Natera (NTRA) 10-K 15 Mar 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Feb. 28, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Natera, Inc.
Entity Central Index Key	1,604,821
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 460
Entity Common Stock, Shares Outstanding		54,131,461
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 12,620	$ 15,256
Restricted cash, current portion	59	1,092
Short-term investments	106,247	130,860
Accounts receivable, net of allowance of $2,000 in 2017 and $1,890 in 2016	8,252	13,396
Inventory	8,998	6,414
Prepaid expenses and other current assets	8,612	7,097
Total current assets	144,788	174,115
Property and equipment, net	29,667	32,289
Restricted cash, long term portion	342	342
Other assets	3,979	3,934
Total assets	178,776	210,680
Current liabilities:
Accounts payable	8,529	11,479
Accrued compensation	9,599	11,067
Other accrued liabilities	33,207	19,879
Deferred revenue	1,420	574
Short-term debt financing	50,112	49,624
Warrants	2,644	3,792
Total current liabilities	105,511	96,415
Long-term debt financing	73,065
Deferred rent, net of current portion	9,241	7,789
Other long-term liabilities	1,329
Total liabilities	189,146	104,204
Commitments and contingencies (Note 6)
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value: 50,000 shares authorized; no shares issued and outstanding at December 31, 2017 and 2016, respectively
Common stock, $0.0001 par value: 750,000 shares authorized at December 31, 2017 and 2016, respectively; 54,040 and 52,665 shares issued and outstanding at December 31, 2017 and 2016, respectively	6	5
Additional paid in capital	472,552	453,044
Accumulated deficit	(482,162)	(345,848)
Accumulated other comprehensive loss	(766)	(725)
Total stockholders' (deficit) equity	(10,370)	106,476
Total liabilities and stockholders' equity (deficit)	$ 178,776	$ 210,680

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets
Allowances on accounts receivable	$ 2,000	$ 1,890
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	50,000	50,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	750,000	750,000
Common stock, shares issued	54,040	52,665
Common stock, shares outstanding	54,040	52,665

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues
Product revenues	$ 205,489	$ 213,968	$ 188,168
Licensing and other revenues	5,450	3,106	2,187
Total revenues	210,939	217,074	190,355
Cost and expenses
Cost of product revenues	135,508	134,494	112,845
Cost of licensing and other revenues	4,088	1,080
Research and development	50,064	41,862	27,711
Selling, general and administrative	155,306	136,126	109,637
Total cost and expenses	344,966	313,562	250,193
(Loss) income from operations	(134,027)	(96,488)	(59,838)
Interest expense	(4,213)	(533)	(3,505)
Interest benefit from changes in the fair value of long term debt			964
Interest and other income (expense), net	2,380	1,398	(7,896)
Loss before income taxes	(135,860)	(95,623)	(70,275)
Income tax expense	(454)	(142)
Net loss	(136,314)	(95,765)	(70,275)
Unrealized (loss) gain on available-for-sale securities, net of tax	(41)	691	(1,416)
Comprehensive loss	$ (136,355)	$ (95,074)	$ (71,691)
Net loss per share (Note 13):
Basic (in dollars per share)	$ (2.56)	$ (1.86)	$ (2.68)
Diluted (in dollars per share)	$ (2.56)	$ (1.86)	$ (2.68)
Weighted-average number of shares used in computing basic and diluted net loss per share:
Basic (in shares)	53,312	51,576	26,204
Diluted (in shares)	53,604	51,576	26,204

Consolidated Statements of Conv

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands	Common stock	Additional Paid-in Capital	Notes Receivable from Officers	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance at Dec. 31, 2014	$ 1	$ 8,664	$ (192)		$ (179,808)	$ (171,335)
Balance (in shares) at Dec. 31, 2014	6,879
Issuance of common stock upon exercise of stock options		1,258				1,258
Issuance of common stock upon exercise of stock options (in shares)	1,170
Stock based compensation		7,326				7,326
Officer loan receivable repayment			$ 192			192
Issuance of common stock in connection with the initial public offering	$ 1	182,465				182,466
Issuance of common stock in connection with the initial public offering (in shares)	10,900
Issuance costs of Initial Public Offering		(4,036)				(4,036)
Conversion of all Preferred Stock into Common Stock upon the completion of the initial public offering	$ 3	240,582				240,585
Conversion of all Preferred Stock into Common Stock upon the completion of the initial public offering (in shares)	31,397
Unrealized (loss) gain on available-for-sale investments				$ (1,416)		(1,416)
Net loss					(70,275)	(70,275)
Balance at Dec. 31, 2015	$ 5	436,259		(1,416)	(250,083)	184,765
Balance (in shares) at Dec. 31, 2015	50,346
Issuance of common stock upon exercise of stock options		3,595				3,595
Issuance of common stock upon exercise of stock options (in shares)	1,913
Issuance of common stock under employee stock purchase plan		2,589				2,589
Issuance of common stock under employee stock purchase plan (in shares)	341
Vesting of restricted stock (in shares)	65
Stock based compensation		10,601				10,601
Unrealized (loss) gain on available-for-sale investments				691		691
Net loss					(95,765)	(95,765)
Balance at Dec. 31, 2016	$ 5	453,044		(725)	(345,848)	$ 106,476
Balance (in shares) at Dec. 31, 2016	52,665					52,665
Issuance of common stock upon exercise of stock options	$ 1	2,314				$ 2,315
Issuance of common stock upon exercise of stock options (in shares)	565
Issuance of common stock under employee stock purchase plan		3,344				3,344
Issuance of common stock under employee stock purchase plan (in shares)	446
Issuance of common stock in exchange for commitment to provide debt financing		2,448				2,448
Issuance of common stock in exchange for commitment to provide debt financing (in shares)	300
Vesting of restricted stock (in shares)	64
Stock based compensation		11,402				11,402
Unrealized (loss) gain on available-for-sale investments				(41)		(41)
Net loss					(136,314)	(136,314)
Balance at Dec. 31, 2017	$ 6	$ 472,552		$ (766)	$ (482,162)	$ (10,370)
Balance (in shares) at Dec. 31, 2017	54,040					54,040

Consolidated Statements of Con6

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Temporary Equity) - 12 months ended Dec. 31, 2015 - USD ($) shares in Thousands, $ in Thousands	Convertible preferred stock	Total
Convertible preferred stock balance at Dec. 31, 2014	$ 240,612
Convertible preferred stock balance (in shares) at Dec. 31, 2014	31,397
Issuance of convertible preferred stock (in shares)
Issuance costs of Series F Preferred Stock	$ (27)
Conversion of all Preferred Stock into Common Stock upon the completion of the initial public offering	$ (240,585)	$ 240,585
Conversion of all Preferred Stock into Common Stock upon the completion of the initial public offering (in shares)	(31,397)
Convertible preferred stock balance at Dec. 31, 2015
Convertible preferred stock balance (in shares) at Dec. 31, 2015

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating activities
Net loss	$ (136,314)	$ (95,765)	$ (70,275)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	7,143	6,176	5,535
Impairment of assets	576	2,138	1,557
Stock-based compensation	11,402	10,601	7,326
Inventory excess adjustments	502	2,110
Provision for doubtful accounts	143	984	529
Premium amortization and discount accretion on investment securities	857	1,445	288
Loss (gain) realized on investment securities	64	(191)
Loss (gain) on sales of property and equipment	12		(2)
(Gain) loss from changes in fair value of warrants	(1,148)	143	1,481
Interest accrued for borrowings	488	533
Amortization of debt discount	154		28
Gain from change in fair value of long term debt			(964)
Loss on debt extinguishment			7,313
Changes in operating assets and liabilities
Accounts receivable	5,001	(8,518)	(450)
Inventory	(3,086)	(431)	2,929
Prepaid expenses and other current assets	(1,515)	(2,077)	(3,797)
Restricted cash	1,033	150	(273)
Other assets	600	(2,812)	(1,041)
Accounts payable	217	1,256	1,354
Accrued compensation	(1,467)	2,515	2,572
Other accrued liabilities	14,919	(378)	8,026
Deferred revenue	846	430	32
Deferred rent, net of current portion	1,452	7,789
Other long-term liabilities	1,329
Net cash used in operating activities	(96,792)	(73,902)	(37,832)
Investing activities
Purchases of investments	(272,819)	(53,522)	(203,290)
Proceeds from sale of investments	65,270	59,185
Proceeds from maturity of investments	231,200	64,500
Proceeds from sale of property and equipment			463
Purchases of property and equipment, net	(9,867)	(23,136)	(7,852)
Net cash provided by (used in) investing activities	13,784	47,027	(210,679)
Financing activities
Proceeds from issuance of common stock, net of issuance costs			180,001
Proceeds from exercise of stock options	2,315	3,595	1,258
Proceeds from issuance of common stock under employee stock purchase plan	3,344	2,589
Proceeds from short-term financing			42,000
Borrowings under long-term debt facility	75,000
Payment for debt issuance costs on long-term debt facility	(287)
Borrowings under credit facility		8,000
Repayment under credit facility		(1,000)
Costs paid for loan			(6)
Repayments of equipment financing			(5,850)
Repayments of secured financings			(20,000)
Proceeds from collection of officer receivable			192
Payment to lender for debt extinguishment			(7,313)
Net cash provided by financing activities	80,372	13,184	190,282
Net decrease in cash	(2,636)	(13,691)	(58,229)
Cash at beginning of period	15,256	28,947	87,176
Cash at end of period	12,620	15,256	28,947
Supplemental disclosure of cash flow information:
Cash paid for income taxes	177
Cash paid for interest	3,568		2,060
Non-cash investing and financing activities:
Purchases of property and equipment through accounts payable and accruals	$ 447	$ 5,204	765
Issuance of common stock for lender's commitment to debt financing	2,448
Conversion of convertible preferred stock to common stock			$ 240,585

Description of Business

Description of Business	12 Months Ended
	Dec. 31, 2017
Description of Business
Description of Business	1 . Description of Business Natera, Inc. (the "Company") was formed in the state of California as Gene Security Network, LLC in November 2003 and incorporated in the state of Delaware in January 2007. The Company’s mission is to change the management of genetic disease worldwide. The Company operates a laboratory certified under the Clinical Laboratory Improvement Amendments ("CLIA") providing a host of preconception and prenatal genetic testing services. The Company determines its operating segments based on the way it organizes its business to make operating decisions and assess performance. The Company has only one operating segment, which is the discovery, development and commercialization of genetic testing services and it has a subsidiary that operates in the state of Texas. The Company's product offerings include its Panorama Non-Invasive Prenatal Test ("NIPT") that screens for chromosomal abnormalities of a fetus typically with a blood draw from the mother; Vistara (“Vistara”), a single-gene mutations screening test performed to identify single-gene disorders; Horizon Carrier Screening ("HCS") to determine carrier status for a large number of severe genetic diseases that could be passed on to the carrier’s children; Spectrum Pre-implantation Genetic Screening ("PGS") and Spectrum Pre-implantation Genetic Diagnosis ("PGD") to analyze chromosomal anomalies or inherited genetic conditions during an in vitro fertilization ("IVF") cycle to select embryos with the highest probability of becoming healthy children; Anora Products of Conception ("POC") test to rapidly and extensively analyze fetal chromosomes to understand the cause of miscarriage; Non-Invasive Paternity Testing ("PAT"), to determine paternity by analyzing the fragments of fetal deoxyribonucleic acid ("DNA") in a pregnant mother's blood and a blood sample from the alleged father(s), which is marketed and sold exclusively by a licensee from whom the Company receives a royalty. All testing is available principally in the United States, and the Company offers its Panorama test to customers outside of the United States. The Company also offers Constellation (“Constellation”), a cloud-based software product that allows laboratory customers to gain access through the cloud to the Company’s algorithms and bioinformatics in order to validate and launch tests based on the Company’s technology. The Company also offers Evercord, which is a cord blood and cord tissue processing and storage service; and Signatera TM , a circulating tumor DNA technology that analyzes and tracks mutations specific to an individual’s tumor, for research use only by oncology and biopharmaceutical companies. Further, the Company has expanded its Panorama test to now screen twin pregnancies for zygosity and chromosomal abnormalities. Initial Public Offering In July 2015, the Company completed an initial public offering (“IPO”), and subsequently in August 2015, the Company completed the sale of additional shares upon exercise of the underwriters’ over-allotment option. In connection with the IPO, including the over-allotment option, the Company sold 10,900,000 shares of common stock at $18.00 per share, which raised $178.5 million in proceeds, net of underwriting discounts and commissions and offering expenses.

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2 . Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Liquidity Matters The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. For the year ended December 31, 2017, the Company had a net loss of $136.3 million, and as of December 31, 2017, it had an accumulated deficit of $482.2 million. At December 31, 2017, the Company had $12.6 million in cash and cash equivalents, $106.2 million in marketable securities, $50.1 million of outstanding balance of the Credit Line (as defined in Note 8) including accrued interest, and $73.1 million of net carrying amount of the 2017 Term Loan (as defined in Note 8). While the Company has introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations. Accordingly, the Company has funded the portion of operating costs that exceeds revenues through a combination of equity issuances, debt issuances, and other financings. The Company continues to develop and commercialize future products and, consequently, it will need to generate additional revenues to achieve future profitability and may need to raise additional equity or debt financing. If the Company raises additional funds by issuing equity securities, its stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and require significant debt service payments, which diverts resources from other activities. Additional financing may not be available at all, or in amounts or on terms acceptable to the Company. If the Company is unable to obtain additional financing, it may be required to delay the development, commercialization and marking of its products and significantly scale back its business and operations. On March 10, 2018, the Company entered into a Distribution Agreement with Qiagen to develop, manufacture, distribute and commercialize NGS-based genetic testing assays for clinical use based on the Company’s proprietary Panorama NIPT technology. According to the agreement, the Company will receive a total of $40.0 million before March 31, 2018. Additionally, the Company is entitled to potential milestone payments totaling $10.0 million from Qiagen upon the achievement of certain volume, regulatory and commercial milestones. The Distribution Agreement has a term of 10 years and expires in March 2028. Based on the Company’s current business plan, the Company believes that its existing cash and marketable securities will be sufficient to meet its anticipated cash requirements for at least 12 months after March 15, 2018. Principles of Consolidation The accompanying consolidated financial statements include all the accounts of the Company and its subsidiary. The Company established a subsidiary that operates in the state of Texas in December 2014 to support the Company’s laboratory and operational functions, which became active in the second quarter of 2015. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include the allowance for doubtful accounts, software development costs to be capitalized, accrued liability for potential refund requests, stock-based compensation, fair value of common stock and warrants, as well as income tax uncertainties. These estimates and assumptions are based on management's best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors, including contractual terms and statutory limits; however, actual results could differ from these estimates and could have an adverse effect on the Company's financial statements. Fair Value The Company discloses the fair value of financial instruments for financial assets and liabilities for which the value is practicable to estimate. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and the Company carries its warrants at fair value measurement guidance. Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market deposits with financial institutions. Restricted Cash The Company discloses both short-term and long-term restricted cash. Short-term restricted cash consists of cash deposits held to secure commercial letters of credit issued by financial institutions, and the balance was insignificant as of December 31, 2017. Long-term restricted cash consists of $0.3 million deposit per credit card terms. Investments Investments consist primarily of debt securities such as U.S. Treasuries, U.S. agency and municipal bonds. Management determines the appropriate classification of securities at the time of purchase and reevaluates such determination at each balance sheet date. The Company generally classifies its entire investment portfolio as available-for-sale. The Company views its available-for-sale portfolio as available for use in current operations. Accordingly, the Company classifies all investments as short-term, even though the stated maturity may be more than one year from the current balance sheet date. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity. Risk and Uncertainties The Company has various financial instruments that are potentially subjected to credit risk, and they consist of cash, accounts receivable and investments. The Company limits its exposure to credit loss by placing its cash in financial institutions with high credit ratings. The Company's cash may consist of deposits held with banks that may at times exceed federally insured limits. The Company performs evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. The Company bills third-party payers for certain tests performed. The amount that is ultimately received from the payer for the Company’s claim and the timing of such payments are subject to the determination of the payer based on the nature of the test performed and their view of the Company’s business practices with respect to collections of plan deductibles and co-payments from patients and other activities. This determination can impact both the amount and timing of when the Company’s invoices are collected. Payers may also withhold payments and request refunds of prior payments if the payer asserts that the Company has not performed in accordance with the policies of these payers. The Company performs evaluations of financial conditions for clinics and laboratory partners and generally does not require collateral to support credit sales. In 2017, 2016 and 2015, there were no customers exceeding 10% of total revenues on an individual basis. As of December 31, 2017, there were no customers with an outstanding balance exceeding 10% of net accounts receivable, and as of December 31, 2016, one customer, Bio-Reference, had an outstanding balance of approximately 52% of net accounts receivable, which was collected in full by the Company in February 2017. Allowance for Doubtful Accounts Trade accounts receivable are recorded at the amount billed to the laboratory partners and clinics. Reducing this amount is an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make the contracted payments. Management analyzes accounts receivable and historical bad debt experience, customer creditworthiness, current economic trends, and changes in customer payment history when evaluating the adequacy of the allowance for doubtful accounts. Accounts receivable are written off against the allowance when there is substantive evidence that the account will not be paid. Revenue Recognition The Company generally bills an insurance carrier, a clinic or a patient for tests it sells upon delivery of the test results. The Company also bills patients directly for out-of-pocket costs not covered by their insurance carriers representing co-pays and deductibles in accordance with their insurance carrier and health plans. For tests performed, where an agreed upon reimbursement rate or fixed fee and a predictable history or likelihood of collections exists, the Company recognizes revenues upon delivery of the test report to the prescribing physician based on the established billing rate less other adjustments such as reserves for retractions and refunds to arrive at the amount that the Company expects to collect. In all other situations, as the Company does not have sufficient history of collection and is not able to determine collectability, the Company recognizes revenues when cash is received. The Company may not get reimbursed for tests completed if the tests are not covered under the insurance carrier’s reimbursement policies or the Company is not a qualified provider to the insurance carrier, or if the tests were not previously authorized. From time to time, the Company receives requests for refunds of payments previously made by insurance carriers. The Company has established an accrued liability for potential refund requests based on its experience, which is accounted for as reductions in revenues in the statement of operations and comprehensive loss. For the year ended December 31, 2017, $4.9 million was reversed from this accrued liability and recognized as revenue. In cases where the Company sells its tests through its laboratory partners, the majority of the laboratory partners bill the patient, clinic, or insurance carrier for the performance of the Company's tests. For tests sold through a limited number of its laboratory partners, the Company bills directly to a patient, clinic or insurance carrier, or a combination of the insurance carrier and patient for the fees. The Company considers its services rendered when it delivers reports of its test results to the laboratory partner, clinic or patient. When the Company has contracted fixed rates for its services and collectability of its revenues is reasonably assured, it recognizes revenues upon delivery of test reports. The fixed fees identified in contracts with laboratory partners change only if a pricing amendment is agreed upon between both parties. For cases in which there is no fixed price established with a laboratory partner, the Company then recognizes revenues from partner distributed tests on a cash basis. Certain of the Company's arrangements include multiple deliverables. For revenue arrangements with multiple deliverables, the Company evaluates each deliverable to determine whether it qualifies as a separate unit of accounting. This determination is based on whether the deliverable has "stand-alone value" to the customer and whether a general right of return exists. The consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. The Company uses judgment in identifying the deliverables in its arrangements, assessing whether each deliverable is a separate unit of accounting, and in determining the best estimate of selling price for certain deliverables. The Company also uses judgment in determining the period over which the deliverables are recognized in certain of its arrangements. Any amounts received that do not meet the criteria for revenue recognition are recorded as deferred revenue until such criteria are met. The Company recognizes revenue from its cloud-based distribution service offering, Constellation. The Company grants its licensees licenses to use certain of the Company’s proprietary intellectual properties and the Company’s cloud-based software and provides other services to support the use of the Company's proprietary technology by its licensees. The Company’s proprietary software is used in connection with the analysis of DNA sequence data in a manner yielding a result indicating the likely presence or absence of full or partial chromosomal abnormalities. The licensees do not have the right to possess the Company’s software, but rather receive the software as a service. The revenues are recognized on an accrual basis (assuming all revenue recognition criteria are met) under the terms of the related agreements and are included in licensing and other revenues in the statements of operation and comprehensive loss. The Company recognizes revenues from Evercord for the collection and storage of newborn cord blood and cord tissue units. Deliverables consist of: (i) the provision of a collection kit and the processing of newborn cord blood and cord tissue units, which are considered delivered at the beginning of the process (the “processing services”), with revenue for this deliverable recognized after the collection and successful processing of the cord blood and cord tissue units, and (ii) the storage of the cord blood and cord tissue units (the “storage services”), for either an annual fee or a prepayment covering an extended period or the lifetime of the newborn donor, with revenue for this deliverable recognized ratably over the applicable storage period. The Company bundles its processing services together with the first year of storage, and each of them has its own standalone value to customers, and therefore, represents a separate deliverable. The selling price for the processing services and the storage services are estimated based on the best estimate of selling price because the Company does not have vendor-specific objective evidence or third-party evidence of selling price for these elements. Evercord revenues are reported in licensing and other revenues in the statements of operations and comprehensive loss. Cost of Product Revenues The components of cost of product revenues are material and service costs, impairment charges associated with testing equipment, personnel costs, including stock-based compensation expense, equipment and infrastructure expenses associated with testing samples, electronic medical record, order and delivery systems, shipping charges to transport samples, third-party test processing fees and allocated overhead including rent, information technology costs, equipment depreciation and utilities. Costs associated with the performance of diagnostic services are recorded as tests are accessioned. Cost of Licensing and Other Revenues The components of cost of licensing and other revenues are material costs associated with test kits, engineering costs incurred by the research and development team to improve and maintain the Constellation software platform, and amortization of Constellation software development costs. Costs also include collection kits consumed during the processing of cord blood samples, processing service and storage of the cord blood samples, and freight charged to transport the samples to the storage facility. Research and Development The Company records research and development costs in the period incurred. Research and development costs consist of personnel costs, contract services, cost of materials utilized in performing tests, costs of clinical trials and allocated facilities and related overhead expenses. Advertising Costs The Company expenses advertising costs as incurred. The Company incurred advertising costs of $0.5 million, $0.4 million and $1.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. Product Shipment Costs The Company expenses product shipment costs in cost of product revenues in the accompanying statements of operations. Shipping and handling costs for the years ended December 31, 2017, 2016 and 2015 were $9.5 million, $8.2 million and $7.0 million, respectively. Income Taxes Income taxes are recorded in accordance with Financial Accounting Standards Board ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Tax benefits are recognized when it is more likely than not that a tax position will be sustained during an audit. Deferred tax assets are reduced by a valuation allowance if current evidence indicates that it is considered more likely than not that these benefits will not be realized. Stock‑Based Compensation Stock‑based compensation related to stock options and restricted stock units (“RSUs”) granted to the Company’s employees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. No compensation cost is recognized when the requisite service has not been met and the awards are therefore forfeited. The Company uses the Black‑Scholes option‑pricing model to estimate the fair value of stock options issued to employees and non-employees. The measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in the Company's statements of operations and comprehensive loss during the period that the related services are rendered. The Black-Scholes option-pricing model requires the input of the Company's expected stock price volatility, the expected term of the awards, and a risk-free interest rate. Determining these assumptions requires significant judgment. The expected term was based on the simplified method and the volatility rate was based on that of publicly traded companies in the DNA sequencing, diagnostics, or personalized medicine industries. When selecting the public companies in these industries to be used in the volatility calculation, companies were selected with comparable characteristics to the Company, including enterprise value and financial leverage. Companies were also selected with historical share price volatility sufficient to meet the expected term of the Company's stock options. The historical volatility data was computed using the daily closing prices for the selected companies' shares during the equivalent period of the calculated expected term of the Company's stock options. The expected term of the non-employee option grants was based on their remaining contractual life at the measurement date. The risk-free interest rate assumption was based on U.S. Treasury instruments with maturities that were consistent with the option's expected term. Starting January 1, 2016, the Company began using a different approach to estimate the expected term of its stock option awards, which involves calculating the average of—(1) its employees’ historical stock option exercise behavior, and (2) the weighted-average of the time-to-vesting and the total contractual life of the options. The Company applied this change in methodology prospectively and accounted for it as a change in accounting estimate. Warrants The Company accounts for warrants to purchase shares of its common stock as a liability at fair value on the balance sheet date because the Company may be obligated to redeem these warrants at some point in the future. The warrants are subject to remeasurement at each balance sheet date, with changes in fair value recognized as a gain or loss from the changes in fair value of the warrants in the statements of operations. The Company will continue to adjust the liability for changes in fair value until such time that the warrants are converted or expire. Capitalized Software Held for Internal Use The Company capitalizes salaries and related costs of employees and consultants who devote time to the development of internal-use software development projects. Capitalization begins during the application development stage, once the preliminary project stage has been completed. If a project constitutes an enhancement to previously developed software, the Company assesses whether the enhancement is significant and creates additional functionality to the software, thus qualifying the work incurred for capitalization. Once the project is available for general release, capitalization ceases and the Company estimates the useful life of the asset and begin amortization. The Company periodically assesses whether triggering events are present to review internal-use software for impairment. Changes in estimates related to internal-use software would increase or decrease operating expenses or amortization recorded during the reporting period. The Company amortizes its internal-use software over the estimated useful lives of three years. The net book value of capitalized software held for internal use was $2.6 million and $1.3 million as of December 31, 2017 and 2016, respectively. Amortized expense for amounts previously capitalized for the years ended December 31, 2017, 2016 and 2015 was $1.0 million, $0.6 million and $0.2 million, respectively. Accumulated Other Comprehensive Loss Comprehensive loss and its components encompass all changes in equity other than those with stockholders, and include net loss, unrealized gains and losses on available-for-sale marketable securities. As of December 31, 2017, and 2016, accumulated other comprehensive loss consisted of $0.8 million and $0.7 million of unrealized losses on available-for-sale marketable securities. See Note 4 for additional disclosures related to change in net unrealized losses and reclassifications out of accumulated other comprehensive loss upon the sale of available-for-sale marketable securities. Property and Equipment Property and equipment, including purchased and internally developed software, are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which are generally three years. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the assets or the remaining term of the lease, whichever is shorter. The Company periodically reviews the depreciable lives assigned to property and equipment placed in service and change the estimates of useful lives to reflect the results of such reviews. Impairment of Long-lived Assets The Company evaluates its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company then compares the carrying amounts of the assets with the future net undiscounted cash flows expected to be generated by such asset. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. See Note 5 for more detail about the asset impairment. Inventory Inventory is valued at the lower of the standard cost, which approximates actual cost, or market. Cost is determined using the first-in, first-out ("FIFO") method. Inventory consists entirely of supplies, which are consumed when providing its test reports, and therefore does not maintain any finished goods inventory. The Company enters into inventory purchases and commitments so that it can meet future delivery schedules based on forecasted demand for its tests. The Company recorded inventory obsolescence charges totaling $0.5 million in the year ended December 31, 2017. During the year ended December 31, 2016, the Company determined $2.1 million of inventory as obsolete in connection with its impairment analysis of the associated automation and sequencing equipment described in Note 5, and recorded an associated charge for these materials. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) under its accounting standard codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed below, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Pronouncements In July 2015, FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 simplifies the subsequent measurement of inventory by replacing today’s lower of cost or market test with a lower of cost and net realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last-in first-out (“LIFO”) and the retail inventory method (“RIM”). Entities that use LIFO and RIM will continue to use existing impairment models (i.e. entities using LIFO would apply the lower of cost or market test). From an operating perspective, the Company does not manufacture products for sale as it is a provider of genetic tests. The Company keeps inventory consisting mainly of laboratory materials and supplies that are consumed during the testing process. Under the existing guidance, the Company measured its inventory at the lower of standard cost or its net realizable value, which was considered as market. This process remains unchanged under the new guidance, and upon adopting ASU 2015-11 in the first quarter of 2017, it did not result in a material impact on the Company’s financial statements and related disclosures. In November 2015, FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which simplifies the presentation of deferred taxes by requiring that deferred tax assets and liabilities be presented as noncurrent on the balance sheet. The Company adopted ASU 2015-17 prospectively in the first quarter of 2017, which did not result in a material impact on its financial statements and related disclosures as a full valuation allowance has been reserved against the deferred tax assets and liabilities on the Company’s balance sheet as of December 31, 2017. No retrospective adjustments were made to the prior periods’ financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new guidance requires any excess tax benefits (“windfalls”) and tax deficiencies (“shortfalls”) associated with vested or settled share-based awards to be recognized in the income statement rather than additional paid-in capital, which is to be applied prospectively. Further, windfalls are required to be presented as an operating activity rather than as an outflow from operating activity and an inflow to financing activity, as required by the existing guidance. The Company adopted this new presentation guidance prospectively in the first quarter of 2017, which did not result in a material impact to its financial statements and related disclosures as a full valuation allowance has been reserved against the deferred tax assets and liabilities due to significant losses incurred since the Company’s inception. Therefore, there was no cumulative-effect adjustment required upon adoption. In addition, ASU 2016-09 allows entities to withhold an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction without having to account for the award as a liability-based award with a cumulative-effect adjustment to opening retained earnings on the modified retrospective approach. This new guidance is not applicable to the Company as it does not have a practice of withholding shares nor offsetting net-share settlement, and the Company does not withhold taxes exceeding its minimum statutory tax rate. ASU 2016-09 also permits forfeitures to be either estimated, as required by the existing guidance, or recognized when they occur. The change in the accounting for forfeitures is required to be applied using a modified retrospective approach, with a cumulative-effect adjustment to opening retained earnings. Upon adoption of this new guidance in the first quarter of 2017, the Company made an accounting policy election to continue estimating forfeitures as required by the existing guidance, which did not result in a cumulative-effect adjustment. New Accounting Pronouncements Not Yet Adopted In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers , which amends the existing accounting standards for revenue recognition. ASU 2014-09, which defines the core principles of ASC 606, establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The new guidance mandates a five-step process, which requires entities to exercise significant judgment and involves estimates to be made on the transaction price and the timing over which revenue will be recognized. Entities have a choice of adopting the new guidance using either the full retrospective approach, which requires restatement of financial statements in each prior reporting period presented, or the modified retrospective approach, with a cumulative-effect adjustment made to the opening retained earnings at the initial date of adoption. The new guidance will be effective for the Company in the first quarter of 2018. The Company has elected to adopt this new standard effective January 1, 2018, using the full retrospective approach. Under this approach, the Company will restate its results for the years ended December 31, 2016 and 2017, including retained earnings, and applicable interim periods within those years, as if ASC 606 had been effective for those periods. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Revenue recognition for arrangements that fall within the scope of ASC 606 is evaluated under its prescribed five-step approach. ASC 606 also impacts certain other areas, such as the accounting for costs incurred to obtain or fulfill a contract. The new standard also requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In 2017, the company established an implementation team and engaged external advisers to develop a multi-phase plan to assess the company’s business and contracts, as well as any changes to processes or systems to adopt the requirements of the new standard. To date, the Company’s revenues have been derived primarily from contracts with insurance carriers, patients, laboratory partners and licensing arrangements. Due to the constraints on establishing fixed pricing and collectability, a significant portion of the Company’s revenues from insurance carriers is recognized on cash basis under the existing guidance. However, ASC 606 eliminates such constraints and requires estimates to be made on variable consideration at the inception of an arrangement, thus cash basis of accounting is no longer applied. Under ASC 606, some of these insurance carriers arrangements have similar characteristics and are being evaluated collectively as a portfolio to reflect consideration which the entity expects to receive in exchange for goods and services. The Company determines its expected consideration based on the combined effect of historical and

Fair Value Measurements

Fair Value Measurements	12 Months Ended
	Dec. 31, 2017
Fair Value Measurements
Fair Value Measurements	3. Fair Value Measurements The Company's financial assets and liabilities carried at fair value are comprised of investment assets that include money market and investments, a liability for convertible preferred stock warrants and a liability for common stock warrants. The fair value accounting guidance requires that assets and liabilities be carried at fair value and classified in one of the following three categories: Level I: Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access Level II: Observable market‑based inputs or unobservable inputs that are corroborated by market data, such as quoted prices, interest rates, and yield curves Level III: Inputs that are unobservable data points that are not corroborated by market data. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. There were no transfers between Level I, Level II and Level III during the periods presented. Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis The following table represents the fair value hierarchy for the Company’s financial assets and financial liabilities measured at fair value on a recurring basis: December 31, 2017 December 31, 2016 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Money market deposits $ 3,477 $ — $ — $ 3,477 $ 10,777 $ — $ — $ 10,777 U.S. Treasury securities 67,026 — — 67,026 57,442 — — 57,442 U.S. agency securities — 27,072 — 27,072 — 56,114 — 56,114 Municipal securities — 12,149 — 12,149 — 17,304 — 17,304 Total financial assets $ 70,503 $ 39,221 $ — $ 109,724 $ 68,219 $ 73,418 $ — $ 141,637 Current Liabilities: Warrants $ $ — $ 2,644 $ 2,644 $ — $ — $ 3,792 $ 3,792 Total financial liabilities $ — $ — $ 2,644 $ 2,644 $ — $ — $ 3,792 $ 3,792 The Company's warrants to purchase common stock are valued using Level III inputs; the Company used inputs from a Black-Scholes model with market volatility that is determined for comparable companies in the same business sector. The carrying amounts of cash, accounts receivable, and accounts payable approximate their fair value and are excluded from the table above. In April 2013, the Company entered into a senior secured term loan with a third-party lender, which consisted of a credit agreement, royalty agreement, warrants and loan commitment. Based upon the Company’s evaluation, the senior secured term loan constituted a liability with embedded derivative features that was accounted for separately as mark-to-market instruments. In addition, adjustments to the embedded royalty feature were recorded as interest expense as they occurred, offset to the carrying amount of the debt (with the eventually cash outlay to settle such amounts recorded against the carrying amount of the debt). Based on the Company’s evaluation, it was determined that the warrants granted are detachable and therefore are a stand-alone component of the senior secured term loan to be fair valued using Level III inputs as a separate derivative. In October 2015, the Company repaid the entire borrowings under the senior secured term loan. The fair value of both the senior secured term loan and warrants was remeasured at the end of each reporting period, with the change in fair value for the term loan recorded as interest benefit from changes in the fair value of long-term debt and the remeasurement gain or loss on the warrants recorded within interest and other income (expense), net in the statements of operations and comprehensive loss. The following table provides a roll forward of the fair value, as determined by Level III inputs, of the warrants for the years ended December 31, 2017 and 2016: Warrants 2017 2016 (in thousands) Beginning balance $ 3,792 $ 3,649 Change in fair value (1,148) 143 Ending balance $ 2,644 $ 3,792 The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurement classified in Level III of the fair value hierarchy at December 31, 2017. Weighted Average Interest on Fair Value at Significant Discount Rate December 31, 2017 Valuation Methodology Unobservable Input (range, if applicable) (in thousands) (in thousands) Warrants $ 2,644 Black-Scholes Option Pricing Model Volatility 40.93 % Warrants The significant unobservable inputs used in the fair value of warrants are derived from the Company's common stock valuation that is based upon a model with inputs from a Black-Scholes model and market volatility that is determined for comparable companies in the same business sector. The inherent risk in the market volatility is the selection of companies with similar business attributes to the Company.

Financial Instruments

Financial Instruments	12 Months Ended
	Dec. 31, 2017
Financial Instruments
Financial Instruments	4. Financial Instruments The Company elected to invest a portion of its cash assets in conservative, income earning, liquid investments effective September 2015. Cash equivalents and investments, all of which are classified as available-for-sale securities, consisted of the following: December 31, 2017 December 31, 2016 Amortized Gross Gross Estimated Fair Amortized Gross Gross Estimated Fair (in thousands) Money market deposits $ 3,477 $ — $ — $ 3,477 $ 10,777 $ — $ — $ 10,777 U.S. Treasury securities 67,480 10 (464) 67,026 57,846 — (404) 57,442 U.S. agency securities 27,293 — (221) 27,072 56,261 — (147) 56,114 Municipal securities 12,240 — (91) 12,149 17,478 — (174) 17,304 Total $ 110,490 $ 10 $ (776) $ 109,724 $ 142,362 $ — $ (725) $ 141,637 Classified as: Cash equivalents $ 3,477 $ 10,777 Short-term investments 106,247 130,860 Total $ 109,724 $ 141,637 The Company invests in U.S. Treasuries, U.S. agency and high quality municipal bonds which mature at par and are all paying their coupons on schedule. Thus, the Company has determined there is currently no other than temporary impairment of its investments, and will continue to recognize unrealized losses in other comprehensive income. As of December 31, 2017, the Company has 19 investments in an unrealized loss position in its portfolio. During the year ended December 31, 2017, the amount of gross realized gains and realized losses upon sales of investments were insignificant, and during the year ended December 31, 2016, sales of investments resulted in gross realized gains of $0.2 million and insignificant gross realized losses. Realized gains and losses are reported in interest and other income (expense), net in the statements of operations and comprehensive loss. The following table shows the change in the net unrealized positions of the available-for-sale securities and reclassifications from accumulated other comprehensive loss upon the sale of those securities: December 31, 2017 2016 (in thousands) Balance at beginning of year $ (725) $ (1,416) Net unrealized (losses) gains on available-for-sale securities, net of tax (105) 882 Reclassifications of losses (gains) realized from sale of available-for-sale securities 64 (191) (Decrease) increase in other comprehensive loss (41) 691 Balance at end of year $ (766) $ (725) During the years ended December 31, 2017, 2016 and 2015, the Company earned interest income of $1.2 million, $1.5 million and $0.5 million, respectively, from its investment portfolio. The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of December 31, 2017: December 31, 2017 Amortized Fair (in thousands) Less than one year $ 57,168 $ 57,046 Greater than one year but less than five years 49,845 49,201 Total $ 107,013 $ 106,247

Balance Sheet Components

Balance Sheet Components	12 Months Ended
	Dec. 31, 2017
Balance Sheet Components
Balance Sheet Components	5. Balance Sheet Components Allowance for Doubtful Accounts The following table presents a reconciliation of the allowance for doubtful accounts: December 31, December 31, December 31, 2017 2016 2015 (in thousands) Beginning balance $ 1,890 $ 971 $ 527 Provision for estimated bad debts 143 984 529 Write offs (33) (65) (85) Ending balance $ 2,000 $ 1,890 $ 971 Property and Equipment, net The Company’s property and equipment consisted of the following: December 31, December 31, Useful Life 2017 2016 (in thousands) Machinery and equipment 3-5 years $ 31,825 $ 27,303 Furniture and fixtures 3 years 1,216 1,087 Computer equipment 3 years 1,958 861 Capitalized software held for internal use 3 years 4,465 2,172 Leasehold improvements Life of lease 10,691 10,444 Construction-in-process 6,497 9,759 56,652 51,626 Less: Accumulated depreciation and amortization (26,985) (19,337) Total Property and Equipment, net $ 29,667 $ 32,289 All of the Company’s long-lived assets are located in the United States. During the year ended December 31, 2017, the Company recorded asset impairment charges totaling $0.6 million in cost of product revenues in the statements of operations and comprehensive loss. This charge was recorded after certain sequencing and automation equipment were fully decommissioned in January 2017. During the year ended December 31, 2016, the Company recorded asset impairment charges totaling $2.1 million in the statements of operations and comprehensive loss, of which $1.9 million was recorded in cost of product revenues and $0.2 million was included in general and administrative expenses, following its impairment analysis on certain sequencing and automation equipment whose service lives were determined to be significantly shorter than initially expected. These charges also included the write-off of $0.3 million unamortized maintenance service contract prepayments related to the impaired equipment described above. The Company expected to phase out the equipment in the first quarter of 2017 as the Company began its transition to the next generation of sequencing and automation equipment to help streamline its production workflows. The Company recorded an asset impairment charge of $1.0 million against a specific group of machinery and equipment during the year ended December 31, 2015. The Company no longer uses this specific group of machinery and equipment because of outsourcing to its partners. The impairment charge was recorded to reflect reductions in the estimated realizable value of the machinery and equipment as a result of planning for its sale in the secondary market. The Company recorded the total impairment charge of $1.0 million in cost of product revenues. The Company sold some of the impaired machinery and equipment during the fourth quarter of 2015 for $0.5 million and classified the remaining impaired machinery and equipment as held for sale at the estimated realizable value of $0.2 million. The remaining impaired machinery was sold in January 2016 for $0.2 million. Other Assets In April 2016, the Company entered into a four-year agreement with an insurance carrier whereby in return for partial exclusivity and the right to pricing benefits the Company paid total consideration of $3.2 million. The total consideration was paid in the third quarter of 2016. As of December 31, 2017 and 2016, $1.8 million and $2.6 million in deferred costs were included in other noncurrent assets. The deferred costs are being amortized ratably over the four-year term of the agreement. During the years ended December 31, 2017 and 2016, the Company has amortized $0.8 million and $0.6 million of such costs, respectively, which was recorded as a reduction of product revenues in the statements of operations and comprehensive loss. In August 2017, the Company entered into the 2017 Term Loan agreement with OrbiMed and issued 300,000 shares of its common stock in exchange for OrbiMed’s initial and remaining funding commitments (as described in Note 8). The Company also paid legal fees totaling $0.3 million in connection with this term loan. Total debt issuance costs of $2.7 million is accounted for as a debt discount. For financial statement presentation purposes, the Company has classified $2.0 million of the debt discount as a direct reduction from the outstanding debt balance, while $0.7 million of such remains in other noncurrent assets for the unused borrowing capacity of $25.0 million. The debt discount is being amortized on a straight-line basis over the term of the loan. For the year ended December 31, 2017, amortization of debt discount related to the unused borrowing capacity was insignificant. As of December 31, 2017, the unamortized portion of the debt discount remained at $0.6 million. Accrued Compensation The Company’s accrued compensation consisted of the following: December 31, December 31, 2017 2016 (in thousands) Accrued paid time off $ 1,806 $ 1,892 Accrued commissions 3,558 3,868 Accrued bonuses 2,063 2,387 Other accrued compensation 2,172 2,920 Total accrued compensation $ 9,599 $ 11,067 December 31, December 31, 2017 2016 (in thousands) Settlement accrued for reimbursement related claims $ 10,062 $ — Reserves for refunds to insurance carriers 6,794 7,535 Accrued charges for outsourced testing 6,566 3,261 Testing and laboratory materials from suppliers 1,367 543 Marketing and corporate affairs 1,456 202 Legal, audit and consulting fees 206 180 Accrued shipping charges 198 467 Sales tax payable 504 459 Accrued specimen service fees 683 469 Accrued rent 856 195 Clinical trials and studies 483 388 Leasehold improvement projects in progress — 1,659 Other accrued expenses 4,032 4,521 Total other accrued liabilities $ 33,207 $ 19,879 As of December 31, 2017, the Company accrued a total of $11.4 million for amounts due under a settlement agreement as further described under the Legal Proceedings section in Note 6, of which $10.1 million was the current portion of it and $1.3 million was recorded in other long-term liabilities. During the year ended December 31, 2017, the Company reserved an additional $4.2 million for refunds to insurance carriers. Amounts totaling $4.9 million previously held in reserves from payers were released and recognized as product revenues in the statements of operations and comprehensive loss.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2017
Commitments and Contingencies
Commitments and Contingencies	6. Commitments and Contingencies Operating Leases As of December 31, 2017, the Company leases office facilities under non‑cancelable operating lease agreements. The Company currently occupies approximately 113,000 square feet of laboratory and office space at its San Carlos, California corporate headquarters pursuant to a lease that it directly entered into with its landlord in October 2016. This lease covers two office spaces (the “First Space and the “Second Space”). The First Space covers approximately 88,000 square feet at a base rent of $319,095. The Second Space covers approximately 25,000 square feet at a base rent of $97,431 per month. The Company paid a security deposit totaling $0.7 million on this lease. The term of this lease is approximately 84 months and expires in October 2023. In October 2016, the Company entered into a sublease for additional office space in Redwood City, California that covers approximately 13,000 square feet. The lease term of the additional space began in November 2016 and carried a monthly base rent of $49,140, subject to an annual increase of 3%, with a security deposit of $0.1 million. The term of this sublease is approximately 28 months and expires in February 2019. In September 2015, the Company’s subsidiary entered into a long-term lease agreement for laboratory and office space totaling approximately 94,000 square feet in Austin, Texas. The lease term is 132 months beginning in December 2015 and expiring in November 2026 with monthly payments beginning in December 2016, increasing from $0.1 million to $0.2 million. Pursuant to the terms of the lease, the subsidiary paid a security deposit of $0.4 million, and the landlord allotted the subsidiary an allowance for leasehold improvements of up to $7.8 million. As of December 31, 2017, the full amount of the allowance has been reimbursed by the landlord. The future annual minimum lease payments under all non-cancelable operating leases as of December 31, 2017 are as follows: Operating Leases (in thousands) Year ending December 31: 2018 $ 8,034 2019 8,547 2020 8,675 2021 8,913 2022 9,160 2023 and thereafter 14,737 Total future minimum lease payments $ 58,066 Rent expense for the years ended December 31, 2017, 2016 and 2015 was $7.2 million, $5.4 million and $2.7 million, respectively. The Company is also required to pay its share of facility operating expenses with respect to the facilities in which it operates. Legal Proceedings From time to time, the Company is involved in disputes, litigation, and other legal actions. The Company is aggressively defending its current litigation matters, and while there can be no assurances and the outcome of these matters is currently not determinable, the Company currently believes that there are no existing claims or proceedings that are likely to have a material adverse effect on its financial position. There are many uncertainties associated with any litigation and these actions or other third-party claims against the Company may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could adversely affect gross margins in future periods. If this were to occur, the Company's business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from the Company's estimates, if any, which could result in the need to record or adjust a liability and record additional expenses. During the periods presented, the Company has not recorded any accrual for loss contingencies associated with such legal proceedings, determined that an unfavorable outcome is probable or reasonably possible, or determined that the amount or range of any possible loss is reasonably estimable, except for the amount accrued in connection with the settlement agreement with the United States Department of Justice described below. On each of February 17, 2016, March 10, 2016, March 28, 2016 and April 4, 2016, purported class action lawsuits were filed in the Superior Court of the State of California for the County of San Mateo (the “San Mateo Superior Court”), against Natera, its directors, certain of its officers and 5% stockholders and their affiliates, and each of the underwriters of the Company’s July 1, 2015 initial public offering (the "IPO"). The complaints assert claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended. The complaints allege, among other things, that the Registration Statement and Prospectus for the Company’s IPO contained materially false or misleading statements, and/or omitted material information that was required to be disclosed, about the Company’s business and prospects. Among other relief, the complaints seek class certification, unspecified compensatory damages, rescission, attorneys' fees, and costs. The Company removed these actions to the United States District Court for the Northern District of California, and the actions were subsequently remanded back to the San Mateo Superior Court. The Company has appealed the remand and discovery has been stayed, or held, pending the appeal. The Company also filed a demurrer, or a request for dismissal as a matter of law, in the San Mateo Superior Court, which was granted on October 23, 2017. The San Mateo Superior Court demurred the claims under Sections 12(a)(2) and 15 of the Securities Act of 1933, as amended, without leave to re-file. The San Mateo Superior Court granted the demurrer as to Section 11 of the Act with leave to re-file prior to November 24, 2017. Plaintiffs refiled an amended complaint on November 22, 2017. The Company filed a motion for judgment on the pleadings on January 25, 2018. The Company intends to continue to defend the matter vigorously, but cannot provide any assurance as to the ultimate outcome or that an adverse resolution would not have a material adverse effect on its financial condition and results of operations. The Company is unable to predict the ultimate outcome and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from any unfavorable outcome. On March 4, 2016, a lawsuit was filed against the Company in the Superior Court of the State of California for the County of San Diego, by a patient alleging that Natera failed to perform a carrier screening test that was ordered. The complaint seeks compensatory damages. On May 26, 2017, the Company filed a motion for summary judgment, which was denied. The matter is set for trial in March 2018. The Company intends to vigorously defend against the claims in this lawsuit, and assert any counterclaims that may be available to it. The Company cannot provide any assurance as to the ultimate outcome or that an adverse resolution of this lawsuit would not have a material adverse effect on its financial condition and results of operations. The Company is unable to predict the outcome and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from any unfavorable outcome. On December 12, 2015, the Company received a civil investigative demand from the United States Department of Justice in connection with a qui tam action related to past reimbursement submissions for some of its testing. The qui tam action was originally filed under seal by the relators on January 26, 2015 in the United States District Court for the Western District of Kentucky. The qui tam complaint alleged that Natera submitted false claims to government health care programs for its testing services performed during the period from January 1, 2013 to December 31, 2016, and sought damages and penalties. The complaint was unsealed on February 8, 2018. On March 7, 2018, the Company reached agreement with the United States Department of Justice to resolve all claims made against it in the action. Under the settlement agreement, the Company will pay a total of approximately $11.4 million to the federal government and the participating state Medicaids, of which approximately $5.3 million plus applicable interest will be paid in four equal quarterly installments, subject to the Company’s option to prepay without penalty. In exchange for the payment of the settlement amounts, the United States and the relators agreed to release the Company from certain claims, including civil or administrative monetary relief sought under the complaint. The settlement agreement does not contain or represent an admission of liability or wrongdoing by the Company, and there will be no corporate integrity agreement. For the year ended December 31, 2017, the Company recorded a charge of $11.4 million associated with this settlement in its statements of operations and comprehensive loss. As of December 31, 2017, the Company classified $10.1 million of this settlement in other accrued liabilities and the remaining $1.3 million in other long-term liabilities. Director and Officer Indemnifications As permitted under Delaware law, and as set forth in the Company’s Certificate of Incorporation and its Bylaws, the Company indemnifies its directors, executive officers, other officers, employees and other agents for certain events or occurrences that may arise while in such capacity. The maximum potential amount of future payments the Company could be required to make under this indemnification is unlimited; however, the Company has insurance policies that may limit its exposure and may enable it to recover a portion of any future amounts paid. Assuming the applicability of coverage, the willingness of the insurer to assume coverage, and subject to certain retention, loss limits and other policy provisions, the Company believes any obligations under this indemnification would not be material, other than an initial $1.5 million for securities related claims an $0.3 million for commercial general liability claims. However, no assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case the Company may incur substantial liabilities as a result of these indemnification obligations. Third-Party Payer Reimbursement Audits One third-party payer has alleged that it has overpaid the Company, and has demanded recoupment of the alleged overpayments. The Company disagrees with the contentions. Contractual Commitments As of December 31, 2017, the Company has non‑cancelable contractual commitments with a supplier for approximately $5.1 million and other material supplier commitments for approximately $7.7 million for inventory material used in the laboratory testing process. As of December 31, 2017, the Company has a non-cancelable license agreement with a vendor for approximately $2.0 million. This represents binding and remaining commitments with the vendor through December 31, 2019. As of December 31, 2017, the Company has a non-cancelable contractual commitments with a vendor for biological sample processing and storage totaling approximately $1.1 million for the next 12 months.

Stock-Based Compensation

Stock-Based Compensation	12 Months Ended
	Dec. 31, 2017
Stock-Based Compensation
Stock-Based Compensation	7. Stock‑Based Compensation Equity Plans 2015 Equity Incentive Plan General . The Company’s board of directors adopted its 2015 Equity Incentive Plan, or the 2015 Plan, in June 2015. The Company’s 2015 Plan replaced its 2007 Stock Plan. No further awards have been made under the 2007 Plan after July 1, 2015, the date of the Company’s initial public offering. However, any remaining awards that were outstanding under the 2007 Plan will continue to be governed by the terms of that plan. As of December 31 2017, there were 5,551,616 shares outstanding under the 2007 Plan, with exercise prices ranging from $0.0978 to $12.8501. Share Reserve . The initial number of shares of the Company’s common stock available for issuance under the 2015 Plan was 3,451,495 shares. As of December 31, 2017, 14,567,816 shares were reserved for future issuance under the 2015 plan, which includes unissued and forfeited shares from the 2007 plan. The number of shares reserved for issuance under the 2015 Plan will be increased automatically on the first business day of each fiscal year, commencing in 2016, by a number equal to the smallest of: · 3,500,000 shares; · 4% of the shares of common stock outstanding on the last business day of the prior fiscal year; or · the number of shares determined by the Company’s board of directors. Stock options vest as determined by the compensation committee. In general, they will vest over a four-year period following the date of grant. Stock options expire at the time determined by the compensation committee but in no event more than ten years after they are granted. These awards generally expire earlier if the participant's service terminates earlier. Restricted Shares and Stock Units. Restricted shares and stock units may be awarded under the 2015 Plan in return for any lawful consideration, and participant who receive restricted shares or stock units generally are not required to pay cash for their awards. In general, these awards will be subject to vesting. Vesting may be based on length of service, the attainment of performance-based milestones or a combination of both, as determined by the compensation committee. 2015 Employee Stock Purchase Plan General . The Company’s 2015 Employee Stock Purchase Plan, or 2015 ESPP, was adopted by its board of directors in June 2015 and its stockholders approved it in June 2015. The 2015 ESPP is intended to qualify under Section 423 of the Internal Revenue Code. Share Reserve. The Company has reserved 893,548 shares of its common stock for issuance under the 2015 ESPP. As of December 31, 2017, 1,136,615 shares were available for issuance under the 2015 ESPP. The number of shares reserved for issuance under the 2015 ESPP will automatically be increased on the first business day of each of the Company’s fiscal years, commencing in 2016, by a number equal to the least of: · 880,000 shares; · 1% of the shares of common stock outstanding on the last business day of the prior fiscal year; or · the number of shares determined by the Company’s board of directors. The number of shares reserved under the 2015 ESPP will automatically be adjusted in the event of a stock split, stock dividend or a reverse stock split (including an adjustment to the per-purchase period share limit). Purchase Price. Employees may purchase each share of common stock under the 2015 ESPP at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of the six-month offering periods. An employee’s payroll deductions under the ESPP are limited to 15% of the compensation, and up to a maximum of 5,000 shares may be purchased during any offering period. A participant shall not be granted an option under the ESPP if such option would permit the participant’s rights to purchase stock to accrue at a rate exceeding $25,000 fair market value of stock for each calendar year in which such option is outstanding at any time. Offering Periods. Each offering period will last a number of months determined by the compensation committee, not to exceed 27 months. A new offering period will begin periodically, as determined by the compensation committee. Offering periods may overlap or may be consecutive. Unless otherwise determined by the compensation committee, two offering periods of six months' duration will begin in each year on May 1 and November 1. The first offering period of 2017 started on November 1, 2016 and ended on April 30, 2017, and 211,729 shares were purchased at the end of this offering period for total proceeds of $1.5 million. The second offering period of 2017 started on May 1, 2017 and ended on October 31, 2017, and 234,452 shares were purchased at the end of this offering period for total proceeds of $1.8 million. Early Exercise of Employee Options As of December 31, 2015, the Company had approximately 1.3 million unvested shares outstanding that are subject to a repurchase right held by the Company at the original issuance price in the event that the optionee’s employment is terminated, either voluntarily or involuntarily. Effective in the year ended December 31, 2015, pursuant to the agreements with the option holders, the Company changed its estimated expiration of its repurchase right for these 1.3 million unvested shares outstanding that are subject to repurchase right held by it through the 210 days after the date of the prospectus filed in connection with the Company’s IPO. Accordingly, the unrecognized compensation expense is being accelerated over a shorter performance period through January 2016. As a result of this acceleration, the Company recorded an additional $1.3 million in stock-based compensation expense during the year ended December 31, 2015. Stock Options The following table summarizes option activity during the year ended December 31, 2017: Outstanding Options Weighted- Weighted- Average Shares Average Remaining Aggregate Available for Number of Exercise Contractual Intrinsic (in thousands, except for contractual life and exercise price) Grant Shares Price Life Value (In years) Balance at December 31, 2016 4,115 9,043 $ 5.72 7.55 $ 55,396 Additional shares authorized 2,107 — Options granted (2,078) 2,078 $ 10.55 Options exercised — (565) $ 4.10 Options forfeited 593 (593) $ 10.37 Balance at December 31, 2017 4,737 9,963 $ 6.54 7.03 $ 31,902 Exercisable at December 31, 2017 6,103 $ 4.41 5.95 $ 30,201 Vested and expected to vest at December 31, 2017 9,592 $ 6.41 6.96 $ 31,738 The total intrinsic value of stock options exercised during the years ended December 31, 2017, 2016 and 2015 was $3.7 million, $16.9 million and $6.9 million, respectively. The total fair value of stock options vested during the years ended December 31, 2017, 2016 and 2015 was $12.1 million $8.5 million and $4.5 million, respectively. The weighted-average grant date fair value of options granted during the years ended December 31, 2017, 2016 and 2015 was $5.71, $5.92 and $7.29 per share, respectively. Performance-based Awards In June 2017, the Board approved a stock option grant of 425,000 shares to the Company’s chief executive officer, of which 200,000 shares are performance-based options. The vesting of these performance-based options is contingent upon the completion of requisite service for the next three years and the achievement of certain milestones within such period. The milestones are (i) to successfully secure a specified strategic arrangement, at which point 50,000 shares will begin vesting over one year in equal quarterly installments, (ii) to successfully secure a specified licensing arrangement, at which point 75,000 shares will begin vesting over one year in equal quarterly installments, and (iii) to successfully secure specified licensing arrangements related to oncology, at which point 75,000 shares will begin vesting over one year in equal quarterly installments. Each milestone is independent of the other. For the year ended December 31, 2017, the Company did not recognize any compensation expense associated with the performance-based options since none of the milestones were achieved or were probable of being achieved. Restricted Stock Units The following table summarizes restricted stock unit activity for the year ended December 31, 2017: Weighted- Average Number of Grant Date Shares Fair Value Balance at December 31, 2016 159 $ 9.80 Granted 345 $ 10.48 Vested (64) $ 9.79 Canceled/Forfeited (51) $ 10.17 Balance at December 31, 2017 389 $ 10.38 Stock‑Based Compensation Expense Employee and non‑employee stock‑based compensation expense was calculated based on awards ultimately expected to vest and have been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods, if actual forfeitures differ from those estimates. The following table presents the effect of employee and non‑employee stock‑based compensation expense on selected statements of operations line items for the years ended December 31, 2017, 2016 and 2015. Year ended December 31, 2017 2016 2015 Employee Non-Employee Total Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 544 $ — $ 544 $ 651 $ (10) $ 641 $ 351 $ 241 $ 592 Research and development 3,214 — 3,214 2,829 24 2,853 1,566 9 1,575 Selling, general and administrative 7,644 — 7,644 6,837 270 7,107 4,993 166 5,159 Total $ 11,402 $ — $ 11,402 $ 10,317 $ 284 $ 10,601 6,910 $ 416 $ 7,326 As of December 31, 2017, approximately $20.0 million of unrecognized compensation expense related to unvested option awards and RSUs, net of estimated forfeitures. The unrecognized compensation expense will be recognized over a weighted‑average period of approximately 2.52 years. Valuation of Stock Option Grants to Employees The Company estimates the fair value of its stock options granted to employees on the grant date using the Black‑Scholes option‑pricing model. The fair value of employee stock options is amortized on a straight‑line basis over the requisite service period of the awards, generally the vesting period. The fair value of employee stock options was estimated using the following assumptions: Year ended December 31, 2017 2016 2015 Expected term (years) 5.14 — 5.24 5.10 — 5.20 5.58 — 10.00 Expected volatility 40.75 % — 62.93 % 63.06 % — 72.49 % 69.65 % — 78.82 % Expected dividend rate 0 % 0 % 0 % Risk-free interest rate 1.67 % — 2.16 % 0.97 % — 1.92 % 1.56 % — 2.32 % Valuation of Stock Option Grants to Non-Employees Total options outstanding as of December 31, 2017 include 135,746 shares of option awards that were granted to non-employees, of which 3,401 shares are unvested. Stock-based compensation expense related to stock options granted to non-employees is recognized as the stock option is earned and the services are rendered. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services rendered. The fair value of the stock options granted to non-employees is calculated at each reporting date using the Black-Scholes options-pricing model with the following assumptions: Year ended December 31, 2017 2016 2015 Expected term (years) 2.67 — 2.71 2.65 — 3.16 4.94 — 9.78 Expected volatility 41.22 % — 52.18 % 50.90 % — 72.61 % 70.17 % — 75.35 % Expected dividend rate 0 % 0 % 0 % Risk-free interest rate 1.42 % — 1.95 % 0.68 % — 1.38 % 1.74 % — 2.24 % Expected Term : The expected term of options represents the period of time that options are expected to be outstanding. For granted "at-the-money" stock options for employees, the Company estimated the expected term by using the simplified method up until December 31, 2015, which involved calculating the average of the time-to-vesting and the total contractual life of the options. Starting January 1, 2016, the Company uses a different approach by calculating the average of—(1) its employees’ historical stock options exercise behavior, and (2) the weighted-average of the time-to-vesting and the total contractual life of the options. For employee stock options that are not granted "at-the-money," the Company uses the binomial lattice model to calculate the expected term. Regarding non-employee stock options, the Company estimated the expected term by assessing their historical exercise behavior and length of service, and calculated the average of these two components. Expected Volatility : The Company derived the expected volatility from the average historical volatilities of comparable publicly traded companies within its peer group over a period approximately equal to the expected term. Expected Dividend Rate : The Company has not paid and does not anticipate paying any dividends in the near future. Risk-Free Interest Rate : The risk-free interest rate assumption is based on U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term.

Debt

Debt	12 Months Ended
	Dec. 31, 2017
Debt
Debt	8. Debt Credit Line Agreement In September 2015, the Company entered into a credit line with UBS (the “Credit Line”) providing for a $50.0 million revolving line of credit which can be drawn down in increments at any time. In October 2015, the Company borrowed $32.0 million against the Credit Line, primarily to prepay all outstanding amounts under the Secured Loan Arrangement with ROS. The Credit Line currently bears interest at 30-day LIBOR plus 1.10%. The Credit Line is secured by a first priority lien and security interest in the Company’s money market and marketable securities held in its managed investment account with UBS. UBS has the right to demand full or partial payment of the Credit Line Obligations and terminate the Credit Line, in its discretion and without cause, at any time. In November 2015, the Company borrowed an additional $10.0 million under the Credit Line to provide working capital, which increased the total principal amount outstanding to $42.0 million. In June 2016, the Company borrowed an additional $8.0 million and repaid $1.0 million on the Credit Line, thereby increasing the total principal amount outstanding to $49.0 million, with accrued interest of $0.6 million as of December 31, 2016. For the year ended December 31, 2017, additional interest of $1.0 million was accrued, of which interest payments totaling $0.5 million have been made by the Company. As of December 31, 2017, accrued interest was $1.1 million, and the total principal amount outstanding including accrued interest was $50.1 million. 2017 Term Loan In August 2017, the Company entered into the 2017 Term Loan with OrbiMed, which has a maximum borrowing capacity of $100.0 million. On the closing date of August 8, 2017, the Company borrowed $75.0 million, with the remaining $25.0 million available to borrow at the Company’s option at any time through December 31, 2018, subject to standard conditions. The amounts borrowed under 2017 Term Loan will primarily be used for general corporate purposes and to fund and support the Company’s business and operations. Interest is accrued on the outstanding balance of the loan at a rate equal to the sum of (i) 8.75% plus (ii) the higher of 1.00% or LIBOR. The 2017 Term Loan has an eighty-four month term and will mature in August 2024. The Company is required to make interest payments on a quarterly basis, with repayment of the full outstanding balance on the maturity date. The Company’s obligations under the 2017 Term Loan are secured by substantially all of its assets, including its intellectual property, subject to certain customary exceptions. The 2017 Term Loan contains customary affirmative and negative covenants including financial information maintenance covenants, indebtedness limitation covenants, minimum net revenues covenants, and investment covenants. It also includes standard events of default such as payment defaults and nonperformance of obligations and covenants described above. Upon an event of default, an additional interest of 3.00% may be applied to the outstanding debt balance until such default is cured, and OrbiMed may declare all outstanding obligations immediately due and payable. As of December 31, 2017, the Company was in compliance with all of its covenants under the 2017 Term Loan. The Company is allowed to voluntarily make prepayments on its outstanding debt balance either partially or in full. When prepayments are made, an additional prepayment premium will be applied to the outstanding principal amount at the time. The prepayment premium will gradually reduce from 12.5% to 2.5% over the term of the loan. On August 14, 2017, the Company paid OrbiMed a fee in consideration of providing the 2017 Term Loan by issuing 300,000 shares of its common stock. The fair value of the fee was $2.4 million, which was determined based on the Company’s stock price of $8.16 on August 8, 2017. Additionally, the Company paid legal fees of $0.3 million in connection with this term loan. Total debt issuance costs incurred amounted to $2.7 million, which is accounted for as a debt discount to be amortized on a straight-line basis over the term of the loan. The Company has classified $2.0 million of the debt discount as a direct reduction from the outstanding debt balance of $75.0 million, while the remainder is classified as noncurrent assets (as described in Note 5). For the year ended December 31, 2017, the Company recorded total interest expense of $3.2 million, of which $0.1 million was the amortization of debt discount. As of December 31, 2017, no principal repayment has been made as the Company is not required to repay the outstanding balance until August 2024. The following table indicates how the Company reported its long-term debt as of December 31, 2017: 2017 Term Loan (in thousands) Principal balance at December 31, 2017 $ 75,000 Less: unamortized debt discount (1,935) Net carrying amount at December 31, 2017 $ 73,065

Warrants

Warrants	12 Months Ended
	Dec. 31, 2017
Warrants.
Warrants	9. Warrants In April 2014, the Company granted warrants to purchase approximately 376,691 warrants to purchase common stock with an exercise price of $2.3229 per common share. The warrants were granted to ROS Acquisition Offshore LP in connection with the Company’s senior secured term loan that has since been repaid and have an expiration date of April 18, 2023. It was determined that the warrants granted are detachable and therefore are a stand-alone component of the senior secured term loan to be fair valued using Level III inputs as a separate derivative. As of December 31, 2017, these warrants remained exercisable for common stock.

Common Stock

Common Stock	12 Months Ended
	Dec. 31, 2017
Common Stock.
Common Stock	10. Common Stock The Company's board of directors and stockholders approved an amendment to its Certificate of Incorporation to effect a 1-for-1.63 reverse split of its capital stock, which was effected on June 19, 2015. All references to common stock, options to purchase common stock, restricted stock, share data, per share data, warrants, convertible preferred stock and related information have been retroactively adjusted where applicable in this report to reflect the reverse stock split of the Company's capital stock as if it had occurred at the beginning of the earliest period presented.

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2017
Income Taxes
Income Taxes	11. Income Taxes The Company's effective tax rates for the years ended December 31, 2017, 2016 and 2015 differ from the U.S. federal statutory rate as follows: Year Ended December 31, 2017 2016 2015 (in thousands, except percentages) U.S. federal taxes (benefit) at statutory rate $ (46,206) % $ (32,277) % $ (24,375) % State tax expense (6,559) % (2,842) % (2,428) % Research and development credits (1,149) % (1,449) % (751) % Stock-based compensation (5,036) % 1,275 % 1,683 % Change in federal tax rate 44,701 % — % — % Mark to market fair value adjustments (390) % 49 % 504 % Nondeductible settlement for claims 3,873 % — % — % Other nondeductible items 1,009 % 933 % 841 % Change in valuation allowance 10,211 % 34,453 % 24,526 % Provision for income taxes $ 454 0.31 % $ 142 0.15 % $ — — % During the year ended December 31, 2017, the Company recorded total income tax expense of $0.4 million. The Company provides testing to clinics and also licenses its cloud-based software to licensees that are based in a foreign country, which contributed to a foreign income tax expense of $0.2 million. Total income tax expense also included a state income tax expense of $0.2 million for the year ended December 31, 2017. During the year ended December 31, 2016, the Company did not record any income tax expense given its history of losses, with the exception of $0.1 million of foreign withholding tax in 2016. As the provision for income taxes was not significant for the year ended December 31, 2015, any income taxes were reclassified out of other income and expenses. Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes as well as net operating loss and tax credit carryforwards. The components of the net deferred income tax assets are as follows: December 31, 2017 2016 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 77,356 $ 68,504 Research and development tax credit carryforwards 12,675 8,634 Reserves and accruals 3,404 5,719 Stock-based compensation 2,929 3,220 Total deferred tax assets before valuation allowance 96,364 86,077 Less: valuation allowance (95,817) (85,606) 547 471 Deferred tax liabilities: Property and equipment (547) (471) Net deferred tax assets $ — $ — The Company established a full valuation allowance against its net deferred tax assets in 2017 and 2016 due to the uncertainty surrounding realization of these assets. The valuation allowance increased to $95.8 million as of December 31, 2017 from $85.6 million as of December 31, 2016. The increase in the valuation allowance was primarily driven by the net loss in the year ended December 31, 2017, current year credits, and the adoption of ASU 2016-09, offset by a decrease resulting from lower federal tax rate. In December 2017, the U.S. Congress passed the Tax Cuts and Jobs Act of 2017. As a result, corporate tax rate was reduced to 21%, effective January 1, 2018. ASC 740, Income Taxes , requires entities to recognize the effect of the tax law changes in the period of enactment. Shortly after the enactment of the Act, the Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when an entity does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. The Company has made adjustments to reduce its deferred tax assets and liabilities by $42.1 million and $0.2 million, respectively, based on the reduction of the U.S. federal corporate tax rate from 34% to 21% and assessed the realizability of its deferred tax assets based on its current understanding of the provisions of the new law. A corresponding net reduction to valuation allowance of $42.2 million has been made for the year ended December 31, 2017. The Company considers its accounting for the impacts of the new law to be provisional and the Company will continue to assess the impact of the recently enacted tax law (and expected further guidance from federal and state tax authorities as well as further guidance for the associated income tax accounting) on its business and consolidated financial statements over the next 12 months. As of December 31, 2017, the Company had federal and state net operating loss (“NOLs”) carryforwards of approximately $319.6 million and $165.5 million, respectively, which begin to expire in 2027 and 2028, respectively, if not utilized. As a result of certain realization requirements of ASC 718, the deferred tax assets and liabilities shown in the table above do not include certain deferred tax assets as of December 31, 2016 that arose directly from the tax deductions related to equity compensation in excess of compensation recognized for financial statement presentation purposes. These deferred tax assets were recorded upon the adoption of ASU 2016-09 effective January 1, 2017. The Company also had federal research and development credit carryforwards of approximately $11.7 million, which begin to expire in 2028, and state research and development credit carryforwards of approximately $8.1 million, which can be carried forward indefinitely. Realization of these deferred tax assets would require $382.8 million in taxable income to fully utilize. Realization is dependent on generating sufficient taxable income prior to expiration of the loss and credit carryforwards. Federal and California tax laws impose substantial restrictions on the utilization of NOLs and credit carryforwards in the event of an "ownership change" for tax purpose, as defined in Section 382 of the Internal Revenue Code. Accordingly, the Company's ability to utilize these carryforwards may be limited as the result of such ownership change. Such a limitation could result in limitation in the use of the NOLs in future years and possibly a reduction of the NOLs available. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: Year Ended December 31, 2017 2016 2015 (in thousands) Balance at beginning of year $ 4,293 $ 2,405 $ 1,360 Additions based on tax positions related to the current year 1,651 1,836 1,045 Additions for tax positions of prior years 1 52 — Balance at end of year $ 5,945 $ 4,293 $ 2,405 The Company adopted the provisions of ASC 740-10-50, Accounting for Uncertainty in Income Taxes , on January 1, 2009. During the years ended December 31, 2017, 2016 and 2015, the amount of unrecognized tax benefits increased $1.7 million, $1.9 million, and $1.0 million, respectively, due to additional research and development credits generated during the year. As of December 31, 2017, 2016 and 2015, the total amount of unrecognized tax benefits was $5.9 million, $4.3 million and $2.4 million, respectively. The reversal of the uncertain tax benefits would not affect the Company's effective tax rate to the extent that it continues to maintain a full valuation allowance against its deferred tax assets. The Company is subject to U.S. federal income taxes and to income taxes in various states in the United States. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations, and require significant judgment to apply. The Company is subject to U.S. federal, state and local tax examinations by tax authorities for all prior tax years since incorporation. The Company does not anticipate significant changes to its current uncertain tax positions through December 31, 2018. The Company recognizes any interest and/or penalties related to income tax matters as a component of income tax expense. As of December 31, 2017, there were no accrued interest and penalties related to uncertain tax positions.

Related-Party Transactions

Related-Party Transactions	12 Months Ended
	Dec. 31, 2017
Related-Party Transactions
Related-Party Transactions	12. Related‑Party Transactions The Company entered into a full recourse promissory note with the Company’s chief executive officer, in April 2012 whereby the Company loaned Dr. Rabinowitz $154,000. This interest only loan bore interest at a rate per annum of 1.15%, compounded annually. This loan, including all accrued interest, was repaid in full by Dr. Rabinowitz in May 2015. The Company entered into a full recourse promissory note with Jonathan Sheena, the Company’s chief technology officer, in April 2012 whereby the Company loaned Mr. Sheena $38,280. This interest only loan bore interest at a rate per annum of 1.15%, compounded annually. This loan, including all accrued interest, was repaid in full by Mr. Sheena in May 2015.

Net Loss per Share

Net Loss per Share	12 Months Ended
	Dec. 31, 2017
Net Loss per Share
Net Loss per Share	13. Net Loss per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Prior to the Company’s IPO in July 2015, the Company’s convertible preferred stock was entitled to receive dividends, prior and in preference to any declaration or payment of any dividend on common stock and thereafter participate pro rata on an as converted basis with the common stock holders on any distributions to common stockholders. The convertible preferred shares were therefore considered to be participating securities. As a result, the Company calculated the net loss per share using the two-class method. Accordingly, the net loss attributable to common stockholders is derived from the net loss for the period and, in periods in which the Company has net income attributable to common stockholders, an adjustment is made for the noncumulative dividends and allocations of earnings to participating securities based on their outstanding shareholder rights. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the convertible preferred stock did not have a contractual obligation to share in the Company’s losses. In periods when the Company has incurred a net loss, common stock equivalents such as outstanding common stock options, restricted stock units, unvested common shares subject to repurchase and warrants are excluded from the calculation of diluted net loss per share as they give an anti-dilutive effect. For the year ended December 31, 2017, the Company reversed $1.1 million of remeasurement gain on the change in the fair value of warrants from its net loss and included the incremental shares from the assumed exercise of the warrants in the computation of its weighted-average shares outstanding as they yielded a dilutive effect to the net loss per share in the period. Other potentially dilutive common stock equivalents such as outstanding common stock options, shares to be purchased under the employee stock purchase plan, and restricted stock units were excluded as their effect was anti-dilutive and the net loss per share would be reduced. The following table provides the basic and diluted net loss per share computations for the years ended December 31, 2017, 2016 and 2015. Year ended December 31, (in thousands, except per share data) 2017 2016 2015 Numerator: Net loss used to compute net loss per share, basic $ (136,314) $ (95,765) $ (70,275) Less: Remeasurement gain on warrant liability (1,148) — — Net loss used to compute net loss per share, diluted $ (137,462) $ (95,765) $ (70,275) Denominator: Weighted-average common shares outstanding 53,312 51,667 27,687 Less: Weighted-average unvested common shares subject to repurchase — (91) (1,483) Weighted-average number of shares used in computing net loss per share, basic 53,312 51,576 26,204 Add: Incremental shares from assumed exercise of warrants 292 — — Weighted-average number of shares used in computing net loss per share, diluted 53,604 51,576 26,204 Net loss per share, basic $ (2.56) $ (1.86) $ (2.68) Net loss per share, diluted $ (2.56) $ (1.86) $ (2.68) The following table shows the potentially dilutive common stock equivalents that were excluded from the computations of diluted net loss per share as their effect would be anti-dilutive, as of December 31, 2017, 2016 and 2015: As of December 31, 2017 2016 2015 Options to purchase common stock 9,963 9,043 9,316 Warrants to purchase common stock — 377 377 Restricted stock units 389 159 — Employee stock purchase plan 79 90 — Common stock subject to repurchase — — 1,307 10,431 9,669 11,000

Geographic Information

Geographic Information	12 Months Ended
	Dec. 31, 2017
Geographic Information
Geographic Information	14. Geographic Information The following table presents total revenues by geographic area based on the location of the Company’s customers: Year ended December 31, 2017 2016 2015 (in thousands) United States $ 186,847 $ 193,054 $ 164,952 Americas, excluding U.S. 3,028 2,562 4,552 Europe, Middle East, India, Africa 13,998 14,256 15,437 Other 7,066 7,202 5,414 Total $ 210,939 $ 217,074 $ 190,355 The Company’s property, plant and equipment are all located in the United States.

Subsequent Events

Subsequent Events	12 Months Ended
	Dec. 31, 2017
Subsequent Events
Subsequent Events	15 . Subsequent Events In January 2018, the Company amended its existing agreement with an insurance carrier, which provides the Company access to contact information of certain referring and ordering physicians and includes the Company as a member of its Preferred Provider Network. The Company will pay a total consideration of approximately $2.0 million over a two-year period in exchange such benefits. In February 2018, the Company amended its existing agreement with one of its laboratory partners to extend the original term of the agreement for two additional years, provided that the agreement is not canceled by the Company on December 31, 2018. The amended agreement expires on December 31, 2020 and requires material commitments from the Company to purchase certain number of tests annually. In March 2018, the Company reached settlement with the United States Department of Justice related to reimbursement related claims. This settlement agreement requires the Company to pay a total of approximately $11.4 million, of which approximately $5.6 million including applicable interest was secured by a letter of credit, will be paid in four equal installments, subject to the Company’s option to prepay without penalty. See Legal Proceedings under Note 6 for more detail. In March 2018, the Company entered into a Distribution Agreement with Qiagen to develop, manufacture, distribute and commercialize NGS-based genetic testing assays for clinical use based on the Company’s proprietary Panorama NIPT technology. According to the agreement, the Company will receive a total of $40.0 million before March 31, 2018. Additionally, the Company is entitled to potential milestone payments totaling $10.0 million from Qiagen upon the achievement of certain volume, regulatory and commercial milestones. The Distribution Agreement has a term of 10 years and expires in March 2028.

Quarterly Financial Data

Quarterly Financial Data	12 Months Ended
	Dec. 31, 2017
Quarterly Financial Data
Quarterly Financial Data	16 . Quarterly Financial Data (unaudited) Three months ended December 31, September 30, June 30, March 31, (in thousands, except per share data) 2017 Operating results: Total revenues $ 53,765 $ 56,656 $ 53,617 $ 46,901 Cost of product revenues 35,153 33,558 33,709 33,088 Cost of licensing and other revenues 1,572 1,054 850 612 Gross profit 17,040 22,044 19,058 13,201 Operating expenses 61,956 47,087 46,095 50,232 Interest expense and other income (expense), net (405) (1,914) (631) 1,117 Income tax expense (181) (162) (64) (47) Net loss $ (45,502) $ (27,119) $ (27,732) $ (35,961) Per share data: Net loss - basic $ (0.84) $ (0.51) $ (0.52) $ (0.68) Net loss - diluted $ (0.87) $ (0.51) $ (0.52) $ (0.70) 2016 Operating results: Total revenues $ 49,299 $ 53,889 $ 51,984 $ 61,902 Cost of product revenues 37,420 33,761 30,973 32,340 Cost of licensing and other revenues 580 500 — — Gross profit 11,299 19,628 21,011 29,562 Operating expenses 49,012 46,283 43,526 39,167 Interest expense and other income (expense), net (155) 741 (641) 920 Income tax expense (39) (103) — — Net loss $ (37,907) $ (26,017) $ (23,156) $ (8,685) Per share data: Net loss - basic $ (0.72) $ (0.50) $ (0.46) $ (0.17) Net loss - diluted $ (0.72) $ (0.50) $ (0.46) $ (0.17)

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2017
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”).
Liquidity Matters	Liquidity Matters The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. For the year ended December 31, 2017, the Company had a net loss of $136.3 million, and as of December 31, 2017, it had an accumulated deficit of $482.2 million. At December 31, 2017, the Company had $12.6 million in cash and cash equivalents, $106.2 million in marketable securities, $50.1 million of outstanding balance of the Credit Line (as defined in Note 8) including accrued interest, and $73.1 million of net carrying amount of the 2017 Term Loan (as defined in Note 8). While the Company has introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations. Accordingly, the Company has funded the portion of operating costs that exceeds revenues through a combination of equity issuances, debt issuances, and other financings. The Company continues to develop and commercialize future products and, consequently, it will need to generate additional revenues to achieve future profitability and may need to raise additional equity or debt financing. If the Company raises additional funds by issuing equity securities, its stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and require significant debt service payments, which diverts resources from other activities. Additional financing may not be available at all, or in amounts or on terms acceptable to the Company. If the Company is unable to obtain additional financing, it may be required to delay the development, commercialization and marking of its products and significantly scale back its business and operations. On March 10, 2018, the Company entered into a Distribution Agreement with Qiagen to develop, manufacture, distribute and commercialize NGS-based genetic testing assays for clinical use based on the Company’s proprietary Panorama NIPT technology. According to the agreement, the Company will receive a total of $40.0 million before March 31, 2018. Additionally, the Company is entitled to potential milestone payments totaling $10.0 million from Qiagen upon the achievement of certain volume, regulatory and commercial milestones. The Distribution Agreement has a term of 10 years and expires in March 2028. Based on the Company’s current business plan, the Company believes that its existing cash and marketable securities will be sufficient to meet its anticipated cash requirements for at least 12 months after March 15, 2018.
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include all the accounts of the Company and its subsidiary. The Company established a subsidiary that operates in the state of Texas in December 2014 to support the Company’s laboratory and operational functions, which became active in the second quarter of 2015. All intercompany balances and transactions have been eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include the allowance for doubtful accounts, software development costs to be capitalized, accrued liability for potential refund requests, stock-based compensation, fair value of common stock and warrants, as well as income tax uncertainties. These estimates and assumptions are based on management's best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors, including contractual terms and statutory limits; however, actual results could differ from these estimates and could have an adverse effect on the Company's financial statements.
Fair Value	Fair Value The Company discloses the fair value of financial instruments for financial assets and liabilities for which the value is practicable to estimate. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and the Company carries its warrants at fair value measurement guidance.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market deposits with financial institutions.
Restricted Cash	Restricted Cash The Company discloses both short-term and long-term restricted cash. Short-term restricted cash consists of cash deposits held to secure commercial letters of credit issued by financial institutions, and the balance was insignificant as of December 31, 2017. Long-term restricted cash consists of $0.3 million deposit per credit card terms.
Investments	Investments Investments consist primarily of debt securities such as U.S. Treasuries, U.S. agency and municipal bonds. Management determines the appropriate classification of securities at the time of purchase and reevaluates such determination at each balance sheet date. The Company generally classifies its entire investment portfolio as available-for-sale. The Company views its available-for-sale portfolio as available for use in current operations. Accordingly, the Company classifies all investments as short-term, even though the stated maturity may be more than one year from the current balance sheet date. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity.
Risk and Uncertainties	Risk and Uncertainties The Company has various financial instruments that are potentially subjected to credit risk, and they consist of cash, accounts receivable and investments. The Company limits its exposure to credit loss by placing its cash in financial institutions with high credit ratings. The Company's cash may consist of deposits held with banks that may at times exceed federally insured limits. The Company performs evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. The Company bills third-party payers for certain tests performed. The amount that is ultimately received from the payer for the Company’s claim and the timing of such payments are subject to the determination of the payer based on the nature of the test performed and their view of the Company’s business practices with respect to collections of plan deductibles and co-payments from patients and other activities. This determination can impact both the amount and timing of when the Company’s invoices are collected. Payers may also withhold payments and request refunds of prior payments if the payer asserts that the Company has not performed in accordance with the policies of these payers. The Company performs evaluations of financial conditions for clinics and laboratory partners and generally does not require collateral to support credit sales. In 2017, 2016 and 2015, there were no customers exceeding 10% of total revenues on an individual basis. As of December 31, 2017, there were no customers with an outstanding balance exceeding 10% of net accounts receivable, and as of December 31, 2016, one customer, Bio-Reference, had an outstanding balance of approximately 52% of net accounts receivable, which was collected in full by the Company in February 2017.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts Trade accounts receivable are recorded at the amount billed to the laboratory partners and clinics. Reducing this amount is an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make the contracted payments. Management analyzes accounts receivable and historical bad debt experience, customer creditworthiness, current economic trends, and changes in customer payment history when evaluating the adequacy of the allowance for doubtful accounts. Accounts receivable are written off against the allowance when there is substantive evidence that the account will not be paid.
Revenue Recognition	Revenue Recognition The Company generally bills an insurance carrier, a clinic or a patient for tests it sells upon delivery of the test results. The Company also bills patients directly for out-of-pocket costs not covered by their insurance carriers representing co-pays and deductibles in accordance with their insurance carrier and health plans. For tests performed, where an agreed upon reimbursement rate or fixed fee and a predictable history or likelihood of collections exists, the Company recognizes revenues upon delivery of the test report to the prescribing physician based on the established billing rate less other adjustments such as reserves for retractions and refunds to arrive at the amount that the Company expects to collect. In all other situations, as the Company does not have sufficient history of collection and is not able to determine collectability, the Company recognizes revenues when cash is received. The Company may not get reimbursed for tests completed if the tests are not covered under the insurance carrier’s reimbursement policies or the Company is not a qualified provider to the insurance carrier, or if the tests were not previously authorized. From time to time, the Company receives requests for refunds of payments previously made by insurance carriers. The Company has established an accrued liability for potential refund requests based on its experience, which is accounted for as reductions in revenues in the statement of operations and comprehensive loss. For the year ended December 31, 2017, $4.9 million was reversed from this accrued liability and recognized as revenue. In cases where the Company sells its tests through its laboratory partners, the majority of the laboratory partners bill the patient, clinic, or insurance carrier for the performance of the Company's tests. For tests sold through a limited number of its laboratory partners, the Company bills directly to a patient, clinic or insurance carrier, or a combination of the insurance carrier and patient for the fees. The Company considers its services rendered when it delivers reports of its test results to the laboratory partner, clinic or patient. When the Company has contracted fixed rates for its services and collectability of its revenues is reasonably assured, it recognizes revenues upon delivery of test reports. The fixed fees identified in contracts with laboratory partners change only if a pricing amendment is agreed upon between both parties. For cases in which there is no fixed price established with a laboratory partner, the Company then recognizes revenues from partner distributed tests on a cash basis. Certain of the Company's arrangements include multiple deliverables. For revenue arrangements with multiple deliverables, the Company evaluates each deliverable to determine whether it qualifies as a separate unit of accounting. This determination is based on whether the deliverable has "stand-alone value" to the customer and whether a general right of return exists. The consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. The Company uses judgment in identifying the deliverables in its arrangements, assessing whether each deliverable is a separate unit of accounting, and in determining the best estimate of selling price for certain deliverables. The Company also uses judgment in determining the period over which the deliverables are recognized in certain of its arrangements. Any amounts received that do not meet the criteria for revenue recognition are recorded as deferred revenue until such criteria are met. The Company recognizes revenue from its cloud-based distribution service offering, Constellation. The Company grants its licensees licenses to use certain of the Company’s proprietary intellectual properties and the Company’s cloud-based software and provides other services to support the use of the Company's proprietary technology by its licensees. The Company’s proprietary software is used in connection with the analysis of DNA sequence data in a manner yielding a result indicating the likely presence or absence of full or partial chromosomal abnormalities. The licensees do not have the right to possess the Company’s software, but rather receive the software as a service. The revenues are recognized on an accrual basis (assuming all revenue recognition criteria are met) under the terms of the related agreements and are included in licensing and other revenues in the statements of operation and comprehensive loss. The Company recognizes revenues from Evercord for the collection and storage of newborn cord blood and cord tissue units. Deliverables consist of: (i) the provision of a collection kit and the processing of newborn cord blood and cord tissue units, which are considered delivered at the beginning of the process (the “processing services”), with revenue for this deliverable recognized after the collection and successful processing of the cord blood and cord tissue units, and (ii) the storage of the cord blood and cord tissue units (the “storage services”), for either an annual fee or a prepayment covering an extended period or the lifetime of the newborn donor, with revenue for this deliverable recognized ratably over the applicable storage period. The Company bundles its processing services together with the first year of storage, and each of them has its own standalone value to customers, and therefore, represents a separate deliverable. The selling price for the processing services and the storage services are estimated based on the best estimate of selling price because the Company does not have vendor-specific objective evidence or third-party evidence of selling price for these elements. Evercord revenues are reported in licensing and other revenues in the statements of operations and comprehensive loss.
Cost of Product Revenues	Cost of Product Revenues The components of cost of product revenues are material and service costs, impairment charges associated with testing equipment, personnel costs, including stock-based compensation expense, equipment and infrastructure expenses associated with testing samples, electronic medical record, order and delivery systems, shipping charges to transport samples, third-party test processing fees and allocated overhead including rent, information technology costs, equipment depreciation and utilities. Costs associated with the performance of diagnostic services are recorded as tests are accessioned.
Cost of Licensing and Other Revenues	Cost of Licensing and Other Revenues The components of cost of licensing and other revenues are material costs associated with test kits, engineering costs incurred by the research and development team to improve and maintain the Constellation software platform, and amortization of Constellation software development costs. Costs also include collection kits consumed during the processing of cord blood samples, processing service and storage of the cord blood samples, and freight charged to transport the samples to the storage facility.
Research and Development	Research and Development The Company records research and development costs in the period incurred. Research and development costs consist of personnel costs, contract services, cost of materials utilized in performing tests, costs of clinical trials and allocated facilities and related overhead expenses.
Advertising Costs	Advertising Costs The Company expenses advertising costs as incurred. The Company incurred advertising costs of $0.5 million, $0.4 million and $1.1 million for the years ended December 31, 2017, 2016 and 2015, respectively.
Product Shipment Costs	Product Shipment Costs The Company expenses product shipment costs in cost of product revenues in the accompanying statements of operations. Shipping and handling costs for the years ended December 31, 2017, 2016 and 2015 were $9.5 million, $8.2 million and $7.0 million, respectively.
Income Taxes	Income Taxes Income taxes are recorded in accordance with Financial Accounting Standards Board ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Tax benefits are recognized when it is more likely than not that a tax position will be sustained during an audit. Deferred tax assets are reduced by a valuation allowance if current evidence indicates that it is considered more likely than not that these benefits will not be realized.
Stock-Based Compensation	Stock‑Based Compensation Stock‑based compensation related to stock options and restricted stock units (“RSUs”) granted to the Company’s employees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. No compensation cost is recognized when the requisite service has not been met and the awards are therefore forfeited. The Company uses the Black‑Scholes option‑pricing model to estimate the fair value of stock options issued to employees and non-employees. The measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in the Company's statements of operations and comprehensive loss during the period that the related services are rendered. The Black-Scholes option-pricing model requires the input of the Company's expected stock price volatility, the expected term of the awards, and a risk-free interest rate. Determining these assumptions requires significant judgment. The expected term was based on the simplified method and the volatility rate was based on that of publicly traded companies in the DNA sequencing, diagnostics, or personalized medicine industries. When selecting the public companies in these industries to be used in the volatility calculation, companies were selected with comparable characteristics to the Company, including enterprise value and financial leverage. Companies were also selected with historical share price volatility sufficient to meet the expected term of the Company's stock options. The historical volatility data was computed using the daily closing prices for the selected companies' shares during the equivalent period of the calculated expected term of the Company's stock options. The expected term of the non-employee option grants was based on their remaining contractual life at the measurement date. The risk-free interest rate assumption was based on U.S. Treasury instruments with maturities that were consistent with the option's expected term. Starting January 1, 2016, the Company began using a different approach to estimate the expected term of its stock option awards, which involves calculating the average of—(1) its employees’ historical stock option exercise behavior, and (2) the weighted-average of the time-to-vesting and the total contractual life of the options. The Company applied this change in methodology prospectively and accounted for it as a change in accounting estimate.
Warrants	Warrants The Company accounts for warrants to purchase shares of its common stock as a liability at fair value on the balance sheet date because the Company may be obligated to redeem these warrants at some point in the future. The warrants are subject to remeasurement at each balance sheet date, with changes in fair value recognized as a gain or loss from the changes in fair value of the warrants in the statements of operations. The Company will continue to adjust the liability for changes in fair value until such time that the warrants are converted or expire.
Capitalized Software Held for Internal Use	Capitalized Software Held for Internal Use The Company capitalizes salaries and related costs of employees and consultants who devote time to the development of internal-use software development projects. Capitalization begins during the application development stage, once the preliminary project stage has been completed. If a project constitutes an enhancement to previously developed software, the Company assesses whether the enhancement is significant and creates additional functionality to the software, thus qualifying the work incurred for capitalization. Once the project is available for general release, capitalization ceases and the Company estimates the useful life of the asset and begin amortization. The Company periodically assesses whether triggering events are present to review internal-use software for impairment. Changes in estimates related to internal-use software would increase or decrease operating expenses or amortization recorded during the reporting period. The Company amortizes its internal-use software over the estimated useful lives of three years. The net book value of capitalized software held for internal use was $2.6 million and $1.3 million as of December 31, 2017 and 2016, respectively. Amortized expense for amounts previously capitalized for the years ended December 31, 2017, 2016 and 2015 was $1.0 million, $0.6 million and $0.2 million, respectively.
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Comprehensive loss and its components encompass all changes in equity other than those with stockholders, and include net loss, unrealized gains and losses on available-for-sale marketable securities. As of December 31, 2017, and 2016, accumulated other comprehensive loss consisted of $0.8 million and $0.7 million of unrealized losses on available-for-sale marketable securities. See Note 4 for additional disclosures related to change in net unrealized losses and reclassifications out of accumulated other comprehensive loss upon the sale of available-for-sale marketable securities.
Property and Equipment	Property and Equipment Property and equipment, including purchased and internally developed software, are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which are generally three years. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the assets or the remaining term of the lease, whichever is shorter. The Company periodically reviews the depreciable lives assigned to property and equipment placed in service and change the estimates of useful lives to reflect the results of such reviews.
Impairment of Long-lived Assets	Impairment of Long-lived Assets The Company evaluates its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company then compares the carrying amounts of the assets with the future net undiscounted cash flows expected to be generated by such asset. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. See Note 5 for more detail about the asset impairment.
Inventory	Inventory Inventory is valued at the lower of the standard cost, which approximates actual cost, or market. Cost is determined using the first-in, first-out ("FIFO") method. Inventory consists entirely of supplies, which are consumed when providing its test reports, and therefore does not maintain any finished goods inventory. The Company enters into inventory purchases and commitments so that it can meet future delivery schedules based on forecasted demand for its tests. The Company recorded inventory obsolescence charges totaling $0.5 million in the year ended December 31, 2017. During the year ended December 31, 2016, the Company determined $2.1 million of inventory as obsolete in connection with its impairment analysis of the associated automation and sequencing equipment described in Note 5, and recorded an associated charge for these materials.
Recent Accounting Pronouncements	Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) under its accounting standard codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed below, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Pronouncements In July 2015, FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 simplifies the subsequent measurement of inventory by replacing today’s lower of cost or market test with a lower of cost and net realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last-in first-out (“LIFO”) and the retail inventory method (“RIM”). Entities that use LIFO and RIM will continue to use existing impairment models (i.e. entities using LIFO would apply the lower of cost or market test). From an operating perspective, the Company does not manufacture products for sale as it is a provider of genetic tests. The Company keeps inventory consisting mainly of laboratory materials and supplies that are consumed during the testing process. Under the existing guidance, the Company measured its inventory at the lower of standard cost or its net realizable value, which was considered as market. This process remains unchanged under the new guidance, and upon adopting ASU 2015-11 in the first quarter of 2017, it did not result in a material impact on the Company’s financial statements and related disclosures. In November 2015, FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which simplifies the presentation of deferred taxes by requiring that deferred tax assets and liabilities be presented as noncurrent on the balance sheet. The Company adopted ASU 2015-17 prospectively in the first quarter of 2017, which did not result in a material impact on its financial statements and related disclosures as a full valuation allowance has been reserved against the deferred tax assets and liabilities on the Company’s balance sheet as of December 31, 2017. No retrospective adjustments were made to the prior periods’ financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new guidance requires any excess tax benefits (“windfalls”) and tax deficiencies (“shortfalls”) associated with vested or settled share-based awards to be recognized in the income statement rather than additional paid-in capital, which is to be applied prospectively. Further, windfalls are required to be presented as an operating activity rather than as an outflow from operating activity and an inflow to financing activity, as required by the existing guidance. The Company adopted this new presentation guidance prospectively in the first quarter of 2017, which did not result in a material impact to its financial statements and related disclosures as a full valuation allowance has been reserved against the deferred tax assets and liabilities due to significant losses incurred since the Company’s inception. Therefore, there was no cumulative-effect adjustment required upon adoption. In addition, ASU 2016-09 allows entities to withhold an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction without having to account for the award as a liability-based award with a cumulative-effect adjustment to opening retained earnings on the modified retrospective approach. This new guidance is not applicable to the Company as it does not have a practice of withholding shares nor offsetting net-share settlement, and the Company does not withhold taxes exceeding its minimum statutory tax rate. ASU 2016-09 also permits forfeitures to be either estimated, as required by the existing guidance, or recognized when they occur. The change in the accounting for forfeitures is required to be applied using a modified retrospective approach, with a cumulative-effect adjustment to opening retained earnings. Upon adoption of this new guidance in the first quarter of 2017, the Company made an accounting policy election to continue estimating forfeitures as required by the existing guidance, which did not result in a cumulative-effect adjustment. New Accounting Pronouncements Not Yet Adopted In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers , which amends the existing accounting standards for revenue recognition. ASU 2014-09, which defines the core principles of ASC 606, establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The new guidance mandates a five-step process, which requires entities to exercise significant judgment and involves estimates to be made on the transaction price and the timing over which revenue will be recognized. Entities have a choice of adopting the new guidance using either the full retrospective approach, which requires restatement of financial statements in each prior reporting period presented, or the modified retrospective approach, with a cumulative-effect adjustment made to the opening retained earnings at the initial date of adoption. The new guidance will be effective for the Company in the first quarter of 2018. The Company has elected to adopt this new standard effective January 1, 2018, using the full retrospective approach. Under this approach, the Company will restate its results for the years ended December 31, 2016 and 2017, including retained earnings, and applicable interim periods within those years, as if ASC 606 had been effective for those periods. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Revenue recognition for arrangements that fall within the scope of ASC 606 is evaluated under its prescribed five-step approach. ASC 606 also impacts certain other areas, such as the accounting for costs incurred to obtain or fulfill a contract. The new standard also requires disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In 2017, the company established an implementation team and engaged external advisers to develop a multi-phase plan to assess the company’s business and contracts, as well as any changes to processes or systems to adopt the requirements of the new standard. To date, the Company’s revenues have been derived primarily from contracts with insurance carriers, patients, laboratory partners and licensing arrangements. Due to the constraints on establishing fixed pricing and collectability, a significant portion of the Company’s revenues from insurance carriers is recognized on cash basis under the existing guidance. However, ASC 606 eliminates such constraints and requires estimates to be made on variable consideration at the inception of an arrangement, thus cash basis of accounting is no longer applied. Under ASC 606, some of these insurance carriers arrangements have similar characteristics and are being evaluated collectively as a portfolio to reflect consideration which the entity expects to receive in exchange for goods and services. The Company determines its expected consideration based on the combined effect of historical and most current collections pattern. Due to the fact that several of the insurance carriers that contribute a material portion of the Company’s revenues have recently adopted new reimbursement standards, which require prior authorization from them at or soon after the date of service and the time claims are submitted for reimbursements, there is always a time lag between the period in which services are provided and when payments are actually received. Given the time needed to gather the most recent collection data before the arrangement consideration can be derived, the Company is currently still in the process of finalizing its analysis for the implementation of ASC 606 as of January 1, 2018. The analysis primarily relates to the estimation of variable consideration as of the date of transition, which requires the knowledge of collections made from prior test deliveries before the end of the first quarter of 2018. In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-02 will be effective for the Company in the fiscal year beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company plans to adopt this new guidance prospectively in the first quarter of 2019. The Company is evaluating the impact of the adoption of this guidance on its financial statements, and expects that it will increase its lease assets and correspondingly increase its lease liabilities. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the Emerging Issues Task Force). The purpose of ASU 2016-15 is to limit diversity in the classification of certain transactions in the statement of cash flows. Such transactions include (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon bonds, (3) contingent consideration payments made after a business combination, (4) proceeds from insurance claims settlement, (5) proceeds from settlement of life insurance policies, and (6) distributions of equity method investments. ASU 2016-15 will be effective for the Company in the first quarter of 2018. The Company does not expect the adoption of this guidance to result in a material impact to its financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The purpose of ASU 2016-18 is to eliminate the diversity in classifying and presenting changes in restricted cash in the statements of cash flows. The new guidance requires restricted cash to be combined with cash and cash equivalents when reconciling the beginning and ending balances of cash on the statement of cash flows, thereby no longer requiring transactions such as transfers between restricted and unrestricted cash to be treated as a cash flow activity. Further, the new guidance requires the nature of the restrictions to be disclosed, as well as a reconciliation between the balance sheet and the statement of cash flows on how restricted and unrestricted cash are segregated. The new guidance will be effective for the Company in the first quarter of 2018, and it must be adopted retrospectively. Upon adoption, the Company will eliminate restricted cash as a separate line item in the statements of cash flows in all periods presented, and a reconciliation between restricted cash and cash and cash equivalents will be shown either on the face of the associated financial statement or in a disclosure. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting . The purpose of this new guidance is to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The new guidance will be effective in the first quarter of 2018, and the Company does not expect the adoption of this guidance to result in a material impact to its financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This new guidance was established as a result of the recently passed Tax Cuts and Jobs Act of 2017, which provides an opportunity for entities to reclassify residual income tax effects from accumulated other comprehensive income to retained earnings due to the reduction of corporate income tax rate. The new guidance will be effective in the first quarter of 2019, and interim periods within that year, with early adoption permitted.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of financial assets and liabilities measured on recurring basis	December 31, 2017 December 31, 2016 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Money market deposits $ 3,477 $ — $ — $ 3,477 $ 10,777 $ — $ — $ 10,777 U.S. Treasury securities 67,026 — — 67,026 57,442 — — 57,442 U.S. agency securities — 27,072 — 27,072 — 56,114 — 56,114 Municipal securities — 12,149 — 12,149 — 17,304 — 17,304 Total financial assets $ 70,503 $ 39,221 $ — $ 109,724 $ 68,219 $ 73,418 $ — $ 141,637 Current Liabilities: Warrants $ $ — $ 2,644 $ 2,644 $ — $ — $ 3,792 $ 3,792 Total financial liabilities $ — $ — $ 2,644 $ 2,644 $ — $ — $ 3,792 $ 3,792
Summary of quantitative information about inputs and valuation methodologies	Weighted Average Interest on Fair Value at Significant Discount Rate December 31, 2017 Valuation Methodology Unobservable Input (range, if applicable) (in thousands) (in thousands) Warrants $ 2,644 Black-Scholes Option Pricing Model Volatility 40.93 %
Warrants
Rollforward of fair value determined by Level 3 inputs	Warrants 2017 2016 (in thousands) Beginning balance $ 3,792 $ 3,649 Change in fair value (1,148) 143 Ending balance $ 2,644 $ 3,792

Financial Instruments (Tables)

Financial Instruments (Tables)	12 Months Ended
	Dec. 31, 2017
Financial Instruments
Schedule of available-for-sale securities	December 31, 2017 December 31, 2016 Amortized Gross Gross Estimated Fair Amortized Gross Gross Estimated Fair (in thousands) Money market deposits $ 3,477 $ — $ — $ 3,477 $ 10,777 $ — $ — $ 10,777 U.S. Treasury securities 67,480 10 (464) 67,026 57,846 — (404) 57,442 U.S. agency securities 27,293 — (221) 27,072 56,261 — (147) 56,114 Municipal securities 12,240 — (91) 12,149 17,478 — (174) 17,304 Total $ 110,490 $ 10 $ (776) $ 109,724 $ 142,362 $ — $ (725) $ 141,637 Classified as: Cash equivalents $ 3,477 $ 10,777 Short-term investments 106,247 130,860 Total $ 109,724 $ 141,637
Change in net unrealized positions of available-for-sale securities and reclassifications from AOCL upon sale	December 31, 2017 2016 (in thousands) Balance at beginning of year $ (725) $ (1,416) Net unrealized (losses) gains on available-for-sale securities, net of tax (105) 882 Reclassifications of losses (gains) realized from sale of available-for-sale securities 64 (191) (Decrease) increase in other comprehensive loss (41) 691 Balance at end of year $ (766) $ (725)
Summarized portfolio of available-for-sale securities by contractual maturity	December 31, 2017 Amortized Fair (in thousands) Less than one year $ 57,168 $ 57,046 Greater than one year but less than five years 49,845 49,201 Total $ 107,013 $ 106,247

Balance Sheet Components (Table

Balance Sheet Components (Tables)	12 Months Ended
	Dec. 31, 2017
Balance Sheet Components
Schedule of allowance for doubtful accounts	December 31, December 31, December 31, 2017 2016 2015 (in thousands) Beginning balance $ 1,890 $ 971 $ 527 Provision for estimated bad debts 143 984 529 Write offs (33) (65) (85) Ending balance $ 2,000 $ 1,890 $ 971
Schedule of property and equipment	December 31, December 31, Useful Life 2017 2016 (in thousands) Machinery and equipment 3-5 years $ 31,825 $ 27,303 Furniture and fixtures 3 years 1,216 1,087 Computer equipment 3 years 1,958 861 Capitalized software held for internal use 3 years 4,465 2,172 Leasehold improvements Life of lease 10,691 10,444 Construction-in-process 6,497 9,759 56,652 51,626 Less: Accumulated depreciation and amortization (26,985) (19,337) Total Property and Equipment, net $ 29,667 $ 32,289
Schedule of accrued compensation	December 31, December 31, 2017 2016 (in thousands) Accrued paid time off $ 1,806 $ 1,892 Accrued commissions 3,558 3,868 Accrued bonuses 2,063 2,387 Other accrued compensation 2,172 2,920 Total accrued compensation $ 9,599 $ 11,067
Schedule of other accrued liabilities	December 31, December 31, 2017 2016 (in thousands) Settlement accrued for reimbursement related claims $ 10,062 $ — Reserves for refunds to insurance carriers 6,794 7,535 Accrued charges for outsourced testing 6,566 3,261 Testing and laboratory materials from suppliers 1,367 543 Marketing and corporate affairs 1,456 202 Legal, audit and consulting fees 206 180 Accrued shipping charges 198 467 Sales tax payable 504 459 Accrued specimen service fees 683 469 Accrued rent 856 195 Clinical trials and studies 483 388 Leasehold improvement projects in progress — 1,659 Other accrued expenses 4,032 4,521 Total other accrued liabilities $ 33,207 $ 19,879

Commitments and Contingencies (

Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2017
Commitments and Contingencies
Schedule of future minimum lease payments	Operating Leases (in thousands) Year ending December 31: 2018 $ 8,034 2019 8,547 2020 8,675 2021 8,913 2022 9,160 2023 and thereafter 14,737 Total future minimum lease payments $ 58,066

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	12 Months Ended
	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Summary of stock option activity	Outstanding Options Weighted- Weighted- Average Shares Average Remaining Aggregate Available for Number of Exercise Contractual Intrinsic (in thousands, except for contractual life and exercise price) Grant Shares Price Life Value (In years) Balance at December 31, 2016 4,115 9,043 $ 5.72 7.55 $ 55,396 Additional shares authorized 2,107 — Options granted (2,078) 2,078 $ 10.55 Options exercised — (565) $ 4.10 Options forfeited 593 (593) $ 10.37 Balance at December 31, 2017 4,737 9,963 $ 6.54 7.03 $ 31,902 Exercisable at December 31, 2017 6,103 $ 4.41 5.95 $ 30,201 Vested and expected to vest at December 31, 2017 9,592 $ 6.41 6.96 $ 31,738
Restricted stock units	Weighted- Average Number of Grant Date Shares Fair Value Balance at December 31, 2016 159 $ 9.80 Granted 345 $ 10.48 Vested (64) $ 9.79 Canceled/Forfeited (51) $ 10.17 Balance at December 31, 2017 389 $ 10.38
Summary of stock-based compensation expenses	Year ended December 31, 2017 2016 2015 Employee Non-Employee Total Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 544 $ — $ 544 $ 651 $ (10) $ 641 $ 351 $ 241 $ 592 Research and development 3,214 — 3,214 2,829 24 2,853 1,566 9 1,575 Selling, general and administrative 7,644 — 7,644 6,837 270 7,107 4,993 166 5,159 Total $ 11,402 $ — $ 11,402 $ 10,317 $ 284 $ 10,601 6,910 $ 416 $ 7,326
Employee stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Schedule of assumptions used in valuation of fair value of employee stock options	Year ended December 31, 2017 2016 2015 Expected term (years) 5.14 — 5.24 5.10 — 5.20 5.58 — 10.00 Expected volatility 40.75 % — 62.93 % 63.06 % — 72.49 % 69.65 % — 78.82 % Expected dividend rate 0 % 0 % 0 % Risk-free interest rate 1.67 % — 2.16 % 0.97 % — 1.92 % 1.56 % — 2.32 %
Non-employee stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Schedule of assumptions used in valuation of fair value of employee stock options	Year ended December 31, 2017 2016 2015 Expected term (years) 2.67 — 2.71 2.65 — 3.16 4.94 — 9.78 Expected volatility 41.22 % — 52.18 % 50.90 % — 72.61 % 70.17 % — 75.35 % Expected dividend rate 0 % 0 % 0 % Risk-free interest rate 1.42 % — 1.95 % 0.68 % — 1.38 % 1.74 % — 2.24 %

Debt (Tables)

Debt (Tables)	12 Months Ended
	Dec. 31, 2017
Debt
Schedule of long-term debt	2017 Term Loan (in thousands) Principal balance at December 31, 2017 $ 75,000 Less: unamortized debt discount (1,935) Net carrying amount at December 31, 2017 $ 73,065

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2017
Income Taxes
Schedule of effective tax rates differing from U.S. federal statutory rate	Year Ended December 31, 2017 2016 2015 (in thousands, except percentages) U.S. federal taxes (benefit) at statutory rate $ (46,206) % $ (32,277) % $ (24,375) % State tax expense (6,559) % (2,842) % (2,428) % Research and development credits (1,149) % (1,449) % (751) % Stock-based compensation (5,036) % 1,275 % 1,683 % Change in federal tax rate 44,701 % — % — % Mark to market fair value adjustments (390) % 49 % 504 % Nondeductible settlement for claims 3,873 % — % — % Other nondeductible items 1,009 % 933 % 841 % Change in valuation allowance 10,211 % 34,453 % 24,526 % Provision for income taxes $ 454 0.31 % $ 142 0.15 % $ — — %
Schedule of tax effects of temporary differences that give rise to significant portions of the deferred tax assets	December 31, 2017 2016 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 77,356 $ 68,504 Research and development tax credit carryforwards 12,675 8,634 Reserves and accruals 3,404 5,719 Stock-based compensation 2,929 3,220 Total deferred tax assets before valuation allowance 96,364 86,077 Less: valuation allowance (95,817) (85,606) 547 471 Deferred tax liabilities: Property and equipment (547) (471) Net deferred tax assets $ — $ —
Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits	Year Ended December 31, 2017 2016 2015 (in thousands) Balance at beginning of year $ 4,293 $ 2,405 $ 1,360 Additions based on tax positions related to the current year 1,651 1,836 1,045 Additions for tax positions of prior years 1 52 — Balance at end of year $ 5,945 $ 4,293 $ 2,405

Net Loss per Share (Tables)

Net Loss per Share (Tables)	12 Months Ended
	Dec. 31, 2017
Net Loss per Share
Basic and diluted net loss per common share	Year ended December 31, (in thousands, except per share data) 2017 2016 2015 Numerator: Net loss used to compute net loss per share, basic $ (136,314) $ (95,765) $ (70,275) Less: Remeasurement gain on warrant liability (1,148) — — Net loss used to compute net loss per share, diluted $ (137,462) $ (95,765) $ (70,275) Denominator: Weighted-average common shares outstanding 53,312 51,667 27,687 Less: Weighted-average unvested common shares subject to repurchase — (91) (1,483) Weighted-average number of shares used in computing net loss per share, basic 53,312 51,576 26,204 Add: Incremental shares from assumed exercise of warrants 292 — — Weighted-average number of shares used in computing net loss per share, diluted 53,604 51,576 26,204 Net loss per share, basic $ (2.56) $ (1.86) $ (2.68) Net loss per share, diluted $ (2.56) $ (1.86) $ (2.68)
Total outstanding potentially dilutive shares not included in the calculation of dilutive EPS	As of December 31, 2017 2016 2015 Options to purchase common stock 9,963 9,043 9,316 Warrants to purchase common stock — 377 377 Restricted stock units 389 159 — Employee stock purchase plan 79 90 — Common stock subject to repurchase — — 1,307 10,431 9,669 11,000

Geographic Information (Tables)

Geographic Information (Tables)	12 Months Ended
	Dec. 31, 2017
Geographic Information
Schedule of total revenue by geographic area	Year ended December 31, 2017 2016 2015 (in thousands) United States $ 186,847 $ 193,054 $ 164,952 Americas, excluding U.S. 3,028 2,562 4,552 Europe, Middle East, India, Africa 13,998 14,256 15,437 Other 7,066 7,202 5,414 Total $ 210,939 $ 217,074 $ 190,355

Quarterly Financial Data (Table

Quarterly Financial Data (Tables)	12 Months Ended
	Dec. 31, 2017
Quarterly Financial Data
Schedule of quarterly financial data	Three months ended December 31, September 30, June 30, March 31, (in thousands, except per share data) 2017 Operating results: Total revenues $ 53,765 $ 56,656 $ 53,617 $ 46,901 Cost of product revenues 35,153 33,558 33,709 33,088 Cost of licensing and other revenues 1,572 1,054 850 612 Gross profit 17,040 22,044 19,058 13,201 Operating expenses 61,956 47,087 46,095 50,232 Interest expense and other income (expense), net (405) (1,914) (631) 1,117 Income tax expense (181) (162) (64) (47) Net loss $ (45,502) $ (27,119) $ (27,732) $ (35,961) Per share data: Net loss - basic $ (0.84) $ (0.51) $ (0.52) $ (0.68) Net loss - diluted $ (0.87) $ (0.51) $ (0.52) $ (0.70) 2016 Operating results: Total revenues $ 49,299 $ 53,889 $ 51,984 $ 61,902 Cost of product revenues 37,420 33,761 30,973 32,340 Cost of licensing and other revenues 580 500 — — Gross profit 11,299 19,628 21,011 29,562 Operating expenses 49,012 46,283 43,526 39,167 Interest expense and other income (expense), net (155) 741 (641) 920 Income tax expense (39) (103) — — Net loss $ (37,907) $ (26,017) $ (23,156) $ (8,685) Per share data: Net loss - basic $ (0.72) $ (0.50) $ (0.46) $ (0.17) Net loss - diluted $ (0.72) $ (0.50) $ (0.46) $ (0.17)

Description of Business (Detail

Description of Business (Details) $ / shares in Units, $ in Millions	1 Months Ended	12 Months Ended
	Jul. 31, 2015USD ($)$ / sharesshares	Dec. 31, 2017segment	Dec. 31, 2015shares
Number of operating segments | segment		1
Common stock
Initial public offering (in shares)			10,900,000
IPO | Common stock
Initial public offering (in shares)	10,900,000
Initial public offering price (in dollars per share) | $ / shares	$ 18
Proceeds from initial public offering, net of offering costs | $	$ 178.5

Summary of Significant Accoun36

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended									12 Months Ended
	Mar. 31, 2018	Jan. 31, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Policies
Net (loss) income				$ (45,502)	$ (27,119)	$ (27,732)	$ (35,961)	$ (37,907)	$ (26,017)	$ (23,156)	$ (8,685)	$ (136,314)	$ (95,765)	$ (70,275)
Accumulated deficit				482,162				345,848				482,162	345,848
Cash and cash equivalents				12,620				15,256				12,620	15,256	28,947	$ 87,176
Marketable securities				106,247				130,860				106,247	130,860
Short-term Credit Line, outstanding balance				50,112				49,624				50,112	49,624
Long-term Term Loan, carrying amount				73,065								73,065
Revenues				53,765	$ 56,656	$ 53,617	$ 46,901	49,299	$ 53,889	$ 51,984	$ 61,902	210,939	217,074	190,355
Licensing revenue												$ 5,450	3,106	$ 2,187
Agreement term												4 years
Restricted cash
Restricted cash, long term portion				$ 342				$ 342				$ 342	$ 342
Forecast | Qiagen
Policies
Revenues			$ 40,000
Subsequent Event
Policies
Agreement term		2 years
Subsequent Event | Qiagen
Policies
Potential milestone payments	$ 10,000
Agreement term	10 years

Summary of Significant Accoun37

Summary of Significant Accounting Policies - Concentration (Details) $ in Millions	12 Months Ended
	Dec. 31, 2017USD ($)customer	Dec. 31, 2016customer	Dec. 31, 2015customer
Risk and Uncertainties
Revenue recognized | $	$ 4.9
Sales | Customer
Risk and Uncertainties
Number of customers exceeding 10% of benchmark	0	0	0
Accounts Receivable | Credit
Risk and Uncertainties
Number of customers exceeding 10% of benchmark	0	1
Concentration risk (as a percent)		52.00%

Summary of Significant Accoun38

Summary of Significant Accounting Policies - Costs (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary of Significant Accounting Policies
Advertising costs	$ 0.5	$ 0.4	$ 1.1
Shipping and handling costs	9.5	8.2	7
Capitalized software	2.6	1.3
Amortized expense	$ 1	$ 0.6	$ 0.2

Summary of Significant Accoun39

Summary of Significant Accounting Policies - AOCL (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies
Accumulated other comprehensive loss	$ 766	$ 725

Summary of Significant Accoun40

Summary of Significant Accounting Policies - Property (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property and Equipment
Estimated useful life	P3Y
Impairment of assets	$ 576	$ 2,138	$ 1,557
Machinery and equipment
Property and Equipment
Impairment of assets		$ 2,100

Summary of Significant Accoun41

Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies
Loss on write down of inventory	$ 502	$ 2,110

Fair Value Measurements - Hiera

Fair Value Measurements - Hierarchy (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Transfers between Levels 1 and 2
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount	$ 0	$ 0
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount	0	0
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount	0	0
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount	0	0
Transfers into and out of Level 3
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers Into Level 3	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers out of Level 3	0	0
Recurring
Financial Assets:
Total financial assets	109,724,000	141,637,000
Current Liabilities:
Warrants	2,644,000	3,792,000
Total financial liabilities	2,644,000	3,792,000
Recurring | Money market deposits
Financial Assets:
Total financial assets	3,477,000	10,777,000
Recurring | U.S. Treasury securities
Financial Assets:
Total financial assets	67,026,000	57,442,000
Recurring | U.S. agency securities
Financial Assets:
Total financial assets	27,072,000	56,114,000
Recurring | Municipal securities
Financial Assets:
Total financial assets	12,149,000	17,304,000
Recurring | Level 1
Financial Assets:
Total financial assets	70,503,000	68,219,000
Recurring | Level 1 | Money market deposits
Financial Assets:
Total financial assets	3,477,000	10,777,000
Recurring | Level 1 | U.S. Treasury securities
Financial Assets:
Total financial assets	67,026,000	57,442,000
Recurring | Level 2
Financial Assets:
Total financial assets	39,221,000	73,418,000
Recurring | Level 2 | U.S. agency securities
Financial Assets:
Total financial assets	27,072,000	56,114,000
Recurring | Level 2 | Municipal securities
Financial Assets:
Total financial assets	12,149,000	17,304,000
Recurring | Level 3
Current Liabilities:
Warrants	2,644,000	3,792,000
Total financial liabilities	$ 2,644,000	$ 3,792,000

Fair Value Measurements - Level

Fair Value Measurements - Level III (Details) - Warrants - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 3,792	$ 3,649
Change in fair value	(1,148)	143
Ending balance	$ 2,644	$ 3,792

Fair Value Measurements - Assum

Fair Value Measurements - Assumptions (Details) - Warrants $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Warrants	$ 2,644
Volatility (as a percent)	40.93%

Financial Instruments (Details)

Financial Instruments (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)position	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Estimated Fair Value	$ 106,247	$ 130,860
Realized gain		200
Number of investments, unrealized loss position | position	19
Interest income	$ 1,200	1,500	$ 500
Amortized Cost
Less than one year	57,168
Greater than one year but less than five years	49,845
Total	107,013
Fair Value
Less than one year	57,046
Greater than one year but less than five years	49,201
Total	106,247
Available-for-sale securities
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Cost	110,490	142,362
Unrealized Gain	10
Unrealized Loss	(776)	(725)
Estimated Fair Value	109,724	141,637
Money market deposits
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Cost	3,477	10,777
Estimated Fair Value	3,477	10,777
U.S. Treasury securities
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Cost	67,480	57,846
Unrealized Gain	10
Unrealized Loss	(464)	(404)
Estimated Fair Value	67,026	57,442
U.S. agency securities
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Cost	27,293	56,261
Unrealized Loss	(221)	(147)
Estimated Fair Value	27,072	56,114
Municipal securities
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Cost	12,240	17,478
Unrealized Loss	(91)	(174)
Estimated Fair Value	12,149	17,304
Cash equivalents | Available-for-sale securities
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Estimated Fair Value	3,477	10,777
Short-term investments | Available-for-sale securities
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Estimated Fair Value	$ 106,247	$ 130,860

Financial Instruments - Net Unr

Financial Instruments - Net Unrealized Positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Available-for-sale Securities
Net unrealized (losses) gains on available-for-sale securities, net of tax	$ (41)	$ 691	$ (1,416)
(Decrease) increase in other comprehensive loss	(41)	691	(1,416)
Available-for-sale securities
Available-for-sale Securities
Balance	(725)	(1,416)
Net unrealized (losses) gains on available-for-sale securities, net of tax	(105)	882
Reclassifications of losses (gains) realized from sale of available-for-sale securities	64	(191)
(Decrease) increase in other comprehensive loss	(41)	691
Balance	$ (766)	$ (725)	$ (1,416)

Balance Sheet Components - Allo

Balance Sheet Components - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allowance for doubtful accounts
Beginning balance	$ 1,890	$ 971	$ 527
Provision for estimated bad debts	143	984	529
Write offs	(33)	(65)	(85)
Ending balance	$ 2,000	$ 1,890	$ 971

Balance Sheet Components - Prop

Balance Sheet Components - Property (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property and Equipment, net
Property and equipment, gross			$ 56,652	$ 51,626
Less: Accumulated depreciation and amortization			(26,985)	(19,337)
Total Property and Equipment, net			29,667	32,289
Impairment of assets			576	2,138	$ 1,557
Proceeds from sale of impaired machinery and equipment					463
Machinery and equipment
Property and Equipment, net
Property and equipment, gross			31,825	27,303
Impairment of assets				2,100
Proceeds from sale of impaired machinery and equipment	$ 200	$ 500
Asset held for sale		$ 200			200
Machinery and equipment | Cost of product revenues
Property and Equipment, net
Impairment of assets			600	1,900	$ 1,000
Machinery and equipment | General and administrative expense
Property and Equipment, net
Impairment of assets				200
Machinery and equipment | Maintenance service contract
Property and Equipment, net
Impairment of assets				300
Furniture and fixtures
Property and Equipment, net
Property and equipment, gross			$ 1,216	1,087
Useful Life			3 years
Computer equipment
Property and Equipment, net
Property and equipment, gross			$ 1,958	861
Useful Life			3 years
Capitalized software held for internal use
Property and Equipment, net
Property and equipment, gross			$ 4,465	2,172
Useful Life			3 years
Leasehold improvements
Property and Equipment, net
Property and equipment, gross			$ 10,691	10,444
Construction-in-process
Property and Equipment, net
Property and equipment, gross			$ 6,497	$ 9,759
Minimum | Machinery and equipment
Property and Equipment, net
Useful Life			3 years
Maximum | Machinery and equipment
Property and Equipment, net
Useful Life			5 years

Balance Sheet Components - Othe

Balance Sheet Components - Other Assets (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Aug. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Aug. 14, 2017	Apr. 30, 2016
Balance Sheet Components [Line Items]
Agreement term		4 years
Total consideration					$ 3,200
Deferred costs included in other long-term assets		$ 1,800	$ 2,600
Amortization of deferred costs		$ 800	$ 600
Common stock, shares issued		54,040,000	52,665,000
Payments of debt issuance costs		$ 287
Noncurrent assets		3,979	$ 3,934
2017 Term Loan
Balance Sheet Components [Line Items]
Common stock, shares issued	300,000			300,000
Debt discount	$ 2,700	$ 600
Debt, increase (decrease)	(2,000)
Debt instrument, fee amount	2,400
Noncurrent assets	700
Remaining borrowing capacity	$ 25,000

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Compensation (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Balance Sheet Components
Accrued paid time off	$ 1,806	$ 1,892
Accrued commissions	3,558	3,868
Accrued bonuses	2,063	2,387
Other accrued compensation	2,172	2,920
Total accrued compensation	$ 9,599	$ 11,067

Balance Sheet Components - Ot51

Balance Sheet Components - Other Accured Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Balance Sheet Components
Settlement accrued for reimbursement related claims	$ 10,062
Reserves for refunds to insurance carriers	6,794	$ 7,535
Accrued charges for outsourced testing	6,566	3,261
Testing and laboratory materials from suppliers	1,367	543
Marketing and corporate affairs	1,456	202
Legal, audit and consulting fees	206	180
Accrued shipping charges	198	467
Sales tax payable	504	459
Accrued specimen service fees	683	469
Accrued rent	856	195
Clinical trials and studies	483	388
Leasehold improvement projects in progress		1,659
Other accrued expenses	4,032	4,521
Total other accrued liabilities	33,207	$ 19,879
Accrued settlement liability	11,400
Accrued settlement liability, current	10,100
Accrued settlement liability, long-term	1,300
Additional reserves for refunds to insurance carriers	4,200
Revenue recognized	$ 4,900

Commitments and Contingencies52

Commitments and Contingencies (Details)	12 Months Ended
	Dec. 31, 2017USD ($)ft²location	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Future minimum lease payments
2,018	$ 8,034,000
2,019	8,547,000
2,020	8,675,000
2,021	8,913,000
2,022	9,160,000
2023 and thereafter	14,737,000
Total future minimum lease payment	58,066,000
Rent expense	$ 7,200,000	$ 5,400,000	$ 2,700,000
Corporate Headquarters Lease
Operating Leases
Office space (area) | ft²	113,000
Number of office space locations | location	2
Security Deposit	$ 700,000
Term of lease	84 months
Security deposit	$ 700,000
"First Space" Sublease
Operating Leases
Office space (area) | ft²	88,000
Monthly base rent	$ 319,095
"Second Space" Sublease
Operating Leases
Office space (area) | ft²	25,000
Monthly base rent	$ 97,431
Additional Office Space Sublease
Operating Leases
Office space (area) | ft²	13,000
Monthly base rent	$ 49,140
Security Deposit	$ 100,000
Term of lease	28 months
Percentage of annual increase in rent	3.00%
Security deposit	$ 100,000
Austin TX, Long-term Lease
Operating Leases
Office space (area) | ft²	94,000
Monthly base rent	$ 100,000
Security Deposit	$ 400,000
Term of lease	132 months
Maximum monthly base rent after escalation	$ 200,000
Security deposit	400,000
Allowance for leasehold improvements	$ 7,800,000

Commitments and Contingencies -

Commitments and Contingencies - Legal (Details) $ in Millions	Mar. 07, 2018USD ($)installment	Feb. 28, 2018USD ($)installment	Dec. 31, 2017USD ($)
Other commitments
Shareholders (as a percent)			5.00%
Accrued settlement liability			$ 11.4
Accrued settlement liability, current			10.1
Accrued settlement liability, long-term			1.3
Supplier one | Inventory material
Other commitments
Purchase commitment			5.1
Supplier two | Inventory material
Other commitments
Purchase commitment			7.7
Supplier three
Other commitments
Purchase commitment			2
Supplier Four | Biological Sample Processing and Storage
Other commitments
Purchase commitment			1.1
Securities related claims
Other commitments
Estimate of possible loss			1.5
Commercial general liability claims
Other commitments
Estimate of possible loss			$ 0.3
Subsequent Event
Other commitments
Accrued settlement liability	$ 11.4	$ 11.4
Settlement agreement, amount plus applicable interest to be paid in installments	$ 5.3	$ 5.6
Settlement agreement, number of equal quarterly installments | installment	4	4

Stock-Based Compensation (Detai

Stock-Based Compensation (Details)	Dec. 31, 2015shares	Jun. 30, 2015shares	Apr. 30, 2016USD ($)shares	Oct. 31, 2016USD ($)shares	Dec. 31, 2017USD ($)$ / sharesperiodshares	Dec. 31, 2016USD ($)shares	Dec. 31, 2015USD ($)	Jun. 30, 2017shares
Stock Based Compensation
Stock option shares approved								425,000
2015 Plan
Stock Based Compensation
Shares reserved for issuance		3,451,495			14,567,816
Shares reserved for issuance as a proportion common stock outstanding (as a percent)					4.00%
2015 Plan | Minimum
Stock Based Compensation
Shares reserved for issuance					3,500,000
2007 Plan
Stock Based Compensation
Stock options, exercise price range, number outstanding (in shares)					5,551,616
Stock options, exercise price range, lower range limit (in dollars per share) | $ / shares					$ 0.0978
Stock options, exercise price range, upper range limit (in dollars per share) | $ / shares					$ 12.8501
Employee stock purchase plan
Stock Based Compensation
Shares reserved for issuance		893,548			1,136,615
Shares reserved for issuance as a proportion common stock outstanding (as a percent)					1.00%
Price in relation to fair market value of common stock on the date of grant, lower range limit (as a percent)					85.00%
Maximum number of shares a participant may receive during the period (in shares)					5,000
Maximum amount of award or purchase during a calendar year | $					$ 25,000
Maximum offering period, term					27 months
Number of expected offering periods each year | period					2
Offering period, expected term					6 months
Issuance of common stock under employee stock purchase plan (in shares)			211,729	234,452
Proceeds from issuance of common stock under employee stock purchase plan | $			$ 1,500,000	$ 1,800,000
Maximum employee contribution of employee's cash compensation (as a percent)					15.00%
Employee stock purchase plan | Minimum
Stock Based Compensation
Shares reserved for issuance					880,000
Performance-baseed awards
Stock Based Compensation
Stock option shares approved								200,000
Employee and non-employee stock options
Stock Based Compensation
Stock-based compensation expense | $					$ 11,402,000	$ 10,601,000	$ 7,326,000
Shares available for issuance					4,737,000	4,115,000
Employee and non-employee stock options | 2015 Plan
Stock Based Compensation
Vesting period					4 years
Expiration period		10 years
Employee and non-employee stock options | 2007 Plan
Stock Based Compensation
Shares exercised and unvested	1,300,000
Period after Market Stand-off repurchase right expires							210 days
Accelerated stock-based compensation expense | $							$ 1,300,000
Stock appreciation rights | 2015 Plan
Stock Based Compensation
Vesting period					4 years
Expiration period					10 years
Restricted stock units
Stock Based Compensation
Shares granted					345

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Options (Details) - Employee and non-employee stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Stock Based Compensation
Shares available for grant, beginning balance	4,115
Additional shares authorized	2,107
Options granted (in shares)	(2,078)
Options forfeited (in shares)	593
Shares available for grant, end balance	4,737	4,115
Number of shares
Outstanding, beginning balance (in shares)	9,043
Options granted (in shares)	2,078
Options exercised (in shares)	(565)
Options forfeited (in shares)	(593)
Outstanding, end balance (in shares)	9,963	9,043
Exercisable (in shares)	6,103
Vested and expected to vest (in shares)	9,592
Weighted-Average Exercise Price
Outstanding, beginning balance (in dollars per share)	$ 5.72
Granted (in dollars per share)	10.55
Exercised (in dollars per share)	4.10
Forfeited (in dollars per share)	10.37
Outstanding, end balance (in dollars per share)	6.54	$ 5.72
Exercisable (in dollars per share)	4.41
Vested and expected to vest (in dollars per share)	$ 6.41
Additional disclosures
Weighted average contractual term, options outstanding	7 years 11 days	7 years 6 months 18 days
Exercisable (in years)	5 years 11 months 12 days
Vested and expected to vest (in years)	6 years 11 months 16 days
Aggregate intrinsic value, options outstanding	$ 31,902	$ 55,396
Aggregate intrinsic value, options exercisable	30,201
Aggregate intrinsic value, vested and expected to vest	31,738
Aggregate intrinsic value, options exercised	3,700	16,900	$ 6,900
Fair value, options vested	$ 12,100	$ 8,500	$ 4,500
Weighted-average grant date fair value, options granted	$ 5.71	$ 5.92	$ 7.29

Stock-Based Compensation - Perf

Stock-Based Compensation - Performance-based Awards (Details) - shares	12 Months Ended
	Dec. 31, 2017	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option shares approved		425,000
Performance-baseed awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option shares approved		200,000
Requisite service period	3 years
Performance-baseed awards | Strategic arrangement milestone
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options unvested (in shares)	50,000
Vesting period	1 year
Performance-baseed awards | Licensing arrangement milestone
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options unvested (in shares)	75,000
Vesting period	1 year
Performance-baseed awards | Licensing arrangements related to oncology milestone
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options unvested (in shares)	75,000
Vesting period	1 year

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Units (Details) - Restricted stock units	12 Months Ended
	Dec. 31, 2017$ / sharesshares
Shares
Balance (in shares) | shares	159
Granted (in shares) | shares	345
Vested (in shares) | shares	(64)
Canceled/Forfeited (in shares) | shares	(51)
Balance (in shares) | shares	389
Weighted Average Grant Date Fair Value
Balance (in dollars per share) | $ / shares	$ 9.80
Granted (in dollars per share) | $ / shares	10.48
Vested (in dollars per share) | $ / shares	9.79
Canceled/Forfeited (in dollars per share) | $ / shares	10.17
Balance (in dollars per share) | $ / shares	$ 10.38

Stock-Based Compensation - Comp

Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee and non-employee stock options
Stock based compensation expense
Options granted (in shares)		2,078,000
Stock-based compensation expense		$ 11,402	$ 10,601	$ 7,326
Unrecognized compensation expense	$ 20,000	$ 20,000
Unrecognized compensation expense recognized over weighted average period		2 years 6 months 7 days
Employee and non-employee stock options | Cost of product revenues
Stock based compensation expense
Stock-based compensation expense		$ 544	641	592
Employee and non-employee stock options | Research and development
Stock based compensation expense
Stock-based compensation expense		3,214	2,853	1,575
Employee and non-employee stock options | Selling, general and administrative
Stock based compensation expense
Stock-based compensation expense		7,644	7,107	5,159
Employee stock options
Stock based compensation expense
Stock-based compensation expense		11,402	10,317	6,910
Employee stock options | Cost of product revenues
Stock based compensation expense
Stock-based compensation expense		544	651	351
Employee stock options | Research and development
Stock based compensation expense
Stock-based compensation expense		3,214	2,829	1,566
Employee stock options | Selling, general and administrative
Stock based compensation expense
Stock-based compensation expense		$ 7,644	6,837	4,993
Non-employee stock options
Stock based compensation expense
Options granted (in shares)	135,746
Options unvested (in shares)	3,401	3,401
Stock-based compensation expense			284	416
Non-employee stock options | Cost of product revenues
Stock based compensation expense
Stock-based compensation expense			(10)	241
Non-employee stock options | Research and development
Stock based compensation expense
Stock-based compensation expense			24	9
Non-employee stock options | Selling, general and administrative
Stock based compensation expense
Stock-based compensation expense			$ 270	$ 166

Stock-Based Compensation - Assu

Stock-Based Compensation - Assumptions (Details)	Dec. 31, 2017shares	Dec. 31, 2017componentshares	Dec. 31, 2016	Dec. 31, 2015
Valuation of Stock Option Grants to Employees
Number of components averaged to estimate expected term | component		2
Employee and non-employee stock options
Stock Based Compensation
Options granted (in shares)		2,078,000
Employee stock options
Valuation of Stock Option Grants to Employees
Expected volatility, minimum		40.75%	63.06%	69.65%
Expected volatility, maximum		62.93%	72.49%	78.82%
Expected dividend rate		0.00%	0.00%	0.00%
Risk free interest rate, minimum		1.67%	0.97%	1.56%
Risk free interest rate, maximum		2.16%	1.92%	2.32%
Employee stock options | Minimum
Valuation of Stock Option Grants to Employees
Expected term (years)		5 years 1 month 21 days	5 years 1 month 6 days	5 years 6 months 29 days
Employee stock options | Maximum
Valuation of Stock Option Grants to Employees
Expected term (years)		5 years 2 months 27 days	5 years 2 months 12 days	10 years
Non-employee stock options
Stock Based Compensation
Options granted (in shares)	135,746
Options unvested (in shares)	3,401	3,401
Valuation of Stock Option Grants to Employees
Expected volatility, minimum		41.22%	50.90%	70.17%
Expected volatility, maximum		52.18%	72.61%	75.35%
Expected dividend rate		0.00%	0.00%	0.00%
Risk free interest rate, minimum		1.42%	0.68%	1.74%
Risk free interest rate, maximum		1.95%	1.38%	2.24%
Non-employee stock options | Minimum
Valuation of Stock Option Grants to Employees
Expected term (years)		2 years 8 months 1 day	2 years 7 months 24 days	4 years 11 months 9 days
Non-employee stock options | Maximum
Valuation of Stock Option Grants to Employees
Expected term (years)		2 years 8 months 16 days	3 years 1 month 28 days	9 years 9 months 11 days

Debt (Details)

Debt (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended				3 Months Ended	10 Months Ended	12 Months Ended			24 Months Ended
	Aug. 31, 2017	Jun. 30, 2016	Nov. 30, 2015	Oct. 31, 2015	Nov. 30, 2015	Jun. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Aug. 14, 2017	Aug. 08, 2017	Sep. 30, 2015
Debt Instrument [Line Items]
Common stock, shares issued							54,040,000	52,665,000		54,040,000
Payments of debt issuance costs							$ 287
Interest expense							4,213	$ 533	$ 3,505
Repayments of equipment financing									5,850
Amortization of debt discount							154		$ 28
Net carrying amount							73,065			$ 73,065
Line Of Credit-UBS
Debt Instrument [Line Items]
Maximum borrowing capacity													$ 50,000
Borrowings		$ 8,000	$ 10,000	$ 32,000	$ 42,000	$ 49,000
Repayments		$ 1,000
Outstanding balance							50,100			50,100
Accrued interest							1,000	$ 600
Debt, interest accrued							$ 1,100
Interest paid										500
Line Of Credit-UBS | 30-day LIBOR
Debt Instrument [Line Items]
Spread on interest rate (as a percent)							1.10%
2017 Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 100,000
Available borrowing capacity	75,000						$ 75,000			75,000
Remaining borrowing capacity	$ 25,000
Repayments							0
Additional interest in the event of default (as a percent)	3.00%
Common stock, shares issued	300,000										300,000
Debt instrument, fee amount	$ 2,400
Stock price												$ 8.16
Interest expense							3,200
Amortization of debt discount							100
Debt discount	2,700						600			600
Debt, increase (decrease)	$ (2,000)
Less: unamortized debt discount							(1,935)			(1,935)
Net carrying amount							$ 73,065			$ 73,065
2017 Term Loan | Minimum
Debt Instrument [Line Items]
Prepayment premium (as a percent)	2.50%
2017 Term Loan | Maximum
Debt Instrument [Line Items]
Prepayment premium (as a percent)	12.50%
2017 Term Loan | Base Rate
Debt Instrument [Line Items]
Spread on interest rate (as a percent)	8.75%
Base interest rate (as a percent)	1.00%

Warrants (Details)

Warrants (Details) - Secured Loan Arrangement	Apr. 30, 2014$ / sharesshares
Class of Stock [Line Items]
Warrants outstanding (in shares) | shares	376,691
Warrants exercise price (in dollars per share) | $ / shares	$ 2.3229

Common Stock (Details)

Common Stock (Details)	Jun. 19, 2015
Common Stock.
Stock split conversion	0.6135

Income Taxes - Effective Tax Ra

Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Thousands	3 Months Ended						12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Effective tax rates differing from U.S. federal statutory rate
U.S. Federal taxes (benefit) at statutory rate							$ (46,206)	$ (32,277)	$ (24,375)
State tax expense							(6,559)	(2,842)	(2,428)
Research and development credits							(1,149)	(1,449)	(751)
Stock-based compensation							(5,036)	1,275	1,683
Change in federal tax rate							44,701
Mark to market fair value adjustments							(390)	49	504
Nondeductible settlement for claims							3,873
Other nondeductible items							1,009	933	841
Change in valuation allowance							10,211	34,453	$ 24,526
Provision for income taxes	$ 181	$ 162	$ 64	$ 47	$ 39	$ 103	$ 454	$ 142
U.S. Federal taxes (benefit) at statutory rate (as a percent)							(34.00%)	(34.00%)	(34.00%)
State tax expense (as a percent)							(4.83%)	(2.99%)	(3.39%)
Research and development credits (as a percent)							(0.85%)	(1.53%)	(1.05%)
Stock-based compensation (as a percent)							(3.71%)	1.34%	2.35%
Change in federal tax rate							32.89%	0.00%	0.00%
Mark to market fair value adjustments (as a percent)							(0.29%)	0.05%	0.70%
Nondeductible settlement for claims (as a percent)							2.85%	0.00%	0.00%
Other nondeductible items (as a percent)							0.74%	0.99%	1.17%
Change in valuation allowance (as a percent)							7.51%	36.29%	34.21%
Provision for income taxes (as a percent)							0.31%	0.15%
Income tax expense	$ 181	$ 162	$ 64	$ 47	$ 39	$ 103	$ 454	$ 142
Foreign income tax expense							200	$ 100
State income tax expense							$ 200

Income Taxes - Deferred Tax Ass

Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Effect Of Tax Cuts And Jobs Act Of 2017 [Abstract]
Corporate tax rate		34.00%	34.00%	34.00%
Decrease related to deferred tax assets		$ 42,100
Increase related to deferred tax liabilities		200
Valuation allowance reduction		42,200
Deferred tax assets
Net operating loss carryforwards		77,356	$ 68,504
Research and development tax credit carryforwards		12,675	8,634
Reserves and accruals		3,404	5,719
Stock based compensation		2,929	3,220
Total deferred tax assets before valuation allowance		96,364	86,077
Less: valuation allowance		(95,817)	(85,606)
Deferred tax assets, net		547	471
Deferred tax liabilities
Property and equipment		(547)	(471)
Net deferred tax assets
Forecast
Effect Of Tax Cuts And Jobs Act Of 2017 [Abstract]
Corporate tax rate	21.00%

Income Taxes - Net Operating Lo

Income Taxes - Net Operating Loss Carryforwards (Details) $ in Millions	Dec. 31, 2017USD ($)
Federal
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 319.6
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 165.5

Income Taxes - Tax Credit Carry

Income Taxes - Tax Credit Carryforwards (Details) $ in Millions	Dec. 31, 2017USD ($)
Tax Credit Carryforward [Line Items]
Taxable income required for full realization of deferred tax assets	$ 382.8
Federal | Research and development tax credit carryforward
Tax Credit Carryforward [Line Items]
Tax credit carryforward	11.7
State | Research and development tax credit carryforward
Tax Credit Carryforward [Line Items]
Tax credit carryforward	$ 8.1

Income Taxes - Unrecognized Tax

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes [Line Items]
Interest and penalties accrued	$ 0
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits
Balance at beginning of year	4,293	$ 2,405	$ 1,360
Additions based on tax positions related to the current year	1,651	1,836	1,045
Additions for tax positions of prior years	1	52
Balance at end of year	5,945	4,293	2,405
Research and development tax credit carryforward
Income Taxes [Line Items]
Unrecognized tax benefits increase	$ 1,700	$ 1,900	$ 1,000

Related-Party Transactions (Det

Related-Party Transactions (Details) - Notes Receivable from Officers	1 Months Ended
	Apr. 30, 2012USD ($)
Chief Executive Officer
Related-Party Transactions
Note receivable	$ 154,000
Note receivable interest rate (as a percent)	1.15%
Mr Sheena
Related-Party Transactions
Note receivable	$ 38,280
Note receivable interest rate (as a percent)	1.15%

Net Loss per Share - Loss per S

Net Loss per Share - Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator:
Net loss used to compute net loss per share, basic									$ (136,314)	$ (95,765)	$ (70,275)
Less: Remeasurement gain on warrant liability									(1,148)
Net loss attributable to common shares, diluted									$ (137,462)	$ (95,765)	$ (70,275)
Denominator:
Weighted-average shares outstanding									53,312	51,667	27,687
Less: weighted-average unvested shares subject to repurchase										(91)	(1,483)
Weighted-average number of shares used in computing net loss per share, basic									53,312	51,576	26,204
Add: incremental shares from assumed exercise of warrants									292
Weighted-average number of shares used in computing net loss per share, diluted									53,604	51,576	26,204
Net loss per share, basic (in dollars per share)	$ (0.84)	$ (0.51)	$ (0.52)	$ (0.68)	$ (0.72)	$ (0.50)	$ (0.46)	$ (0.17)	$ (2.56)	$ (1.86)	$ (2.68)
Net loss per share, diluted (in dollars per share)	$ (0.87)	$ (0.51)	$ (0.52)	$ (0.70)	$ (0.72)	$ (0.50)	$ (0.46)	$ (0.17)	$ (2.56)	$ (1.86)	$ (2.68)

Net Loss per Share - Potentiall

Net Loss per Share - Potentially Dilutive Shares (Details) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations	10,431	9,669	11,000
Employee and non-employee stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations	9,963	9,043	9,316
Warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations		377	377
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations	389	159
Employee stock purchase plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations	79	90
Common stock subject to repurchase
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares not included in diluted per share calculations			1,307

Geographic Information (Details

Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 53,765	$ 56,656	$ 53,617	$ 46,901	$ 49,299	$ 53,889	$ 51,984	$ 61,902	$ 210,939	$ 217,074	$ 190,355
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									186,847	193,054	164,952
Americas, excluding U.S.
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									3,028	2,562	4,552
Europe, Middle East, India, Africa
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									13,998	14,256	15,437
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues									$ 7,066	$ 7,202	$ 5,414

Subsequent Events (Details)

Subsequent Events (Details) $ in Thousands

Mar. 07, 2018USD ($)installment

Mar. 31, 2018USD ($)

Feb. 28, 2018USD ($)installment

Jan. 31, 2018USD ($)

Mar. 31, 2018USD ($)

Dec. 31, 2017USD ($)

Sep. 30, 2017USD ($)

Jun. 30, 2017USD ($)

Mar. 31, 2017USD ($)

Dec. 31, 2016USD ($)

Sep. 30, 2016USD ($)

Jun. 30, 2016USD ($)

Mar. 31, 2016USD ($)

Dec. 31, 2017USD ($)

Dec. 31, 2016USD ($)

Dec. 31, 2015USD ($)

Subsequent Event [Line Items]

Agreement term

4 years

Accrued settlement liability

$ 11,400

$ 11,400

Revenues

$ 53,765

$ 56,656

$ 53,617

$ 46,901

$ 49,299

$ 53,889

$ 51,984

$ 61,902

210,939

$ 217,074

$ 190,355

Licensing revenue

$ 5,450

$ 3,106

$ 2,187

Forecast | Qiagen

Subsequent Event [Line Items]

Revenues

$ 40,000

Subsequent Event

Subsequent Event [Line Items]

Payment for rights to pricing benefits from insurance carrier

$ 2,000

Agreement term

2 years

Accrued settlement liability

$ 11,400

$ 11,400

Settlement agreement, amount plus applicable interest to be paid in installments

$ 5,300

$ 5,600

Settlement agreement, number of equal quarterly installments | installment

4

4

Subsequent Event | Laboratory partner

Subsequent Event [Line Items]

Agreement term

2 years

Subsequent Event | Qiagen

Subsequent Event [Line Items]

Agreement term

10 years

Potential milestone payments

$ 10,000

Quarterly Financial Data (Detai

Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating results:
Total revenues	$ 53,765	$ 56,656	$ 53,617	$ 46,901	$ 49,299	$ 53,889	$ 51,984	$ 61,902	$ 210,939	$ 217,074	$ 190,355
Cost of product revenues	35,153	33,558	33,709	33,088	37,420	33,761	30,973	32,340	135,508	134,494	112,845
Cost of licensing and other revenues	1,572	1,054	850	612	580	500			4,088	1,080
Gross profit	17,040	22,044	19,058	13,201	11,299	19,628	21,011	29,562
Other expenses	61,956	47,087	46,095	50,232	49,012	46,283	43,526	39,167
Interest expense and other income (expense), net	(405)	(1,914)	(631)	1,117	(155)	741	(641)	920
Income tax expense	(181)	(162)	(64)	(47)	(39)	(103)			(454)	(142)
Net loss	$ (45,502)	$ (27,119)	$ (27,732)	$ (35,961)	$ (37,907)	$ (26,017)	$ (23,156)	$ (8,685)	$ (136,314)	$ (95,765)	$ (70,275)
Per share data:
Net loss - basic (in dollars per share)	$ (0.84)	$ (0.51)	$ (0.52)	$ (0.68)	$ (0.72)	$ (0.50)	$ (0.46)	$ (0.17)	$ (2.56)	$ (1.86)	$ (2.68)
Net loss - diluted (in dollars per share)	$ (0.87)	$ (0.51)	$ (0.52)	$ (0.70)	$ (0.72)	$ (0.50)	$ (0.46)	$ (0.17)	$ (2.56)	$ (1.86)	$ (2.68)