |
Per Share Price at Issuance | $ 2.25000 | |
Aggregate Liquidation Preference | $ 229,202 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Reserved Shares of Common Stock, On An As-if-converted Basis, for Future Issuance (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Class Of Stock [Line Items] | ||
Common stock shares reserved for future issuance | $ 9,737,469 | $ 34,663,975 |
Series A Preferred Stock | ||
Class Of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 13,213,254 | |
Series B Preferred Stock | ||
Class Of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 16,488,731 | |
Series B Preferred Stock Purchase Warrant | ||
Class Of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 359,699 | |
Common Stock Warrant | ||
Class Of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 400,160 | |
Restricted Stock Units Outstanding | ||
Class Of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 1,095,095 | 322,608 |
Outstanding Options to Purchase Common Stock | ||
Class Of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 3,848,838 | 2,561,866 |
Available for Future Issuance under Equity Incentive Plan | ||
Class Of Stock [Line Items] | ||
Common stock shares reserved for future issuance | $ 4,393,376 | $ 1,717,817 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jan. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Mar. 04, 2020 | Mar. 31, 2019 | Feb. 28, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation expense | $ 900 | $ 3,024 | $ 597 | $ 5,081 | $ 1,152 | ||||
Weighted-average grant date fair value of options granted | $ 6.78 | $ 7.50 | |||||||
Unrecognized compensation cost related to unvested stock options expected to be recognized amount | $ 10,300 | $ 10,300 | $ 4,100 | ||||||
Unrecognized compensation cost related to unvested stock options expected to be recognized over remaining weighted average vesting period | 3 years 2 months 26 days | 2 years 8 months 8 days | |||||||
2018 Equity Incentive Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Shares available for future grant | 1,100,000 | 700,000 | |||||||
Second Amended and Restated 2012 Stock Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock options issuable under the plan | 0 | ||||||||
2015 Consultant Stock Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock options issuable under the plan | 0 | ||||||||
Second Amended and Restated 2018 Equity Incentive Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Shares available for future grant | 2,700,000 | ||||||||
Third Amended and Restated 2018 Equity Incentive Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Shares available for future grant | 7,600,000 | ||||||||
2018 Third Amended Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Shares available for future grant | 4,393,376 | 4,393,376 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Activity under Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Options Outstanding Balance at December 31, 2019 | 2,561,866 |
Stock Options Outstanding Options granted | 1,520,900 |
Stock Options Outstanding Options exercised | (77,609) |
Stock Options Outstanding Options forfeited/cancelled | (156,319) |
Stock Options Outstanding Balance at June 30, 2020 | 3,848,838 |
Stock Options Outstanding Vested and expected to vest at June 30, 2020 | 3,568,553 |
Stock Options Outstanding Vested and exercisable at June 30, 2020 | 2,067,251 |
Weighted-Average Exercise Price Balance at December 31, 2019 | $ 9.01 |
Weighted-Average Exercise Price Options granted | 10.56 |
Weighted-Average Exercise Price Options exercised | 1.90 |
Weighted-Average Exercise Price Options forfeited/cancelled | 12.15 |
Weighted-Average Exercise Price Balance at June 30, 2020 | 8.33 |
Weighted-Average Exercise Price Vested and expected to vest at June 30, 2020 | 8.16 |
Weighted-Average Exercise Price Vested and exercisable at June 30, 2020 | $ 6.36 |
Weighted-Average Remaining Contractual Term (in years) Balance at June 30, 2020 | 7 years 7 days |
Weighted-Average Remaining Contractual Term (in years) Vested and expected to vest at June 30, 2020 | 6 years 9 months 29 days |
Weighted-Average Remaining Contractual Term (in years) Vested and exercisable at June 30, 2020 | 4 years 10 months 13 days |
Aggregate Intrinsic Value Balance at June 30, 2020 | $ 7,316 |
Aggregate Intrinsic Value Vested and expected to vest at June 30, 2020 | 7,316 |
Aggregate Intrinsic Value Vested and exercisable at June 30, 2020 | $ 7,316 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions used to Determine Fair Value of Stock Options Granted (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 0.80% |
Risk-free interest rate, maximum | 1.70% |
Expected volatility, minimum | 57.00% |
Expected volatility, maximum | 71.00% |
Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected life (years) | 4 years |
Maximum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected life (years) | 6 years 3 months 18 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||
Stock-based compensation expense | $ 900 | $ 3,024 | $ 597 | $ 5,081 | $ 1,152 |
Cost of Sales | |||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||
Stock-based compensation expense | 210 | 53 | 438 | 102 | |
Research and Development | |||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||
Stock-based compensation expense | 850 | 206 | 1,512 | 382 | |
Selling and Marketing | |||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||
Stock-based compensation expense | 512 | 129 | 885 | 251 | |
General and Administrative | |||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||
Stock-based compensation expense | $ 1,452 | $ 209 | $ 2,246 | $ 417 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | |
Income Tax [Line Items] | |||
Effective tax rate | 0.00% | 0.00% | |
Income tax discrete benefit related to net operating loss CARES Act | $ 37,700,000 | $ 37,700,000 | |
Income taxes percentage of payments related to civil settlement damages awards and tax refund CARES Act | 65.00% | 65.00% | |
Income tax refund related to net operating loss CARES Act | $ 22,700,000 | ||
Maximum | |||
Income Tax [Line Items] | |||
Net operating loss carryback period in CARES Act | 5 years | ||
Testing period for ownership change | 3 years | ||
Minimum | |||
Income Tax [Line Items] | |||
Income taxes civil settlement damages awards and tax refund amount in single year CARES Act | $ 5,000,000 | $ 5,000,000 | |
Percentage of shift in stock ownership to determine whether ownership change occurred | 50.00% | ||
Percentage of shareholders ownership | 5.00% |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Loss Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 5,344,093 | 23,496,379 |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 3,848,838 | 2,636,721 |
Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 1,095,095 | 313,785 |
Common Stock Warrant | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 400,160 | |
Series A Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 13,213,254 | |
Series A-1 Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 4,810,649 | |
Series B Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 2,292,700 | |
Series B Preferred Stock Purchase Warrant | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities not included in calculation of diluted loss per share | 229,270 |