Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 02, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38721 | |
Entity Registrant Name | Axonics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-4744083 | |
Entity Address, Address Line One | 26 Technology Drive | |
Entity Address, City or Town | Irvine, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | (949) | |
Local Phone Number | 396-6322 | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | AXNX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 46,297,344 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001603756 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 228,797 | $ 241,181 |
Accounts receivable, net of allowance for doubtful accounts of $385 and $465 at September 30, 2021 and December 31, 2020, respectively | 26,641 | 18,270 |
Inventory, net | 70,358 | 63,060 |
Prepaid expenses and other current assets | 4,433 | 5,435 |
Total current assets | 330,229 | 327,946 |
Property and equipment, net | 6,168 | 6,328 |
Intangible assets, net | 108,302 | 196 |
Other assets | 7,041 | 7,736 |
Goodwill | 109,565 | 0 |
Total assets | 561,305 | 342,206 |
Current liabilities | ||
Accounts payable | 10,512 | 10,660 |
Accrued liabilities | 6,424 | 6,684 |
Accrued compensation and benefits | 9,305 | 5,948 |
Operating lease liability, current portion | 1,401 | 1,280 |
Debt, net of unamortized debt issuance costs, current portion | 109 | 21,110 |
Total current liabilities | 27,751 | 45,682 |
Operating lease liability, net of current portion | 8,152 | 9,154 |
Deferred tax liabilities, net | 26,432 | 0 |
Other long-term liabilities | 8,880 | 0 |
Total liabilities | 71,215 | 54,836 |
Stockholders’ equity | ||
Preferred stock, par value $0.0001 per share; 10,000,000 shares authorized, no shares issued and outstanding at September 30, 2021 and December 31, 2020 | 0 | 0 |
Common stock, par value $0.0001, 50,000,000 shares authorized at September 30, 2021 and December 31, 2020; 46,258,758 and 39,931,030 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 5 | 4 |
Additional paid-in capital | 796,397 | 522,296 |
Accumulated deficit | (299,400) | (234,499) |
Accumulated other comprehensive loss | (6,912) | (431) |
Total stockholders’ equity | 490,090 | 287,370 |
Total liabilities and stockholders’ equity | $ 561,305 | $ 342,206 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 385 | $ 465 |
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock issued (in shares) | 46,258,758 | 39,931,030 |
Common stock outstanding (in shares) | 46,258,758 | 39,931,030 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net revenue | $ 46,913 | $ 35,243 | $ 127,155 | $ 76,752 |
Cost of goods sold | 15,719 | 13,434 | 46,828 | 31,792 |
Gross profit | 31,194 | 21,809 | 80,327 | 44,960 |
Operating Expenses | ||||
Research and development | 8,648 | 7,719 | 27,115 | 20,944 |
General and administrative | 8,720 | 5,773 | 23,381 | 18,963 |
Sales and marketing | 28,112 | 17,057 | 74,451 | 47,846 |
Amortization of intangible assets | 2,216 | 29 | 5,094 | 86 |
Acquisition-related costs | 0 | 0 | 4,414 | 0 |
Total operating expenses | 47,696 | 30,578 | 134,455 | 87,839 |
Loss from operations | (16,502) | (8,769) | (54,128) | (42,879) |
Other Expense | ||||
Interest income | 9 | 35 | 24 | 742 |
Interest and other expense | (229) | (434) | (7,528) | (1,429) |
Other expense, net | (220) | (399) | (7,504) | (687) |
Loss before income tax expense | (16,722) | (9,168) | (61,632) | (43,566) |
Income tax expense | 528 | 0 | 3,269 | 1 |
Net loss | (17,250) | (9,168) | (64,901) | (43,567) |
Foreign currency translation adjustment | (5,138) | 99 | (6,481) | (186) |
Comprehensive loss | $ (22,388) | $ (9,069) | $ (71,382) | $ (43,753) |
Net loss per share, basic (in USD per share) | $ (0.38) | $ (0.24) | $ (1.53) | $ (1.20) |
Net loss per share, diluted (in USD per share) | $ (0.38) | $ (0.24) | $ (1.53) | $ (1.20) |
Weighted-average shares used to compute basic net loss per share (in shares) | 44,848,023 | 38,830,924 | 42,436,061 | 36,312,984 |
Weighted-average shares used to compute diluted net loss per share (in shares) | 44,848,023 | 38,830,924 | 42,436,061 | 36,312,984 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance at beginning of period (in shares) at Dec. 31, 2019 | 34,110,995 | ||||
Balance at beginning of period at Dec. 31, 2019 | $ 183,003 | $ 3 | $ 363,012 | $ (179,584) | $ (428) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for employee stock option exercises for cash (in shares) | 181,456 | ||||
Issuance of common stock for employee stock option exercises for cash | 344 | 344 | |||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (in shares) | 171,875 | ||||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation | 3,039 | 3,039 | |||
Issuance of common stock for vesting of Restricted Stock Units (RSU) and stock-based compensation (in shares) | 46,336 | ||||
Issuance of common stock for vesting of Restricted Stock Units (RSU) and stock-based compensation | 883 | 883 | |||
Foreign currency translation adjustment | (177) | (177) | |||
Net loss | (14,616) | (14,616) | |||
Balance at end of period (in shares) at Mar. 31, 2020 | 34,510,662 | ||||
Balance at end of period at Mar. 31, 2020 | 172,476 | $ 3 | 367,278 | (194,200) | (605) |
Balance at beginning of period (in shares) at Dec. 31, 2019 | 34,110,995 | ||||
Balance at beginning of period at Dec. 31, 2019 | 183,003 | $ 3 | 363,012 | (179,584) | (428) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for acquisition of Contura Limited | 0 | ||||
Foreign currency translation adjustment | (186) | ||||
Net loss | (43,567) | ||||
Balance at end of period (in shares) at Sep. 30, 2020 | 39,753,638 | ||||
Balance at end of period at Sep. 30, 2020 | 293,898 | $ 4 | 517,659 | (223,151) | (614) |
Balance at beginning of period (in shares) at Mar. 31, 2020 | 34,510,662 | ||||
Balance at beginning of period at Mar. 31, 2020 | 172,476 | $ 3 | 367,278 | (194,200) | (605) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for employee stock option exercises for cash (in shares) | 319,680 | ||||
Issuance of common stock for employee stock option exercises for cash | 1,008 | 1,008 | |||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (in shares) | 32,063 | ||||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation | 2,969 | 2,969 | |||
Issuance of common stock for vesting of Restricted Stock Units (RSU) and stock-based compensation | 847 | 847 | |||
Follow-on offering - issuance, less closing costs (in shares) | 4,600,000 | ||||
Follow-on offering - issuance, less closing costs | 140,487 | $ 1 | 140,486 | ||
Foreign currency translation adjustment | (108) | (108) | |||
Net loss | (19,783) | (19,783) | |||
Balance at end of period (in shares) at Jun. 30, 2020 | 39,462,405 | ||||
Balance at end of period at Jun. 30, 2020 | 297,896 | $ 4 | 512,588 | (213,983) | (713) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for employee stock option exercises for cash (in shares) | 164,233 | ||||
Issuance of common stock for employee stock option exercises for cash | 1,296 | 1,296 | |||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (in shares) | 127,000 | ||||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation | 2,920 | 2,920 | |||
Issuance of common stock for vesting of Restricted Stock Units (RSU) and stock-based compensation | 855 | 855 | |||
Foreign currency translation adjustment | 99 | 99 | |||
Net loss | (9,168) | (9,168) | |||
Balance at end of period (in shares) at Sep. 30, 2020 | 39,753,638 | ||||
Balance at end of period at Sep. 30, 2020 | $ 293,898 | $ 4 | 517,659 | (223,151) | (614) |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 39,931,030 | 39,931,030 | |||
Balance at beginning of period at Dec. 31, 2020 | $ 287,370 | $ 4 | 522,296 | (234,499) | (431) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for employee stock option exercises for cash (in shares) | 206,507 | ||||
Issuance of common stock for employee stock option exercises for cash | 2,821 | 2,821 | |||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (in shares) | 358,300 | ||||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation | 3,809 | 3,809 | |||
Issuance of common stock for vesting of Restricted Stock Units (RSU) and stock-based compensation (in shares) | 169,054 | ||||
Issuance of common stock for vesting of Restricted Stock Units (RSU) and stock-based compensation | 1,494 | 1,494 | |||
Issuance of common stock for acquisition of Contura Holdings Limited (in shares) | 1,096,583 | ||||
Issuance of common stock for acquisition of Contura Limited | 55,728 | 55,728 | |||
Issuance of common stock for exclusive license asset (in shares) | 65,594 | ||||
Issuance of common stock for exclusive license asset | 3,637 | 3,637 | |||
Foreign currency translation adjustment | (2,202) | (2,202) | |||
Net loss | (22,503) | (22,503) | |||
Balance at end of period (in shares) at Mar. 31, 2021 | 41,827,068 | ||||
Balance at end of period at Mar. 31, 2021 | $ 330,154 | $ 4 | 589,785 | (257,002) | (2,633) |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 39,931,030 | 39,931,030 | |||
Balance at beginning of period at Dec. 31, 2020 | $ 287,370 | $ 4 | 522,296 | (234,499) | (431) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for acquisition of Contura Limited | 55,728 | ||||
Foreign currency translation adjustment | (6,481) | ||||
Net loss | $ (64,901) | ||||
Balance at end of period (in shares) at Sep. 30, 2021 | 46,258,758 | 46,258,758 | |||
Balance at end of period at Sep. 30, 2021 | $ 490,090 | $ 5 | 796,397 | (299,400) | (6,912) |
Balance at beginning of period (in shares) at Mar. 31, 2021 | 41,827,068 | ||||
Balance at beginning of period at Mar. 31, 2021 | 330,154 | $ 4 | 589,785 | (257,002) | (2,633) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for employee stock option exercises for cash (in shares) | 206,921 | ||||
Issuance of common stock for employee stock option exercises for cash | 2,095 | 2,095 | |||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (in shares) | 31,975 | ||||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation | 4,381 | 4,381 | |||
Issuance of common stock for vesting of Restricted Stock Units (RSU) and stock-based compensation | 1,946 | 1,946 | |||
Follow-on offering - issuance, less closing costs (in shares) | 4,025,000 | ||||
Follow-on offering - issuance, less closing costs | 189,978 | $ 1 | 189,977 | ||
Foreign currency translation adjustment | 859 | 859 | |||
Net loss | (25,148) | (25,148) | |||
Balance at end of period (in shares) at Jun. 30, 2021 | 46,090,964 | ||||
Balance at end of period at Jun. 30, 2021 | 504,265 | $ 5 | 788,184 | (282,150) | (1,774) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for employee stock option exercises for cash (in shares) | 86,894 | ||||
Issuance of common stock for employee stock option exercises for cash | 1,523 | 1,523 | |||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation (in shares) | 80,900 | ||||
Restricted Shares Award (RSA) issuances and forfeitures for terminations, net and stock-based compensation | 4,723 | 4,723 | |||
Issuance of common stock for vesting of Restricted Stock Units (RSU) and stock-based compensation | 1,967 | 1,967 | |||
Foreign currency translation adjustment | (5,138) | (5,138) | |||
Net loss | $ (17,250) | (17,250) | |||
Balance at end of period (in shares) at Sep. 30, 2021 | 46,258,758 | 46,258,758 | |||
Balance at end of period at Sep. 30, 2021 | $ 490,090 | $ 5 | $ 796,397 | $ (299,400) | $ (6,912) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Sale of stock, price per share (in USD per share) | $ 50 | $ 32.50 | ||
Closing costs | $ 11,272 | $ 9,013 | $ 11,272 | $ 9,013 |
Common Stock | ||||
Follow-on offering - issuance, less closing costs (in shares) | 4,025,000 | 4,600,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities | ||
Net loss | $ (64,901) | $ (43,567) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 6,483 | 1,253 |
Stock-based compensation | 18,320 | 11,513 |
Amortization of debt issuance costs | 4,991 | 594 |
Provision for doubtful accounts | (92) | 390 |
Deferred income taxes and other items, net | 4,961 | 142 |
Changes in operating assets and liabilities, net of business acquisition | ||
Accounts receivable | (6,669) | (10,161) |
Inventory | (6,671) | (28,600) |
Prepaid expenses and other current assets | 1,075 | 1,352 |
Other assets | (273) | 16 |
Accounts payable | 62 | 3,533 |
Accrued liabilities | (978) | 3,508 |
Accrued compensation and benefits | 3,047 | 4,141 |
Lease liability | 115 | 458 |
Net cash used in operating activities | (40,530) | (55,428) |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (1,177) | (1,915) |
Acquisition of a business, net of cash acquired | (140,741) | 0 |
Proceeds from sales and maturities of short-term investments | 0 | 12,592 |
Net cash (used in) provided by investing activities | (141,918) | 10,677 |
Cash Flows from Financing Activities | ||
Payment of debt issuance costs | (106) | 0 |
Proceeds from debt | 75,000 | 0 |
Repayment of debt | (101,000) | 0 |
Proceeds from issuance of common stock upon follow-on public offering | 201,250 | 149,500 |
Payment of common stock issuance costs upon follow-on public offering | (11,272) | (9,013) |
Proceeds from exercise of stock options | 6,439 | 2,648 |
Net cash provided by financing activities | 170,311 | 143,135 |
Effect of exchange rate changes on cash and cash equivalents | (247) | (186) |
Net (decrease) increase in cash and cash equivalents | (12,384) | 98,198 |
Cash and cash equivalents, beginning of year | 241,181 | 171,082 |
Cash and cash equivalents, end of period | 228,797 | 269,280 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 2,178 | 849 |
Cash paid for taxes | 1 | 0 |
Noncash Investing and Financing Activities | ||
Common stock issuance for business acquisition | 55,728 | 0 |
Contingent consideration for business acquisition | 7,630 | 0 |
Common stock issuance for exclusive license asset | 3,637 | 0 |
Accrued loan fees as debt issuance costs | $ 4,500 | $ 0 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Axonics, Inc. (the Company) was incorporated in the state of Delaware on March 2, 2012 under the name American Restorative Medicine, Inc. In August 2013, the Company changed its name to Axonics Modulation Technologies, Inc. In March 2021, the Company changed its name to Axonics, Inc. The Company had no operations until October 1, 2013, when the license agreement between Alfred E. Mann Foundation for Scientific Research (AMF) and the Company (the License Agreement) was entered into. The Company is a medical technology company that develops and commercializes innovative and minimally invasive products to treat urinary and fecal dysfunction. The Company has designed and developed the rechargeable sacral neuromodulation (SNM) system (r-SNM System), which delivers mild electrical pulses to the targeted sacral nerve in order to restore normal communication to and from the brain to reduce the symptoms of overactive bladder (OAB), urinary retention (UR) and fecal incontinence (FI). The r-SNM System is protected by intellectual property based on Company-generated innovations and patents and other intellectual property licensed from AMF. The Company has marketing approvals in the United States, Europe, Canada, and Australia for all relevant clinical indications. T he premarket approval (PMA) application for the r-SNM System for the treatment of FI was approved by the U.S. Food and Drug Administration (FDA) on September 6, 2019, and the PMA application for the r-SNM System for the treatment of OAB and UR was approved by the FDA on November 13, 2019. Accordingly, the Company began U.S. commercialization of its r-SNM System in the fourth quarter of 2019. Prior to the fourth quarter of 2019, the Company derived revenue only from its international operations in select markets including England, the Netherlands and Canada, and its activities have consisted primarily of developing the r-SNM System, conducting its RELAX-OAB post-market clinical follow-up study in Europe, its ARTISAN-SNM pivotal clinical study in the United States and hiring and training its U.S. commercial team in preparation for the launch of the r-SNM System in the United States. Beginning in February 2021 with the acquisition of Contura Limited, the Company also markets Bulkamid, a urethral bulking agent to treat female stress urinary incontinence (SUI). For more information, see Note 8. May 2020 Follow-On Offering On May 12, 2020, the Company completed a follow-on offering by issuing 4,600,000 shares of common stock, at an offering price of $32.50 per share, inclusive of 600,000 shares of the Company’s common stock issued upon the exercise by the underwriters of their option to purchase additional shares. The net proceeds to the Company were approximately $140.5 million, after deducting underwriting discounts, commissions and offering expenses payable by the Company. May 2021 Follow-On Offering On May 14, 2021, the Company completed a follow-on offering by issuing 4,025,000 shares of common stock, at an offering price of $50.00 per share, inclusive of 525,000 shares of the Company’s common stock issued upon the exercise by the underwriters of their option to purchase additional shares. The net proceeds to the Company were approximately $190.0 million, after deducting underwriting discounts, commissions and offering expenses payable by the Company. Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Axonics Europe, S.A.S., Axonics Modulation Technologies U.K. Limited, Axonics Modulation Technologies Australia Pty Ltd, Axonics Women’s Health Limited, Bulkamid SARL, and Axonics GmbH. Intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation Interim Financial Statements The interim condensed consolidated financial statements and related footnote disclosures as of and for the three and nine months ended September 30, 2021 are unaudited, and are not necessarily indicative of the Company’s operating results for a full year. The unaudited interim condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial results for the three and nine months ended September 30, 2021 in accordance with United States (U.S.) generally accepted accounting principles (GAAP), however, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the U.S. Securities and Exchange Commission (SEC) rules and regulations relating to interim financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included within the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (filed with the SEC on March 1, 2021). Reclassifications Certain prior period reported amounts have been reclassified to conform with the current period presentation. COVID-19 The recent COVID-19 outbreak, and the resulting restrictions intended to slow the spread of COVID-19, including stay-at-home orders, business shutdowns and other restrictions, has adversely affected the Company’s business in several ways. The primary impact on the Company’s business was the cancellation or delay of elective procedures in certain areas to allow health care facilities to prioritize the treatment of COVID-19 patients during the initial stages and resurgence periods of the pandemic or because patients are avoiding health care facilities that they feel are unsafe. These developments materially reduced the number of procedures using the Company’s r-SNM System. If governmental authorities recommend that it is deemed advisable for health care facilities to not perform outpatient elective procedures as was the case in late March and April of 2020 and again in the third quarter of 2021 related to the Delta variant, the Company expects it would materially harm the Company’s revenues and potentially increase the Company’s operating loss. Even as efforts to contain the pandemic have made progress and some restrictions have relaxed, new variants of the virus may continue to cause additional outbreaks. These challenges will likely continue for the duration of the pandemic and could reduce our revenue and negatively impact our business, financial condition and results of operations while the pandemic continues. If these delays in procedures occur in the future, the Company may have to scale back its business, including reducing headcount, which could have a negative impact on the Company’s long-term operations. The Company could also experience other negative impacts of the COVID-19 outbreak such as the lack of availability of the Company’s key personnel, temporary closures of the Company’s office or the facilities of the Company’s business partners, customers, third party service providers or other vendors, and the interruption of the Company’s supply chain, distribution channels, liquidity and capital or financial markets. Any disruption and volatility in the global capital markets as a result of the pandemic may increase the Company’s cost of capital and adversely affect the Company’s ability to access financing when and on terms that the Company desires. In addition, a recession resulting from the spread of COVID-19 could materially affect the Company’s business, especially if a recession results in higher unemployment causing potential patients to not have access to health insurance. The ultimate extent to which the COVID-19 pandemic and its repercussions impact the Company’s business will depend on future developments, which are highly uncertain. However, the foregoing and other continued disruptions to the Company’s business as a result of COVID-19 could result in a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses, and related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. The results of this evaluation then form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and such differences may be material to the consolidated financial statements. Revenue Recognition Revenue recognized during the three and nine months ended September 30, 2021 and 2020 relates entirely to the sale of the Company’s products to its customers and distributors. The Company has revenue arrangements that consist of a single performance obligation. The Company recognizes revenue at the point in time when it transfers control of promised goods to its customers. Revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods. The amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as discounts, where applicable. The Company also sells to distributors and applies the same policies as its revenue arrangements with customers, specifically that revenue is recognized at the point in time when it transfers control of promised goods to its distributors, revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods, the amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as discounts, where applicable. The Company does not offer rights of return or price protection. The amount of variable consideration included in the transaction price may be constrained and is included only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Payment terms, typically less than three months, do not include a significant financing component. The Company extends credit to its customers and distributors based upon an evaluation of the their financial condition and credit history and generally requires no collateral. The Company does not have any contract balances related to product sales. The Company also does not have significant contract acquisition costs related to product sales. In accordance with Company policy and based on the Company’s historical experience, the allowance for product returns was $0.2 million and $0.3 million at September 30, 2021 and December 31, 2020, respectively. Damaged or defective products are replaced at no charge under the Company’s standard warranty. For the three and nine months ended September 30, 2021, the replacement costs were minimal and $0.2 million, respectively. For the three and nine months ended September 30, 2020, replacement costs were minimal and $0.1 million, respectively. Shipping and handling costs incurred for the delivery of goods to customers and distributors are included in cost of goods sold. Amounts billed to customers and distributors for shipping and handling are included in net revenue. The following table provides additional information pertaining to net revenue disaggregated by product and geographic market for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 SNM net revenue United States $ 39,147 $ 34,139 $ 110,135 $ 73,833 International markets 922 1,104 3,031 2,919 $ 40,069 $ 35,243 $ 113,166 $ 76,752 Bulkamid net revenue United States $ 3,921 $ — $ 6,870 $ — International markets 2,923 — 7,119 — $ 6,844 $ — $ 13,989 $ — Total net revenue $ 46,913 $ 35,243 $ 127,155 $ 76,752 Allowance for Doubtful Accounts The Company makes estimates of the collectability of accounts receivable in accordance with ASU 2016-13. The Company’s estimate of future losses is made by management based upon historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and reasonable forecasted economic trends. Despite the Company’s efforts to minimize credit risk exposure, customers could be adversely affected if future economic and industry trends, including those related to COVID-19, change in such a manner as to negatively impact their cash flows. The full effects of COVID-19 on the Company’s customers are highly uncertain and cannot be predicted. As a result, the Company’s future collection experience can differ significantly from historical collection trends. If the Company’s customers experience a negative impact on their cash flows, it could have a material adverse effect on the Company’s results of operations and financial condition. The following table summarizes the changes in our allowance for doubtful accounts (in thousands): Nine Months Ended 2021 2020 Balance at beginning of period $ 465 $ 75 Write-offs 12 — Bad debt expense, net (92) 390 Balance at end of period $ 385 $ 465 Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments purchased with an original maturity of three months or less. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. At times, the cash and cash equivalent balances may exceed federally insured limits. The Company does not believe that this results in any significant credit risk as the Company’s policy is to place its cash and cash equivalents in highly-rated financial institutions. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3: Inputs are unobservable inputs based on the Company’s assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. The Company’s assessment of the significance of an input to the fair value measurement requires judgment, which may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The carrying amounts reported in the condensed consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payables, and accrued expenses, due to their short-term nature. The carrying amount of the Company’s term loan, which is described below, approximates fair value, considering the interest rates are based on the prime interest rate. The purchase price of business acquisitions is primarily allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the excess recorded as goodwill. Contingent consideration represents contingent milestone, performance and revenue-sharing payment obligations related to acquisitions and is measured at fair value, based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration is estimated using a binary option-based approach with assumptions the Company believes would be made by a market participant. Significant inputs include projected revenues, discount rates, volatility factors and risk-free rates. The Company assesses these assumptions on an ongoing basis as additional data impacting the assumptions is obtained and any change in fair value of the contingent consideration is recorded in the consolidated statements of comprehensive loss. Significant increases or decreases in any of those inputs in isolation would result in a significantly lower or higher fair value measurement. Generally, a change in the assumption used for the projected revenues would result in a directionally similar change to the overall estimate of the contingent consideration. The fair value of contingent consideration of $8.9 million at September 30, 2021 is reflected in other long-term liabilities on the Company’s condensed consolidated balance sheets with the change in fair value of $1.3 million during the three months ended September 30, 2021 reflected in general and administrative expenses in the consolidated statements of comprehensive loss. The following table summarizes the changes in the fair value of recurring Level 3 fair value measurements during the nine months ended September 30, 2021 (in thousands): Liabilities Contingent consideration: December 31, 2020 $ — February 25, 2021 Acquisition 7,630 Loss on change in fair value included in earnings 1,250 September 30, 2021 $ 8,880 There were no transfers between Levels 1, 2 or 3 for the periods presented. Investment Securities Those investments in debt securities with maturities less than 12 months at the date of purchase are considered short-term investments. Those investments in debt securities with maturities greater than 12 months at the date of purchase are considered long-term investments. The Company’s investment securities classified as available-for-sale are recorded at fair value based on the fair value hierarchy (Level 1 and Level 2 inputs in the fair value hierarchy), and consists primarily of commercial paper, corporate notes and U.S. government and agency securities. Unrealized gains or losses, deemed temporary in nature, are reported as other comprehensive income within the condensed consolidated statement of comprehensive income (loss). There were no unrealized gains or losses during the three and nine months ended September 30, 2021 and 2020. A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to net income (loss) and the corresponding establishment of a new cost basis for the security. Premiums (discounts) are amortized (accreted) over the life of the related security as an adjustment to yield using the straight-line interest method. Dividend and interest income are recognized when earned. Realized gains or losses are included in net income (loss) and are derived using the specific identification method for determining the cost of securities sold. The Company had no outstanding investment securities as of September 30, 2021 and December 31, 2020. Foreign Currency Translation The functional currencies of the Company’s subsidiaries are currencies other than the U.S. dollar. The Company translates assets and liabilities of the foreign subsidiaries into U.S. dollars at the exchange rate in effect on the balance sheet date. Revenue and expenses of the subsidiaries are translated into U.S. dollars at the average exchange rate during the period. Gains or losses from these translation adjustments are reported as a separate component of stockholders’ equity in accumulated other comprehensive gain or loss until there is a sale or complete or substantially complete liquidation of the Company’s investment in the foreign subsidiary at which time the gains or losses will be realized and included in net income (loss). As of September 30, 2021 and December 31, 2020, all foreign currency translation gains (losses) have been unrealized and included in accumulated other comprehensive loss. Accumulated other comprehensive loss consists entirely of losses or gains from translation of foreign subsidiaries at September 30, 2021 and December 31, 2020. Inventory, Net Inventories are stated at the lower of cost or net realizable value, with cost computed on a first-in, first-out basis. The Company reduces the carrying value of inventories for items that are potentially excess, obsolete, or slow-moving based on changes in customer demand, technology developments, or other economic factors. The Company capitalizes inventory produced for commercial sale. The Company capitalizes manufacturing costs as inventory following both the receipt of regulatory approval from regulatory bodies and the Company’s intent to commercialize. Costs associated with developmental products prior to satisfying the Company’s inventory capitalization criteria are charged to research and development expense as incurred. Products that have been approved by certain regulatory authorities may also be used in clinical programs to assess the safety and efficacy of the products for usage that have not been approved by the FDA or other regulatory authorities. The form of product utilized for both commercial and certain clinical programs that are identical are included as inventory with an “alternative future use” as defined in authoritative guidance. Component materials and purchased products associated with clinical development programs are included in inventory and charged to research and development expense when the product enters the research and development process and no longer can be used for commercial purposes and, therefore, does not have an “alternative future use.” For products that are under development and have not yet been approved by regulatory authorities, purchased component materials are charged to research and development expense when the inventory ownership transfers to the Company. The Company analyzes inventory levels to identify inventory that may expire prior to sale, inventory that has a cost basis in excess of its net realizable value, or inventory in excess of expected sales requirements. Although the manufacturing of the r-SNM System is subject to strict quality control, certain batches or units of product may no longer meet quality specifications or may expire, which would require adjustments to the Company’s inventory values. The Company also applies judgment related to the results of quality tests that are performed throughout the production process, as well as the understanding of regulatory guidelines, to determine if it is probable that inventory will be saleable. These quality tests are performed throughout the pre- and post-production processes, and the Company continually gathers information regarding product quality for periods after the manufacturing date. The Company’s products currently have a maximum estimated shelf life range of 12 to 36 months and, based on sales forecasts, the Company expects to realize the carrying value of the product inventory. In the future, reduced demand, quality issues, or excess supply beyond those anticipated by management may result in a material adjustment to inventory levels, which would be recorded as an increase to cost of sales. The determination of whether or not inventory costs will be realizable requires estimates by the Company’s management. A critical input in this determination is future expected inventory requirements based on internal sales forecasts. Management then compares these requirements to the expiry dates of inventory on hand. To the extent that inventory is expected to expire prior to being sold, management will write down the value of inventory. As of September 30, 2021, the Company had $45.3 million, $9.6 million and $15.5 million of finished goods inventory, work-in-process inventory and raw materials inventory, respectively, net of reserves of $0.3 million. As of December 31, 2020, the Company had $42.1 million, $3.5 million and $17.5 million of finished goods inventory, work-in-process inventory and raw materials inventory, respectively. Reserves were de minimus as of December 31, 2020. Customer and Vendor Concentration As of September 30, 2021 and December 31, 2020, there were no customers who accounted for over 10% of the Company’s consolidated accounts receivable. As of September 30, 2021 and December 31, 2020, there was one and one vendor, respectively, who accounted for over 10% of the Company’s consolidated accounts payable. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three Goodwill Goodwill represents the excess purchase price over the fair values of the identifiable assets acquired less the liabilities assumed. Goodwill is tested for impairment at least annually. Goodwill is tested for impairment at the reporting unit level by comparing the reporting unit’s carrying amount to the fair value of the reporting unit. The fair values are estimated using an income and discounted cash flow approach. The Company performs an annual impairment test for goodwill in the fourth quarter of each year. The Company considers qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill. During the nine months ended September 30, 2021, the Company did not record any impairment charges related to goodwill. Intangible Assets Patent license asset The intangible asset represents exclusive rights to an additional field-of-use on the patent suite within the License Agreement with AMF. The additional field-of-use was provided in exchange for 50,000 shares of Series A preferred stock, the fair value of which was $1.0 million in 2013. The intangible asset was recorded at its fair value of $1.0 million at the date contributed. In connection with the IPO, such shares of Series A preferred stock were converted into common stock. Amortization of this asset is recorded over the shorter of the patent or legal life on a straight-line basis. The weighted-average amortization period is 8.71 years. Accumulated amortization of this intangible asset is $0.9 million and $0.8 million at September 30, 2021 and December 31, 2020, respectively. The amortization of this intangible asset was $0.1 million during the nine months ended September 30, 2021 and 2020. The amortization of this intangible asset was minimal during the three months ended September 30, 2021 and 2020. The Company will review the intangible asset for impairment whenever an impairment indicator exists. There have been no intangible asset impairment charges to date. For additional information, see Note 9. Exclusive license asset The intangible asset represents exclusive rights of existing technologies and development services from MST entered into on March 2, 2021. The agreement was provided in exchange for 65,594 shares of common stock, $0.0001 par value, the fair value of which was $3.6 million upon transfer. The intangible asset was recorded at its fair value of $3.3 million at the date of the agreement, with the difference of $0.3 million recorded as a vendor credit in accounts payable in the condensed consolidated balance sheets. Amortization of this asset is recorded over the four-year term of the agreement on a straight-line basis. There was $0.2 million and $0.4 million amortization of this intangible asset recorded during the three and nine months ended September 30, 2021, respectively. The Company will review the intangible asset for impairment whenever an impairment indicator exists. There have been no intangible asset impairment charges to date. For additional information, see Note 9. Contura acquisition The intangible assets represent technology, trade names and trademarks, and customer relationships acquired from Contura on February 25, 2021. For additional information, see Notes 8 and 9. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net cash flows that the assets are expected to generate. If said assets are considered to be impaired, the impairment that would be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. There have been minimal impairments of long-lived assets to date. Leases In accordance with ASU No. 2016-02, “Leases (Topic 842)”, components of a lease should be split into three categories: lease components, non-lease components, and non-components. The fixed and in-substance fixed contract consideration (including any consideration related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Entities may elect not to separate lease and non-lease components. Rather, entities would account for each lease component and related non-lease component together as a single lease component. The Company has elected to account for lease and non-lease components together as a single lease component for all underlying assets and allocate all of the contract consideration to the lease component only. Topic 842 allows for the use of judgment in determining whether the assumed lease term is for a major part of the remaining economic life of the underlying asset and whether the present value of lease payments represents substantially all of the fair value of the underlying asset. The Company applies the bright line thresholds referenced in Topic 842 to assist in evaluating leases for appropriate classification. The aforementioned bright lines are applied consistently to the Company’s entire portfolio of leases. Operating lease ROU asset and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate, which is the rate for a fully collateralized amortizing loan with the same maturity as the lease term, based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Research and Development Research and development costs are charged to operations as incurred. Research and development costs include salary and personnel-related costs, costs of clinical studies and testing, supplies and materials, and outside consultant costs. Advertising Expense The Company expenses advertising costs as they are incurred. During the three and nine months ended September 30, 2021, advertising expense totaled $2.6 million and $5.5 million, respectively, and are recorded within the sales and marketing expenses in its consolidated statements of comprehensive loss. During the three and nine months ended September 30, 2020, advertising expense totaled $0.8 million and $1.4 million, respectively, and are recorded within the sales and marketing expenses in its consolidated statements of comprehensive loss. Income Taxes The Company accounts for income taxes using the asset and liability method to compute the difference between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets. The realization of these deferred tax assets is dependent upon the Company’s ability to generate sufficient taxable income in future years. Valuation allowances are established, when necess |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consists of the following (in thousands) at: September 30, December 31, 2021 2020 Research and development equipment $ 1,484 $ 1,205 Computer hardware and software 2,468 2,286 Tools and molds 1,597 1,404 Leasehold improvements 3,772 3,759 Furniture and fixtures 1,514 1,360 Construction in progress 537 129 11,372 10,143 Less: accumulated depreciation and amortization (5,204) (3,815) $ 6,168 $ 6,328 Depreciation and amortization expense of property and equipment was $0.5 million and $1.4 million for the three and nine months ended September 30, 2021, respectively. Depreciation and amortization expense of property and equipment was $0.5 million and $1.2 million for the three and nine months ended September 30, 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases In August 2014, the Company entered into a five-year operating lease for approximately 12,215 square feet of office space beginning on November 1, 2014, and expiring on October 31, 2019. In June 2019, the lease was amended to extend the expiration date to October 31, 2020 and in September 2020, the lease was amended to extend the expiration date to July 31, 2022. Upon the execution of the amendments, which were deemed to be a lease modification, the Company reassessed the lease liability using the discount rate at the modification date and recorded ROU assets for the same amount. The Company also reassessed the lease classification and concluded that the lease continues to be an operating lease. Under the terms of the lease, the Company is responsible for taxes, insurance, and maintenance expense. The lease contains certain scheduled rent increases. Rent expense is recognized on a straight-line basis over the expected lease term. In November 2017, the Company entered into a seven-year operating lease for approximately 25,548 square feet of office space beginning on August 1, 2018, and expiring on August 31, 2025. In June 2019, the lease was amended to extend the expiration date to October 31, 2027. Upon the execution of the amendments, which were deemed to be a lease modification, the Company reassessed the lease liability using the discount rate at the modification date and recorded ROU assets for the same amount. The Company also reassessed the lease classification and concluded that the lease continues to be an operating lease. Under the terms of the lease, the Company is responsible for taxes, insurance, and maintenance expense. The lease contains certain scheduled rent increases. Rent expense is recognized on a straight-line basis over the expected lease term. The Company has a renewal option to extend the term of the lease for a period of five years beyond the initial term. Under the terms of the lease, the base rent payable with respect to each renewal term will be equal to the prevailing market rental rent as of the commencement of the applicable renewal term. In the event of a default of certain of the Company’s obligations under the lease, the Company’s landlord would have the right to terminate the lease. In June 2019, the Company entered into an eight-year operating lease for approximately 32,621 square feet of office space beginning on January 15, 2020 and expiring on January 31, 2028. The Company uses these premises as its new principal executive offices and for general office space. The Company intends to utilize its other currently-leased spaces through the lease expiration dates to conduct the training of its sales team and for manufacturing purposes. Under the terms of the lease, the Company is responsible for taxes, insurance, and maintenance expense. The lease contains certain scheduled rent increases. Rent expense is recognized on a straight- line basis over the expected lease term. The Company has a renewal option to extend the term of the lease for a period of five years beyond the initial term. Under the terms of the lease, the base rent payable with respect to each renewal term will be equal to the prevailing market rental rent as of the commencement of the applicable renewal term. In the event of a default of certain of the Company’s obligations under the lease, the Company’s landlord would have the right to terminate the lease. In August 2020, the Company entered into a 38-month operating lease for approximately 5,693 square feet of warehouse space beginning on October 15, 2020 and expiring on December 31, 2023. The Company uses these premises for general warehouse space. During the three and nine months ended September 30, 2021, ROU assets obtained in exchange for new operating lease liabilities were none and $0.1 million, respectively. During the three and nine months ended September 30, 2020, ROU assets obtained in exchange for new operating lease liabilities were none and $3.0 million, respectively. As of September 30, 2021 and December 31, 2020, the ROU asset has a balance of $6.4 million and $7.1 million, respectively. The operating lease ROU asset is included within the Company’s other non-current assets, and lease liabilities are included in current or noncurrent liabilities on the Company’s condensed consolidated balance sheets. During the three and nine months ended September 30, 2021, cash paid for amounts included in operating lease liabilities were $0.5 million and $1.5 million, respectively. During the three and nine months ended September 30, 2020, cash paid for amounts included in operating lease liabilities were $0.4 million and $1.0 million, respectively. Amortization of the ROU asset was $0.3 million and $0.8 million for the three and nine months ended September 30, 2021. Amortization of the ROU asset was $0.2 million and $0.6 million for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021 and December 31, 2020, the weighted-average remaining lease term for the Company’s operating leases were 6.0 years and 6.6 years, respectively. The weighted-average discount rate used to determine the present value of the Company’s operating leases’ future payments was 6.7% as of September 30, 2021 and December 31, 2020. Total lease cost for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Lease cost Operating lease cost $ 524 $ 491 $ 1,583 $ 1,472 Short-term lease cost 25 51 77 119 Variable lease cost 54 65 152 123 Total lease cost $ 603 $ 607 $ 1,812 $ 1,714 License Agreement In October 2013, the Company entered into the License Agreement, pursuant to which AMF, a Company stockholder, licensed the Company certain patents and know-how (collectively, the AMF IP) relating to, in relevant part, an implantable pulse generator and related system components in development by AMF as of that date, in addition to any peripheral or auxiliary devices, including all components, that when assembled, comprise such device, excluding certain implantable pulse generators (collectively, the AMF Licensed Products). Under the License Agreement, for each calendar year beginning in 2018, the Company is obligated to pay AMF a royalty on an AMF Licensed Product-by-AMF Licensed Product basis if one of the following conditions applies: (i) one or more valid claims within any of the patents licensed to the Company by AMF covers such AMF Licensed Products or the manufacture of such AMF Licensed Products or (ii) for a period of 12 years from the first commercial sale anywhere in the world of such AMF Licensed Product, in each case. The foregoing royalty is calculated as the greater of (a) 4% of all net revenue derived from the AMF Licensed Products, and (b) the Minimum Royalty, payable quarterly. The Minimum Royalty will automatically increase each year after 2018, subject to a maximum amount of $200,000 per year. The Company generated net SNM revenue of $40.1 million and $113.2 million during the three and nine months ended September 30, 2021, respectively, and recorded related royalties of $1.6 million and $4.5 million during the three and nine months ended September 30, 2021, respectively. The Company generated net SNM revenue of $35.2 million and $76.8 million during the three and nine months ended September 30, 2020, respectively, and recorded related royalties of $1.4 million and $3.0 million during the three and nine months ended September 30, 2020, respectively. Royalty expense is included in operating expenses in the condensed consolidated statements of comprehensive loss. Accrued royalty of $1.6 million and $1.4 million as of September 30, 2021 and December 31, 2020, respectively, is included within accrued liabilities on the Company’s condensed consolidated balance sheets. Legal Matters On November 4, 2019, Medtronic, Inc., Medtronic Puerto Rico Operations Co., Medtronic Logistics LLC and Medtronic USA, Inc. (collectively, the Medtronic Affiliates) filed an initial complaint against the Company in the United States District Court for the Central District of California, Case No. 8:19-cv-2115, and amended the complaint on November 26, 2019. The Company refers to this matter as the Medtronic Litigation. The complaint asserts that the Company’s r-SNM System infringes U.S. Patent Nos. 8,036,756, 8,626,314, 9,463,324 and 9,821,112 held by the Medtronic Affiliates, and the amended complaint further includes the additional patents 8,738,148; 8,457,758; and 7,774,069 (collectively, the Medtronic Patents). The Medtronic Litigation requests customary remedies for patent infringement, including (i) a judgment that the Company has infringed and is infringing the Medtronic Patents, (ii) damages, including treble damages for willful infringement, (iii) a permanent injunction preventing the Company from infringing the Medtronic Patents, (iv) attorneys’ fees, and (v) costs and expenses. The Company believes the allegations are without merit and is vigorously defending itself against them. Given the early stage of the Medtronic Litigation, the Company is unable to predict the likelihood of success of the claims of the Medtronic Affiliates against the Company or to quantify any risk of loss. The Medtronic Litigation could last for an extended period of time and require the Company to dedicate significant financial resources and management resources to its defense. An adverse ruling against the Company could materially and adversely affect its business, financial position, results of operations or cash flows and could also result in reputational harm. Even if the Company is successful in defending against these claims, the Medtronic Litigation could result in significant costs, delays in future product developments, reputational harm or other collateral consequences. On March 16, 2020, the Company filed seven petitions before the United States Patent and Trademark Office (USPTO) requesting inter partes review (IPR) to contest the validity of each of the Medtronic patents that Medtronic has alleged are being infringed by the Company. In September 2020, the USPTO decided that it will accept or “institute” the IPR process for six of the seven patents, finding that the Company had demonstrated a reasonable likelihood that at least one, if not all, of the claims of these six patents are invalid. The USPTO issued decisions on the IPR petitions in September 2021. The USPTO invalidated several claims in the Medtronic patents but declined to invalidate the majority of asserted claims. The Company plans to appeal the decisions on the claims that were not invalidated. Following these IPR decisions, the judge presiding over the litigation in the United States District Court for the Central District of California lifted the stay on litigation proceedings. In addition to the Medtronic Litigation, the Company is and may continue to be involved in claims, le gal proceedings, and investigations arising out of its operations in the normal course of business. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt In June 2021, the principal amount, accrued interest, accrued loan fees, and prepayment fees related to the term loan under the Loan and Security Agreement with Silicon Valley Bank entered into in February 2021, were paid in full. The unamortized debt issuance costs of $4.4 million as of March 31, 2021 was expensed and recognized as interest expense during the three months ended June 30, 2021. In January 2021, the principal amount, accrued interest, accrued loan fees, and prepayment fees related to the term loan under the Loan and Security Agreement with Silicon Valley Bank entered into in February 2018, were paid in full. The unamortized debt issuance costs of $0.4 million as of December 31, 2020 was expensed and recognized as interest expense during the three months ended March 31, 2021. Debt, net of unamortized debt issuance costs, consists of the following (in thousands) at: September 30, December 31, 2021 2020 Debt, principal $ 109 $ 20,000 Accrued loan fees — 1,500 Debt, total 109 21,500 Less: unamortized debt issuance costs — (390) Debt, net of unamortized debt issuance costs $ 109 $ 21,110 |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of comprehensive loss is allocated as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Research and development $ 1,549 $ 882 $ 4,435 $ 2,493 General and administrative 2,158 1,448 5,930 4,726 Sales and marketing 2,983 1,445 7,955 4,294 $ 6,690 $ 3,775 $ 18,320 $ 11,513 Stock Option Activity The option awards issued under the 2014 Stock Option Plan (the 2014 Plan) and the 2018 Omnibus Incentive Plan (the 2018 Plan) were measured based on fair value. The Company’s fair value calculations were made using the Black-Scholes option pricing model with the following assumptions: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Expected term (in years) 5.50 — 5.46 - 6.00 6.05 Stock volatility 63.49% — 63.49% 72.01% Risk-free interest rate 0.85% — 0.53% - 1.16% 1.37% Dividend rate — — — — The Company used the simplified method of determining the expected term of stock options as the Company believes this represents the best estimate of the expected term of a new option. The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have sufficient trading history for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. Treasury instruments, whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The assumptions regarding the expected term of the options and the expected volatility of the stock price are subjective, and these assumptions have a significant effect on the estimated fair value amounts. The weighted-average grant date fair value of options granted was $33.08 and $32.93 for the three and nine months ended September 30, 2021, respectively. The weighted-average grant date fair value of options granted was none and $18.56 for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021 and December 31, 2020, there was $8.4 million and $11.6 million, respectively, of total unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of approximately 1.8 years and 2.4 years, respectively. The following table summarizes stock option activity for the nine months ended September 30, 2021 under the 2014 and 2018 Plans (in thousands, except share and per share data): Number of Options Weighted-Average Exercise Price Per Share Aggregate Intrinsic Value Outstanding at December 31, 2020 1,955,243 $ 16.01 Options granted 46,000 58.07 Options exercised (500,322) 12.53 $ 23,450 (1) Options forfeited (36,957) 24.18 Outstanding at September 30, 2021 1,463,964 $ 18.32 $ 68,475 (2) _____________________________________________ (1) Represents the total difference between the Company’s closing stock price at the time of exercise and the stock option exercise price, multiplied by the number of options exercised. (2) Represents the total difference between the Company’s closing stock price on the last trading day of the third quarter of 2021 and the stock option exercise price, multiplied by the number of in-the-money options as of September 30, 2021. The amount of intrinsic value will change based on the fair market value of the Company’s stock. The weighted-average remaining contractual term of options outstanding and exercisable is 7.2 years and 7.7 years at September 30, 2021 and December 31, 2020, respectively. Restricted Shares Awards Activity As of September 30, 2021 and December 31, 2020, there was $42.3 million and $22.6 million, respectively, of total unrecognized compensation cost related to unvested restricted shares awards that is expected to be recognized over a weighted-average period of approximately 3.2 years and 3.3 years, respectively. The following table summarizes restricted shares awards activity for the nine months ended September 30, 2021: Number of Restricted Shares Awards Weighted-Average Fair Value Per Share at Grant Date Outstanding at December 31, 2020 817,183 $ 31.70 Restricted shares awards granted 552,400 56.95 Restricted shares awards vested (175,372) 29.35 Restricted shares awards forfeited (81,225) 36.53 Outstanding at September 30, 2021 1,112,986 $ 44.25 Restricted Stock Units Activity As of September 30, 2021 and December 31, 2020, there was $3.9 million and $1.2 million, respectively, of total unrecognized compensation cost related to unvested restricted stock units that is expected to be recognized over a weighted-average period of approximately 0.8 years and 0.9 years, respectively. The following table summarizes restricted stock units activity for the nine months ended September 30, 2021: Number of Restricted Stock Units Weighted-Average Fair Value Per Share at Grant Date Outstanding at December 31, 2020 207,101 $ 23.49 Restricted stock units granted 212,417 43.62 Restricted stock units vested (169,054) 19.89 Outstanding at September 30, 2021 250,464 $ 42.99 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents details of the provision for income taxes and effective tax rates (in thousands, except percentages): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Provision for income taxes $528 $— $3,269 $1 Effective tax rate 3.16% —% 5.30% —% The Company accounts for income taxes according to ASC 740, which, among other things, requires the estimation of the annual effective income tax rate for the full year applied to year-to-date ordinary income (loss) to compute the year-to-date tax expense (benefit). The Company periodically evaluates whether a portion or all of its deferred tax assets will be recovered. The Company records a valuation allowance against deferred tax assets if and to the extent it is more likely than not that they will not be recovered. In evaluating the need for a valuation allowance, the Company weighs all relevant positive and negative evidence, including among other factors, historical financial performance, forecasts of income over the applicable carryforward periods, and the market environment, with each piece weighted based on its reliability. As of September 30, 2021, the Company continues to maintain a full valuation allowance against its U.S. net deferred tax assets. The effective tax rate differs from the statutory U.S. income tax rate due to differing tax rates imposed on income earned in foreign jurisdictions, losses in foreign jurisdictions, and certain nondeductible expenses. The effective tax rate could change significantly from quarter to quarter because of recurring and nonrecurring factors. The provision for income taxes for the nine months ended September 30, 2021 was primarily the result of remeasuring deferred tax liabilities in the Company’s U.K. jurisdiction due to the increase in the U.K. income tax rate from 19% to 25% which was enacted during Q2 2021 and effective April 1, 2023. At December 31, 2020, the Company had federal and California net operating loss (NOL) carryforwards of approximately $213.5 million. Pursuant to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), use of the Company’s NOL carryforwards may be limited if the Company experiences a cumulative change in ownership of greater than 50% in a rolling three-year period. The Company performed an analysis of changes in ownership for purposes of these Internal Revenue Code sections. Based on the study performed in 2020, the Company determined that an ownership change occurred in 2014, 2018 and 2019. Future ownership changes could impact the Company’s ability to utilize NOL carryforwards. The Company has recorded a full valuation allowance against its otherwise recognizable U.S. deferred income tax assets as of December 31, 2020. The Company has determined, after evaluating all positive and negative historical and prospective evidence, that it is more likely than not that the U.S. deferred income tax assets will not be realized. Ownership changes could impact the Company’s ability to utilize NOL carryforwards remaining at an ownership change date. The Company’s NOL carryforwards were generated from domestic operations. The federal NOLs from the 2013-2017 tax years will expire between 2033 and 2037 and NOLs from 2018-2020 will carryover indefinitely. The state NOLs will expire between 2033 and 2039. Under California Assembly Bill 85, effective June 29, 2020, net operating loss deductions were suspended for tax years beginning in 2020, 2021, and 2022 and the carry forward periods of any net operating losses not utilized due to such suspension were extended. CARES Act |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe Company sponsors a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code. This plan covers all employees who meet minimum age and service requirements, and allows participants to defer a portion of their annual compensation on a pre- or post-tax basis. Contributions to the plan by the Company may be made at the discretion of the board of directors. During the three and nine months ended September 30, 2021, the Company contributions to the plan amounted to $0.4 million and $1.4 million, respectively. During the three and nine months ended September 30, 2020, the Company contributions to the plan amounted to $0.4 million and $1.2 million, respectively. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition | Acquisition On February 25, 2021, the Company acquired all issued and outstanding shares of Contura Limited (Contura) through a Share Purchase Agreement. As a result of the acquisition, the Company acquired a 100% equity interest in Contura. The Company accounted for the acquisition as a business combination pursuant to ASC 805. In accordance with ASC 805, fair values are assigned to tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date based on the information that was available as of the acquisition date. The Company believes that the information available provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed for the acquisition, however, preliminary measurements of fair value, including, but not limited to, contingent consideration, intangible assets, goodwill, and deferred taxes, are subject to change during the measurement period, and such changes could be material. The Company expects to finalize the valuation and accounting for the acquisition as soon as practicable, but no later than one year after the acquisition date. The purchase price consideration for the acquisition totaled $204.7 million, of which $141.3 million was in the form of cash and $55.7 million was in the form of 1,096,583 shares of the Company’s common stock. An additional payment of $35 million will be paid to Contura if the Company is able to generate $50 million in Bulkamid sales within a 12-month period before December 31, 2024. As the additional payment is contingent on future sales, the preliminary estimate of fair value was assessed to be $7.6 million which is reflected as other long-term liabilities in the consolidated balance sheet. The cash consideration paid for the acquisition was funded by existing cash on hand. The following table presents the purchase price allocation of Contura assets acquired and liabilities assumed, based on their relative fair values, which have been preliminarily assessed as of the February 25, 2021 acquisition date (in thousands): Preliminary Purchase Price Allocation Assets Acquired Cash and cash equivalents $ 593 Accounts receivable 1,688 Inventory 988 Prepaid expenses and other current assets 115 Property and equipment 52 Other assets 108 Intangible assets 112,200 Total assets acquired 115,744 Liabilities Assumed Accounts payable 209 Accrued liabilities 820 Accrued compensation and benefits 315 Lease liability 86 Debt 122 Deferred tax liabilities 23,765 Total liabilities assumed 25,317 Net assets acquired 90,427 Purchase price consideration 204,692 Goodwill $ 114,265 Intangible assets Identified intangible assets consist of technology, trade names and trademarks, and customer relationships. The fair value of each is being determined by a valuation specialist and the useful life determination was made by management. Both determinations were made in accordance with ASC 805 and are outlined in the table below: Preliminary Preliminary Technology $ 81,100 12 years Trade names and trademarks $ 19,700 Indefinite Customer relationships $ 11,400 12 years Intangible assets were valued using models and approaches best suited for the asset type. Technology was valued using the Multi-Period Excess Earnings Method (MPEEM), which calculates economic benefits by determining the income attributable to an intangible asset after returns are subtracted for contributory assets. Significant assumptions in the MPEEM include projected revenue growth rates, future margins, royalty rate indication, and tax rate. Trade names and trademarks were valued using the Relief from Royalty Method. The relief from royalty method is a variant of the discounted cash flow method, which is a form of the income approach. It is based on the premise that ownership of the intangible asset relieves the need to pay a licensing fee for the ability to use the asset. Significant assumptions include a discount rate, tax rate, royalty rate indication, long-term growth rate, and implied profit split time period. Customer relationships were valued using the distributor method. The distributor method was utilized as the asset was determined to be a secondary intangible asset and the Company’s product could be sold through distributors. Significant assumptions used in the distributor method include projected revenue growth rates, future margins, rate of customer retention, and an appropriate discount rate. Intangible assets will be amortized based on their useful life. $2.0 million and $4.6 million in amortization expense was recognized during the three and nine months ended September 30, 2021 in the consolidated statements of comprehensive loss. The unamortized balance as of September 30, 2021 was $105.3 million. The total weighted-average original amortization period for the acquired finite-lived intangible assets is 12 years. Goodwill Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired in a business combination and represents the future economic benefits expected to arise from anticipated synergies and intangible assets acquired that do not qualify for separate recognition, including an assembled workforce, noncontractual relationships, and other agreements. As an indefinite-lived asset, goodwill is not amortized but rather is subject to impairment testing on at least an annual basis. The Contura acquisition resulted in the preliminary recognition of $114.3 million of goodwill, which is not expected to be deductible for tax purposes. Contingent consideration As part of the transaction, the Company agreed to pay Contura $35 million if Bulkamid sales achieve $50 million in any 12-month period before December 31, 2024. The preliminary fair value of the estimated contingent consideration was determined by using a binary option-based approach. Significant inputs used in the assessment include the Company’s projected revenue rate, an appropriate discount rate, volatility, and risk-free rate. The estimated fair value of the contingent consideration was originally determined to be $6.8 million. After the March 31, 2021 interim financial statements were issued, the Company received a final valuation report from a third-party valuation firm relating to the contingent consideration. After considering the results of that valuation report, the Company estimated the fair value of the contingent consideration to be $7.6 million as of the acquisition date. As a result, the fair value of the contingent consideration increased by $0.8 million with a corresponding increase to goodwill. To the extent that the forecast milestone achievements probabilities changed, future fair value measurement adjustments to the contingent consideration liability will be recognized in the consolidated statements of comprehensive loss. Deferred tax liabilities After the March 31, 2021 interim financial statements were issued, the Company received a preliminary tax provision report from a third-party tax firm. After considering the results of that tax provision report, the Company preliminarily estimated the fair value of the deferred tax liabilities assumed to be $17.9 million. As a result, the fair value of the deferred tax liabilities increased by $17.9 million with a corresponding increase to goodwill. After the June 30, 2021 interim financial statements were issued, the Company received an updated preliminary tax provision report from a third-party tax firm. After considering the results of that tax provision report, the Company estimated the fair value of the deferred tax liabilities assumed to be $23.8 million. As a result, the fair value of the deferred tax liabilities increased by $5.9 million with a corresponding increase to goodwill. Transaction-related costs Acquisition costs are not included as components of consideration transferred and instead are accounted for as expenses in the period in which the costs are incurred. The Company incurred $4.4 million of acquisition-related costs in the first quarter of fiscal year 2021. Pro forma The following unaudited pro forma financial information presents the condensed consolidated results of operations of the Company with Contura for the three and nine months ended September 30, 2021 and 2020, and the year ended December 31, 2020 as if the acquisition had occurred on January 1, 2020 instead of February 25, 2021 (in thousands, except share and per share data). Contura’s revenue and net income for the three months ended September 30, 2021 were $6.8 million and $5.2 million, respectively, of which $6.8 million in revenue and $5.2 million in net income was recognized after the February 25, 2021 acquisition date. Contura’s revenue and net loss for the nine months ended September 30, 2021 were $15.3 million and $2.9 million, respectively, of which $14.0 million in revenue and $3.5 million in net loss was recognized after the February 25, 2021 acquisition date. Revenue and net loss recognized after the acquisition date were recorded within the Company’s condensed consolidated statements of comprehensive loss. The pro forma information does not necessarily reflect the results of operations that would have occurred had the entities been a single company during the respective periods. Three Months Ended Nine Months Ended Year ended 2021 2020 2021 2020 2020 Net revenue $ 46,913 $ 38,208 $ 128,508 $ 83,989 $ 122,444 Net loss $ (17,250) $ (10,024) $ (62,369) $ (51,424) $ (63,183) Net loss per share, basic and diluted $ (0.38) $ (0.25) $ (1.46) $ (1.37) $ (1.66) Weighted-average shares used to compute basic and diluted net loss per share 44,848,023 39,927,507 42,656,984 37,409,567 38,077,918 The unaudited pro forma financial information above reflects the following pro forma adjustments: • An adjustment to decrease net loss for the three and nine months ended September 30, 2021 by none and $4.4 million, respectively, to eliminate integration and acquisition related costs incurred by the Company and Contura and a corresponding increase to net loss for the three and nine months ended September 30, 2020 by none and $4.4 million, respectively, to give effect to the integration and acquisition of Contura as if it had occurred on January 1, 2020. • An adjustment to increase net loss for the three and nine months ended September 30, 2021 by none and $1.3 million, respectively, and a corresponding increase to net loss for the three and nine months ended September 30, 2020 by $1.9 million and $5.8 million, respectively, to reflect amortization of the fair value adjustments for intangible assets as if the assets were acquired January 1, 2020. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The change in the carrying amount of goodwill during the nine months ended September 30, 2021 included the following (in thousands): December 31, 2020 $ — February 25, 2021 Acquisition 114,265 Foreign currency translation adjustment (4,700) September 30, 2021 $ 109,565 Intangible assets as of September 30, 2021 included the following (in thousands): September 30, 2021 Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Foreign currency translation adjustment Intangible Assets, Net Patent license asset 8.71 years $ 1,000 (890) — $ 110 Exclusive license asset 4 years $ 3,300 (440) — $ 2,860 Technology 12 years $ 81,100 (4,004) (1,690) $ 75,406 Trade names and trademarks Indefinite $ 19,700 — (440) $ 19,260 Customer relationships 12 years $ 11,400 (564) (170) $ 10,666 $ 116,500 $ (5,898) $ (2,300) $ 108,302 Intangible asset as of December 31, 2020 included the following (in thousands): December 31, 2020 Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Foreign currency translation adjustment Intangible Asset, Net Patent license asset 8.71 years $ 1,000 (804) — $ 196 |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Axonics Europe, S.A.S., Axonics Modulation Technologies U.K. Limited, Axonics Modulation Technologies Australia Pty Ltd, Axonics Women’s Health Limited, Bulkamid SARL, and Axonics GmbH. Intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation Interim Financial Statements The interim condensed consolidated financial statements and related footnote disclosures as of and for the three and nine months ended September 30, 2021 are unaudited, and are not necessarily indicative of the Company’s operating results for a full year. The unaudited interim condensed consolidated financial statements |
Reclassifications | Reclassifications Certain prior period reported amounts have been reclassified to conform with the current period presentation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses, and related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. The results of this evaluation then form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and such differences may be material to the consolidated financial statements. |
Revenue Recognition | Revenue Recognition Revenue recognized during the three and nine months ended September 30, 2021 and 2020 relates entirely to the sale of the Company’s products to its customers and distributors. The Company has revenue arrangements that consist of a single performance obligation. The Company recognizes revenue at the point in time when it transfers control of promised goods to its customers. Revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods. The amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as discounts, where applicable. The Company also sells to distributors and applies the same policies as its revenue arrangements with customers, specifically that revenue is recognized at the point in time when it transfers control of promised goods to its distributors, revenue is measured as the amount of consideration it expects to receive in exchange for transferring goods, the amount of revenue that is recognized is based on the transaction price, which represents the invoiced amount and includes estimates of variable consideration such as discounts, where applicable. The Company does not offer rights of return or price protection. The amount of variable consideration included in the transaction price may be constrained and is included only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Payment terms, typically less than three months, do not include a significant financing component. The Company extends credit to its customers and distributors based upon an evaluation of the their financial condition and credit history and generally requires no collateral. The Company does not have any contract balances related to product sales. The Company also does not have significant contract acquisition costs related to product sales. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company makes estimates of the collectability of accounts receivable in accordance with ASU 2016-13. The Company’s estimate of future losses is made by management based upon historical bad debts, customer receivable balances, age of customer receivable balances, customers’ financial conditions and reasonable forecasted economic trends. Despite the Company’s efforts to minimize credit risk exposure, customers could be adversely affected if future economic and industry trends, including those related to COVID-19, change in such a |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments purchased with an original maturity of three months or less. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. At times, the cash and cash equivalent balances may exceed federally insured limits. The Company does not believe that this results in any significant credit risk as the Company’s policy is to place its cash and cash equivalents in highly-rated financial institutions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3: Inputs are unobservable inputs based on the Company’s assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. The Company’s assessment of the significance of an input to the fair value measurement requires judgment, which may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The carrying amounts reported in the condensed consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payables, and accrued expenses, due to their short-term nature. The carrying amount of the Company’s term loan, which is described below, approximates fair value, considering the interest rates are based on the prime interest rate. The purchase price of business acquisitions is primarily allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the excess recorded as goodwill. Contingent consideration represents contingent milestone, performance and revenue-sharing payment obligations related to acquisitions and is measured at fair value, based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration is estimated using a binary option-based approach with assumptions the Company believes would be made by a market participant. Significant inputs include projected revenues, discount rates, volatility factors and risk-free rates. The Company assesses these assumptions on an ongoing basis as additional data impacting the assumptions is obtained and any change in fair value of the contingent consideration is recorded in the consolidated statements of comprehensive loss. Significant increases or decreases in any of those inputs in isolation would result in a significantly lower or higher fair value measurement. Generally, a change in the assumption used for the projected revenues would result in a directionally similar change to the overall estimate of the contingent consideration. The fair value of contingent consideration of $8.9 million at September 30, 2021 is reflected in other long-term liabilities on the Company’s condensed consolidated balance sheets with the change in fair value of $1.3 million during the three months ended September 30, 2021 reflected in general and administrative expenses in the consolidated statements of comprehensive loss. The following table summarizes the changes in the fair value of recurring Level 3 fair value measurements during the nine months ended September 30, 2021 (in thousands): Liabilities Contingent consideration: December 31, 2020 $ — February 25, 2021 Acquisition 7,630 Loss on change in fair value included in earnings 1,250 September 30, 2021 $ 8,880 There were no transfers between Levels 1, 2 or 3 for the periods presented. |
Investment Securities | Investment Securities Those investments in debt securities with maturities less than 12 months at the date of purchase are considered short-term investments. Those investments in debt securities with maturities greater than 12 months at the date of purchase are considered long-term investments. The Company’s investment securities classified as available-for-sale are recorded at fair value based on the fair value hierarchy (Level 1 and Level 2 inputs in the fair value hierarchy), and consists primarily of commercial paper, corporate notes and U.S. government and agency securities. Unrealized gains or losses, deemed temporary in nature, are reported as other comprehensive income within the condensed consolidated statement of comprehensive income (loss). There were no unrealized gains or losses during the three and nine months ended September 30, 2021 and 2020. A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to net income (loss) and the corresponding establishment of a new cost basis for the security. Premiums (discounts) are amortized (accreted) over the life of the related security as an adjustment to yield using the straight-line interest method. Dividend and interest income are recognized when earned. Realized gains or losses are included in net income (loss) and are derived using the specific identification method for determining the cost of securities sold. |
Foreign Currency Translation | Foreign Currency Translation The functional currencies of the Company’s subsidiaries are currencies other than the U.S. dollar. The Company translates assets and liabilities of the foreign subsidiaries into U.S. dollars at the exchange rate in effect on the balance sheet date. Revenue and expenses of the subsidiaries are translated into U.S. dollars at the average exchange rate during the period. Gains or losses from these translation adjustments are reported as a separate component of stockholders’ equity in accumulated other comprehensive gain or loss until there is a sale or complete or substantially complete liquidation of the Company’s investment in the foreign subsidiary at which time the gains or losses will be realized and included in net income (loss). As of September 30, 2021 and December 31, 2020, all foreign currency translation gains (losses) have been unrealized and included in accumulated other comprehensive loss. Accumulated other comprehensive loss consists entirely of losses or gains from translation of foreign subsidiaries at September 30, 2021 and December 31, 2020. |
Inventory, Net | Inventory, Net Inventories are stated at the lower of cost or net realizable value, with cost computed on a first-in, first-out basis. The Company reduces the carrying value of inventories for items that are potentially excess, obsolete, or slow-moving based on changes in customer demand, technology developments, or other economic factors. The Company capitalizes inventory produced for commercial sale. The Company capitalizes manufacturing costs as inventory following both the receipt of regulatory approval from regulatory bodies and the Company’s intent to commercialize. Costs associated with developmental products prior to satisfying the Company’s inventory capitalization criteria are charged to research and development expense as incurred. Products that have been approved by certain regulatory authorities may also be used in clinical programs to assess the safety and efficacy of the products for usage that have not been approved by the FDA or other regulatory authorities. The form of product utilized for both commercial and certain clinical programs that are identical are included as inventory with an “alternative future use” as defined in authoritative guidance. Component materials and purchased products associated with clinical development programs are included in inventory and charged to research and development expense when the product enters the research and development process and no longer can be used for commercial purposes and, therefore, does not have an “alternative future use.” For products that are under development and have not yet been approved by regulatory authorities, purchased component materials are charged to research and development expense when the inventory ownership transfers to the Company. The Company analyzes inventory levels to identify inventory that may expire prior to sale, inventory that has a cost basis in excess of its net realizable value, or inventory in excess of expected sales requirements. Although the manufacturing of the r-SNM System is subject to strict quality control, certain batches or units of product may no longer meet quality specifications or may expire, which would require adjustments to the Company’s inventory values. The Company also applies judgment related to the results of quality tests that are performed throughout the production process, as well as the understanding of regulatory guidelines, to determine if it is probable that inventory will be saleable. These quality tests are performed throughout the pre- and post-production processes, and the Company continually gathers information regarding product quality for periods after the manufacturing date. The Company’s products currently have a maximum estimated shelf life range of 12 to 36 months and, based on sales forecasts, the Company expects to realize the carrying value of the product inventory. In the future, reduced demand, quality issues, or excess supply beyond those anticipated by management may result in a material adjustment to inventory levels, which would be recorded as an increase to cost of sales. The determination of whether or not inventory costs will be realizable requires estimates by the Company’s management. A critical input in this determination is future expected inventory requirements based on internal sales forecasts. Management then compares these requirements to the expiry dates of inventory on hand. To the extent that inventory is expected to expire prior to being sold, management will write down the value of inventory. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three |
Goodwill | Goodwill Goodwill represents the excess purchase price over the fair values of the identifiable assets acquired less the liabilities assumed. Goodwill is tested for impairment at least annually. Goodwill is tested for impairment at the reporting unit level by comparing the reporting unit’s carrying amount to the fair value of the reporting unit. The fair values are estimated using an income and discounted cash flow approach. The Company performs an annual impairment test for goodwill in the fourth quarter of each year. The Company considers qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill. During the nine months ended September 30, 2021, the Company did not record any impairment charges related to goodwill. |
Intangible Assets | Intangible Assets Patent license asset The intangible asset represents exclusive rights to an additional field-of-use on the patent suite within the License Agreement with AMF. The additional field-of-use was provided in exchange for 50,000 shares of Series A preferred stock, the fair value of which was $1.0 million in 2013. The intangible asset was recorded at its fair value of $1.0 million at the date contributed. In connection with the IPO, such shares of Series A preferred stock were converted into common stock. Amortization of this asset is recorded over the shorter of the patent or legal life on a straight-line basis. The weighted-average amortization period is 8.71 years. Accumulated amortization of this intangible asset is $0.9 million and $0.8 million at September 30, 2021 and December 31, 2020, respectively. The amortization of this intangible asset was $0.1 million during the nine months ended September 30, 2021 and 2020. The amortization of this intangible asset was minimal during the three months ended September 30, 2021 and 2020. The Company will review the intangible asset for impairment whenever an impairment indicator exists. There have been no intangible asset impairment charges to date. For additional information, see Note 9. Exclusive license asset The intangible asset represents exclusive rights of existing technologies and development services from MST entered into on March 2, 2021. The agreement was provided in exchange for 65,594 shares of common stock, $0.0001 par value, the fair value of which was $3.6 million upon transfer. The intangible asset was recorded at its fair value of $3.3 million at the date of the agreement, with the difference of $0.3 million recorded as a vendor credit in accounts payable in the condensed consolidated balance sheets. Amortization of this asset is recorded over the four-year term of the agreement on a straight-line basis. There was $0.2 million and $0.4 million amortization of this intangible asset recorded during the three and nine months ended September 30, 2021, respectively. The Company will review the intangible asset for impairment whenever an impairment indicator exists. There have been no intangible asset impairment charges to date. For additional information, see Note 9. Contura acquisition The intangible assets represent technology, trade names and trademarks, and customer relationships acquired from Contura on February 25, 2021. For additional information, see Notes 8 and 9. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsThe Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net cash flows that the assets are expected to generate. If said assets are considered to be impaired, the impairment that would be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. |
Leases | Leases In accordance with ASU No. 2016-02, “Leases (Topic 842)”, components of a lease should be split into three categories: lease components, non-lease components, and non-components. The fixed and in-substance fixed contract consideration (including any consideration related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Entities may elect not to separate lease and non-lease components. Rather, entities would account for each lease component and related non-lease component together as a single lease component. The Company has elected to account for lease and non-lease components together as a single lease component for all underlying assets and allocate all of the contract consideration to the lease component only. Topic 842 allows for the use of judgment in determining whether the assumed lease term is for a major part of the remaining economic life of the underlying asset and whether the present value of lease payments represents substantially all of the fair value of the underlying asset. The Company applies the bright line thresholds referenced in Topic 842 to assist in evaluating leases for appropriate classification. The aforementioned bright lines are applied consistently to the Company’s entire portfolio of leases. |
Research and Development | Research and Development Research and development costs are charged to operations as incurred. Research and development costs include salary and personnel-related costs, costs of clinical studies and testing, supplies and materials, and outside consultant costs. |
Advertising Expense | Advertising ExpenseThe Company expenses advertising costs as they are incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method to compute the difference between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets. The realization of these deferred tax assets is dependent upon the Company’s ability to generate sufficient taxable income in future years. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. The Company evaluates the recoverability of the deferred tax assets annually, and maintains a full valuation allowance on its U.S. deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company is subject to transfer pricing and other tax regulations designed to ensure that appropriate levels of income are reported as earned by the Company’s U.S. and foreign entities and are taxed accordingly. In the normal course of business, the Company is audited by federal, state and foreign tax authorities, and subject to inquiries from those tax authorities regarding the amount of taxes due. These inquiries may relate to the timing and amount of deductions and the allocation of income among various tax jurisdictions. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits, if any, in income tax expense. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of employee and non-employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes compensation cost over the requisite service period (typically the vesting period), generally four years. Forfeitures are estimated at the time of the grant and revised in subsequent periods to reflect differences between the estimates and the number of shares that actually become exercisable. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options (as of the date of grant) that have service conditions for vesting. Stock options and restricted shares awards vest based on service conditions, typically over four years. |
Net Loss per Share of Common Stock | Net Loss per Share of Common Stock Basic net loss per share of common stock is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, convertible preferred stock, common and preferred stock warrants, common stock options, unvested RSAs and RSUs are considered to be potentially dilutive securities. Because the Company has reported a net loss in all periods presented, diluted net loss per share of common stock is the same as basic net loss per share of common stock for those periods. For the three and nine months ended September 30, 2021, there were 2,459,912 and 2,460,176 potentially dilutive weighted-average shares, respectively, that were not included in the computation of diluted weighted-average shares of common stock and common stock equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss. For the three and nine months ended September 30, 2020, there were 2,279,353 and 2,251,155 potentially dilutive weighted-average shares, respectively, that were not included in the computation of diluted weighted-average shares of common stock and common stock equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes—Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by clarifying and amending existing guidance related to the recognition of franchise tax, the evaluation of a step-up in the tax basis of goodwill and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. This guidance is effective for annual periods beginning after December 15, 2020, which was the Company’s first quarter of fiscal year 2021, with early adoption permitted. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements or related disclosures. |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Revenue Disaggregated by Product and Geographic Market | The following table provides additional information pertaining to net revenue disaggregated by product and geographic market for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 SNM net revenue United States $ 39,147 $ 34,139 $ 110,135 $ 73,833 International markets 922 1,104 3,031 2,919 $ 40,069 $ 35,243 $ 113,166 $ 76,752 Bulkamid net revenue United States $ 3,921 $ — $ 6,870 $ — International markets 2,923 — 7,119 — $ 6,844 $ — $ 13,989 $ — Total net revenue $ 46,913 $ 35,243 $ 127,155 $ 76,752 |
Schedule of Changes in Allowance for Doubtful Accounts | The following table summarizes the changes in our allowance for doubtful accounts (in thousands): Nine Months Ended 2021 2020 Balance at beginning of period $ 465 $ 75 Write-offs 12 — Bad debt expense, net (92) 390 Balance at end of period $ 385 $ 465 |
Schedule of Changes in Fair Value of Liabilities Measured on Recurring Basis | The following table summarizes the changes in the fair value of recurring Level 3 fair value measurements during the nine months ended September 30, 2021 (in thousands): Liabilities Contingent consideration: December 31, 2020 $ — February 25, 2021 Acquisition 7,630 Loss on change in fair value included in earnings 1,250 September 30, 2021 $ 8,880 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following (in thousands) at: September 30, December 31, 2021 2020 Research and development equipment $ 1,484 $ 1,205 Computer hardware and software 2,468 2,286 Tools and molds 1,597 1,404 Leasehold improvements 3,772 3,759 Furniture and fixtures 1,514 1,360 Construction in progress 537 129 11,372 10,143 Less: accumulated depreciation and amortization (5,204) (3,815) $ 6,168 $ 6,328 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Total Lease Cost | Total lease cost for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Lease cost Operating lease cost $ 524 $ 491 $ 1,583 $ 1,472 Short-term lease cost 25 51 77 119 Variable lease cost 54 65 152 123 Total lease cost $ 603 $ 607 $ 1,812 $ 1,714 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt, Net of Unamortized Debt Issuance Costs | Debt, net of unamortized debt issuance costs, consists of the following (in thousands) at: September 30, December 31, 2021 2020 Debt, principal $ 109 $ 20,000 Accrued loan fees — 1,500 Debt, total 109 21,500 Less: unamortized debt issuance costs — (390) Debt, net of unamortized debt issuance costs $ 109 $ 21,110 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of comprehensive loss is allocated as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Research and development $ 1,549 $ 882 $ 4,435 $ 2,493 General and administrative 2,158 1,448 5,930 4,726 Sales and marketing 2,983 1,445 7,955 4,294 $ 6,690 $ 3,775 $ 18,320 $ 11,513 |
Schedule of Option Awards Fair Valuation Assumptions | The option awards issued under the 2014 Stock Option Plan (the 2014 Plan) and the 2018 Omnibus Incentive Plan (the 2018 Plan) were measured based on fair value. The Company’s fair value calculations were made using the Black-Scholes option pricing model with the following assumptions: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Expected term (in years) 5.50 — 5.46 - 6.00 6.05 Stock volatility 63.49% — 63.49% 72.01% Risk-free interest rate 0.85% — 0.53% - 1.16% 1.37% Dividend rate — — — — |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the nine months ended September 30, 2021 under the 2014 and 2018 Plans (in thousands, except share and per share data): Number of Options Weighted-Average Exercise Price Per Share Aggregate Intrinsic Value Outstanding at December 31, 2020 1,955,243 $ 16.01 Options granted 46,000 58.07 Options exercised (500,322) 12.53 $ 23,450 (1) Options forfeited (36,957) 24.18 Outstanding at September 30, 2021 1,463,964 $ 18.32 $ 68,475 (2) _____________________________________________ (1) Represents the total difference between the Company’s closing stock price at the time of exercise and the stock option exercise price, multiplied by the number of options exercised. (2) Represents the total difference between the Company’s closing stock price on the last trading day of the third quarter of 2021 and the stock option exercise price, multiplied by the number of in-the-money options as of September 30, 2021. The amount of intrinsic value will change based on the fair market value of the Company’s stock. |
Schedule of Restricted Shares Awards Activity | The following table summarizes restricted shares awards activity for the nine months ended September 30, 2021: Number of Restricted Shares Awards Weighted-Average Fair Value Per Share at Grant Date Outstanding at December 31, 2020 817,183 $ 31.70 Restricted shares awards granted 552,400 56.95 Restricted shares awards vested (175,372) 29.35 Restricted shares awards forfeited (81,225) 36.53 Outstanding at September 30, 2021 1,112,986 $ 44.25 |
Schedule of Restricted Stock Units Activity | The following table summarizes restricted stock units activity for the nine months ended September 30, 2021: Number of Restricted Stock Units Weighted-Average Fair Value Per Share at Grant Date Outstanding at December 31, 2020 207,101 $ 23.49 Restricted stock units granted 212,417 43.62 Restricted stock units vested (169,054) 19.89 Outstanding at September 30, 2021 250,464 $ 42.99 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes and Effective Tax Rates | The following table presents details of the provision for income taxes and effective tax rates (in thousands, except percentages): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Provision for income taxes $528 $— $3,269 $1 Effective tax rate 3.16% —% 5.30% —% |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Allocation of Total Purchase Consideration | The following table presents the purchase price allocation of Contura assets acquired and liabilities assumed, based on their relative fair values, which have been preliminarily assessed as of the February 25, 2021 acquisition date (in thousands): Preliminary Purchase Price Allocation Assets Acquired Cash and cash equivalents $ 593 Accounts receivable 1,688 Inventory 988 Prepaid expenses and other current assets 115 Property and equipment 52 Other assets 108 Intangible assets 112,200 Total assets acquired 115,744 Liabilities Assumed Accounts payable 209 Accrued liabilities 820 Accrued compensation and benefits 315 Lease liability 86 Debt 122 Deferred tax liabilities 23,765 Total liabilities assumed 25,317 Net assets acquired 90,427 Purchase price consideration 204,692 Goodwill $ 114,265 |
Schedule of Intangible Assets Acquired | Identified intangible assets consist of technology, trade names and trademarks, and customer relationships. The fair value of each is being determined by a valuation specialist and the useful life determination was made by management. Both determinations were made in accordance with ASC 805 and are outlined in the table below: Preliminary Preliminary Technology $ 81,100 12 years Trade names and trademarks $ 19,700 Indefinite Customer relationships $ 11,400 12 years |
Schedule of Pro Forma Information | The following unaudited pro forma financial information presents the condensed consolidated results of operations of the Company with Contura for the three and nine months ended September 30, 2021 and 2020, and the year ended December 31, 2020 as if the acquisition had occurred on January 1, 2020 instead of February 25, 2021 (in thousands, except share and per share data). Contura’s revenue and net income for the three months ended September 30, 2021 were $6.8 million and $5.2 million, respectively, of which $6.8 million in revenue and $5.2 million in net income was recognized after the February 25, 2021 acquisition date. Contura’s revenue and net loss for the nine months ended September 30, 2021 were $15.3 million and $2.9 million, respectively, of which $14.0 million in revenue and $3.5 million in net loss was recognized after the February 25, 2021 acquisition date. Revenue and net loss recognized after the acquisition date were recorded within the Company’s condensed consolidated statements of comprehensive loss. The pro forma information does not necessarily reflect the results of operations that would have occurred had the entities been a single company during the respective periods. Three Months Ended Nine Months Ended Year ended 2021 2020 2021 2020 2020 Net revenue $ 46,913 $ 38,208 $ 128,508 $ 83,989 $ 122,444 Net loss $ (17,250) $ (10,024) $ (62,369) $ (51,424) $ (63,183) Net loss per share, basic and diluted $ (0.38) $ (0.25) $ (1.46) $ (1.37) $ (1.66) Weighted-average shares used to compute basic and diluted net loss per share 44,848,023 39,927,507 42,656,984 37,409,567 38,077,918 The unaudited pro forma financial information above reflects the following pro forma adjustments: • An adjustment to decrease net loss for the three and nine months ended September 30, 2021 by none and $4.4 million, respectively, to eliminate integration and acquisition related costs incurred by the Company and Contura and a corresponding increase to net loss for the three and nine months ended September 30, 2020 by none and $4.4 million, respectively, to give effect to the integration and acquisition of Contura as if it had occurred on January 1, 2020. • An adjustment to increase net loss for the three and nine months ended September 30, 2021 by none and $1.3 million, respectively, and a corresponding increase to net loss for the three and nine months ended September 30, 2020 by $1.9 million and $5.8 million, respectively, to reflect amortization of the fair value adjustments for intangible assets as if the assets were acquired January 1, 2020. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amount of Goodwill | The change in the carrying amount of goodwill during the nine months ended September 30, 2021 included the following (in thousands): December 31, 2020 $ — February 25, 2021 Acquisition 114,265 Foreign currency translation adjustment (4,700) September 30, 2021 $ 109,565 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets | Intangible assets as of September 30, 2021 included the following (in thousands): September 30, 2021 Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Foreign currency translation adjustment Intangible Assets, Net Patent license asset 8.71 years $ 1,000 (890) — $ 110 Exclusive license asset 4 years $ 3,300 (440) — $ 2,860 Technology 12 years $ 81,100 (4,004) (1,690) $ 75,406 Trade names and trademarks Indefinite $ 19,700 — (440) $ 19,260 Customer relationships 12 years $ 11,400 (564) (170) $ 10,666 $ 116,500 $ (5,898) $ (2,300) $ 108,302 Intangible asset as of December 31, 2020 included the following (in thousands): December 31, 2020 Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Foreign currency translation adjustment Intangible Asset, Net Patent license asset 8.71 years $ 1,000 (804) — $ 196 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | May 14, 2021 | Mar. 02, 2021 | Feb. 25, 2021 | May 12, 2020 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2013 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
May 2020 and 2021 Follow-On Offering: | |||||||||||||
Sale of stock, price per share (in USD per share) | $ 50 | $ 32.50 | |||||||||||
Revenue Recognition | |||||||||||||
Allowance for product returns | $ 200,000 | $ 200,000 | $ 300,000 | ||||||||||
Replacement costs | 0 | $ 0 | 200,000 | $ 100,000 | |||||||||
Investment Securities: | |||||||||||||
Unrealized gain (loss) on investment securities | 0 | 0 | 0 | 0 | |||||||||
Outstanding investment securities | 0 | 0 | 0 | ||||||||||
Inventory: | |||||||||||||
Finished goods inventory | 45,300,000 | 45,300,000 | 42,100,000 | ||||||||||
Work-in-process inventory | 9,600,000 | 9,600,000 | 3,500,000 | ||||||||||
Raw materials inventory | 15,500,000 | 15,500,000 | 17,500,000 | ||||||||||
Inventory reserves | 300,000 | 300,000 | $ 0 | ||||||||||
Goodwill: | |||||||||||||
Impairment charges related to goodwill | 0 | ||||||||||||
Intangible Asset: | |||||||||||||
Fair value of shares issued for purchase of intangible asset | $ 3,637,000 | ||||||||||||
Accumulated Amortization | 5,898,000 | 5,898,000 | |||||||||||
Amortization of intangible assets | $ 2,216,000 | 29,000 | 5,094,000 | 86,000 | |||||||||
Impairment of finite-lived intangible asset | $ 0 | ||||||||||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Advertising Expense: | |||||||||||||
Advertising expense | $ 2,600,000 | $ 800,000 | $ 5,500,000 | $ 1,400,000 | |||||||||
Stock-Based Compensation: | |||||||||||||
Requisite service period of recognition of compensation cost | 4 years | ||||||||||||
Net Loss per Share of Common Stock: | |||||||||||||
Potentially dilutive weighted-average shares not included in computation of diluted weighted average shares (in shares) | 2,459,912 | 2,279,353 | 2,460,176 | 2,251,155 | |||||||||
Contura | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Contingent consideration at fair value | $ 7,600,000 | ||||||||||||
Intangible Asset: | |||||||||||||
Finite-lived intangible assets, weighted-average amortization period | 12 years | ||||||||||||
Amortization of intangible assets | $ 2,000,000 | $ 4,600,000 | |||||||||||
Contura | Contingent Consideration Liability | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Contingent consideration at fair value | $ 6,800,000 | 8,900,000 | $ 8,900,000 | $ 7,600,000 | |||||||||
Increase in contingent consideration liability | 1,300,000 | ||||||||||||
Stock Option and Restricted Stock-Based Awards | |||||||||||||
Stock-Based Compensation: | |||||||||||||
Vesting period | 4 years | ||||||||||||
Restricted Stock Units | |||||||||||||
Stock-Based Compensation: | |||||||||||||
Vesting period | 1 year | ||||||||||||
Patent license asset | |||||||||||||
Intangible Asset: | |||||||||||||
Finite-lived intangible asset acquired | $ 1,000,000 | ||||||||||||
Finite-lived intangible assets, weighted-average amortization period | 8 years 8 months 15 days | ||||||||||||
Accumulated Amortization | 890,000 | $ 890,000 | $ 804,000 | ||||||||||
Amortization of intangible assets | 0 | $ 0 | $ 100,000 | $ 100,000 | |||||||||
Exclusive license asset | |||||||||||||
Intangible Asset: | |||||||||||||
Finite-lived intangible asset acquired | $ 3,300,000 | ||||||||||||
Finite-lived intangible assets, weighted-average amortization period | 4 years | ||||||||||||
Accumulated Amortization | 440,000 | $ 440,000 | |||||||||||
Amortization of intangible assets | $ 200,000 | $ 400,000 | |||||||||||
Vendor credit in accounts payable | $ 300,000 | ||||||||||||
Preferred Stock | Patent license asset | |||||||||||||
Intangible Asset: | |||||||||||||
Stock issued for purchase of intangible asset (in shares) | 50,000 | ||||||||||||
Fair value of shares issued for purchase of intangible asset | $ 1,000,000 | ||||||||||||
Common Stock | |||||||||||||
Intangible Asset: | |||||||||||||
Stock issued for purchase of intangible asset (in shares) | 65,594 | ||||||||||||
Common Stock | Exclusive license asset | |||||||||||||
Intangible Asset: | |||||||||||||
Stock issued for purchase of intangible asset (in shares) | 65,594 | ||||||||||||
Fair value of shares issued for purchase of intangible asset | $ 3,600,000 | ||||||||||||
Minimum | |||||||||||||
Inventory: | |||||||||||||
Inventory shelf life | 12 months | ||||||||||||
Property and Equipment: | |||||||||||||
Property and equipment useful life | 3 years | ||||||||||||
Maximum | |||||||||||||
Inventory: | |||||||||||||
Inventory shelf life | 36 months | ||||||||||||
Property and Equipment: | |||||||||||||
Property and equipment useful life | 7 years | ||||||||||||
Follow-on Offering | |||||||||||||
May 2020 and 2021 Follow-On Offering: | |||||||||||||
Stock issued (in shares) | 4,025,000 | 4,600,000 | |||||||||||
Sale of stock, price per share (in USD per share) | $ 50 | $ 32.50 | |||||||||||
Net proceeds from sale of stock | $ 190,000,000 | $ 140,500,000 | |||||||||||
Exercise of Underwriters Option | |||||||||||||
May 2020 and 2021 Follow-On Offering: | |||||||||||||
Stock issued (in shares) | 525,000 | 600,000 |
Nature of Operations and Summ_5
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Revenue Disaggregated by Geographic Market (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 46,913 | $ 35,243 | $ 127,155 | $ 76,752 |
SNM net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 40,069 | 35,243 | 113,166 | 76,752 |
Bulkamid net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 6,844 | 0 | 13,989 | 0 |
United States | SNM net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 39,147 | 34,139 | 110,135 | 73,833 |
United States | Bulkamid net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 3,921 | 0 | 6,870 | 0 |
International markets | SNM net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 922 | 1,104 | 3,031 | 2,919 |
International markets | Bulkamid net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 2,923 | $ 0 | $ 7,119 | $ 0 |
Nature of Operations and Summ_6
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 465 | $ 75 |
Write-offs | 12 | 0 |
Bad debt expense, net | (92) | 390 |
Balance at end of period | $ 385 | $ 465 |
Nature of Operations and Summ_7
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Changes in Fair Value of Liabilities Measured on Recurring Basis (Details) - Level 3 - Contingent Consideration Liability - Fair Value, Recurring $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Contingent consideration: | |
Balance at beginning of period | $ 0 |
February 25, 2021 Acquisition | 7,630 |
Loss on change in fair value included in earnings | 1,250 |
Balance at end of period | $ 8,880 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 11,372 | $ 10,143 |
Less: accumulated depreciation and amortization | (5,204) | (3,815) |
Property and equipment, net | 6,168 | 6,328 |
Research and development equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,484 | 1,205 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,468 | 2,286 |
Tools and molds | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,597 | 1,404 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,772 | 3,759 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,514 | 1,360 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 537 | $ 129 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 6,483 | $ 1,253 | ||
Property and Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 500 | $ 500 | $ 1,400 | $ 1,200 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Sep. 30, 2020petition | Mar. 16, 2020petition | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Aug. 31, 2020ft² | Jun. 30, 2019ft² | Nov. 30, 2017ft² | Aug. 31, 2014ft² |
Loss Contingencies [Line Items] | |||||||||||
Variable lease cost | $ 54,000 | $ 65,000 | $ 152,000 | $ 123,000 | |||||||
Right-of-use assets obtained in exchange for operating lease liabilities | 0 | 0 | 100,000 | 3,000,000 | |||||||
Right-of-use asset | 6,400,000 | 6,400,000 | $ 7,100,000 | ||||||||
Cash paid for operating lease liabilities | 500,000 | 400,000 | 1,500,000 | 1,000,000 | |||||||
Amortization of the ROU asset | $ 300,000 | 200,000 | $ 800,000 | 600,000 | |||||||
Weighted-average remaining lease terms for operating leases | 6 years | 6 years | 6 years 7 months 6 days | ||||||||
Weighted-average discount rate on operating leases (as a percent) | 6.70% | 6.70% | 6.70% | ||||||||
Period after first sale royalty is due | 12 years | ||||||||||
Net revenue due as royalty (as a percent) | 4.00% | ||||||||||
Revenues | $ 46,913,000 | 35,243,000 | $ 127,155,000 | 76,752,000 | |||||||
Royalty expense | 1,600,000 | 1,400,000 | 4,500,000 | 3,000,000 | |||||||
Accrued royalty expense | 1,600,000 | 1,600,000 | $ 1,400,000 | ||||||||
Medtronic Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of petitions filed with the United States Patent and Trademark Office | petition | 7 | 7 | |||||||||
Number of petitions accepted by the United States Patent and Trademark Office | petition | 6 | ||||||||||
Minimum number of claims by Medtronic that are invalid as determined by the United States Patent and Trademark Office | petition | 1 | ||||||||||
SNM net revenue | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Revenues | 40,069,000 | $ 35,243,000 | 113,166,000 | $ 76,752,000 | |||||||
Maximum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Royalty commitments | $ 200,000 | $ 200,000 | |||||||||
First Lease | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Term of operating lease contract | 5 years | ||||||||||
Net rentable area (square feet) | ft² | 12,215 | ||||||||||
Second Lease | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Term of operating lease contract | 7 years | ||||||||||
Net rentable area (square feet) | ft² | 25,548 | ||||||||||
Renewal term of operating lease | 5 years | ||||||||||
Third Lease | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Term of operating lease contract | 8 years | ||||||||||
Net rentable area (square feet) | ft² | 32,621 | ||||||||||
Renewal term of operating lease | 5 years | ||||||||||
Fourth Lease | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Term of operating lease contract | 38 months | ||||||||||
Net rentable area (square feet) | ft² | 5,693 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Total Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 524 | $ 491 | $ 1,583 | $ 1,472 |
Short-term lease cost | 25 | 51 | 77 | 119 |
Variable lease cost | 54 | 65 | 152 | 123 |
Total lease cost | $ 603 | $ 607 | $ 1,812 | $ 1,714 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ 0 | $ 390 | ||
Term Loans | Term Loan Two | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ 4,400 | |||
Interest expense | $ 4,400 | |||
Term Loans | Term Loan One | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ 400 | |||
Interest expense | $ 400 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt, Net of Unamortized Debt Issuance Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Debt, principal | $ 109 | $ 20,000 |
Accrued loan fees | 0 | 1,500 |
Debt, total | 109 | 21,500 |
Less: unamortized debt issuance costs | 0 | (390) |
Debt, net of unamortized debt issuance costs | $ 109 | $ 21,110 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 6,690 | $ 3,775 | $ 18,320 | $ 11,513 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,549 | 882 | 4,435 | 2,493 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 2,158 | 1,448 | 5,930 | 4,726 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 2,983 | $ 1,445 | $ 7,955 | $ 4,294 |
Stock-based Compensation - Sc_2
Stock-based Compensation - Schedule of Option Awards Fair Valuation Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 5 years 6 months | 0 years | 6 years 18 days | |
Stock volatility, minimum (as a percent) | 63.49% | 0.00% | 63.49% | 72.01% |
Stock volatility, maximum (as a percent) | 63.49% | 0.00% | 63.49% | 72.01% |
Risk-free interest rate, minimum (as a percent) | 0.85% | 0.00% | 0.53% | 1.37% |
Risk-free interest rate, maximum (as a percent) | 0.85% | 0.00% | 1.16% | 1.37% |
Dividend rate (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 5 years 5 months 15 days | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 6 years |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average grant date fair value of options granted (in USD per share) | $ 33.08 | $ 0 | $ 32.93 | $ 18.56 | |
Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to unvested stock options | $ 8.4 | $ 8.4 | $ 11.6 | ||
Weighted-average period of recognition of compensation cost | 1 year 9 months 18 days | 2 years 4 months 24 days | |||
Weighted-average remaining contractual term of options outstanding and exercisable | 7 years 2 months 12 days | 7 years 8 months 12 days | |||
Restricted Shares Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average period of recognition of compensation cost | 3 years 2 months 12 days | 3 years 3 months 18 days | |||
Unrecognized compensation cost related to unvested RSAs or RSUs | 42.3 | $ 42.3 | $ 22.6 | ||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average period of recognition of compensation cost | 9 months 18 days | 10 months 24 days | |||
Unrecognized compensation cost related to unvested RSAs or RSUs | $ 3.9 | $ 3.9 | $ 1.2 |
Stock-based Compensation - Sc_3
Stock-based Compensation - Schedule of Stock Option Activity (Details) - Stock Option $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Number of Options | |
Outstanding at beginning of period (in shares) | shares | 1,955,243 |
Options granted (in shares) | shares | 46,000 |
Options exercised (in shares) | shares | (500,322) |
Options forfeited (in shares) | shares | (36,957) |
Outstanding at end of period (in shares) | shares | 1,463,964 |
Weighted-Average Exercise Price Per Share | |
Outstanding at beginning of period (in USD per share) | $ / shares | $ 16.01 |
Options granted (in USD per share) | $ / shares | 58.07 |
Options exercised (in USD per share) | $ / shares | 12.53 |
Options forfeited (in USD per share) | $ / shares | 24.18 |
Outstanding at end of period (in USD per share) | $ / shares | $ 18.32 |
Aggregate Intrinsic Value | |
Intrinsic value of options exercised | $ | $ 23,450 |
Intrinsic value of options outstanding | $ | $ 68,475 |
Stock-based Compensation - Sc_4
Stock-based Compensation - Schedule of Restricted Shares Awards Activity (Details) - Restricted Shares Awards | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of Restricted Shares Awards | |
Outstanding at beginning of period (in shares) | shares | 817,183 |
Granted (in shares) | shares | 552,400 |
Vested (in shares) | shares | (175,372) |
Forfeited (in shares) | shares | (81,225) |
Outstanding at end of period (in shares) | shares | 1,112,986 |
Weighted-Average Fair Value Per Share at Grant Date | |
Outstanding at beginning of period (in USD per share) | $ / shares | $ 31.70 |
Granted (in USD per share) | $ / shares | 56.95 |
Vested (in USD per share) | $ / shares | 29.35 |
Forfeited (in USD per share) | $ / shares | 36.53 |
Outstanding at end of period (in USD per share) | $ / shares | $ 44.25 |
Stock-based Compensation - Sc_5
Stock-based Compensation - Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of Restricted Stock Units | |
Outstanding at beginning of period (in shares) | shares | 207,101 |
Granted (in shares) | shares | 212,417 |
Vested (in shares) | shares | (169,054) |
Outstanding at end of period (in shares) | shares | 250,464 |
Weighted-Average Fair Value Per Share at Grant Date | |
Outstanding at beginning of period (in USD per share) | $ / shares | $ 23.49 |
Granted (in USD per share) | $ / shares | 43.62 |
Vested (in USD per share) | $ / shares | 19.89 |
Outstanding at end of period (in USD per share) | $ / shares | $ 42.99 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes and Effective Tax Rates (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 528 | $ 0 | $ 3,269 | $ 1 |
Effective tax rate | 3.16% | 0.00% | 5.30% | 0.00% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | Dec. 31, 2020USD ($) |
Income Tax Disclosure [Abstract] | |
Operating loss carryforwards | $ 213.5 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Retirement Benefits [Abstract] | ||||
Contributions by employer | $ 0.4 | $ 0.4 | $ 1.4 | $ 1.2 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - USD ($) | Feb. 25, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||||||
Amortization of intangible assets | $ 2,216,000 | $ 29,000 | $ 5,094,000 | $ 86,000 | |||||||
Goodwill | 109,565,000 | $ 109,565,000 | 109,565,000 | $ 0 | |||||||
Revenues | 46,913,000 | 35,243,000 | 127,155,000 | 76,752,000 | |||||||
Net loss | (17,250,000) | $ (25,148,000) | $ (22,503,000) | $ (9,168,000) | $ (19,783,000) | $ (14,616,000) | (64,901,000) | $ (43,567,000) | |||
Contura | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Revenues | 6,800,000 | 15,300,000 | |||||||||
Net loss | 5,200,000 | 2,900,000 | |||||||||
Contura | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Equity interest acquired (as a percent) | 100.00% | ||||||||||
Purchase price consideration | $ 204,692,000 | ||||||||||
Cash consideration transferred | 141,300,000 | ||||||||||
Stock consideration transferred | $ 55,700,000 | ||||||||||
Stock transferred in acquisition (in shares) | 1,096,583 | ||||||||||
Maximum contingent consideration | $ 35,000,000 | ||||||||||
Amount of sales to achieve for maximum contingent consideration | 50,000,000 | ||||||||||
Contingent consideration at fair value | 7,600,000 | ||||||||||
Amortization of intangible assets | 2,000,000 | 4,600,000 | |||||||||
Balance of intangible assets acquired, net | $ 112,200,000 | 105,300,000 | 105,300,000 | 105,300,000 | |||||||
Finite-lived intangible assets, weighted-average amortization period | 12 years | ||||||||||
Goodwill | $ 114,265,000 | ||||||||||
Deferred tax liabilities | 23,765,000 | ||||||||||
Acquisition-related costs | 4,400,000 | ||||||||||
Revenue of acquiree since acquisition date | 6,800,000 | 14,000,000 | |||||||||
Net loss of acquiree since acquisition date | 5,200,000 | 3,500,000 | |||||||||
Contura | Contingent Consideration Liability | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent consideration at fair value | $ 6,800,000 | 8,900,000 | 7,600,000 | 8,900,000 | 8,900,000 | ||||||
Increase in goodwill | 800,000 | ||||||||||
Contura | Deferred Tax Liability | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Increase in goodwill | 5,900,000 | 17,900,000 | |||||||||
Deferred tax liabilities | $ 23,800,000 | $ 17,900,000 | $ 23,800,000 | $ 23,800,000 |
Acquisition - Schedule of Preli
Acquisition - Schedule of Preliminary Allocation of Total Purchase Consideration (Details) - USD ($) $ in Thousands | Feb. 25, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Liabilities Assumed | |||
Goodwill | $ 109,565 | $ 0 | |
Contura | |||
Assets Acquired | |||
Cash and cash equivalents | $ 593 | ||
Accounts receivable | 1,688 | ||
Inventory | 988 | ||
Prepaid expenses and other current assets | 115 | ||
Property and equipment | 52 | ||
Other assets | 108 | ||
Intangible assets | 112,200 | $ 105,300 | |
Total assets acquired | 115,744 | ||
Liabilities Assumed | |||
Accounts payable | 209 | ||
Accrued liabilities | 820 | ||
Accrued compensation and benefits | 315 | ||
Lease liability | 86 | ||
Debt | 122 | ||
Deferred tax liabilities | 23,765 | ||
Total liabilities assumed | 25,317 | ||
Net assets acquired | 90,427 | ||
Purchase price consideration | 204,692 | ||
Goodwill | $ 114,265 |
Acquisition - Schedule of Intan
Acquisition - Schedule of Intangible Assets Acquired (Details) - Contura $ in Thousands | Feb. 25, 2021USD ($) |
Business Acquisition [Line Items] | |
Preliminary Useful Life | 12 years |
Trade names and trademarks | |
Business Acquisition [Line Items] | |
Fair value of indefinite-lived intangibles acquired | $ 19,700 |
Technology | |
Business Acquisition [Line Items] | |
Fair value of finite-lived intangibles acquired | $ 81,100 |
Preliminary Useful Life | 12 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Fair value of finite-lived intangibles acquired | $ 11,400 |
Preliminary Useful Life | 12 years |
Acquisition - Schedule of Pro F
Acquisition - Schedule of Pro Forma Information (Details) - Contura - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Business Acquisition, Pro Forma Information [Abstract] | |||||
Net revenue | $ 46,913 | $ 38,208 | $ 128,508 | $ 83,989 | $ 122,444 |
Net loss | $ (17,250) | $ (10,024) | $ (62,369) | $ (51,424) | $ (63,183) |
Net loss per share, basic (USD per share) | $ (0.38) | $ (0.25) | $ (1.46) | $ (1.37) | $ (1.66) |
Net loss per share, diluted (USD per share) | $ (0.38) | $ (0.25) | $ (1.46) | $ (1.37) | $ (1.66) |
Weighted-average shares used to compute basic net loss per share (in shares) | 44,848,023 | 39,927,507 | 42,656,984 | 37,409,567 | 38,077,918 |
Weighted-average shares used to compute diluted net loss per share (in shares) | 44,848,023 | 39,927,507 | 42,656,984 | 37,409,567 | 38,077,918 |
Acquisition-related costs | |||||
Business Acquisition, Pro Forma Information [Abstract] | |||||
Net loss | $ 0 | $ 0 | $ 4,400 | $ (4,400) | |
Fair value adjustment to intangible assets | |||||
Business Acquisition, Pro Forma Information [Abstract] | |||||
Net loss | $ 0 | (1,900) | $ (1,300) | (5,800) | |
Fair value adjustment for deferred tax liabilities | |||||
Business Acquisition, Pro Forma Information [Abstract] | |||||
Net loss | $ 600 | $ 1,700 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 0 |
February 25, 2021 Acquisition | 114,265 |
Foreign currency translation adjustment | (4,700) |
Balance at end of period | $ 109,565 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Finite-Lived and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net: | ||
Accumulated Amortization | $ (5,898) | |
Foreign currency translation adjustment | (2,300) | |
Intangible Assets, Net (Excluding Goodwill): | ||
Gross Carrying Amount | 116,500 | |
Accumulated Amortization | (5,898) | |
Foreign currency translation adjustment | (2,300) | |
Intangible Assets, Net | 108,302 | $ 196 |
Trade names and trademarks | ||
Indefinite-lived Intangible Assets: | ||
Gross Carrying Amount | 19,700 | |
Foreign currency translation adjustment | (440) | |
Intangible Assets, Net | $ 19,260 | |
Patent license asset | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 8 years 8 months 15 days | 8 years 8 months 15 days |
Finite-Lived Intangible Assets, Net: | ||
Gross Carrying Amount | $ 1,000 | $ 1,000 |
Accumulated Amortization | (890) | (804) |
Foreign currency translation adjustment | 0 | 0 |
Intangible Assets, Net | 110 | 196 |
Intangible Assets, Net (Excluding Goodwill): | ||
Accumulated Amortization | (890) | (804) |
Foreign currency translation adjustment | $ 0 | $ 0 |
Exclusive license asset | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 4 years | |
Finite-Lived Intangible Assets, Net: | ||
Gross Carrying Amount | $ 3,300 | |
Accumulated Amortization | (440) | |
Foreign currency translation adjustment | 0 | |
Intangible Assets, Net | 2,860 | |
Intangible Assets, Net (Excluding Goodwill): | ||
Accumulated Amortization | (440) | |
Foreign currency translation adjustment | $ 0 | |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 12 years | |
Finite-Lived Intangible Assets, Net: | ||
Gross Carrying Amount | $ 81,100 | |
Accumulated Amortization | (4,004) | |
Foreign currency translation adjustment | (1,690) | |
Intangible Assets, Net | 75,406 | |
Intangible Assets, Net (Excluding Goodwill): | ||
Accumulated Amortization | (4,004) | |
Foreign currency translation adjustment | $ (1,690) | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 12 years | |
Finite-Lived Intangible Assets, Net: | ||
Gross Carrying Amount | $ 11,400 | |
Accumulated Amortization | (564) | |
Foreign currency translation adjustment | (170) | |
Intangible Assets, Net | 10,666 | |
Intangible Assets, Net (Excluding Goodwill): | ||
Accumulated Amortization | (564) | |
Foreign currency translation adjustment | $ (170) |