Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2020 | |
Entity File Number | 001-37478 | |
Entity Registrant Name | Natera, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 01-0894487 | |
Entity Address, Address Line One | 201 Industrial Road, SuiteĀ 410 | |
Entity Address, City or Town | San Carlos | |
Entity Address, State or Province | CA | |
Entity Address, Country | US | |
Entity Address, Postal Zip Code | 94070 | |
City Area Code | 650 | |
Local Phone Number | 249-9090 | |
Title of 12(g) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | NTRA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 78,725,320 | |
Entity Central Index Key | 0001604821 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 74,144 | $ 61,926 |
Restricted cash, current portion | 55 | 55 |
Short-term investments | 331,681 | 379,065 |
Accounts receivable, net of allowance of $3,020 in 2020 and $2,919 in 2019 | 61,577 | 53,351 |
Inventory | 14,161 | 12,394 |
Prepaid expenses and other current assets, net | 15,590 | 16,376 |
Total current assets | 497,208 | 523,167 |
Property and equipment, net | 26,718 | 23,283 |
Operating lease right-of-use assets | 22,620 | 23,730 |
Other assets | 12,093 | 12,476 |
Total assets | 558,639 | 582,656 |
Current liabilities: | ||
Accounts payable | 8,369 | 8,604 |
Accrued compensation | 15,953 | 16,088 |
Other accrued liabilities | 50,393 | 49,043 |
Deferred revenue, current portion | 51,840 | 56,016 |
Short-term debt financing | 50,087 | 50,123 |
Total current liabilities | 176,642 | 179,874 |
Long-term debt financing | 72,881 | 73,656 |
Deferred revenue, long-term portion | 25,152 | 23,808 |
Operating lease liabilities, long-term portion | 24,727 | 26,297 |
Other long-term liabilities | 310 | 310 |
Total liabilities | 299,712 | 303,945 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value: 750,000 shares authorized at both March 31, 2020 and December 31, 2019, respectively; 78,652 and 78,005 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 8 | 8 |
Additional paid in capital | 988,199 | 976,955 |
Accumulated deficit | (734,946) | (699,171) |
Accumulated other comprehensive income | 5,666 | 919 |
Total stockholders' equity | 258,927 | 278,711 |
Total liabilities and stockholders' equity | $ 558,639 | $ 582,656 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Allowances on accounts receivable | $ 3,020 | $ 2,919 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000 | 750,000 |
Common stock, shares issued | 78,652 | 78,005 |
Common stock, shares outstanding | 78,652 | 78,005 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Total revenues | $ 94,012,000 | $ 66,824,000 |
Cost and expenses | ||
Cost of revenues | 41,520,000 | 41,605,000 |
Research and development | 18,225,000 | 11,435,000 |
Selling, general and administrative | 65,681,000 | 43,832,000 |
Total cost and expenses | 128,884,000 | 98,570,000 |
Loss from operations | (34,872,000) | (31,746,000) |
Interest expense | (2,464,000) | (2,724,000) |
Interest and other income, net | 1,987,000 | 453,000 |
Loss before income taxes | (35,349,000) | (34,017,000) |
Income tax expense | (23,000) | (74,000) |
Net loss | (35,372,000) | (34,091,000) |
Unrealized gain on available-for-sale securities, net of tax | 4,747,000 | 286,000 |
Comprehensive loss | $ (30,625,000) | $ (33,805,000) |
Net loss per share (Note 12): | ||
Basic and diluted (in dollars per share) | $ (0.45) | $ (0.54) |
Weighted-average number of shares used in computing basic and diluted net loss per share: | ||
Basic and diluted (in shares) | 78,287 | 62,831 |
Product | ||
Revenues | ||
Total revenues | $ 87,046,000 | $ 63,364,000 |
Licensing and other | ||
Revenues | ||
Total revenues | 6,966,000 | 3,460,000 |
Cost and expenses | ||
Cost of revenues | $ 3,458,000 | $ 1,698,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Common stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 7 | $ 607,236 | $ (552) | $ (574,529) | $ 32,162 |
Balance (in shares) at Dec. 31, 2018 | 62,083 | ||||
Cumulative-effect adjustment upon adoption | (185) | 185 | |||
Issuance of common stock upon exercise of stock options | 2,578 | 2,578 | |||
Issuance of common stock upon exercise of stock options (in shares) | 1,070 | ||||
Vesting of restricted stock (in shares) | 187 | ||||
Stock based compensation | 4,051 | 4,051 | |||
Unrealized gain on available-for-sale securities | 286 | 286 | |||
Net loss | (34,091) | (34,091) | |||
Balance at Mar. 31, 2019 | $ 7 | 613,680 | (266) | (608,435) | 4,986 |
Balance (in shares) at Mar. 31, 2019 | 63,340 | ||||
Balance at Dec. 31, 2019 | $ 8 | 976,955 | 919 | (699,171) | $ 278,711 |
Balance (in shares) at Dec. 31, 2019 | 78,005 | 78,005 | |||
Cumulative-effect adjustment upon adoption | (403) | $ (403) | |||
Issuance of common stock upon exercise of stock options | 3,826 | 3,826 | |||
Issuance of common stock upon exercise of stock options (in shares) | 356 | ||||
Vesting of restricted stock (in shares) | 291 | ||||
Stock based compensation | 7,418 | 7,418 | |||
Unrealized gain on available-for-sale securities | 4,747 | 4,747 | |||
Net loss | (35,372) | (35,372) | |||
Balance at Mar. 31, 2020 | $ 8 | $ 988,199 | $ 5,666 | $ (734,946) | $ 258,927 |
Balance (in shares) at Mar. 31, 2020 | 78,652 | 78,652 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities | ||
Net loss | $ (35,372) | $ (34,091) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,826 | 1,920 |
Inventory excess adjustments | (64) | 101 |
Premium amortization and discount accretion on investment securities | 721 | 70 |
Stock-based compensation | 7,417 | 4,051 |
Non-cash lease expense | 1,940 | 1,890 |
Amortization of debt discount | 121 | 98 |
Other non-cash charges | 8 | |
Other non-cash (benefits) | (57) | |
Provision for credit losses | 1,387 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (8,786) | 2,145 |
Inventory | (1,703) | (216) |
Prepaid expenses and other current assets | (3,227) | (2,135) |
Other assets | 99 | 201 |
Accounts payable | 217 | (5,466) |
Accrued compensation | (135) | (1,850) |
Other accrued liabilities | 3,348 | 1,018 |
Deferred revenue | (2,832) | 437 |
Net cash used in operating activities | (35,100) | (31,819) |
Investing activities | ||
Purchases of investments | (53,876) | (18,628) |
Proceeds from sale of investments | 11,500 | |
Proceeds from maturity of investments | 93,785 | 32,500 |
Purchases of property and equipment, net | (7,917) | (955) |
Net cash provided by investing activities | 43,492 | 12,917 |
Financing activities | ||
Proceeds from exercise of stock options | 3,826 | 2,578 |
Net cash provided by financing activities | 3,826 | 2,578 |
Net (decrease) increase in cash, cash equivalents and restricted cash | 12,218 | (16,324) |
Cash, cash equivalents and restricted cash, beginning of period | 61,981 | 51,004 |
Cash, cash equivalents and restricted cash, end of period | 74,199 | 34,680 |
Supplemental non-cash investing and financing activities: | ||
Obtaining right-of-use assets in exchange for lease liabilities | 28,191 | |
Purchases of property and equipment in accounts payable and accruals | $ 2,657 | $ 199 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
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 Companyās 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 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 (āVistaraā), 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 carrierās 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 TM |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (āU.S. GAAPā) for interim financial information. The unaudited interim condensed consolidated financial information includes only adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholdersā equity, and cash flows. The results of operations for the three months ended March 31, 2020, are not necessarily indicative of the results for the full year or the results for any future periods. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements at that date, these financial statements should be read in conjunction with the audited financial statements, and related notes for the year ended December 31, 2019 included in the Companyās Annual Report on Form 10-K filed with the SEC on March 2, 2020. Liquidity Matters The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. The Company had a net loss of $35.4 million for the three months ended March 31, 2020 and recorded a cumulative-effect adjustment of $0.4 million upon the adoption of ASU 2016-13 on January 1, 2020, which increased the accumulated deficit to $734.9 million at March 31, 2020 from $699.2 million at December 31, 2019. As of March 31, 2020, the Company had $74.1 million in cash and cash equivalents, $331.7 million in marketable securities, $50.1 million of outstanding balance of the Credit Line (as defined in Note 10, Debt Debt 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 will 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 requires 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 and commercialization of its products and significantly scale back its business and operations. In April 2019, the Company completed an underwritten equity offering to and sold 6,052,631 shares of its common stock at a price to the public of $19 per share. Before offering expenses of $0.6 million, the Company received proceeds of $108.1 million net of the underwriting discount. In October 2019, the Company completed another underwritten equity offering and sold 6,571,428 shares of its common stock at a price to the public of $35 per share. Before offering expenses of $0.4 million, the Company received proceeds of $216.2 million net of the underwriting discount. In April 2020, the Company executed a purchase agreement for the sale of $287.5 million aggregate principal amount of its 2.25% Convertible Senior Notes due 2027 (the āConvertible Notesā) to the initial purchasers in a private placement and for initial resale to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. A maximum of 9,634,700 shares of the Companyās common stock may be issued upon conversion of the Convertible Notes, subject to adjustment. The net proceeds from the offering of the Convertible Notes, given the initial purchasersā full exercise of their option to purchase additional Convertible Notes, were approximately $278.9 million net of underwriting discount. In April 2020, the Company used a portion of the net proceeds from the offering of the Convertible Notes to repay its obligations under its 2017 Term Loan with OrbiMed. The payoff amount was $79.2 million, which includes the principal amount of $75.0 million and $4.2 million of early payment penalties and accrued interest through the payment date. Based on the Companyās 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 May 7, 2020. Principles of Consolidation ā The accompanying condensed consolidated financial statements include all the accounts of the Company and its subsidiaries. The Company established a subsidiary that operates in the state of Texas to support the Companyās laboratory and operational functions. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) in the United States 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, the operating right-of-use assets and the associated lease liabilities, deferred revenues associated with unsatisfied performance obligations, accrued liability for potential refund requests, stock-based compensation, the fair value of common stock, income tax uncertainties, and the expected consideration to be received from contracts with customers. 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). Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market deposits with financial institutions. Restricted Cash The Company separately discloses restricted cash from cash and cash equivalents. As of March 31, 2020, short-term restricted cash totaled $0.1 million held as collateral for the settlement of foreign Credit Losses ā Trade accounts receivable and other receivables. ā Available-for-sale debt securities. ā 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 re-evaluates 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 stockholdersā equity. Risk and Uncertainties The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict, as the response to the pandemic information is rapidly evolving. Our test volumes began to decrease in the second half of March 2020 as a result of the COVID-19 pandemic spreading to the United States and resulting limitations and reordering of priorities across the U.S. healthcare system. The Company expects test volumes to continue to be adversely affected by COVID-19 and cannot predict when volumes will return to normal. Financial instruments that potentially subject the Company to credit risk 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 performs evaluations of financial conditions for insurance carriers, patients, clinics and laboratory partners and generally does not require collateral to support credit sales. For the three months ended March 31, 2020, and 2019, there were no customers exceeding 10% of total revenues on an individual basis. As of March 31, 2020 and December 31, 2019, there were no customers with an outstanding balance exceeding 10% of net accounts receivable. Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers ā ā Identification of a contract, or contracts, with a customer; ā Identification of the performance obligations in the contract; ā Determination of the transaction price; ā Allocation of the transaction price to the performance obligations in the contract; and ā Revenue recognition when, or as, the performance obligations are satisfied ā Revenue Recognition ā 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 records, order and delivery systems, shipping charges to transport samples, third-party test 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 Stock-Based Compensation Stock-based compensation is related to stock options and restricted stock units (āRSUsā) granted to the Companyās employees and 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 on a straight-line basis. No compensation cost is recognized when the requisite service has not been met and the awards are therefore forfeited. ā For stock options with market conditions, the Company derives the requisite service period using the Monte Carlo simulation model. For stock options and RSUs that vest upon meeting performance conditions or market conditions in combination with performance conditions, the Company derives the requisite service period from the grant date to the date it is probable that the vesting conditions will be met. ā The fair value of non-employee awards is determined based on a one-time measurement at the grant date, and it is no longer subject to periodic remeasurement. The Company continues to recognize stock-based compensation expense as services are rendered by the non-employees over the vesting period, which is accounted for on a straight-line basis. The Company uses the Black-Scholes option-pricing model and the Monte Carlo simulation model to estimate the fair value of stock options issued to employees and non-employees. The 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. See further discussion on the valuation assumptions used under Note 9, Stock-based Compensation 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 begins 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 $1.1 million and $1.2 million as of March 31, 2020 and December 31, 2019, respectively. Amortized expense for amounts previously capitalized for the three months ended March 31, 2020 and 2019 was $0.3 million for both periods. Accumulated Other Comprehensive Income (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. ā ā ā ā ā ā ā ā Three months ended ā March 31, ā 2020 ā 2019 ā (in thousands) Beginning balance $ 919 ā $ (552) Net unrealized gain on available-for-sale securities, net of tax ā 4,747 ā ā 286 Reclassifications of losses realized from sale of available-for-sale securities ā ā ā ā ā Increase in other comprehensive loss ā 4,747 ā ā 286 Ending balance $ 5,666 ā $ (266) ā Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for potential dilutive shares. For purposes of the diluted net loss per share calculation, outstanding common stock options, RSUs, and ESPP are considered potential dilutive shares but are excluded from this calculation as the result becomes anti-dilutive, unless the consideration of any one of them gives a dilutive effect. ā 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 five years Impairment of Long-lived Assets The Company periodically evaluates the carrying value of 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 amount of the long-lived 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 assetās fair value determined using discounted estimates of future cash flows. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (āFASBā) under its accounting standard codifications 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 accounting standards updates recently issued 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 Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure FrameworkāChanges to the Disclosure Requirements for Fair Value Measurement Goodwill - Internal-Use Software Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 ā 40): Customerās Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial InstrumentsāCredit Losses: Measurement of Credit Losses on Financial Instruments amortized costs. The Company adopted ASU 2016-13, as amended, effective January 1, 2020 using the modified retrospective method and recorded a cumulative-effect adjustment of $0.4 million in retained earnings as of January 1, 2020. Collaborative Arrangements Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 New Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. The guidance will be effective for the Company in the first quarter of our fiscal year 2021. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. In March 2020, ASU 2020-04, Reference Rate Reform (Topic 848) |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition | |
Revenue Recognition | ĀĀ 3. Revenue Recognition The Company recognizes revenues when, or as, performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers. Product Revenues ā Product revenues are derived from contracts with insurance carriers, laboratory partners and patients in connection with sales of prenatal genetic tests. The majority of the Companyās revenues is derived from Panorama NIPT, HCS (as defined in Note 1, Description of Business ā A performance obligation represents a promise in a contract to transfer a distinct good or service to a customer, which represents a unit of accounting in accordance with ASC 606. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once the Company has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. A portion of the consideration should be allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company evaluates its contracts with insurance carriers, laboratory partners and patients and identifies the performance obligations in those contracts, which are the delivery of the test results. ā The total consideration which the Company expects to collect in exchange for the Companyās products is an estimate and may be fixed or variable. Consideration includes reimbursement from both patients and insurance carriers, adjusted for variable consideration related to disallowed cases, discounts, refunds and doubtful accounts, and is estimated using the expected value approach. For insurance carriers with similar reimbursement characteristics, the Company uses a portfolio of relevant historical data to estimate variable consideration and total collections for the Companyās products. The Company constrains the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods. The consideration expected from laboratory partners usually includes a fixed amount, but it can be variable depending on the volume of tests performed, and the Company determines the variable consideration using the expected value approach. For insurance carriers, laboratory partners and patients, the Company allocates the total consideration to a single performance obligation, which is the delivery of the test results to the customers. ā When assessing the total consideration for insurance carriers and patients, a certain percentage of revenues is further constrained for estimated refunds. ā The Company generally bills an insurance carrier, a laboratory partner or a patient upon delivery of test results. The Company also bills patients directly for out-of-pocket costs involving co-pays and deductibles that they are responsible for. Tests billed to insurance carriers and directly to patients usually take an average of nine two ā Product revenue is recognized in an amount equal to the total consideration (as described above) at a point in time when the test results are delivered. The Company reserves certain amounts in other accrued liabilities on the balance sheet in anticipation of requests for refunds of payments previously made by insurance carriers, which are accounted for as reductions in product revenues in the statement of operations and comprehensive loss. During the three months ended March 31, 2020, $1.0 million was released from amounts previously held in reserves in other accrued liabilities and recognized as product revenue, compared to $0.5 million for the three months ended March 31, 2019. ā Licensing and Other Revenues ā The Company recognizes licensing revenues from its cloud-based distribution service offering, Constellation, by granting licenses to its licensees to use certain of the Companyās proprietary intellectual properties and cloud-based software and IVD kits. The Company also recognizes revenues from the Signatera research use only (āRUOā) offering, the Qiagen LLC, BGI Genomics Co., Ltd., and Foundation Medicine, Inc. agreements. Constellation The laboratory partners with which the Company enters into a licensing arrangement represent the licensees and are identified as customers. The licensees do not have the right to possess the Companyās software, but rather receive professional services through the cloud software. These arrangements often include: (i) the delivery of the professional services through the cloud software, (ii) the necessary support and training, and (iii) the IVD kits to be consumed as tests are processed. The Company does not consider the software as a service, the support and training as being distinct in the context of such arrangements, and therefore they are combined as a single performance obligation. The software, support and training are delivered simultaneously to the licensees over the term of the arrangement. The Company provides IVD kits that are customized for its licensees to process tests using its cloud-based software. IVD kits revenues are recognized based on their standalone selling price at a point in time upon delivery to the licensees and expiration of their right of return. The Company bills the majority of licensees, who process the tests in their laboratories, a fixed price for each test processed. Licensing revenues are recognized as the performance obligations are satisfied (i.e., upon the delivery of each test) and reported in licensing and other revenues in the statements of operations and comprehensive loss Signatera The Company enters into agreements with pharmaceutical companies to utilize the Companyās Signatera tests typically to study new cancer treatments or to validate the outcomes of clinical trials for which the pharmaceutical companies are identified as customers. Such arrangements generally involve performing whole exome sequencing (āWESā) services and the testing of patient samples to detect cancer mutations using its Signatera test. Each test is billable to customers and the personalized cancer profile also makes each test distinct within the context of the contract as customers can exercise control over the test results upon delivery. The company allocates the contract price to each test using the stand-alone selling price for each service and recognizes the test processing revenue as individual test results are delivered to customers. Qiagen mitigate the risk of significant reversal of the cumulative revenue in the subsequent periods. Accordingly, no revenues were recognized on the prepaid royalties that may be subject to a refund. BGI Genomics ā ā ā The Company is responsible for granting a license to specified intellectual property and performing certain development activities to customize its genetic testing assays for oncology and NIPT for use with BGI Genomicsā sequencing instruments and proprietary technology platform. Revenue associated with these performance obligations is recognized over time using the input method, based on costs incurred to perform the development services, since the level of costs incurred over time best reflect the transfer of development services. Revenue associated with the assay interpretation services will be recognized upon delivery of these services. Funds received in advance are recorded as deferred revenue and will be recognized as the related services are delivered. The initial transaction price was primarily comprised of license and milestone fees. The Company constrains the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods. Certain milestone and license fees were constrained and not included in the transaction price due to the uncertainties of research and development. The Company re-evaluates the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The allocation of the transaction price was performed based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately. In accordance with ASC 340-40, any incremental costs incurred to obtain a contract with a customer are required to be capitalized and amortized over the period in which the goods and services are transferred to the customer. The Company has elected to apply a practical expedient under ASC 340-40 to recognize the incremental costs of obtaining a contract as an expense when incurred provided that the amortization period of such costs, if capitalized, is one year or less. The incremental costs incurred in connection with the BGI Genomics arrangement is not material on an accumulated basis and therefore will not be capitalized on the balance sheet but will be expensed as incurred. Foundation Medicine, Inc. In August 2019, the Company entered into a License and Collaboration Agreement (āthe Foundation Medicine Agreementā) with Foundation Medicine, Inc. (āFoundation Medicineā) to develop and commercialize personalized circulating tumor DNA monitoring assays, for use by biopharmaceutical and clinical customers who order Foundation Medicineās FoundationOne CDx. The agreement has an initial term of five years, expiring in August 2024, with automatic renewals thereafter for successive one-year terms, unless the agreement is earlier terminated in accordance with its terms. Natera and Foundation Medicine will share the revenues generated from both biopharmaceutical and clinical customers in accordance with the terms of the agreement. The agreement provides for approximately $13.3 million in upfront licensing fees and prepaid revenues payable to Natera, and up to approximately $32.0 million in minimum annual payments and payments tied to Nateraās achievement of certain developmental, regulatory, and commercial milestones. As of December 31, 2019, the Company received $16.3 million of these amounts, of which $3.0 million was for achieving certain milestones, and $13.3 million was for licensing fees and prepaid revenue. No additional payments have been received in the first quarter of 2020. ā Pursuant to the agreement, the Company will provide development services in conjunction with granting the use of the Companyās intellectual property. Following completion of those development services, the Company will provide assay testing services over the term of the agreement. The Company has concluded that the license is not a distinct performance obligation as it is highly interrelated and interdependent with the related development services. Therefore, license and related development services represent a single performance obligation. ā The Company is responsible for providing the technology license and certain development services that are required to customize its proprietary Signatera test to work with Foundation Medicineās FoundationOne CDx. The intellectual property has been licensed to Foundation Medicine for the customized test. In addition, the Company is responsible for delivering clinical study plans in order to demonstrate efficacy of the customized test. Revenues associated with each of the performance obligations are recognized over time using the input method, based on costs incurred to perform the development services, since the level of costs incurred over time best reflect the transfer of development services. Revenue associated with the assay testing services will be recognized upon delivery of these services. Funds received in advance are recorded as deferred revenue and will be recognized as the related services are delivered. ā The initial transaction price was primarily comprised of license and milestone fees. The Company constrains the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods. Certain milestone fees were constrained and not included in the transaction price due to the uncertainties of research and development. The Company re-evaluates the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The allocation of the transaction price was performed based on standalone selling prices, which are based on estimated amounts that the Company would charge for a performance obligation if it were sold separately. ā In accordance with ASC 340-40, any incremental costs incurred to obtain a contract with a customer are required to be capitalized and amortized over the period in which the goods and services are transferred to the customer. The Company has elected to apply a under ASC 340-40 to recognize the incremental costs of obtaining a contract as an expense when incurred provided that the amortization period of such costs, if capitalized, is one year or less. Disaggregation of Revenues ā Our disaggregated revenues were as follows (in thousands): ā ā ā ā ā ā ā ā ā ā Three months ended ā ā March 31, ā ā 2020 ā 2019 (Amounts in thousands) ā ā ā ā ā Product revenues ā ā ā ā ā ā Sale of genetic tests ā $ 87,046 ā $ 63,364 Licensing and other ā ā ā ā ā Constellation and paternity ā ā 1,367 ā ā 1,332 License and development services ā ā 4,802 ā ā 148 Other ā ā 797 ā ā 1,980 Licensing and other revenues ā ā 6,966 ā ā 3,460 Total revenues ā $ 94,012 ā $ 66,824 ā The Company measures its performance results primarily based on revenues recognized from the three categories described below. The following table shows disaggregation of revenues by payer types: ā ā ā ā ā ā ā ā ā ā Three months ended ā ā March 31, ā ā 2020 ā 2019 (Amounts in thousands) ā ā ā ā ā Insurance carriers ā $ 70,672 ā $ 50,201 Laboratory and other partners ā ā 15,683 ā ā 10,023 Patients ā ā 7,657 ā ā 6,600 Total revenues ā $ 94,012 ā $ 66,824 ā The following table presents total revenues by geographic area based on the location of the Companyās payers: ā ā ā ā ā ā ā ā ā ā Three months ended ā ā March 31, ā 2020 2019 (Amounts in thousands) ā ā ā ā ā United States $ 86,731 $ 60,283 Americas, excluding U.S. ā 782 ā 818 Europe, Middle East, India, Africa ā 3,476 ā 4,004 Asia Pacific and Other ā 3,023 ā 1,719 Total revenues $ 94,012 $ 66,824 ā ā ā ā ā ā ā ā ā ā ā ā ā ā Balance at ā Balance at ā ā March 31, ā December 31, (Amounts in thousands) ā 2020 ā 2019 Assets: ā ā ā ā ā ā Accounts receivable ā $ 61,577 ā $ 53,351 Liabilities: ā ā ā ā ā ā Deferred revenue, current portion ā $ 51,840 ā $ 56,016 Deferred revenue, long-term portion ā ā 25,152 ā ā 23,808 Total deferred revenues ā $ 76,992 ā $ 79,824 ā ā ā ā ā ā ā ā Deferred ā ā Revenues ā ā (in thousands) Balance at December 31, 2019 ā $ 79,824 Increase in deferred revenues ā ā 710 Revenue recognized during the period that was included in ā ā (3,455) Revenue recognized from performance obligations satisfied ā ā (87) Balance at March 31, 2020 ā $ 76,992 ā ā |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 4. 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. 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. Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā March 31, 2020 ā December 31, 2019 ā Level I Level II Level III Total Level I Level II Level III Total ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (in thousands) Financial Assets: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Money market deposits ā $ 35,818 ā $ ā ā $ ā ā $ 35,818 ā $ 22,477 ā $ ā ā $ ā ā $ 22,477 U.S. Treasury securities ā ā 249,314 ā ā ā ā ā ā ā ā 249,314 ā ā 293,157 ā ā ā ā ā ā ā ā 293,157 Municipal securities ā ā ā ā ā 82,367 ā ā ā ā ā 82,367 ā ā ā ā ā 85,908 ā ā ā ā ā 85,908 Total financial assets ā $ 285,132 ā $ 82,367 ā $ ā ā $ 367,499 ā $ 315,634 ā $ 85,908 ā $ ā ā $ 401,542 ā |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Financial Instruments | |
Financial Instruments | 5. Financial Instruments The Company elected to invest a portion of its cash assets in conservative, income earning, and liquid investments. Cash equivalents and investments, all of which are classified as available-for-sale securities, consisted of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā March 31, 2020 ā December 31, 2019 ā Amortized Gross Gross Estimated Fair Value Amortized Gross Gross Estimated Fair Value ā ā (in thousands) Money market deposits ā $ 35,818 ā $ ā ā $ ā ā $ 35,818 ā $ 22,477 ā $ ā ā $ ā ā $ 22,477 U.S. Treasury securities ā 243,821 ā ā 5,493 ā ā ā ā 249,314 ā 292,506 ā 731 ā (80) ā 293,157 Municipal securities ā ā 82,214 ā ā 195 ā ā (42) ā ā 82,367 ā ā 85,638 ā ā 277 ā ā (7) ā ā 85,908 Total ā $ 361,853 ā $ 5,688 ā $ (42) ā $ 367,499 ā $ 400,621 ā $ 1,008 ā $ (87) ā $ 401,542 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Classified as: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Cash equivalents ā ā ā ā ā ā ā ā ā ā $ 35,818 ā ā ā ā ā ā ā ā ā ā $ 22,477 Short-term investments ā ā ā ā ā ā ā ā ā ā ā 331,681 ā ā ā ā ā ā ā ā ā ā ā 379,065 Total ā ā ā ā ā ā ā ā ā ā $ 367,499 ā ā ā ā ā ā ā ā ā ā $ 401,542 ā The Company invests in U.S. Treasuries, U.S. agency and high quality municipal bonds which mature at par value and are all paying their coupons on schedule. The Company has therefore concluded there is currently no In accordance with the adoption of ASU 2016-13 (Topic 326), the Company has assessed the unrealized loss position for available-for-sale debt securities for which an allowance for credit losses has not been recorded. The fair value for municipal securities at an unrealized loss position as of March 31, 2020 was $23.2 million. The aggregate amount of unrealized losses of these securities not significant, and the impact of the securities in a continuous loss position to the condensed consolidated statements of operations and comprehensive loss were not material as of March 31, 2020. ā ā ā ā ā ā ā ā ā ā March 31, 2020 ā ā Amortized ā Fair ā ā (in thousands) Less than one year ā $ 127,898 ā $ 128,675 Greater than one year but less than five years ā ā 198,137 ā ā 203,006 Total ā $ 326,035 ā $ 331,681 ā |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2020 | |
Balance Sheet Components | |
Balance Sheet Components | 6. Balance Sheet Components Property and Equipment, net The Companyās property and equipment consisted of the following: ā ā ā ā ā ā ā ā ā ā March 31, ā December 31, ā Useful Life 2020 2019 ā ā (in thousands) Machinery and equipment 3 -5 $ 41,634 ā $ 36,414 Furniture and fixtures 3 years ā 1,376 ā 1,376 Computer equipment 3 years ā 1,796 ā 1,828 Capitalized software held for internal use 3 years ā 6,480 ā ā 5,917 Leasehold improvements Lesser of useful life or lease term ā 11,746 ā 11,556 Construction-in-process ā ā 7,037 ā 7,716 ā ā ā 70,069 ā 64,807 Less: Accumulated depreciation and amortization ā ā (43,351) ā (41,524) Total Property and Equipment, net ā $ 26,718 ā $ 23,283 ā During the three months ended March 31, 2020, the increase in net property in equipment was due to purchases of new equipment for our laboratory located in Texas to expand testing capabilities, offset by depreciation expense of $1.8 million recorded in the three months ended March 31, 2020. The Company did not incur an impairment charge in the first quarter of 2020. Other Assets In August 2017, the Company entered into the 2017 Term Loan with OrbiMed (as described in Note 10, Debt As of March 31, 2020, other assets also included long-term advances to BGI Genomics of $10.0 million for future sequencing equipment and services. Furthermore, other assets include additional consideration estimated at $3.1 million in connection with the sale of Evercord, which represent the amount Natera is entitled to receive from the buyer as a percentage of collections on the transferred accounts receivable as part of the sale (i.e., receivables from third-party buyer). The consideration decreased from $4.7 million as of December 31, 2019 due to $0.5 million of net collections from the buyer and $1.2 million credit loss expense on the additional consideration. The credit loss expense was determined based on a recent collectability assessment of the accounts receivables transferred to the buyer on the disposal date. Accrued Compensation The Companyās accrued compensation consisted of the following: ā ā ā ā ā ā ā ā March 31, December 31, ā 2020 2019 ā (in thousands) Accrued paid time off $ 1,912 ā $ 1,850 Accrued commissions 6,997 ā 5,767 Accrued bonuses 2,017 ā 5,710 Other accrued compensation 5,027 ā 2,761 Total accrued compensation $ 15,953 ā $ 16,088 ā Other Accrued Liabilities The Companyās other accrued liabilities consisted of the following: ā ā ā ā ā ā ā ā March 31, December 31, ā 2020 2019 ā (in thousands) Reserves for refunds to insurance carriers $ 11,599 ā $ 9,410 Accrued charges for outsourced testing ā 6,051 ā ā 8,408 Testing and laboratory materials from suppliers ā 7,821 ā ā 4,301 Marketing and corporate affairs ā 2,136 ā ā 2,957 Legal, audit and consulting fees 5,055 ā 2,873 Accrued shipping charges ā 209 ā ā 305 Sales tax payable ā 1,412 ā ā 1,691 Accrued specimen service fees ā 1,066 ā ā 2,269 Clinical trials and studies ā 1,157 ā ā 1,092 Operating lease liabilities, current portion ā 5,947 ā ā 5,739 Fixed asset purchases ā 643 ā ā 1,482 Other accrued expenses ā 7,297 ā ā 8,516 Total other accrued liabilities $ 50,393 ā $ 49,043 ā Reserves for refunds to insurance carriers include overpayments from and amounts to be refunded to insurance carriers, and additional amounts that the Company estimates for potential refund requests during the period. When the Company releases these previously accrued amounts, they are recognized as product revenues in the statements of operations and comprehensive loss. ā The following table summarizes the reserve balance and activities for refunds to insurance carriers: ā ā ā ā ā ā ā ā March 31, March 31, ā 2020 2019 ā (in thousands) Beginning balance $ 9,410 ā $ 10,012 Additional reserves 4,684 ā 2,504 Reserves released (2,495) ā (1,465) Ending balance $ 11,599 ā $ 11,051 ā ā ā ā ā ā Released into revenue $ 1,027 ā $ 478 ā ā ā ā ā ā ā |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Leases | 7. Leases Operating Leases ā ā ā ā ā March 31, ā 2020 ā ā ( in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 5,947 Operating lease liabilities, long-term portion ā 24,727 Total operating lease liabilities $ 30,674 ā The present value of the future annual minimum lease payments under all non-cancelable operating leases as of March 31, 2020 are as follows: ā ā ā ā ā Operating Leases ā (in thousands) Year ending December 31: ā ā 2020 (remaining 9 months) $ 6,633 2021 ā 9,067 2022 ā 9,319 2023 ā 7,797 2024 ā 2,400 2025 and thereafter ā 4,730 ā ā 39,946 Less: imputed interest ā (9,272) Operating lease liabilities $ 30,674 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Legal Proceedings From time to time, the Company is involved in disputes, litigation, and other legal actions, including those with respect to intellectual property, employment, testing and other matters. Such actions may include allegations of negligence, products/professional liability or other similar legal claims, and could involve claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. The Company is aggressively defending and/or prosecuting its current litigation matters, 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. There are many uncertainties associated with any litigation and these actions or other third party claims against the Company, or by the Company against third parties, 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 Company assesses legal contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. When evaluating legal contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against it may be unsupported, exaggerated or unrelated to possible outcomes, and as such are not meaningful indicators of its potential liability. 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. Illumina Litigation. On March 16, 2018, a lawsuit (the ā831 lawsuit) against the Company was filed in the United States District Court for the Northern District of California by Illumina, Inc., or Illumina, alleging that the Companyās Panorama test infringes certain claims of U.S. Patent No. 9,493,831 (the ā831 patent). Among other relief, the complaint seeks damages or other monetary relief including costs and pre- and post-judgment interest, treble damages, injunctive relief, attorneysā fees and costs. On August 16, 2018, the Company filed a counterclaim against Illumina, alleging that certain of Illuminaās NIPT tests infringe on the Companyās U.S. Patent No. 8,682,592 (the ā592 patent). Among other relief, Natera seeks damages or other monetary relief including costs and pre- and post-judgment interest, treble damages, injunctive relief, attorneysā fees and costs. On June 13, 2019, Illumina filed a petition for inter partes CareDX Litigation Matters. On March 26, 2019, CareDX, Inc., or CareDX, filed suit against the Company in the United States District Court for the District of Delaware (āCareDXās Patent Caseā). The suit alleges that the Company infringed two patents, 9,845,497 and 8,703,652. The complaint seeks unspecified damages and injunctive relief. On May 16, 2019, the Company filed a motion to dismiss CareDXās Patent Case for failure to state a claim, and a hearing on the motion took place on November 21, 2019. On March 23, 2020, CareDX additionally alleged in an amended complaint that Natera infringed U.S. Patent No. 10,329,607. On April 8, 2020, Natera filed a renewed motion to dismiss all three of CareDXās patent assertions for failure to state a claim. On May 4, 2020, Natera withdrew its earlier motion to dismiss with the intent to promptly file an early motion for summary judgment. ā In an action that has been consolidated with CareDXās Patent Case, Natera has also alleged that CareDX infringes Nateraās U.S. Patent Nos. 10,526,658 and 10,597,724, seeking unspecified damages and injunctive relief. ā In addition, on April 10, 2019, CareDX filed suit against the Company in the United States District Court for the District of Delaware, alleging false advertising, trademark disparagement, unfair competition, and unfair or deceptive trade practices based on statements describing studies that concern the Companyās technology and CareDXās technology (āCareDXās Advertising Caseā). The complaint seeks unspecified damages and injunctive relief. On May 30, 2019, the Company filed a motion to dismiss the entirety of CareDXās Advertising Case for failure to state a claim. On February 7, 2020, CareDx filed an amended complaint withdrawing its trademark disparagement claim. On February 18, 2020, the Company filed a counterclaim against CareDX in the United States District Court for the District of Delaware, alleging false advertising, unfair competition and deceptive trade practices and seeking unspecified damages and injunctive relief. Other Litigation Matters. On or about January 27, 2020, the Company filed suit against ArcherDX, Inc., or ArcherDX, in the United States District Court for the District of Delaware, alleging that certain of ArcherDXās DNA oncology products infringe on the Companyās U.S. Patent No. 10,538,814 (the ā814 patent). On April 15, 2020, Natera filed an amended complaint alleging that ArcherDx also infringed the Companyās U.S. Patent Nos. 10,557,172, 10,597,708, and 10,590,482. The amended complaint seeks monetary damages and injunctive relief. On or about August 13, 2019, a suit was filed against the Company in the Circuit Court of Cook County, Illinois by a patient alleging claims relating to a discordant test result and seeking monetary damages. On March 15, 2019, a purported class action lawsuit was filed against the Company in the United States District Court for the Northern District of California, alleging that the plaintiff received an unauthorized text message to her cellular telephone in violation of the Telephone Consumer Protection Act. Among other relief, the complaint seeks statutory and other damages, injunctive relief, attorneysā fees, and costs. On June 18, 2019, the Company filed a motion to dismiss, which was denied. An amended complaint was filed on April 23, 2020. 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 āSan Mateo Superior Courtā), against Natera, its directors, certain of its officers and 5% stockholders and their affiliates, and each of the underwriters of the Companyās July 1, 2015 initial public offering (the āIPOā). The complaints asserted claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended. The complaints alleged, among other things, that the Registration Statement and Prospectus for the Companyās IPO contained materially false or misleading statements, and/or omitted material information that was required to be disclosed, about the Companyās business and prospects. Among other relief, the complaints sought class certification, unspecified compensatory damages, rescission, attorneysā fees, and costs. On October 23, 2017, the San Mateo Superior Court granted the Companyās motion to dismiss the claims under Sections 12(a)(2) and 15 of the Securities Act of 1933, as amended, without leave to re-file, and granted the Companyās motion to dismiss the claims under Section 11 of the Act with leave to re-file. Plaintiffs refiled an amended complaint on November 22, 2017. On August 7, 2018 the judge granted a motion by the Company for judgment on the pleadings, without leave to amend, and ordered that judgment be entered in favor of the defendants. Plaintiffs appealed the judgment on or about March 29, 2019, and the appeal was heard on February 18, 2020. On February 28, 2020, the Court of Appeal for the State of California affirmed the judgment on the pleadings in favor of Natera . ā Director and Officer Indemnifications As permitted under Delaware law, and as set forth in the Companyās 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 and $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 From time to time, the Company receives recoupment requests from third-party payers for alleged overpayments. The Company disagrees with the contentions of pending requests and/or has recorded an estimated reserve for the alleged overpayments. Contractual Commitments The following table sets forth the material contractual commitments as of March 31, 2020 with a remaining term of at least one year: ā ā ā ā ā ā Party Commitments ā Expiry Date ā ā (in thousands) ā ā Laboratory instruments supplier $ 6,683 ā December-2021 Material supplier ā 10,375 ā March-2021 Application service providers ā 9,778 ā January-2021 - October-2022 Gene sequencing reagents and kits provider ā 675 ā April-2021 Other material suppliers ā 9,712 ā Various ā $ 37,223 ā ā ā |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock-Based Compensation 2015 Equity Incentive Plan In June 2015, the Board adopted, and the Companyās stockholders approved, the Companyās 2015 Equity Incentive Plan (the ā2015 Planā), which, by its terms, took effect as of the Companyās IPO on July 2, 2015. The 2015 Plan replaced the Companyās 2007 Stock Plan (the ā2007 Planā). No further awards have been granted under the 2007 Plan after July 1, 2015. However, any remaining awards that were outstanding under the 2007 Plan will continue to be governed by the terms of that plan. The Company initially reserved 3,451,495 shares of its common stock for issuance under the 2015 Plan; in addition, the Company authorized the reservation of up to 9,890,310 shares of common stock to cover shares reserved but unissued under the 2007 Plan and shares subject to outstanding awards under the 2007 Plan that expire or lapse unexercised or shares issued under the 2007 Plan that are subsequently reacquired by the Company. Performance-based Awards ā ā ā ā ā ā ā ā ā ā ā ā ā Period Granted ā Options Granted ā RSUs Granted ā Options Vested ā RSUs Vested ā Milestone ā Valuation Method (in thousands) Q1 2019 ā 200 ā 300 ā 38 ā 69 ā (1) ā Monte-Carlo Simulation Q2 2019 ā ā ā 188 ā ā ā ā ā (2) ā Fair Market Value Q3 2019 ā ā ā 50 ā ā ā ā ā (1) ā Monte-Carlo Simulation Q1 2020 ā 150 ā 300 ā ā ā ā ā (1) ā Monte-Carlo Simulation Q1 2020 ā ā ā 436 ā ā ā ā ā (3) ā Fair Market Value Q1 2020 ā 129 ā ā ā ā ā ā ā (3) ā Black-Scholes-Merton ________________________________ (1) The awards will vest based on the achievement of certain values of the Companyās common stock at multiple thresholds within certain periods and are contingent upon the completion of requisite service through the date of such vesting. ā (2) The vesting of the awards will be triggered after the end of the achievement milestone, as measured by the Company. ā (3) The awards will vest based on achievement of certain revenue target and are contingent upon the completion of requisite service through the date of such vesting. ā The Company has recognized $1.4 million and $0.2 million in stock-based compensation for performance-based awards for the three months ended March 31, 2020 and March 31, 2019, respectively. ā ā ā ā ā ā ā ā ā ā March 31, ā 2020 Risk-free interest rate ā 0.61 % ā 1.64 % Expected dividend yield ā ā ā ā 0.00 % Expected volatility ā 55 % ā 65 % Expected term (years) ā 5.25 ā ā 7.25 ā ā Employee Stock Purchase Plan In the second quarter of 2015, the Companyās stockholders approved the 2015 Natera, Inc. Employee Stock Purchase Plan (the āESPPā), which became effective upon the Companyās IPO on July 2, 2015. Under the ESPP, employees may purchase the Companyās common stock through payroll deductions 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 six-month offering periods. An employeeās payroll deductions under the ESPP are limited to 15% of the employeeās compensation and employees may not purchase more than 5,000 shares of stock during any offering period. A participant shall not be granted an option under the ESPP if such option would permit the participantās rights to purchase stock to accrue at a rate that exceeds $25,000 fair market value of stock for each calendar year in which such option is outstanding at any time. The Company has made 893,548 shares available for issuance under the Plan, a number that is automatically increased by the least of (i) 1% of the total number of shares of common stock actually issued and outstanding on the last business day of the prior fiscal year, (ii) 880,000 shares of common stock (subject to certain adjustments pursuant to Subsection (c) below), or (iii) a number of shares of common stock determined by the Board. The first offering period of 2020 started on November 1, 2019 and will end on April 30, 2020. No shares were purchased in the three months ending March 31, 2020. Stock Options The following table summarizes option activity for the three months ended March 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Outstanding Options ā ā ā ā Weighted- ā ā ā ā ā ā ā Weighted- ā Average ā ā ā ā Shares ā ā ā Average ā Remaining ā Aggregate ā ā Available for ā Number of ā Exercise ā Contractual ā Intrinsic (in thousands, except for contractual life and exercise price) ā Grant ā Shares ā Price ā Life ā Value ā ā ā ā ā ā ā ā ā (In years) ā ā Balance at December 31, 2019 6,416 8,497 ā $ 10.39 ā 6.88 ā $ 197,955 Additional shares authorized 3,120 ā ā ā ā ā ā ā ā ā ā Options granted (409) 409 ā $ 25.51 ā ā ā ā ā Options exercised ā (356) ā $ 10.74 ā ā ā ā ā Options forfeited/cancelled 45 (45) ā $ 17.76 ā ā ā ā ā RSUs granted ā (4,140) ā ā ā ā ā ā ā ā ā ā RSUs forfeited/cancelled ā 88 ā ā ā ā ā ā ā ā ā ā Balance at March 31, 2020 5,120 8,505 ā $ 11.07 ā 6.78 ā $ 159,957 Exercisable at March 31, 2020 ā ā 5,078 ā $ 7.85 ā 5.54 ā $ 111,759 Vested and expected to vest at March 31, 2020 ā ā 8,316 ā $ 10.96 ā 6.74 ā $ 157,297 ā Restricted Stock Units The following table summarizes RSU activity for the three months ended March 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted- ā ā ā ā Average ā ā ā ā Grant Date (in thousands, except for grant date fair value) ā Shares ā Fair Value ā ā ā ā ā ā Balance at December 31, 2019 ā 2,404 ā $ 19.86 Granted ā 2,071 ā $ 26.67 Vested ā (291) ā $ 16.88 Cancelled/forfeited ā (44) ā $ 21.35 Balance at March 31, 2020 ā 4,140 ā $ 22.48 ā Stock-Based Compensation Expense Employee stock-based compensation expense was calculated based on awards ultimately expected to vest and has 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. Non-employee stock-based compensation expense was not adjusted for estimated forfeitures up until the occurrence of the actual forfeiture of the associated awards. The following tables present the effect of employee and non-employee stock-based compensation expense on selected statements of operations line items for the three months ended March 31, 2020 and 2019. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended March 31, ā ā 2020 ā 2019 ā Employee Non-Employee Total Employee Non-Employee Total ā (in thousands) ā Cost of revenues ā $ 314 ā $ ā ā $ 314 ā $ 168 ā $ ā ā $ 168 ā Research and development ā 1,682 ā 160 ā 1,842 ā 894 ā ā ā 894 ā Selling, general and administrative ā 5,252 ā 9 ā 5,261 ā 2,646 ā 343 ā 2,989 ā Total ā $ 7,248 ā $ 169 ā $ 7,417 ā $ 3,708 ā $ 343 ā $ 4,051 ā As of March 31, 2020, approximately $96.7 million of unrecognized compensation expense, adjusted for estimated forfeitures, related to unvested option awards and RSUs will be recognized over a weighted-average period of approximately 3.1 years. Valuation of Stock Option Grants to Employees and Non-employees Upon the adoption of ASU 2018-07 on January 1, 2019, the fair value of stock options granted to both employees and non-employees is estimated on the grant date using the Black-Scholes option-pricing model except for the performance-based options with a market condition. Prior to January 1, 2019, the Company only estimated the fair value of the stock options granted to its employees on the grant date, while the fair value of its unvested non-employee stock options was remeasured at the end of each reporting period up until their vesting date. The fair value of the stock options is amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The Company utilizes Black-Scholes option pricing model when estimating the fair value of stock options. For the three months ended March 31, 2020, the following valuation assumptions were applied on both the employee and non-employee options. In the same period of the prior year, the valuation assumptions as follows were only used for stock options granted to employees. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended March 31, ā 2020 2019 Expected term (years) 5.27 ā ā 10.0 ā 5.33 ā ā 5.53 ā Expected volatility 49.94 % ā 58.53 % 42.53 % ā 42.75 % Expected dividend rate ā ā ā 0.00 % ā ā ā 0.00 % Risk-free interest rate 0.44 % ā 1.70 % 2.26 % ā 2.60 % ā Expected Term Expected Volatility Expected Dividend Rate Risk-Free Interest Rate |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt | |
Debt | 10 . Debt Credit Line Agreement In September 2015, the Company entered into a credit line with UBS (the āCredit Lineā) providing for a $50.0 million revolving line of credit that can be drawn down in increments at any time. The Credit Line was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%. The Credit Line is secured by a first priority lien and security interest in the Companyās 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. For the three months ended March 31, 2020 and 2019, the Company recorded interest expense on the Credit Line of $0.3 million and $0.4 million, respectively. Interest payments on the Credit Line were made within the same periods. As of March 31, 2020, remaining accrued interest was $1.1 million, and the total principal amount outstanding with accrued interest was $49.0 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 Companyās option at any time through December 31, 2019, 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 Companyās 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 Companyās obligations under the 2017 Term Loan are secured by substantially all of its assets, including its intellectual property, subject to certain customary exceptions. On December 31, 2018, the Company amended certain terms in the 2017 Term Loan with OrbiMed. The amendment increased the existing unused borrowing capacity from $25.0 million to $50.0 million and extended the expiration date for the option to draw the additional to March 31, 2019. If the Company has drawn from the unused borrowing capacity of $50.0 million, the interest rate described above would instead decrease to the sum of (i) 8.25% plus (ii) the higher of 1.00% or LIBOR. If the amount drawn is less than $50.0 million, the interest rate would remain at the sum of (i) 8.75% plus (ii) the higher of 1.00% or LIBOR. In April 2019, the Company entered into a second amendment of the 2017 Term Loan with OrbiMed to further extend the expiration date until December 31, 2019 to draw the unused borrowing capacity of $50.0 million. In the second amendment, the interest rate is equal to the sum of (i) 8.25% plus (ii) the higher of 1.00% or LIBOR, provided the Company draws the minimum capacity of $25.0 million. If the amount drawn is less than $25.0 million, the interest rate would remain at the sum of (i) 8.75% plus (ii) the higher of 1.00% or LIBOR. As a fee in consideration of extending the commitment to provide this option to draw until December 31, 2019, the Company issued an additional 25,000 shares of our common stock to OrbiMed on April 29, 2019. As of December 31, 2019, the Company did not exercise such option, and the right to draw the unused borrowing capacity has expired. 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, 2019, the Company was in compliance with all of its covenants under the 2017 Term 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 Companyās 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 $2.1 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 6, Balance Sheet Components ). The following table indicates how the Company reported its long-term debt at the end of the period: ā ā ā ā ā ā ā ā ā March 31, December 31, ā ā 2020 ā 2019 ā ā ā (Amounts in thousands) ā ā ā Debt principal balance ā $ 75,000 ā $ 75,000 Less: unamortized debt discount ā ā (2,119) ā ā (1,344) Net carrying amount at end of period ā $ 72,881 ā $ 73,656 ā The unamortized debt discount increased from $1.3 million as of December 31, 2019 to $2.1 million due to a reclass of the unamortized portion of debt issuance cost previously classified in noncurrent assets of $0.9 million to long-term debt financing. The reclass was recorded as a result of the expiration for option to draw the unused borrow capacity as of March 31, 2020. The term loan was subsequently paid off in April 2020 (see Note 13, Subsequent Events ). ā ā |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes | |
Income Taxes | 11. Income Taxes In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in March 2020. The CARES Act includes modifications for net operating loss carryovers and carrybacks, limitations of business interest expense, immediate refund of alternative minimum tax (AMT) credit carryovers as well as a technical correction to the Tax Cuts and Jobs Act of 2017, for qualified improvement property. As of March 31, 2020, the Company expects that these provisions will not have a material impact as the Company has no net operating losses or AMT credits that would fall under these provisions and does not expect interest expense to be deductible due to current and historical losses. During the three months ended March 31, 2020 and 2019, the Company recorded total income tax expense of approximately $23,000 and $74,000, respectively. The income tax expense is primarily attributable to foreign income tax expenses resulting from testing to clinics and licenses cloud-based software and intellectual property, that are based in a foreign country. There was no state income tax expense recorded for the three months ended March 31, 2020 and March 31, 2019. Due to the Companyās history of cumulative operating losses, the Company concluded that, after considering all the available objective evidence, it is not more likely than not that all of the Companyās net deferred tax assets will be realized. Accordingly, all of the Companyās deferred tax assets, which includes net operating loss or NOL carryforwards and tax credits related primarily to research and development, continue to be subjected to a valuation allowance as of March 31, 2020. The Company will continue to maintain a full valuation allowance until there is sufficient evidence to support recoverability of its deferred tax assets. The Company had $9.0 million and $8.6 million in unrecognized tax benefits at March 31, 2020 and December 31, 2019, respectively. The reversal of the uncertain tax benefits would not affect the effective tax rate to the extent that the Company continues to maintain a full valuation allowance against its deferred tax assets. Unrecognized tax benefits may change during the next twelve months for items that arise in the ordinary course of business. Interest and/or penalties related to income tax matters are recognized as a component of income tax expense. As of March 31, 2020, there were no |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2020 | |
Net Loss per Share | |
Net Loss per Share | 12. Net Loss per Share Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, excluding shares subject to repurchase and without consideration of potentially dilutive securities. Diluted net loss per share is computed by giving effect to all potentially dilutive common shares outstanding for the period. For purposes of this computation, outstanding common stock options, and restricted stock units are considered to be common share equivalents. Common share equivalents are excluded from the computation in periods in which they have an anti-dilutive effect, unless the consideration of any one of them gives a dilutive effect. The following table provides the basic and diluted net loss per share computations for the three months ended March 31, 2020 and 2019. ā ā ā ā ā ā ā ā ā ā Three months ended ā ā March 31, (in thousands, except per share data) 2020 2019 Numerator: ā ā ā ā ā ā Net loss, basic and diluted $ (35,372) $ (34,091) ā ā ā ā ā ā ā Denominator: ā ā ā ā ā ā Weighted-average number of shares used in computing net loss per share, basic and diluted ā ā 78,287 ā ā 62,831 ā ā ā ā ā ā ā Net loss per share, basic and diluted ā $ (0.45) ā $ (0.54) ā The following table shows total outstanding potentially dilutive shares excluded from the computation of diluted loss per share as their effect would be anti-dilutive, as of March 31, 2020 and 2019: ā ā ā ā ā ā ā ā March 31, ā 2020 2019 ā (in thousands) Options to purchase common stock ā 8,505 9,533 Restricted stock units ā 4,140 ā 2,086 Employee stock purchase plan ā 77 ā 99 ā ā 12,722 11,718 ā |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events | |
Subsequent Events | ā 13. Subsequent Events In April 2020, the Company executed a purchase agreement for the sale of $287.5 million aggregate principal amount of its 2.25% Convertible Senior Notes due 2027 to the initial purchasers in a private placement and for initial resale to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. A maximum of 9,634,700 shares of the Companyās common stock may be issued upon conversion of the Convertible Notes, subject to adjustment. The net proceeds from the offering of the Convertible Notes, given the initial purchasersā full exercise of their option to purchase additional Convertible Notes, were approximately $278.9 million net of the underwriting discount. In April 2020, the Company used a portion of the net proceeds from the offering of the Convertible Notes to repay its obligations under its 2017 Term Loan with OrbiMed. The payoff amount was $79.2 million, which includes the principal amount of $75.0 million and $4.2 million of early payment penalties and accrued interest through the payment date. ā |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (āU.S. GAAPā) for interim financial information. The unaudited interim condensed consolidated financial information includes only adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholdersā equity, and cash flows. The results of operations for the three months ended March 31, 2020, are not necessarily indicative of the results for the full year or the results for any future periods. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements at that date, these financial statements should be read in conjunction with the audited financial statements, and related notes for the year ended December 31, 2019 included in the Companyās Annual Report on Form 10-K filed with the SEC on March 2, 2020. |
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. The Company had a net loss of $35.4 million for the three months ended March 31, 2020 and recorded a cumulative-effect adjustment of $0.4 million upon the adoption of ASU 2016-13 on January 1, 2020, which increased the accumulated deficit to $734.9 million at March 31, 2020 from $699.2 million at December 31, 2019. As of March 31, 2020, the Company had $74.1 million in cash and cash equivalents, $331.7 million in marketable securities, $50.1 million of outstanding balance of the Credit Line (as defined in Note 10, Debt Debt 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 will 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 requires 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 and commercialization of its products and significantly scale back its business and operations. In April 2019, the Company completed an underwritten equity offering to and sold 6,052,631 shares of its common stock at a price to the public of $19 per share. Before offering expenses of $0.6 million, the Company received proceeds of $108.1 million net of the underwriting discount. In October 2019, the Company completed another underwritten equity offering and sold 6,571,428 shares of its common stock at a price to the public of $35 per share. Before offering expenses of $0.4 million, the Company received proceeds of $216.2 million net of the underwriting discount. In April 2020, the Company executed a purchase agreement for the sale of $287.5 million aggregate principal amount of its 2.25% Convertible Senior Notes due 2027 (the āConvertible Notesā) to the initial purchasers in a private placement and for initial resale to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. A maximum of 9,634,700 shares of the Companyās common stock may be issued upon conversion of the Convertible Notes, subject to adjustment. The net proceeds from the offering of the Convertible Notes, given the initial purchasersā full exercise of their option to purchase additional Convertible Notes, were approximately $278.9 million net of underwriting discount. In April 2020, the Company used a portion of the net proceeds from the offering of the Convertible Notes to repay its obligations under its 2017 Term Loan with OrbiMed. The payoff amount was $79.2 million, which includes the principal amount of $75.0 million and $4.2 million of early payment penalties and accrued interest through the payment date. Based on the Companyās 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 May 7, 2020. |
Principles of Consolidation | Principles of Consolidation ā The accompanying condensed consolidated financial statements include all the accounts of the Company and its subsidiaries. The Company established a subsidiary that operates in the state of Texas to support the Companyās laboratory and operational functions. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) in the United States 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, the operating right-of-use assets and the associated lease liabilities, deferred revenues associated with unsatisfied performance obligations, accrued liability for potential refund requests, stock-based compensation, the fair value of common stock, income tax uncertainties, and the expected consideration to be received from contracts with customers. 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). |
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 separately discloses restricted cash from cash and cash equivalents. As of March 31, 2020, short-term restricted cash totaled $0.1 million held as collateral for the settlement of foreign |
Credit Losses | Credit Losses ā Trade accounts receivable and other receivables. ā Available-for-sale debt securities. |
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 re-evaluates 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 stockholdersā equity. |
Risk and Uncertainties | Risk and Uncertainties The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict, as the response to the pandemic information is rapidly evolving. Our test volumes began to decrease in the second half of March 2020 as a result of the COVID-19 pandemic spreading to the United States and resulting limitations and reordering of priorities across the U.S. healthcare system. The Company expects test volumes to continue to be adversely affected by COVID-19 and cannot predict when volumes will return to normal. Financial instruments that potentially subject the Company to credit risk 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 performs evaluations of financial conditions for insurance carriers, patients, clinics and laboratory partners and generally does not require collateral to support credit sales. For the three months ended March 31, 2020, and 2019, there were no customers exceeding 10% of total revenues on an individual basis. As of March 31, 2020 and December 31, 2019, there were no customers with an outstanding balance exceeding 10% of net accounts receivable. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers ā ā Identification of a contract, or contracts, with a customer; ā Identification of the performance obligations in the contract; ā Determination of the transaction price; ā Allocation of the transaction price to the performance obligations in the contract; and ā Revenue recognition when, or as, the performance obligations are satisfied ā Revenue Recognition |
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 records, order and delivery systems, shipping charges to transport samples, third-party test 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 |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is related to stock options and restricted stock units (āRSUsā) granted to the Companyās employees and 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 on a straight-line basis. No compensation cost is recognized when the requisite service has not been met and the awards are therefore forfeited. ā For stock options with market conditions, the Company derives the requisite service period using the Monte Carlo simulation model. For stock options and RSUs that vest upon meeting performance conditions or market conditions in combination with performance conditions, the Company derives the requisite service period from the grant date to the date it is probable that the vesting conditions will be met. ā The fair value of non-employee awards is determined based on a one-time measurement at the grant date, and it is no longer subject to periodic remeasurement. The Company continues to recognize stock-based compensation expense as services are rendered by the non-employees over the vesting period, which is accounted for on a straight-line basis. The Company uses the Black-Scholes option-pricing model and the Monte Carlo simulation model to estimate the fair value of stock options issued to employees and non-employees. The 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. See further discussion on the valuation assumptions used under Note 9, Stock-based Compensation |
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 begins 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 $1.1 million and $1.2 million as of March 31, 2020 and December 31, 2019, respectively. Amortized expense for amounts previously capitalized for the three months ended March 31, 2020 and 2019 was $0.3 million for both periods. |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (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. ā ā ā ā ā ā ā ā Three months ended ā March 31, ā 2020 ā 2019 ā (in thousands) Beginning balance $ 919 ā $ (552) Net unrealized gain on available-for-sale securities, net of tax ā 4,747 ā ā 286 Reclassifications of losses realized from sale of available-for-sale securities ā ā ā ā ā Increase in other comprehensive loss ā 4,747 ā ā 286 Ending balance $ 5,666 ā $ (266) |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for potential dilutive shares. For purposes of the diluted net loss per share calculation, outstanding common stock options, RSUs, and ESPP are considered potential dilutive shares but are excluded from this calculation as the result becomes anti-dilutive, unless the consideration of any one of them gives a dilutive effect. ā |
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 five years |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company periodically evaluates the carrying value of 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 amount of the long-lived 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 assetās fair value determined using discounted estimates of future cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (āFASBā) under its accounting standard codifications 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 accounting standards updates recently issued 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 Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure FrameworkāChanges to the Disclosure Requirements for Fair Value Measurement Goodwill - Internal-Use Software Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 ā 40): Customerās Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial InstrumentsāCredit Losses: Measurement of Credit Losses on Financial Instruments amortized costs. The Company adopted ASU 2016-13, as amended, effective January 1, 2020 using the modified retrospective method and recorded a cumulative-effect adjustment of $0.4 million in retained earnings as of January 1, 2020. Collaborative Arrangements Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 New Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. The guidance will be effective for the Company in the first quarter of our fiscal year 2021. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. In March 2020, ASU 2020-04, Reference Rate Reform (Topic 848) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of Accumulated Other Comprehensive Income (Loss) | ā ā ā ā ā ā ā ā Three months ended ā March 31, ā 2020 ā 2019 ā (in thousands) Beginning balance $ 919 ā $ (552) Net unrealized gain on available-for-sale securities, net of tax ā 4,747 ā ā 286 Reclassifications of losses realized from sale of available-for-sale securities ā ā ā ā ā Increase in other comprehensive loss ā 4,747 ā ā 286 Ending balance $ 5,666 ā $ (266) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition | |
Schedule of disaggregation of revenues | ā ā ā ā ā ā ā ā ā ā Three months ended ā ā March 31, ā ā 2020 ā 2019 (Amounts in thousands) ā ā ā ā ā Product revenues ā ā ā ā ā ā Sale of genetic tests ā $ 87,046 ā $ 63,364 Licensing and other ā ā ā ā ā Constellation and paternity ā ā 1,367 ā ā 1,332 License and development services ā ā 4,802 ā ā 148 Other ā ā 797 ā ā 1,980 Licensing and other revenues ā ā 6,966 ā ā 3,460 Total revenues ā $ 94,012 ā $ 66,824 |
Schedule of disaggregation of revenues by payer types | ā ā ā ā ā ā ā ā ā ā Three months ended ā ā March 31, ā ā 2020 ā 2019 (Amounts in thousands) ā ā ā ā ā Insurance carriers ā $ 70,672 ā $ 50,201 Laboratory and other partners ā ā 15,683 ā ā 10,023 Patients ā ā 7,657 ā ā 6,600 Total revenues ā $ 94,012 ā $ 66,824 |
Schedule of total revenue by geographic area | ā ā ā ā ā ā ā ā ā ā Three months ended ā ā March 31, ā 2020 2019 (Amounts in thousands) ā ā ā ā ā United States $ 86,731 $ 60,283 Americas, excluding U.S. ā 782 ā 818 Europe, Middle East, India, Africa ā 3,476 ā 4,004 Asia Pacific and Other ā 3,023 ā 1,719 Total revenues $ 94,012 $ 66,824 |
Schedule of beginning and ending balances of accounts receivable and deferred revenues | ā ā ā ā ā ā ā ā ā ā Balance at ā Balance at ā ā March 31, ā December 31, (Amounts in thousands) ā 2020 ā 2019 Assets: ā ā ā ā ā ā Accounts receivable ā $ 61,577 ā $ 53,351 Liabilities: ā ā ā ā ā ā Deferred revenue, current portion ā $ 51,840 ā $ 56,016 Deferred revenue, long-term portion ā ā 25,152 ā ā 23,808 Total deferred revenues ā $ 76,992 ā $ 79,824 |
Schedule of changes in the balance of deferred revenues | ā ā ā ā ā ā ā Deferred ā ā Revenues ā ā (in thousands) Balance at December 31, 2019 ā $ 79,824 Increase in deferred revenues ā ā 710 Revenue recognized during the period that was included in ā ā (3,455) Revenue recognized from performance obligations satisfied ā ā (87) Balance at March 31, 2020 ā $ 76,992 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Summary of financial assets and liabilities measured on recurring basis | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā March 31, 2020 ā December 31, 2019 ā Level I Level II Level III Total Level I Level II Level III Total ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (in thousands) Financial Assets: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Money market deposits ā $ 35,818 ā $ ā ā $ ā ā $ 35,818 ā $ 22,477 ā $ ā ā $ ā ā $ 22,477 U.S. Treasury securities ā ā 249,314 ā ā ā ā ā ā ā ā 249,314 ā ā 293,157 ā ā ā ā ā ā ā ā 293,157 Municipal securities ā ā ā ā ā 82,367 ā ā ā ā ā 82,367 ā ā ā ā ā 85,908 ā ā ā ā ā 85,908 Total financial assets ā $ 285,132 ā $ 82,367 ā $ ā ā $ 367,499 ā $ 315,634 ā $ 85,908 ā $ ā ā $ 401,542 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Financial Instruments | |
Schedule of available-for-sale securities | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā March 31, 2020 ā December 31, 2019 ā Amortized Gross Gross Estimated Fair Value Amortized Gross Gross Estimated Fair Value ā ā (in thousands) Money market deposits ā $ 35,818 ā $ ā ā $ ā ā $ 35,818 ā $ 22,477 ā $ ā ā $ ā ā $ 22,477 U.S. Treasury securities ā 243,821 ā ā 5,493 ā ā ā ā 249,314 ā 292,506 ā 731 ā (80) ā 293,157 Municipal securities ā ā 82,214 ā ā 195 ā ā (42) ā ā 82,367 ā ā 85,638 ā ā 277 ā ā (7) ā ā 85,908 Total ā $ 361,853 ā $ 5,688 ā $ (42) ā $ 367,499 ā $ 400,621 ā $ 1,008 ā $ (87) ā $ 401,542 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Classified as: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Cash equivalents ā ā ā ā ā ā ā ā ā ā $ 35,818 ā ā ā ā ā ā ā ā ā ā $ 22,477 Short-term investments ā ā ā ā ā ā ā ā ā ā ā 331,681 ā ā ā ā ā ā ā ā ā ā ā 379,065 Total ā ā ā ā ā ā ā ā ā ā $ 367,499 ā ā ā ā ā ā ā ā ā ā $ 401,542 |
Summarized portfolio of available-for-sale securities by contractual maturity | ā ā ā ā ā ā ā ā ā ā March 31, 2020 ā ā Amortized ā Fair ā ā (in thousands) Less than one year ā $ 127,898 ā $ 128,675 Greater than one year but less than five years ā ā 198,137 ā ā 203,006 Total ā $ 326,035 ā $ 331,681 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Balance Sheet Components | |
Schedule of property and equipment | ā ā ā ā ā ā ā ā ā ā March 31, ā December 31, ā Useful Life 2020 2019 ā ā (in thousands) Machinery and equipment 3 -5 $ 41,634 ā $ 36,414 Furniture and fixtures 3 years ā 1,376 ā 1,376 Computer equipment 3 years ā 1,796 ā 1,828 Capitalized software held for internal use 3 years ā 6,480 ā ā 5,917 Leasehold improvements Lesser of useful life or lease term ā 11,746 ā 11,556 Construction-in-process ā ā 7,037 ā 7,716 ā ā ā 70,069 ā 64,807 Less: Accumulated depreciation and amortization ā ā (43,351) ā (41,524) Total Property and Equipment, net ā $ 26,718 ā $ 23,283 |
Schedule of accrued compensation | ā ā ā ā ā ā ā ā March 31, December 31, ā 2020 2019 ā (in thousands) Accrued paid time off $ 1,912 ā $ 1,850 Accrued commissions 6,997 ā 5,767 Accrued bonuses 2,017 ā 5,710 Other accrued compensation 5,027 ā 2,761 Total accrued compensation $ 15,953 ā $ 16,088 |
Schedule of other accrued liabilities | ā ā ā ā ā ā ā ā March 31, December 31, ā 2020 2019 ā (in thousands) Reserves for refunds to insurance carriers $ 11,599 ā $ 9,410 Accrued charges for outsourced testing ā 6,051 ā ā 8,408 Testing and laboratory materials from suppliers ā 7,821 ā ā 4,301 Marketing and corporate affairs ā 2,136 ā ā 2,957 Legal, audit and consulting fees 5,055 ā 2,873 Accrued shipping charges ā 209 ā ā 305 Sales tax payable ā 1,412 ā ā 1,691 Accrued specimen service fees ā 1,066 ā ā 2,269 Clinical trials and studies ā 1,157 ā ā 1,092 Operating lease liabilities, current portion ā 5,947 ā ā 5,739 Fixed asset purchases ā 643 ā ā 1,482 Other accrued expenses ā 7,297 ā ā 8,516 Total other accrued liabilities $ 50,393 ā $ 49,043 |
Summary of reserve balance and activities for refunds to insurance carriers | ā ā ā ā ā ā ā ā March 31, March 31, ā 2020 2019 ā (in thousands) Beginning balance $ 9,410 ā $ 10,012 Additional reserves 4,684 ā 2,504 Reserves released (2,495) ā (1,465) Ending balance $ 11,599 ā $ 11,051 ā ā ā ā ā ā Released into revenue $ 1,027 ā $ 478 ā ā ā ā ā ā |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Schedule of lease liabilities | ā ā ā ā ā March 31, ā 2020 ā ā ( in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 5,947 Operating lease liabilities, long-term portion ā 24,727 Total operating lease liabilities $ 30,674 |
Schedule of annual minimum lease payments | ā ā ā ā ā Operating Leases ā (in thousands) Year ending December 31: ā ā 2020 (remaining 9 months) $ 6,633 2021 ā 9,067 2022 ā 9,319 2023 ā 7,797 2024 ā 2,400 2025 and thereafter ā 4,730 ā ā 39,946 Less: imputed interest ā (9,272) Operating lease liabilities $ 30,674 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies | |
Schedule of material contractual commitments | ā ā ā ā ā ā Party Commitments ā Expiry Date ā ā (in thousands) ā ā Laboratory instruments supplier $ 6,683 ā December-2021 Material supplier ā 10,375 ā March-2021 Application service providers ā 9,778 ā January-2021 - October-2022 Gene sequencing reagents and kits provider ā 675 ā April-2021 Other material suppliers ā 9,712 ā Various ā $ 37,223 ā ā |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of performance-based awards | ā ā ā ā ā ā ā ā ā ā ā ā ā Period Granted ā Options Granted ā RSUs Granted ā Options Vested ā RSUs Vested ā Milestone ā Valuation Method (in thousands) Q1 2019 ā 200 ā 300 ā 38 ā 69 ā (1) ā Monte-Carlo Simulation Q2 2019 ā ā ā 188 ā ā ā ā ā (2) ā Fair Market Value Q3 2019 ā ā ā 50 ā ā ā ā ā (1) ā Monte-Carlo Simulation Q1 2020 ā 150 ā 300 ā ā ā ā ā (1) ā Monte-Carlo Simulation Q1 2020 ā ā ā 436 ā ā ā ā ā (3) ā Fair Market Value Q1 2020 ā 129 ā ā ā ā ā ā ā (3) ā Black-Scholes-Merton ________________________________ (1) The awards will vest based on the achievement of certain values of the Companyās common stock at multiple thresholds within certain periods and are contingent upon the completion of requisite service through the date of such vesting. ā (2) The vesting of the awards will be triggered after the end of the achievement milestone, as measured by the Company. ā (3) The awards will vest based on achievement of certain revenue target and are contingent upon the completion of requisite service through the date of such vesting. |
Summary of stock option activity | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Outstanding Options ā ā ā ā Weighted- ā ā ā ā ā ā ā Weighted- ā Average ā ā ā ā Shares ā ā ā Average ā Remaining ā Aggregate ā ā Available for ā Number of ā Exercise ā Contractual ā Intrinsic (in thousands, except for contractual life and exercise price) ā Grant ā Shares ā Price ā Life ā Value ā ā ā ā ā ā ā ā ā (In years) ā ā Balance at December 31, 2019 6,416 8,497 ā $ 10.39 ā 6.88 ā $ 197,955 Additional shares authorized 3,120 ā ā ā ā ā ā ā ā ā ā Options granted (409) 409 ā $ 25.51 ā ā ā ā ā Options exercised ā (356) ā $ 10.74 ā ā ā ā ā Options forfeited/cancelled 45 (45) ā $ 17.76 ā ā ā ā ā RSUs granted ā (4,140) ā ā ā ā ā ā ā ā ā ā RSUs forfeited/cancelled ā 88 ā ā ā ā ā ā ā ā ā ā Balance at March 31, 2020 5,120 8,505 ā $ 11.07 ā 6.78 ā $ 159,957 Exercisable at March 31, 2020 ā ā 5,078 ā $ 7.85 ā 5.54 ā $ 111,759 Vested and expected to vest at March 31, 2020 ā ā 8,316 ā $ 10.96 ā 6.74 ā $ 157,297 |
Restricted stock units | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted- ā ā ā ā Average ā ā ā ā Grant Date (in thousands, except for grant date fair value) ā Shares ā Fair Value ā ā ā ā ā ā Balance at December 31, 2019 ā 2,404 ā $ 19.86 Granted ā 2,071 ā $ 26.67 Vested ā (291) ā $ 16.88 Cancelled/forfeited ā (44) ā $ 21.35 Balance at March 31, 2020 ā 4,140 ā $ 22.48 |
Performance-based awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used in valuation of fair value | ā ā ā ā ā ā ā ā ā March 31, ā 2020 Risk-free interest rate ā 0.61 % ā 1.64 % Expected dividend yield ā ā ā ā 0.00 % Expected volatility ā 55 % ā 65 % Expected term (years) ā 5.25 ā ā 7.25 ā |
Employee stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used in valuation of fair value | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended March 31, ā 2020 2019 Expected term (years) 5.27 ā ā 10.0 ā 5.33 ā ā 5.53 ā Expected volatility 49.94 % ā 58.53 % 42.53 % ā 42.75 % Expected dividend rate ā ā ā 0.00 % ā ā ā 0.00 % Risk-free interest rate 0.44 % ā 1.70 % 2.26 % ā 2.60 % |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt | |
Schedule of maturities of long-term debt | ā ā ā ā ā ā ā ā ā March 31, December 31, ā ā 2020 ā 2019 ā ā ā (Amounts in thousands) ā ā ā Debt principal balance ā $ 75,000 ā $ 75,000 Less: unamortized debt discount ā ā (2,119) ā ā (1,344) Net carrying amount at end of period ā $ 72,881 ā $ 73,656 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Net Loss per Share | |
Basic and diluted net loss per common share | ā ā ā ā ā ā ā ā ā ā Three months ended ā ā March 31, (in thousands, except per share data) 2020 2019 Numerator: ā ā ā ā ā ā Net loss, basic and diluted $ (35,372) $ (34,091) ā ā ā ā ā ā ā Denominator: ā ā ā ā ā ā Weighted-average number of shares used in computing net loss per share, basic and diluted ā ā 78,287 ā ā 62,831 ā ā ā ā ā ā ā Net loss per share, basic and diluted ā $ (0.45) ā $ (0.54) |
Total outstanding potentially dilutive shares not included in the calculation of dilutive EPS | ā ā ā ā ā ā ā ā March 31, ā 2020 2019 ā (in thousands) Options to purchase common stock ā 8,505 9,533 Restricted stock units ā 4,140 ā 2,086 Employee stock purchase plan ā 77 ā 99 ā ā 12,722 11,718 |
Description of Business (Detail
Description of Business (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Description of Business | |
Number of operating segments | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Liquidity Matters (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 13, 2020 | Oct. 17, 2019 | Apr. 26, 2019 | Jan. 01, 2019 | Apr. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Oct. 31, 2019 | Apr. 30, 2019 | Apr. 23, 2019 | Dec. 31, 2018 | Aug. 31, 2017 | Aug. 14, 2017 | Aug. 08, 2017 |
Policies | |||||||||||||||
Net (loss) income | $ (35,372) | $ (34,091) | |||||||||||||
Cumulative-effect adjustment upon adoption | $ 400 | 403 | |||||||||||||
Accumulated deficit | 734,946 | 699,200 | $ 699,171 | ||||||||||||
Cash and cash equivalents | 74,144 | 61,926 | |||||||||||||
Marketable securities | 331,681 | 379,065 | |||||||||||||
Short-term Credit Line, outstanding balance | 50,087 | 50,123 | |||||||||||||
Long-term Term Loan, carrying amount | $ 72,881 | $ 73,656 | |||||||||||||
Common stock, shares issued | 78,652,000 | 78,005,000 | |||||||||||||
Payment of offering expenses | $ 400 | $ 600 | |||||||||||||
Proceeds from issuance of common stock | $ 216,200 | $ 108,100 | |||||||||||||
Aggregate principal amount | $ 75,000 | $ 75,000 | |||||||||||||
Debt principal balance | 75,000 | $ 75,000 | |||||||||||||
2017 Term Loan | |||||||||||||||
Policies | |||||||||||||||
Long-term Term Loan, carrying amount | 72,900 | ||||||||||||||
Remaining borrowing capacity | $ 50,000 | $ 50,000 | $ 50,000 | $ 25,000 | |||||||||||
Common stock, shares issued | 25,000 | 300,000 | 300,000 | ||||||||||||
Stock issued (in dollars per share) | $ 8.16 | ||||||||||||||
Aggregate principal amount | $ 75,000 | ||||||||||||||
Debt principal balance | $ 75,000 | ||||||||||||||
Subsequent Event | 2.25% Convertible Senior Notes | |||||||||||||||
Policies | |||||||||||||||
Aggregate principal amount | $ 287,500 | $ 287,500 | |||||||||||||
Interest rate (as a percent) | 2.25% | 2.25% | |||||||||||||
Common stock that may be issued upon conversion of notes | 9,634,700 | 9,634,700 | |||||||||||||
Net proceeds | $ 278,900 | $ 278,900 | |||||||||||||
Debt principal balance | $ 287,500 | 287,500 | |||||||||||||
Subsequent Event | 2017 Term Loan | |||||||||||||||
Policies | |||||||||||||||
Aggregate principal amount | 75,000 | ||||||||||||||
Repayment of Term Loan | 79,200 | ||||||||||||||
Debt principal balance | 75,000 | ||||||||||||||
Debt extinguishment costs | $ 4,200 | ||||||||||||||
Equity offering | |||||||||||||||
Policies | |||||||||||||||
Common stock, shares issued | 6,571,428 | 6,052,631 | |||||||||||||
Stock issued (in dollars per share) | $ 35 | $ 19 | |||||||||||||
Accumulated Deficit | |||||||||||||||
Policies | |||||||||||||||
Net (loss) income | (35,372) | (34,091) | |||||||||||||
Cumulative-effect adjustment upon adoption | $ 403 | $ (185) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Restricted Cash (Details) $ in Millions | Mar. 31, 2020USD ($) |
Summary of Significant Accounting Policies | |
Restricted cash, current portion in balance sheet | $ 0.1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Allowance for credit losses | $ 4,300 | $ 3,300 |
Credit losses | 1,387 | |
Write offs | $ 400 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Concentration (Details) - customer | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Sales | Customer | |||
Risk and Uncertainties | |||
Number of customers exceeding 10% of benchmark | 0 | 0 | |
Concentration risk (as a percent) | 10.00% | ||
Accounts receivable | Credit | |||
Risk and Uncertainties | |||
Number of customers exceeding 10% of benchmark | 0 | 0 | |
Concentration risk (as a percent) | 10.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Cost of revenues | $ 41,520 | $ 41,605 | |
Capitalized software | $ 1,100 | $ 1,200 | |
Capitalized software held for internal use | |||
Estimated useful life (in years) | 3 years | ||
Amortized expense | $ 300 | $ 300 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - AOCIL (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ 919 | |
Increase in other comprehensive loss | 4,747 | $ 286 |
Ending balance | 5,666 | |
Net unrealized gain on available-for-sale securities, net of tax | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Increase in other comprehensive loss | 4,747 | 286 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 919 | (552) |
Ending balance | $ 5,666 | $ (266) |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Property (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Minimum | |
Property and Equipment | |
Estimated useful life | P3Y |
Maximum | |
Property and Equipment | |
Estimated useful life | P5Y |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Accounting Pronouncements (Details) $ in Millions | Dec. 31, 2019USD ($) |
ASU 2016-13 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment | $ 0.4 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Aug. 31, 2019 | Feb. 28, 2019 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | |
Revenue recognized | $ 1,027 | $ 478 | ||||||
Cost of revenues | 41,520 | 41,605 | ||||||
Deferred revenue, Long-term | 25,152 | $ 23,808 | ||||||
Other assets | 12,093 | 12,476 | ||||||
Deferred revenue | 76,992 | 79,824 | ||||||
Deferred revenue, current portion | 51,840 | 56,016 | ||||||
Total revenues | 94,012 | 66,824 | ||||||
Deferred revenue, long-term portion | 25,152 | $ 23,808 | ||||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | (3,455) | |||||||
Product | ||||||||
Revenue recognized | 1,000 | 500 | ||||||
Total revenues | $ 87,046 | 63,364 | ||||||
Product | Minimum | ||||||||
Billing collection period (in months) | 9 months | |||||||
Product | Maximum | ||||||||
Billing collection period (in months) | 12 months | |||||||
Licensing and other | ||||||||
Cost of revenues | $ 3,458 | 1,698 | ||||||
Total revenues | 6,966 | $ 3,460 | ||||||
Genetic testing services | ||||||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ (200) | |||||||
Qiagen | ||||||||
Proceeds from license agreement | $ 5,000 | |||||||
Agreement term | 10 years | |||||||
Revenue, remaining performance obligation | 40,000 | |||||||
Qiagen | Volume, regulatory and commercial milestones | ||||||||
Revenue, remaining performance obligation | $ 10,000 | |||||||
Laboratory distribution partners | Product | Minimum | ||||||||
Billing collection period (in months) | 2 months | |||||||
Laboratory distribution partners | Product | Maximum | ||||||||
Billing collection period (in months) | 3 months | |||||||
BGI | ||||||||
Proceeds from license agreement | $ 50,000 | $ 35,600 | ||||||
Receivable | $ 2,500 | |||||||
Agreement term | 10 years | |||||||
BGI | Sequencing services | ||||||||
Other assets | $ 6,000 | |||||||
BGI | Sequencing products | ||||||||
Other assets | 4,000 | |||||||
BGI | Sequencing products and services | ||||||||
Other assets | $ 10,000 | $ 10,000 | ||||||
Foundation Medicine, Inc. ("FMI") | ||||||||
Proceeds from license agreement | 16,300 | |||||||
Agreement term | 5 years | |||||||
Automatic renewals, successive period thereafter | 1 year | |||||||
Foundation Medicine, Inc. ("FMI") | Upfront licensing fees and prepaid revenues | ||||||||
Initial transaction price | $ 13,300 | |||||||
Foundation Medicine, Inc. ("FMI") | Developmental, regulatory, and commercial milestones | ||||||||
Initial transaction price | $ 32,000 | |||||||
Foundation Medicine, Inc. ("FMI") | Developmental performance milestones | ||||||||
Proceeds from license agreement | 3,000 | |||||||
Foundation Medicine, Inc. ("FMI") | Licensing fees and prepaid revenue | ||||||||
Proceeds from license agreement | 13,300 | |||||||
BGI and FMI | Genetic testing services | ||||||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ (3,300) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 94,012 | $ 66,824 |
Decrease to loss from operations | $ (34,872) | $ (31,746) |
Basic and diluted (in dollars per share) | $ (0.45) | $ (0.54) |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 86,731 | $ 60,283 |
Americas, excluding U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 782 | 818 |
Europe, Middle East, India, Africa | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,476 | 4,004 |
Asia Pacific and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,023 | 1,719 |
Insurance carriers | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 70,672 | 50,201 |
Laboratory and other partners | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 15,683 | 10,023 |
Patients | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 7,657 | 6,600 |
Product | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 87,046 | 63,364 |
Upfront license and constellation and paternity | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,367 | 1,332 |
License and development services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,802 | 148 |
Other, licensing and other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 797 | 1,980 |
Licensing and other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 6,966 | $ 3,460 |
Revenue Recognition - Accounts
Revenue Recognition - Accounts Receivable and Deferred Revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Assets | |||
Accounts receivable | $ 61,577 | $ 53,351 | |
Liabilities: | |||
Deferred revenue, current portion | 51,840 | 56,016 | |
Deferred revenue, long-term portion | 25,152 | 23,808 | |
Total deferred revenues | 76,992 | 79,824 | |
Current accounts receivable | 61,577 | 53,351 | |
Other noncurrent assets | $ 12,093 | $ 12,476 | |
BGI | |||
Liabilities: | |||
Accounts receivable | $ 2,500 |
Revenue Recognition - Changes i
Revenue Recognition - Changes in Balance of Deferred Revenues (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revenue Recognition | |
Balance | $ 79,824 |
Increase in deferred revenues | 710 |
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | (3,455) |
Revenue recognized from performance obligations satisfied within the same period | (87) |
Balance | $ 76,992 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Revenue Recognition | ||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 3,455 | |
Deferred revenue, current portion | 51,840 | $ 56,016 |
Deferred revenue, Long-term | 25,152 | 23,808 |
Total deferred revenues | $ 76,992 | $ 79,824 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Available-for-sale securities | ||
Fair Value Measurements | ||
Unrealized losses | $ 23,200 | |
Recurring | ||
Financial Assets: | ||
Total financial assets | 367,499 | $ 401,542 |
Recurring | Money market deposits | ||
Financial Assets: | ||
Total financial assets | 35,818 | 22,477 |
Recurring | U.S. Treasury securities | ||
Financial Assets: | ||
Total financial assets | 249,314 | 293,157 |
Recurring | Municipal securities | ||
Financial Assets: | ||
Total financial assets | 82,367 | 85,908 |
Recurring | Level 1 | ||
Financial Assets: | ||
Total financial assets | 285,132 | 315,634 |
Recurring | Level 1 | Money market deposits | ||
Financial Assets: | ||
Total financial assets | 35,818 | 22,477 |
Recurring | Level 1 | U.S. Treasury securities | ||
Financial Assets: | ||
Total financial assets | 249,314 | 293,157 |
Recurring | Level 2 | ||
Financial Assets: | ||
Total financial assets | 82,367 | 85,908 |
Recurring | Level 2 | Municipal securities | ||
Financial Assets: | ||
Total financial assets | $ 82,367 | 85,908 |
Contingent consideration | Evercord | ||
Liabilities: | ||
Total consideration | $ 4,700 |
Financial Instruments (Details)
Financial Instruments (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)itemposition | Mar. 31, 2019item | Dec. 31, 2019USD ($) | |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Estimated Fair Value | $ 331,681 | $ 379,065 | |
Other than temporary impairment | $ 0 | ||
Number of investments sold | item | 0 | 0 | |
Number of investments, unrealized loss position | position | 10 | ||
Amortized Cost | |||
Less than one year | $ 127,898 | ||
Greater than one year but less than five years | 198,137 | ||
Total | 326,035 | ||
Fair Value | |||
Less than one year | 128,675 | ||
Greater than one year but less than five years | 203,006 | ||
Total | 331,681 | ||
Available-for-sale securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 361,853 | 400,621 | |
Unrealized Gain | 5,688 | 1,008 | |
Unrealized Loss | (42) | (87) | |
Estimated Fair Value | 367,499 | 401,542 | |
Unrealized loss position | 23,200 | ||
Money market deposits | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 35,818 | 22,477 | |
Estimated Fair Value | 35,818 | 22,477 | |
U.S. Treasury securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 243,821 | 292,506 | |
Unrealized Gain | 5,493 | 731 | |
Unrealized Loss | (80) | ||
Estimated Fair Value | 249,314 | 293,157 | |
Municipal securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 82,214 | 85,638 | |
Unrealized Gain | 195 | 277 | |
Unrealized Loss | (42) | (7) | |
Estimated Fair Value | 82,367 | 85,908 | |
Cash equivalents | Available-for-sale securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Estimated Fair Value | 35,818 | 22,477 | |
Short-term investments | Available-for-sale securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Estimated Fair Value | $ 331,681 | $ 379,065 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment, net | ||
Property and equipment, gross | $ 70,069 | $ 64,807 |
Less: Accumulated depreciation and amortization | (43,351) | (41,524) |
Total Property and Equipment, net | 26,718 | 23,283 |
Depreciation expense | 1,800 | |
Impairment | 0 | |
Machinery and equipment | ||
Property and Equipment, net | ||
Property and equipment, gross | 41,634 | 36,414 |
Furniture and fixtures | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 1,376 | 1,376 |
Useful Life | 3 years | |
Computer equipment | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 1,796 | 1,828 |
Useful Life | 3 years | |
Capitalized software held for internal use | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 6,480 | 5,917 |
Useful Life | 3 years | |
Leasehold improvements | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 11,746 | 11,556 |
Construction-in-process | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 7,037 | $ 7,716 |
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 | 3 Months Ended | ||||||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Apr. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2017 | Aug. 14, 2017 | Aug. 08, 2017 | |
Balance Sheet Components [Line Items] | |||||||||
Common stock, shares issued | 78,652,000 | 78,005,000 | |||||||
Cost of revenues | $ 41,520 | $ 41,605 | |||||||
Amortization of debt discount | 121 | $ 98 | |||||||
Noncurrent assets | 12,093 | $ 12,476 | |||||||
Evercord | |||||||||
Balance Sheet Components [Line Items] | |||||||||
Net collections | 500 | ||||||||
Credit loss expense | 1,200 | ||||||||
Evercord | Contingent consideration | |||||||||
Balance Sheet Components [Line Items] | |||||||||
Total consideration | $ 4,700 | ||||||||
Noncurrent assets | |||||||||
Balance Sheet Components [Line Items] | |||||||||
Debt discount | 0 | ||||||||
Long-term Debt | |||||||||
Balance Sheet Components [Line Items] | |||||||||
Debt discount | 900 | ||||||||
2017 Term Loan | |||||||||
Balance Sheet Components [Line Items] | |||||||||
Common stock, shares issued | 25,000 | 300,000 | 300,000 | ||||||
Debt instrument, fee amount | $ 2,400 | ||||||||
Remaining borrowing capacity | $ 50,000 | $ 50,000 | $ 50,000 | $ 25,000 | |||||
Debt discount | $ 2,700 | ||||||||
2017 Term Loan | Noncurrent assets | |||||||||
Balance Sheet Components [Line Items] | |||||||||
Debt instrument, fee amount | $ 1,200 | ||||||||
Evercord | Contingent consideration | |||||||||
Balance Sheet Components [Line Items] | |||||||||
Accounts receivable | 3,100 | ||||||||
BGI | Sequencing products and services | |||||||||
Balance Sheet Components [Line Items] | |||||||||
Noncurrent assets | $ 10,000 | $ 10,000 |
Balance Sheet Components - Impa
Balance Sheet Components - Impairment for Receivables (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Balance Sheet Components | |
Bad debt expense | $ 1,387 |
Impairment | $ 0 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Compensation (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Balance Sheet Components | ||
Accrued paid time off | $ 1,912 | $ 1,850 |
Accrued commissions | 6,997 | 5,767 |
Accrued bonuses | 2,017 | 5,710 |
Other accrued compensation | 5,027 | 2,761 |
Total accrued compensation | $ 15,953 | $ 16,088 |
Balance Sheet Components - Ot_2
Balance Sheet Components - Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Balance Sheet Components | ||||
Reserves for refunds to insurance carriers | $ 11,599 | $ 9,410 | $ 11,051 | $ 10,012 |
Accrued charges for outsourced testing | 6,051 | 8,408 | ||
Testing and laboratory materials from suppliers | 7,821 | 4,301 | ||
Marketing and corporate affairs | 2,136 | 2,957 | ||
Legal, audit and consulting fees | 5,055 | 2,873 | ||
Accrued shipping charges | 209 | 305 | ||
Sales tax payable | 1,412 | 1,691 | ||
Accrued specimen service fees | 1,066 | 2,269 | ||
Clinical trials and studies | 1,157 | 1,092 | ||
Operating lease liabilities, current portion | 5,947 | 5,739 | ||
Fixed asset purchases | 643 | 1,482 | ||
Other accrued expenses | 7,297 | 8,516 | ||
Total other accrued liabilities | $ 50,393 | $ 49,043 |
Balance Sheet Components - Rese
Balance Sheet Components - Reserve Balance and Activities for Refunds (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Balance Sheet Components | ||
Beginning balance | $ 9,410 | $ 10,012 |
Additional reserves | 4,684 | 2,504 |
Reserves released | (2,495) | (1,465) |
Ending balance | 11,599 | 11,051 |
Released into revenue | $ 1,027 | $ 478 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020USD ($)ftĀ²location | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($)ftĀ² | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease liabilities, current portion included in other accrued liabilities | $ | $ 5,947 | $ 5,739 | ||
Operating lease liabilities, long-term portion | $ | 24,727 | $ 26,297 | ||
Operating lease liabilities | $ | $ 30,674 | |||
Weighted average remaining lease term | 2 years 10 months 17 days | |||
Weighted average discount rate (as a percent) | 10.77% | |||
Lease expense | $ | $ 1,900 | |||
Operating lease payments | $ | $ 2,200 | $ 2,100 | ||
Corporate Headquarters Lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Office space (area) | ftĀ² | 113,000 | |||
Number of office space locations | location | 2 | |||
Term of lease | 84 months | |||
Renewal term of lease | 5 years | |||
"First Space" Sublease | ||||
Lessee, Lease, Description [Line Items] | ||||
Office space (area) | ftĀ² | 88,000 | |||
"Second Space" Sublease | ||||
Lessee, Lease, Description [Line Items] | ||||
Office space (area) | ftĀ² | 25,000 | |||
Corporate Headquarters Sublease | ||||
Lessee, Lease, Description [Line Items] | ||||
Office space (area) | ftĀ² | 25,879 | |||
Term of lease | 48 months | |||
Sublease receivable | $ | $ 1,900 | |||
Tukwila, WA lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Office space (area) | ftĀ² | 10,000 | |||
Term of lease | 62 months | |||
Renewal term of lease | 5 years | |||
Austin TX, Long-term Lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Office space (area) | ftĀ² | 94,000 | |||
Term of lease | 132 months |
Leases - Payments (Details)
Leases - Payments (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases | |
2020 (remaining 9 months) | $ 6,633 |
2021 | 9,067 |
2022 | 9,319 |
2023 | 7,797 |
2024 | 2,400 |
2025 and thereafter | 4,730 |
Total | 39,946 |
Less: imputed interest | (9,272) |
Operating lease liabilities | $ 30,674 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 31, 2020USD ($) | Mar. 26, 2019claim | |
Other commitments | |||
Shareholders (as a percent) | 5.00% | ||
Total commitments | $ 37,223 | ||
Laboratory instruments supplier | |||
Other commitments | |||
Total commitments | 6,683 | ||
Material supplier | |||
Other commitments | |||
Total commitments | 10,375 | ||
Application service provider | |||
Other commitments | |||
Total commitments | 9,778 | ||
Gene sequencing reagents and kits | |||
Other commitments | |||
Total commitments | 675 | ||
Other material supplier | |||
Other commitments | |||
Total commitments | 9,712 | ||
Securities related claims | |||
Other commitments | |||
Estimate of possible loss | 1,500 | ||
Commercial general liability claims | |||
Other commitments | |||
Estimate of possible loss | $ 300 | ||
CareDX's Patent Case | |||
Other commitments | |||
Number of claims | claim | 2 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 30, 2015 | |
Stock Based Compensation | ||||
Shares granted | 4,140,000 | |||
2015 Plan | ||||
Stock Based Compensation | ||||
Shares reserved for issuance | 3,451,495 | |||
Additional shares reserved for issuance | 9,890,310 | |||
Performance-based awards | ||||
Stock Based Compensation | ||||
Stock-based compensation expense | $ 1,400,000 | $ 200,000 | ||
Employee and non-employee stock options | ||||
Stock Based Compensation | ||||
Stock-based compensation expense | $ 7,417,000 | $ 4,051,000 | ||
Shares available for issuance | 5,120,000 | 6,416,000 | ||
Restricted stock units | ||||
Stock Based Compensation | ||||
Number of shares vested | 291,000 | |||
Shares granted | 2,071,000 | |||
2015 Employee Stock Purchase Plan | ||||
Stock Based Compensation | ||||
Shares reserved for issuance | 893,548 | |||
Shares granted | 0 | |||
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 employee contribution of employee's cash compensation (as a percent) | 15.00% | |||
2015 Employee Stock Purchase Plan | Minimum | ||||
Stock Based Compensation | ||||
Shares reserved for issuance | 880,000 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance-based Awards (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs Granted (in shares) | 4,140 | |||
FMV | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Valuation Method | Fair Market Value | Fair Market Value | ||
Black-Scholes Merton | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Valuation Method | Black-Scholes-Merton | |||
Monte-Carlo | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Valuation Method | Monte-Carlo Simulation | Monte-Carlo Simulation | Monte-Carlo Simulation | |
Performance-based awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,400 | $ 200 | ||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs Granted (in shares) | 2,071 | |||
RSUs Vested (in shares) | 291 | |||
Restricted stock units | FMV | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs Granted (in shares) | 436 | 188 | ||
Restricted stock units | Monte-Carlo | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs Granted (in shares) | 300 | 50 | 300 | |
RSUs Vested (in shares) | 69 | |||
Employee and non-employee stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options Granted (in shares) | 409 | |||
Stock-based compensation expense | $ 7,417 | $ 4,051 | ||
Employee and non-employee stock options | Black-Scholes Merton | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options Granted (in shares) | 129 | |||
Employee and non-employee stock options | Monte-Carlo | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options Granted (in shares) | 150 | 200 | ||
Options Vested (in shares) | 38 | |||
Number of options vested | 38 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Stock Based Compensation | ||
RSUs granted (in shares) | (4,140) | |
RSUs forfeited/cancelled (in shares) | 88 | |
Employee and non-employee stock options | ||
Stock Based Compensation | ||
Shares available for grant, beginning balance | 6,416 | |
Additional shares authorized | 3,120 | |
Options granted (in shares) | (409) | |
Options forfeited (in shares) | 45 | |
Shares available for grant, end balance | 5,120 | 6,416 |
Number of shares | ||
Outstanding, beginning balance (in shares) | 8,497 | |
Options granted (in shares) | 409 | |
Options exercised (in shares) | (356) | |
Options forfeited (in shares) | (45) | |
Outstanding, end balance (in shares) | 8,505 | 8,497 |
Exercisable (in shares) | 5,078 | |
Vested and expected to vest (in shares) | 8,316 | |
Weighted-Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ 10.39 | |
Granted (in dollars per share) | 25.51 | |
Exercised (in dollars per share) | 10.74 | |
Forfeited (in dollars per share) | 17.76 | |
Outstanding, end balance (in dollars per share) | 11.07 | $ 10.39 |
Exercisable (in dollars per share) | 7.85 | |
Vested and expected to vest (in dollars per share) | $ 10.96 | |
Additional disclosures | ||
Weighted average contractual term, options outstanding | 6 years 9 months 10 days | 6 years 10 months 17 days |
Exercisable (in years) | 5 years 6 months 14 days | |
Vested and expected to vest (in years) | 6 years 8 months 26 days | |
Aggregate intrinsic value, options outstanding | $ 159,957 | $ 197,955 |
Aggregate intrinsic value, options exercisable | 111,759 | |
Aggregate intrinsic value, vested and expected to vest | $ 157,297 | |
Restricted stock units | ||
Stock Based Compensation | ||
RSUs granted (in shares) | (2,071) | |
RSUs forfeited/cancelled (in shares) | 44 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Performance-based awards | ||
Valuation of Stock Option Grants to Employees | ||
Expected volatility, minimum | 55.00% | |
Expected volatility, maximum | 65.00% | |
Risk free interest rate, minimum | 0.61% | |
Risk free interest rate, maximum | 1.64% | |
Performance-based awards | Minimum | ||
Valuation of Stock Option Grants to Employees | ||
Expected term (years) | 5 years 3 months | |
Performance-based awards | Maximum | ||
Valuation of Stock Option Grants to Employees | ||
Expected term (years) | 7 years 3 months | |
Expected dividend yield | 0.00% | |
Employee and non-employee stock options | ||
Stock Based Compensation | ||
Options granted (in shares) | 409,000 | |
Employee stock options | ||
Valuation of Stock Option Grants to Employees | ||
Expected volatility, minimum | 49.94% | 42.53% |
Expected volatility, maximum | 58.53% | 42.75% |
Expected dividend yield | 0.00% | 0.00% |
Risk free interest rate, minimum | 0.44% | 2.26% |
Risk free interest rate, maximum | 1.70% | 2.60% |
Employee stock options | Minimum | ||
Valuation of Stock Option Grants to Employees | ||
Expected term (years) | 5 years 3 months 7 days | 5 years 3 months 29 days |
Employee stock options | Maximum | ||
Valuation of Stock Option Grants to Employees | ||
Expected term (years) | 10 years | 5 years 6 months 10 days |
Non-employee stock options | ||
Stock Based Compensation | ||
Options granted (in shares) | 72,849 | |
Options unvested (in shares) | 23,126 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Shares | |
Granted (in shares) | 4,140 |
Canceled/Forfeited (in shares) | (88) |
Restricted stock units | |
Shares | |
Balance (in shares) | 2,404 |
Granted (in shares) | 2,071 |
Vested (in shares) | (291) |
Canceled/Forfeited (in shares) | (44) |
Balance (in shares) | 4,140 |
Weighted Average Grant Date Fair Value | |
Balance (in dollars per share) | $ / shares | $ 19.86 |
Granted (in dollars per share) | $ / shares | 26.67 |
Vested (in dollars per share) | $ / shares | 16.88 |
Canceled/Forfeited (in dollars per share) | $ / shares | 21.35 |
Balance (in dollars per share) | $ / shares | $ 22.48 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee and non-employee stock options | ||
Stock based compensation expense | ||
Options granted (in shares) | 409,000 | |
Stock-based compensation expense | $ 7,417 | $ 4,051 |
Unrecognized compensation expense | $ 96,700 | |
Unrecognized compensation expense, weighted average period of recognition | 3 years 1 month 6 days | |
Employee and non-employee stock options | Cost of revenues | ||
Stock based compensation expense | ||
Stock-based compensation expense | $ 314 | 168 |
Employee and non-employee stock options | Research and development | ||
Stock based compensation expense | ||
Stock-based compensation expense | 1,842 | 894 |
Employee and non-employee stock options | Selling, general and administrative | ||
Stock based compensation expense | ||
Stock-based compensation expense | 5,261 | 2,989 |
Employee stock options | ||
Stock based compensation expense | ||
Stock-based compensation expense | 7,248 | 3,708 |
Employee stock options | Cost of revenues | ||
Stock based compensation expense | ||
Stock-based compensation expense | 314 | 168 |
Employee stock options | Research and development | ||
Stock based compensation expense | ||
Stock-based compensation expense | 1,682 | 894 |
Employee stock options | Selling, general and administrative | ||
Stock based compensation expense | ||
Stock-based compensation expense | $ 5,252 | 2,646 |
Non-employee stock options | ||
Stock based compensation expense | ||
Options granted (in shares) | 72,849 | |
Options unvested (in shares) | 23,126 | |
Stock-based compensation expense | $ 169 | 343 |
Non-employee stock options | Research and development | ||
Stock based compensation expense | ||
Stock-based compensation expense | 160 | |
Non-employee stock options | Selling, general and administrative | ||
Stock based compensation expense | ||
Stock-based compensation expense | $ 9 | $ 343 |
Debt (Details)
Debt (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 29, 2019 | Dec. 31, 2018 | Aug. 14, 2017 | Aug. 08, 2017 | Apr. 30, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2017 | Sep. 30, 2015 |
Debt Instrument [Line Items] | |||||||||||
Issuance of common stock to Orbimed (in shares) | 25,000 | ||||||||||
Common stock, shares issued | 78,652,000 | 78,652,000 | 78,005,000 | ||||||||
Amortization of debt discount | $ 121 | $ 98 | |||||||||
Interest expense | 2,464 | 2,724 | |||||||||
Debt principal balance | 75,000 | $ 75,000 | $ 75,000 | ||||||||
Less: unamortized debt discount | (2,119) | (2,119) | (1,344) | ||||||||
Net carrying amount at end of period | 72,881 | 72,881 | $ 73,656 | ||||||||
Line Of Credit-UBS | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 50,000 | ||||||||||
Outstanding balance | 49,000 | 49,000 | |||||||||
Accrued interest | 1,100 | ||||||||||
Interest expense | $ 300 | 400 | |||||||||
Line Of Credit-UBS | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Spread on interest rate (as a percent) | 1.10% | ||||||||||
Noncurrent assets | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt discount | $ 0 | 0 | |||||||||
Long-term Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt discount | 900 | 900 | |||||||||
2017 Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 100,000 | ||||||||||
Remaining borrowing capacity | $ 50,000 | $ 25,000 | $ 50,000 | $ 50,000 | |||||||
Outstanding balance | $ 75,000 | ||||||||||
Interest expense | 2,100 | $ 2,300 | |||||||||
Additional interest in the event of default (as a percent) | 3.00% | ||||||||||
Common stock, shares issued | 300,000 | 25,000 | 300,000 | ||||||||
Debt instrument, fee amount | $ 2,400 | ||||||||||
Stock issued (in dollars per share) | $ 8.16 | ||||||||||
Legal fees | $ 300 | ||||||||||
Debt discount | 2,700 | ||||||||||
Debt, increase (decrease) | (2,100) | ||||||||||
Debt principal balance | $ 75,000 | ||||||||||
Net carrying amount at end of period | $ 72,900 | $ 72,900 | |||||||||
2017 Term Loan | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Remaining borrowing capacity | $ 25,000 | ||||||||||
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 | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Spread on interest rate (as a percent) | 8.75% | 8.75% | 8.75% | ||||||||
Base interest rate (as a percent) | 1.00% | 1.00% | 1.00% | ||||||||
2017 Term Loan | LIBOR | Scenario of minimum borrowing capacity of drawn | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Spread on interest rate (as a percent) | 8.25% | 8.25% | |||||||||
Base interest rate (as a percent) | 1.00% | 1.00% | |||||||||
2017 Term Loan | Noncurrent assets | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, fee amount | $ 1,200 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Income Taxes | |||
Income tax expense | $ 23,000 | $ 74,000 | |
Unrecognized tax benefits | 9,000,000 | $ 8,600,000 | |
Interest and penalties accrued | $ 0 |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net loss, basic and diluted | $ (35,372) | $ (34,091) |
Denominator: | ||
Weighted-average number of shares used in computing net loss per share, basic and diluted | 78,287 | 62,831 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.45) | $ (0.54) |
Net Loss per Share - Potentiall
Net Loss per Share - Potentially Dilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculations | 12,722 | 11,718 |
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 | 8,505 | 9,533 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculations | 4,140 | 2,086 |
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 | 77 | 99 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Apr. 13, 2020 | Apr. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Aug. 14, 2017 |
Subsequent Event [Line Items] | |||||
Debt principal balance | $ 75,000 | $ 75,000 | |||
Subsequent Event | 2.25% Convertible Senior Notes | |||||
Subsequent Event [Line Items] | |||||
Interest rate (as a percent) | 2.25% | 2.25% | |||
Common stock that may be issued upon conversion of notes | 9,634,700 | 9,634,700 | |||
Net proceeds | $ 278,900 | $ 278,900 | |||
Debt principal balance | $ 287,500 | 287,500 | |||
2017 Term Loan | |||||
Subsequent Event [Line Items] | |||||
Debt principal balance | $ 75,000 | ||||
2017 Term Loan | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Repayment of Term Loan | 79,200 | ||||
Debt principal balance | 75,000 | ||||
Debt extinguishment costs | $ 4,200 |