Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 01, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
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 | 13011 McCallen Pass | |
Entity Address, Address Line Two | Building A Suite 100 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78753 | |
City Area Code | 650 | |
Local Phone Number | 249-9090 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | NTRA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 93,783,076 | |
Entity Central Index Key | 0001604821 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 62,811 | $ 48,668 |
Restricted cash | 228 | 187 |
Short-term investments | 517,432 | 688,606 |
Accounts receivable, net of allowance of $2,649 in 2021 and $3,080 in 2020 | 100,130 | 78,565 |
Inventory | 28,409 | 20,031 |
Prepaid expenses and other current assets, net | 30,878 | 26,606 |
Total current assets | 739,888 | 862,663 |
Property and equipment, net | 48,884 | 33,348 |
Operating lease right-of-use assets | 48,337 | 21,399 |
Other assets | 12,847 | 14,743 |
Total assets | 849,956 | 932,153 |
Current liabilities: | ||
Accounts payable | 20,307 | 8,096 |
Accrued compensation | 30,842 | 30,371 |
Other accrued liabilities | 86,143 | 60,407 |
Deferred revenue, current portion | 10,647 | 50,125 |
Short-term debt financing | 50,049 | 50,054 |
Total current liabilities | 197,988 | 199,053 |
Long-term debt financing | 279,777 | 202,493 |
Deferred revenue, long-term portion | 23,562 | 22,805 |
Operating lease liabilities, long-term portion | 49,519 | 21,246 |
Other long-term liabilities | 320 | |
Total liabilities | 550,846 | 445,917 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value: 750,000 shares authorized at both June 30, 2021 and December 31, 2020, respectively; 88,498 and 86,223 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 9 | 9 |
Additional paid in capital | 1,399,659 | 1,411,286 |
Accumulated deficit | (1,102,999) | (929,318) |
Accumulated other comprehensive gain | 2,441 | 4,259 |
Total stockholders' equity | 299,110 | 486,236 |
Total liabilities and stockholders' equity | $ 849,956 | $ 932,153 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Allowances on accounts receivable | $ 2,649 | $ 3,080 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000 | 750,000 |
Common stock, shares issued | 88,498 | 86,223 |
Common stock, shares outstanding | 88,498 | 86,223 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues | ||||
Total revenues | $ 142,026,000 | $ 86,472,000 | $ 294,342,000 | $ 180,484,000 |
Cost and expenses | ||||
Research and development | 53,752,000 | 23,005,000 | 93,940,000 | 41,230,000 |
Selling, general and administrative | 127,456,000 | 68,188,000 | 235,788,000 | 133,869,000 |
Total cost and expenses | 257,320,000 | 138,132,000 | 472,653,000 | 267,016,000 |
Loss from operations | (115,294,000) | (51,660,000) | (178,311,000) | (86,532,000) |
Interest expense | (2,075,000) | (4,038,000) | (4,148,000) | (6,502,000) |
Interest and other income, net | 1,585,000 | 1,924,000 | 2,956,000 | 3,911,000 |
Loss on debt extinguishment | (5,848,000) | (5,848,000) | ||
Loss before income taxes | (115,784,000) | (59,622,000) | (179,503,000) | (94,971,000) |
Income tax expense | (242,000) | (15,000) | (376,000) | (38,000) |
Net loss | (116,026,000) | (59,637,000) | (179,879,000) | (95,009,000) |
Unrealized gain (loss) on available-for-sale securities, net of tax | (756,000) | 104,000 | (1,818,000) | 4,851,000 |
Comprehensive loss | $ (116,782,000) | $ (59,533,000) | $ (181,697,000) | $ (90,158,000) |
Net loss per share (Note 12): | ||||
Basic and diluted (in dollars per share) | $ (1.32) | $ (0.75) | $ (2.06) | $ (1.21) |
Weighted-average number of shares used in computing basic and diluted net loss per share: | ||||
Basic and diluted (in shares) | 88,077 | 79,069 | 87,387 | 78,681 |
Product | ||||
Revenues | ||||
Total revenues | $ 137,232,000 | $ 80,414,000 | $ 255,614,000 | $ 167,460,000 |
Cost and expenses | ||||
Cost of revenues | 73,227,000 | 42,731,000 | 134,549,000 | 84,251,000 |
Licensing and other | ||||
Revenues | ||||
Total revenues | 4,794,000 | 6,058,000 | 38,728,000 | 13,024,000 |
Cost and expenses | ||||
Cost of revenues | $ 2,885,000 | $ 4,208,000 | $ 8,376,000 | $ 7,666,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 8 | $ 976,955 | $ 919 | $ (699,171) | $ 278,711 |
Balance (in shares) at Dec. 31, 2019 | 78,005 | ||||
Issuance of common stock upon exercise of stock options | 10,808 | 10,808 | |||
Issuance of common stock upon exercise of stock options (in shares) | 1,037 | ||||
Issuance of common stock under employee stock purchase plan | 3,062 | 3,062 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 97 | ||||
Equity component of Convertible Notes, net | 82,873 | 82,873 | |||
Vesting of restricted stock units (in shares) | 578 | ||||
Stock based compensation | 19,374 | 19,374 | |||
Unrealized (loss) gain on available-for-sale securities | 4,851 | 4,851 | |||
Cumulative-effect adjustment upon adoption | (403) | (403) | |||
Net loss | (95,009) | (95,009) | |||
Balance at Jun. 30, 2020 | $ 8 | 1,093,072 | 5,770 | (794,583) | 304,267 |
Balance (in shares) at Jun. 30, 2020 | 79,717 | ||||
Balance at Mar. 31, 2020 | $ 8 | 988,199 | 5,666 | (734,946) | 258,927 |
Balance (in shares) at Mar. 31, 2020 | 78,652 | ||||
Issuance of common stock upon exercise of stock options | 6,981 | 6,981 | |||
Issuance of common stock upon exercise of stock options (in shares) | 680 | ||||
Issuance of common stock under employee stock purchase plan | 3,062 | 3,062 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 97 | ||||
Equity component of Convertible Notes, net | 82,873 | 82,873 | |||
Vesting of restricted stock units (in shares) | 288 | ||||
Stock based compensation | 11,957 | 11,957 | |||
Unrealized (loss) gain on available-for-sale securities | 104 | 104 | |||
Net loss | (59,637) | (59,637) | |||
Balance at Jun. 30, 2020 | $ 8 | 1,093,072 | 5,770 | (794,583) | 304,267 |
Balance (in shares) at Jun. 30, 2020 | 79,717 | ||||
Balance at Dec. 31, 2020 | $ 9 | 1,411,286 | 4,259 | (929,318) | $ 486,236 |
Balance (in shares) at Dec. 31, 2020 | 86,223 | 86,223 | |||
Issuance of common stock upon exercise of stock options | 6,829 | $ 6,829 | |||
Issuance of common stock upon exercise of stock options (in shares) | 782 | ||||
Issuance of common stock under employee stock purchase plan | 6,085 | 6,085 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 106 | ||||
Vesting of restricted stock units (in shares) | 1,387 | ||||
Stock based compensation | 58,335 | 58,335 | |||
Unrealized (loss) gain on available-for-sale securities | (1,818) | (1,818) | |||
Cumulative-effect adjustment upon adoption | (82,876) | 6,198 | (76,678) | ||
Net loss | (179,879) | (179,879) | |||
Balance at Jun. 30, 2021 | $ 9 | 1,399,659 | 2,441 | (1,102,999) | $ 299,110 |
Balance (in shares) at Jun. 30, 2021 | 88,498 | 88,498 | |||
Balance at Mar. 31, 2021 | $ 9 | 1,356,212 | 3,197 | (986,973) | $ 372,445 |
Balance (in shares) at Mar. 31, 2021 | 87,430 | ||||
Issuance of common stock upon exercise of stock options | 2,259 | 2,259 | |||
Issuance of common stock upon exercise of stock options (in shares) | 207 | ||||
Issuance of common stock under employee stock purchase plan | 6,085 | 6,085 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 106 | ||||
Vesting of restricted stock units (in shares) | 755 | ||||
Stock based compensation | 35,103 | 35,103 | |||
Unrealized (loss) gain on available-for-sale securities | (756) | (756) | |||
Net loss | (116,026) | (116,026) | |||
Balance at Jun. 30, 2021 | $ 9 | $ 1,399,659 | $ 2,441 | $ (1,102,999) | $ 299,110 |
Balance (in shares) at Jun. 30, 2021 | 88,498 | 88,498 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Net loss | $ (179,879) | $ (95,009) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 5,262 | 4,036 |
Premium amortization and discount accretion on investment securities | 3,790 | 1,887 |
(Gain) loss on investments | (35) | |
Stock-based compensation | 58,335 | 19,374 |
Non-cash lease expense | 5,357 | 3,880 |
Amortization of debt discount and issuance cost | 610 | 2,180 |
Inventory reserve adjustments | 612 | |
Other non-cash benefits (charges) | 117 | (341) |
Provision for credit losses | 63 | 1,445 |
Loss on Debt Extinguishment | 5,848 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (21,628) | (5,972) |
Inventory | (8,991) | (5,410) |
Prepaid expenses and other current assets | (7,466) | (5,610) |
Other assets | (23) | 99 |
Accounts payable | 12,313 | (4,684) |
Accrued compensation | 471 | 495 |
Other accrued liabilities | 24,374 | 6,602 |
Deferred revenue | (38,721) | (4,900) |
Net cash used in operating activities | (145,439) | (76,080) |
Investing activities | ||
Purchases of investments | (71,054) | (266,139) |
Proceeds from sale of investments | 31,144 | 11,500 |
Proceeds from maturity of investments | 205,510 | 142,815 |
Purchases of property and equipment, net | (18,891) | (10,130) |
Net cash provided by (used in) investing activities | 146,709 | (121,954) |
Financing activities | ||
Proceeds from exercise of stock options | 6,829 | 10,808 |
Proceeds from issuance of common stock under employee stock purchase plan | 6,085 | 3,062 |
Proceeds from Convertible Note, net of issuance costs | 278,317 | |
Loan payment | (78,757) | |
Net cash provided by financing activities | 12,914 | 213,430 |
Net increase in cash, cash equivalents and restricted cash | 14,184 | 15,396 |
Cash, cash equivalents and restricted cash, beginning of period | 48,855 | 61,981 |
Cash, cash equivalents and restricted cash, end of period | 63,039 | 77,377 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 3,538 | 2,976 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment in accounts payable and accruals | $ 4,688 | $ 255 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2021 | |
Description of Business | |
Description of Business | 1. Description of Business Natera, Inc. (the "Company") was formed in the state of California as Gene Security Network, LLC in November 2003 and incorporated in the state of Delaware in January 2007. The Company is a diagnostics company with proprietary molecular and bioinformatics technology that it is applying to change the management of disease worldwide. The Company’s cell-free DNA (“cfDNA”) technology combines its novel molecular assays, which reliably measure many informative regions across the genome from samples as small as a single cell, with its statistical algorithms which incorporate data available from the broader scientific community to identify genetic variations covering a wide range of serious conditions with best-in-class accuracy and coverage. The Company’s technology has been proven clinically and commercially in the women’s health space, in which it develops and commercializes non- or minimally-invasive tests to evaluate risk for, and thereby enable early detection of, a wide range of genetic conditions, such as Down syndrome. The Company is now translating its success in women’s health and applying its core technology to the oncology market, in which it is commercializing a personalized blood-based DNA test to detect molecular residual disease and monitor disease recurrence, as well as to the organ health market, initially with a test to assess kidney transplants for rejection. The Company operates laboratories certified under the Clinical Laboratory Improvement Amendments ("CLIA") providing a host of cell-free DNA-based molecular 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 operates one segment, the development and commercialization of molecular testing services, applying its proprietary technology in the fields of women’s health, oncology and organ health. The Company also 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 as well as in twin pregnancies, typically with a blood draw from the mother; Vistara, a single-gene mutations screening test performed to identify single-gene disorders; Horizon Carrier Screening ("HCS") to determine carrier status for a large number of severe genetic diseases that could be passed on to the carrier’s children; Spectrum Pre-implantation Genetics (“Spectrum”) to evaluate embryos to identify chromosomal anomalies or inherited genetic conditions to improve the chances of a healthy pregnancy during an in vitro fertilization ("IVF") cycle; Anora Miscarriage Test (“Anora”) to rapidly and extensively analyze fetal chromosomes to understand the cause of miscarriage; Non-Invasive Paternity Testing ("PAT"), which is exclusively marketed and sold by a licensee from whom the Company receives a royalty; Signatera, which detects circulating tumor DNA in patients previously diagnosed with cancer to assess molecular residual disease and monitor for recurrence; and Prospera, to assess organ transplant rejection. All testing is available principally in the United States. The Company also offers its Panorama test to customers outside of the United States, primarily in Europe. The Company also offers Constellation, a cloud-based software platform that enables laboratory customers to gain access through the cloud to the Company’s algorithms and bioinformatics in order to validate and launch tests based on the Company’s technology. Through the third quarter of 2019, the Company offered Evercord for the collection and storage of newborn cord blood and cord tissue units, which was sold in the third quarter of 2019 to a third-party buyer. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
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 (“U.S. GAAP”) 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 stockholders’ equity, and cash flows. The results of operations for the three and six months ended June 30, 2021, 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, 2020 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, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2021. 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 $179.9 million for the six months ended June 30, 2021 and an accumulated deficit of $1.1 billion as of June 30, 2021. As of June 30, 2021, the Company had $63.0 million in cash, cash equivalents, and restricted cash, $517.4 million in marketable securities, $50.0 million of outstanding balance of the Credit Line (as defined in Note 10, 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 May 2021, the Company entered into a development and option agreement with a third party that requires the third party to use its best efforts to perform an agreed upon development plan and provides the Company with an exclusive option to purchase the third party’s assets. The Company paid the third party $10 million in the second quarter of 2021 In April 2019, the Company completed an underwritten equity offering and sold 6,052,631 shares of its common stock at a price of $19 per share to the public. 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 of $35 per share to the public. Before offering expenses of $0.4 million, the Company received proceeds of $216.2 million net of the underwriting discount. In September 2020, the Company completed an additional underwritten equity offering and sold 4,791,665 shares of its common stock at a price of $60.00 per share to the public. Before offering expenses of $0.3 million, the Company received proceeds of $271.0 million net of the underwriting discount. In July 2021, the Company completed an underwritten equity offering and sold 5,175,000 shares of its common stock at a price of $113 per share to the public. Before offering expenses of $0.4 million, the Company received proceeds of $551.2 million net of the underwriting discount. Based on the Company’s current business plan, the Company believes that its existing cash and marketable securities will be sufficient to meet its anticipated cash requirements for at least 12 months after August 5, 2021. Principles of Consolidation 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 Company’s 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 calculated based on the average selling price expected to be received from insurance payors, the operating right-of-use assets and the associated lease liabilities, deferred revenues associated with unsatisfied performance obligations, accrued liability for potential refund requests, the valuation of the Convertible Notes, 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. Credit Losses Trade accounts receivable and other receivables. The following is a roll-forward of the allowances for credit losses related to trade accounts receivable and other receivables for the six months ended June 30, 2021: Six Months Ended June 30, 2021 (in thousands) Beginning balance $ 4,220 Provision for credit losses 63 Write-offs (495) Total $ 3,788 Available-for-sale debt securities. 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, irrespective of maturity date. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity. Risk and Uncertainties The Company 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, and the full extent and duration of the impact of the COVID-19 pandemic on its business, its operations, and the global economy as a whole is not yet known. While the Company’s test volumes and overall average selling prices for its tests increased during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, the Company cannot predict the potential nature, magnitude and duration of the effects of the COVID-19 pandemic on the macroeconomic environment or its business. 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 six months ended June 30, 2021, and 2020, there were no customers exceeding 10% of total revenues on an individual basis. As of June 30, 2021 and December 31, 2020, there were no customers with an outstanding balance exceeding 10% of net accounts receivable. 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. Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 (in thousands) (in thousands) Beginning balance $ 3,197 $ 5,666 $ 4,259 $ 919 Net unrealized gain (loss) on available-for-sale securities, net of tax (756) 104 (1,818) 4,851 Ending balance $ 2,441 $ 5,770 $ 2,441 $ 5,770 Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) 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 Framework—Changes to the Disclosure Requirements for Fair Value Measurement changes in assets and liabilities categorized within Level III of the fair value hierarchy, as well as quantitative information about significant unobservable inputs used to value such assets and liabilities. It eliminates the requirement to disclose the reasons for the transfers of assets and liabilities measured in fair value on a recurring basis between Level I and Level II. The Company has adopted this ASU as of January 1, 2020, which did not have a material impact on its consolidated financial statements. Goodwill - Internal-Use Software Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 ‑ 40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments Collaborative Arrangements Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 Income Taxes Simplifying the Accounting for Income Taxes (Topic 740) Codification Improvements as of January 1, 2021, which did not have a material impact on its condensed consolidated financial statements upon the adoption. Debt In August 2020, ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) December 31, ASU 2020-06 January 1, 2020 Adoption Adjustment 2021 (in thousands) Liabilities Outstanding Principal $ 287,500 $ — $ 287,500 Unamortized debt discount and issuance cost (85,007) 76,674 (8,333) Net carrying amount $ 202,493 $ 76,674 $ 279,167 Equity Additional paid-in-capital $ (1,411,286) $ 82,872 $ (1,328,414) Accumulated deficit (929,318) 6,198 (923,120) New Accounting Pronouncements Not Yet Adopted In March 2020, ASU 2020-04, Reference Rate Reform (Topic 848) |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2021 | |
Revenue Recognition | |
Revenue Recognition | 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 Product revenues are derived from contracts with insurance carriers, laboratory partners and patients in connection with sales primarily related to prenatal genetic tests. The Company enters into contracts with insurance carriers with primarily payment terms related to tests provided to the patients who have health insurance coverage. Insurance carriers are considered as third-party payers on behalf of the patients, and the patients are considered as the customers who receive genetic test services. Tests may be billed to insurance carriers, patients, or a combination of insurance carriers and patients. Further, the Company sells tests to a number of domestic and international laboratory partners and identifies the laboratory partners as customers provided that there is a test services agreement between the two parties. 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. The total consideration which the Company expects to collect in exchange for the Company’s 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 Company’s 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. When assessing the total consideration for insurance carriers and patients, a certain percentage of revenues is further constrained for estimated refunds. 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 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 June 30, 2021 and 2020, $1.7 million and $0.6 million, respectively, were released from amounts previously held in reserves in other accrued liabilities, and recognized as product revenue. During the six months ended June 30, 2021 and 2020, $3.0 million and $1.6 million, respectively, were released from amounts previously held in reserves in other accrued liabilities, and recognized as product revenue. The release of amounts reserved were recognized as product revenue within that period. Licensing and Other Revenues The Company recognizes licensing revenues from its cloud-based distribution service offering, Constellation, by granting licenses to its licensees to use certain of the Company’s proprietary intellectual properties and cloud-based software and IVD kits. The Company also recognizes revenues from the Signatera research use only (“RUO”) offering and from its agreements with Qiagen LLC, (“Qiagen”), BGI Genomics Co., Ltd. (“BGI Genomics”), and Foundation Medicine, Inc. (“Foundation Medicine”). Constellation The laboratory partners with whom 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 Company’s software, but rather receive services through the cloud software. These arrangements often include: (i) the delivery of the 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 or the 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 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 Company’s statements of operations and comprehensive loss. Signatera The Company enters into agreements with pharmaceutical companies to utilize the Company’s 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 (“WES”) 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 million as a result of the termination. The remaining $28.6 million of deferred revenue was recognized as other licensing and other revenue in the first quarter of 2021. BGI Genomics 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 Genomics’ 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 (the “Foundation Medicine Agreement”) with Foundation Medicine to develop and commercialize personalized circulating tumor DNA monitoring assays, for use by biopharmaceutical and clinical customers who order Foundation Medicine’s FoundationOne CDx. The Foundation Medicine Agreement has an initial term of five years, expiring in August 2024, with automatic renewals thereafter for successive one-year terms, unless the Foundation Medicine 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 Foundation Medicine Agreement. The Foundation Medicine Agreement provides for approximately $13.3 million in upfront licensing fees and prepaid revenues payable to the Company, and up to approximately $32.0 million in minimum annual payments and payments tied to the Company’s 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. There was an additional milestone met in May 2021. The Company accrued a $1.0 million milestone payment against accounts receivable and short-term deferred revenue. This milestone was paid in early July 2021 Pursuant to the Foundation Medicine Agreement, the Company will provide development services in conjunction with granting the use of the Company’s intellectual property. Following completion of those development services, the Company is currently providing RUO 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. 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 Medicine’s 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 which has commenced in the second quarter of 2021. 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. As of June 30, 2021, the Company started providing biopharma RUO services for which partial revenue is recognized from the earlier prepaid $2.5 million royalties. In addition, in the second quarter of 2021, the Company has initiated clinical trial studies for which no revenue has been recognized as of June 30, 2021. 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. 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. Disaggregation of Revenues 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: Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 (in thousands) Insurance carriers $ 118,396 $ 67,630 $ 218,795 $ 138,302 Laboratory and other partners 15,599 13,041 60,134 28,724 Patients 8,031 5,801 15,413 13,458 Total revenues $ 142,026 $ 86,472 $ 294,342 $ 180,484 The following table presents total revenues by geographic area based on the location of the Company’s payers: Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 (in thousands) United States $ 134,814 $ 80,757 $ 279,771 $ 167,488 Americas, excluding U.S. 992 721 1,805 1,503 Europe, Middle East, India, Africa 4,265 3,584 8,724 7,060 Asia Pacific and Other 1,955 1,410 4,042 4,433 Total revenues $ 142,026 $ 86,472 $ 294,342 $ 180,484 Balance at Balance at June 30, December 31, (in thousands) 2021 2020 Assets: Accounts receivable $ 100,130 $ 78,565 Liabilities: Deferred revenue, current portion $ 10,647 $ 50,125 Deferred revenue, long-term portion 23,562 22,805 Total deferred revenues $ 34,209 $ 72,930 Deferred Revenues (in thousands) Balance at December 31, 2020 $ 72,930 Increase in deferred revenues 3,474 Refunds of revenues previously deferred (10,000) Revenue recognized during the period that was included in (30,839) Revenue recognized from performance obligations satisfied (1,356) Balance at June 30, 2021 $ 34,209 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 December 31, 2020 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Money market deposits $ 5,509 $ — $ — $ 5,509 $ 28,990 $ — $ — $ 28,990 U.S. Treasury securities 434,639 — — 434,639 597,744 — — 597,744 Corporate bonds and notes — 14,248 — 14,248 — 12,328 — 12,328 Municipal securities — 68,545 — 68,545 — 78,534 — 78,534 Total financial assets $ 440,148 $ 82,793 $ — $ 522,941 $ 626,734 $ 90,862 $ — $ 717,596 Fair Value of Long-Term Debt: As of June 30, 2021, the estimated fair value of the Convertible Notes, which are not presented at fair value on the Condensed Consolidated Balance Sheets as of June 30, 2021, was $871.0 million and was based upon observable, Level 2 inputs, including pricing information from recent trades of the Convertible Notes (see Note 10, Debt |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2021 | |
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: June 30, 2021 December 31, 2020 Amortized Gross Gross Estimated Fair Value Amortized Gross Gross Estimated Fair Value (in thousands) Money market deposits $ 5,509 $ — $ — $ 5,509 $ 28,990 $ — $ — $ 28,990 U.S. Treasury securities (1) 432,610 2,180 (151) 434,639 594,252 3,512 (20) 597,744 Corporate bonds and notes (1) 14,284 2 (38) 14,248 12,331 2 (5) 12,328 Municipal securities 68,097 505 (57) 68,545 77,764 796 (26) 78,534 Total $ 520,500 $ 2,687 $ (246) $ 522,941 $ 713,337 $ 4,310 $ (51) $ 717,596 Classified as: Cash equivalents (2) $ 5,509 $ 28,990 Short-term investments 517,432 688,606 Total $ 522,941 $ 717,596 (1) Per the Company’s investment policy, all debt securities are classified as short-term investments irrespective of holding period. (2) Cash equivalents includes cash sweep accounts and U.S. Treasury money market mutual funds. 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 other than temporary impairment of its investments and will continue to recognize unrealized gains and losses in other comprehensive income (loss). During the six months ended June 30, 2021 and 2020, the Company sold $31.1 million and $11.5 million of investments, respectively. During the six months ended June 30, 2021, the amount of gross realized gains and realized losses upon sales of investments were insignificant. The Company uses the specific investment identification method to calculate realized gains and losses and amounts reclassified out of other comprehensive income to net income. As of June 30, 2021, the Company had 23 investments in an unrealized loss position in its portfolio. An allowance for credit losses was not necessary for the second quarter of 2021 since the investments are low risk, investment grade securities. 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 investment securities at an unrealized loss position as of June 30, 2021 was $158.8 million. The aggregate amount of unrealized losses of these securities were 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 June 30, 2021. June 30, 2021 Amortized Fair (in thousands) Less than or equal to one year $ 213,114 $ 213,493 Greater than one year but less than five years 301,877 303,939 Total $ 514,991 $ 517,432 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2021 | |
Balance Sheet Components | |
Balance Sheet Components | 6. Balance Sheet Components Property and Equipment, net The Company’s property and equipment consisted of the following: June 30, December 31, Useful Life 2021 2020 (in thousands) Machinery and equipment 3- 5 years $ 58,432 $ 51,001 Furniture and fixtures 3 years 1,376 1,376 Computer equipment 3 years 2,772 2,428 Capitalized software held for internal use 3 years 7,582 7,417 Leasehold improvements Lesser of useful life or lease term 14,952 14,810 Construction-in-process 19,087 6,370 104,201 83,402 Less: Accumulated depreciation and amortization (55,317) (50,054) Total Property and Equipment, net $ 48,884 $ 33,348 All of the Company’s long-lived assets are located in the United States. During the six months ended June 30, 2021, the increase in net property and equipment was due to purchases of new equipment for the Company’s laboratories located in Texas and California to expand testing capabilities, offset by depreciation expense of $5.3 million recorded in the six months ended June 30, 2021. The Company did not incur an impairment charge during the six months ended June 30, 2021. Accrued Compensation The Company’s accrued compensation consisted of the following: June 30, December 31, 2021 2020 (in thousands) Accrued paid time off $ 2,439 $ 2,260 Accrued commissions 14,104 12,686 Accrued bonuses 7,984 9,635 Other accrued compensation 6,315 5,790 Total accrued compensation $ 30,842 $ 30,371 Other Accrued Liabilities The Company’s other accrued liabilities consisted of the following: June 30, December 31, 2021 2020 (in thousands) Reserves for refunds to insurance carriers 22,301 $ 17,366 Accrued charges for third-party testing 10,422 5,141 Testing and laboratory materials from suppliers 7,805 2,720 Marketing and corporate affairs 5,374 3,325 Legal, audit and consulting fees 4,364 4,189 Accrued shipping charges 1,276 1,604 Sales tax payable 1,501 1,723 Accrued third-party service fees 2,482 2,355 Clinical trials and studies 2,419 2,353 Operating lease liabilities, current portion 6,330 7,300 Fixed asset purchases 1,740 1,691 Other accrued interest 1,078 1,078 Deposits held for sublease 10 — Other accrued expenses 19,041 9,562 Total other accrued liabilities $ 86,143 $ 60,407 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. The following table summarizes the reserve balance and activities for refunds to insurance carriers for the six months ended June 30, 2021: June 30, June 30, 2021 2020 (in thousands) Beginning balance $ 17,366 9,410 Additional reserves 10,960 8,563 Refunds to carriers (3,054) (3,251) Reserves released to revenue (2,971) (1,622) Ending balance $ 22,301 $ 13,100 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2021 | |
Leases | |
Leases | 7. Leases Operating Leases market rent amount upon renewal is not available from the landlord. In January 2021, the Company entered into an amendment of the lease to extend the term for 48 months to October 2027. The combined annual rent for the First Space and Second Space will be $9.3 million commencing in October 2023. 36-month June 30, 2021 (in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 6,330 Operating lease liabilities, long-term portion 49,519 Total operating lease liabilities $ 55,849 The present value of the future annual minimum lease payments under all non-cancellable operating leases as of June 30, 2021 are as follows: Operating Leases (in thousands) Year ending December 31: 2021 (remaining 6 months) $ 5,086 2022 10,404 2023 11,071 2024 11,889 2025 12,186 2026 and thereafter 20,064 70,700 Less: imputed interest (14,851) Operating lease liabilities $ 55,849 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
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 regulatory or administrative actions, including those with respect to intellectual property, employment, testing, billing, reimbursement and other matters. Such actions may include allegations of negligence, products/professional liability or other 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, including by governmental entities, 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 or other matters 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 or other matters, determined that an unfavorable outcome is probable or reasonably possible, or determined that the amount or range of any possible loss is reasonably estimable. Intellectual Property Litigation Matters. The Company is involved in patent litigation against CareDx, Inc. (“CareDx”), in the United States District Court for the District of Delaware (“CareDx’s Patent Case”). CareDx alleges, in a complaint filed jointly with the Board of Trustees of the Leland Stanford Junior University in March 2019 and amended in March 2020, that the Company infringed three patents. The complaint seeks unspecified damages and injunctive relief. The Company has also alleged infringement by CareDx of two of the Company’s patents, seeking unspecified damages and injunctive relief. The cases have been consolidated and the Court has set a trial date of April 25, 2022. The cases are currently stayed pending a ruling on the Company’s motion for summary judgment challenging the patent eligibility of the asserted patents. The Company has filed suit against ArcherDX, Inc. (“ArcherDX”), in the United States District Court for the District of Delaware, alleging, in complaints filed in January, April, and August of 2020, which cases were consolidated in September 2020, that certain ArcherDX DNA oncology products infringe five of the Company’s patents. In June 2020, ArcherDX filed a motion to dismiss aspects of the Company’s case, including to invalidate several of the Company’s asserted patents. That motion was denied in its entirety in October 2020. In January 2021, the Company filed a second amended complaint naming an additional Archer DX entity, ArcherDx LLC, and Invitae Corp. as defendants. The Company is seeking unspecified monetary damages and injunctive relief. A jury trial is set for May 16, 2022. In May 2021, Invitae Corp. (“Invitae”) filed a complaint against the Company alleging infringement of one patent and seeking monetary damages and injunctive relief. In June 2021, the Company filed a motion to dismiss Invitae’s complaint in its entirety. The Company is the subject of a lawsuit filed against it by Ravgen, Inc. (“Ravgen”) in June 2020 in the United States District Court for the Western District of Texas, alleging infringement of two Ravgen patents. The complaint seeks monetary damages and injunctive relief. Trial is set for December 13, 2021. The Company filed suit against Progenity, Inc. (“Progenity”), in June 2020 in the United States District Court for the Western District of Texas and in the United States District Court for the Northern District of Texas, in each case alleging that Progenity’s NIPT test infringes six of the Company’s patents. The complaints seek treble damages and injunctive relief. In July 2020, Progenity filed suit against the Company in the United States District Court for the Southern District of California, seeking declaratory judgment of non-infringement of the Company’s asserted patents. Progenity also petitioned the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office for inter partes In October 2020, the Company filed suit against Genosity Inc. (“Genosity”), in the United States District Court for the District of Delaware, alleging that various Genosity oncology products infringe one of the Company’s patents and seeking unspecified monetary damages and injunctive relief. In March 2021, the Company filed a motion to dismiss certain of Genosity’s affirmative defenses and a counterclaim. In January 2021, the Company filed suit against Inivata, Inc. and Inivata Ltd. (collectively “Inivata”) in the United States District Court for the District of Delaware, alleging that various Inivata oncology products infringe two of the Company’s patents. The complaint seeks unspecified monetary damages and injunctive relief. In April 2021, Inivata filed a motion to dismiss the Company’s complaint. Other Litigation Matters. In August 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. The suit was dismissed in June 2021. The Company is also the subject of a lawsuit filed by CareDx against the Company in April 2019 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 Company’s technology and CareDx’s technology (“CareDx’s Advertising Case”). The complaint seeks unspecified damages and injunctive relief. In May 2019, the Company filed a motion to dismiss the entirety of CareDx’s Advertising Case for failure to state a claim, following which in February 2020, CareDx filed an amended complaint withdrawing its trademark disparagement claim. Also in February 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. The parties cross-moved for partial summary judgment, which was denied in April 2021. A jury trial is set for October 25, 2021. The Company is involved in litigation against Guardant, Inc. (“Guardant”). On or about May 27, 2021, Guardant filed suit against the Company in the United States District Court of the Northern District of California alleging false advertising and related claims and seeking unspecified damages and injunctive relief. On or about May 28, 2021, the Company filed suit against Guardant in the Western District of Texas, alleging false advertising and related claims. The Company has voluntarily dismissed its Texas suit against Guardant. In the California action, the Company has answered Guardant’s complaint and has asserted its claims as counterclaims, seeking unspecified damages and injunctive relief. On August 3, 2021, Guardant moved to dismiss the Company’s counterclaims. Director and Officer Indemnifications As permitted under Delaware law, and as set forth in the Company’s Amended and Restated Certificate of Incorporation and its Amended and Restated 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 $2.5 million for securities related 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 June 30, 2021 with a remaining term of at least one year: Party Commitments Expiry Date (in thousands) Material supplier $ 14,207 June 2026 Application service providers 31,853 March 2026 Other material suppliers 16,662 Various Total $ 62,722 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock-Based Compensation 2015 Equity Incentive Plan General Share Reserve The initial number of shares of the Company’s common stock available for issuance under the 2015 Plan was 3,451,495 shares. ● 3,500,000 shares; ● 4% of the shares of common stock outstanding on the last business day of the prior fiscal year; or ● the number of shares determined by the Company’s board of directors. Stock options vest as determined by the compensation committee. In general, they will vest over a four-year period following the date of grant. Stock options expire at the time determined by the compensation committee but in no event more than ten years after they are granted. These awards generally expire earlier if the participant's service terminates earlier. Restricted Shares and Stock Units. Performance-based Awards Period Granted Options Granted RSUs Granted Options Vested RSUs Vested Milestone Valuation Method (in thousands) Q1 2019 200 300 169 260 (1) Monte-Carlo Simulation Q2 2019 — 188 — 81 (2) Fair Market Value Q3 2019 — 50 — 38 (1) Monte-Carlo Simulation Q1 2020 150 300 94 216 (1) Monte-Carlo Simulation Q1 2020 — 436 — 404 (3) Fair Market Value Q1 2020 129 — 129 — (3) Black-Scholes-Merton Q2 2020 — 21 — 21 (3) Fair Market Value Q3 2020 10 — 10 — (4) Black-Scholes-Merton Q3 2020 — 27 — 13 (3) Fair Market Value Q4 2020 — 32 — 6 (1) Monte-Carlo Simulation Q4 2020 — 22 — 2 (5) Fair Market Value Q1 2021 150 125 — — (1) Monte-Carlo Simulation Q1 2021 — 279 — 10 (3) Fair Market Value Q2 2021 163 — — — (1) Monte-Carlo Simulation Q2 2021 29 — — — (3) Black-Scholes-Merton Q2 2021 — 7 — — (3) Fair Market Value ________________________________ (1) The awards will vest based on the achievement of certain values of the Company’s common stock at multiple thresholds within certain periods and are contingent upon the completion of requisite service through the date of such vesting. (2) The vesting of the awards will be triggered after the end of the achievement milestone, as measured by the Company. (3) The awards will vest based on achievement of a revenue target and are contingent upon the completion of requisite service through the date of such vesting. (4) The awards vest based on achievement of a reimbursement target. (5) The awards will vest based on achievement of certain revenue and recruiting targets. The Company has recognized $19.0 million and $30.0 million in stock-based compensation for performance-based awards for the three and six months ended June 30, 2021, respectively. The Company has recognized $3.8 million and $5.2 million in stock-based compensation for performance-based awards for the three and six months ended June 30, 2020, respectively. June 30, 2021 Risk-free interest rate 0.80 % — 1.42 % Expected dividend yield 0.00 % Expected volatility 60 % Expected term (years) 7.25 — 10.00 Employee Stock Purchase Plan During the period ended June 30, 2021, there have not been any changes to the Company’s 2015 Natera, Inc. Employee Stock Purchase Plan (the “ESPP”) as disclosed in Form 10-K for the fiscal year ended December 31, 2020. The Company has made 2,940,084 shares available for issuance under the Plan as of June 30, 2021, 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 Company’s board of directors. The first offering period of 2021 started on November 1, 2020 and ended on April 30, 2021 , and 106,435 shares were purchased for proceeds of $6.1 million. The second offering period of 2021 began on May 1, 2021 and will end on October 31, 2021. As of June 30, 2021, no shares have been purchased in the second offering period. Stock Options The following table summarizes option activity for the six months ended June 30, 2021: Outstanding Options Weighted- Weighted- Average Shares Average Remaining Aggregate Available for Number of Exercise Contractual Intrinsic (in thousands, except for contractual life and exercise price) Grant Shares Price Life Value (in years) Balance at December 31, 2020 3,197 6,707 $ 11.19 6.04 $ 592,468 Additional shares authorized 3,446 — Options granted (390) 390 $ 104.01 Options exercised — (782) $ 8.73 Options forfeited/cancelled 31 (31) $ 13.80 RSUs granted (1,355) — RSUs forfeited/cancelled 164 — Balance at June 30, 2021 5,093 6,284 $ 17.25 5.93 $ 605,986 Exercisable at June 30, 2021 4,823 $ 9.93 5.23 $ 499,683 Vested and expected to vest at June 30, 2021 6,194 $ 16.90 5.90 $ 599,432 Restricted Stock Units The following table summarizes RSU activity for the six months ended June 30, 2021: Weighted- Average Grant Date (in thousands, except for grant date fair value) Shares Fair Value Balance at December 31, 2020 4,188 $ 34.02 Granted 1,355 $ 103.67 Vested (1,387) $ 26.50 Cancelled/forfeited (164) $ 41.33 Balance at June 30, 2021 3,992 $ 59.73 Stock-Based Compensation Expense Stock based compensation is related to stock options and RSUs granted to the Company’s 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. 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 and six months ended June 30, 2021 and 2020. Three months ended June 30, 2021 2020 Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 1,275 $ — $ 1,275 $ 441 $ — $ 441 Research and development 6,276 340 6,616 2,631 282 2,913 Selling, general and administrative 27,146 66 27,212 8,527 76 8,603 Total $ 34,697 $ 406 $ 35,103 $ 11,599 $ 358 $ 11,957 Six months ended June 30, 2021 2020 Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 1,983 $ — $ 1,983 $ 755 $ — $ 755 Research and development 9,926 564 10,490 4,313 442 4,755 Selling, general and administrative 45,751 111 45,862 13,779 85 13,864 Total $ 57,660 $ 675 $ 58,335 $ 18,847 $ 527 $ 19,374 Valuation of Stock Option Grants to Employees and Non-employees The Company utilizes the Black-Scholes option pricing model when estimating the fair value of stock options. For the three six months ended June 30, 2021, 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. Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Expected term (years) 5.11 — 10.00 10.00 5.11 — 10.00 5.27 — 10.00 Expected volatility 56.01 % — 63.30 % 53.94 % 55.33 % — 63.30 % 49.94 % — 58.53 % Expected dividend rate 0.00 % 0.00 % 0.00 % 0.00 % Risk-free interest rate 0.81 % — 1.67 % 0.71 % 0.81 % — 1.67 % 0.44 % — 1.70 % |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt | |
Debt | 10 . Debt Credit Line Agreement In September 2015, the Company entered into a credit line with UBS (the “Credit Line”) providing for a $50.0 million revolving line of credit 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 Company’s money market and marketable securities held in its managed investment account with UBS. UBS has the right to demand full or partial payment of the Credit Line Obligations and terminate the Credit Line, in its discretion and without cause, at any time. For the three months ended June 30, 2021 and 2020, the Company recorded interest expense on the Credit Line of $0.2 million for both periods. For the six months ended June 30, 2021 and 2020, the Company recorded interest expense on the Credit Line of $0.3 million and $0.5 million, respectively. Interest payments on the Credit Line were made within the same periods. As of June 30, 2021, remaining accrued interest was $1.0 million, and the total principal amount outstanding with accrued interest was $49.0 million. Convertible Notes ● During any fiscal quarter commencing after March 31, 2020 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day. ● During the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of that five-day consecutive trading period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day. ● If the Company calls any or all of the Convertible Notes for redemption at any time prior to the close of business on the second business day prior to the redemption date. ● Upon the occurrence of certain distributions. ● Upon the occurrence of specified corporate transactions. upon the occurrence of certain events but will not be adjusted for any accrued or unpaid interest. The holders of the Convertible Notes who redeem their Convertible Notes in connection with a make-whole fundamental change are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change, the holders of the Convertible Notes may require the Company to repurchase for cash all or a portion of their Convertible Notes at a price equal to 100% of the principal amount, plus any accrued and unpaid interest. June 30, 2021 (in thousands) Long-Term Debt Outstanding Principal $ 287,500 Unamortized debt discount and issuance cost (7,723) Net carrying amount $ 279,777 Three months ended Six months ended June 30, June 30, 2021 2021 (in thousands) Cash interest expense Contractual interest expense $ 1,617 $ 3,234 Non-cash interest expense Amortization of debt discount and debt issuance cost 306 610 Total interest expense $ 1,923 $ 3,844 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021, 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 June 30, 2021, the Company recorded total income tax expense of approximately $242,000 and $15,000, respectively. During the six months ended June 30, 2021 and 2020, the Company recorded total income tax expense of approximately $376,000 and $38,000, respectively. For the three and six months ended June 30, 2021, the income tax expense is primarily attributable to state income tax and foreign income tax expenses resulting from testing to clinics and licenses of cloud-based software and intellectual property that are based in a foreign country. There was no state income tax expense recorded for the three and six months ended June 30, 2020. Due to the Company’s 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 Company’s net deferred tax assets will be realized. Accordingly, all of the Company’s 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 June 30, 2021. The Company will continue to maintain a full valuation allowance until there is sufficient evidence to support recoverability of its deferred tax assets. As described in Note 10, Debt The Company had $12.9 million and $11.5 million in unrecognized tax benefits as of June 30, 2021 and December 31, 2020, 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 June 30, 2021, there were no accrued interest and penalties related to uncertain tax positions. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2021 | |
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 Convertible Notes are convertible as of June 30, 2021. Upon conversion, the Company has the option to pay cash, issue shares of common stock, or any combination thereof for the aggregate amount due upon conversion. If converted, the value of the Convertible Notes based on contractual settlement provisions would exceed its principal amount by $450.1 million as of June 30, 2021. Since the Company is in a net loss position in the periods presented, the shares which would be issued upon conversion of the Convertible Notes are excluded from the net loss per share calculation as it would have an antidilutive effect. As such, the 7.4 million shares underlying the conversion option of the Convertible Notes will not have an impact on the Company’s diluted earnings per share. If converted, the Company does not intend to settle the obligation in cash. The following table provides the basic and diluted net loss per share computations for the six months ended June 30, 2021 and 2020. Three months ended Six months ended June 30, June 30, (in thousands, except per share data) 2021 2020 2021 2020 Numerator: Net loss, basic and diluted $ (116,026) $ (59,637) $ (179,879) $ (95,009) Denominator: Weighted-average number of shares used in computing net loss per share, basic and diluted 88,077 79,069 87,387 78,681 Net loss per share, basic and diluted $ (1.32) $ (0.75) $ (2.06) $ (1.21) 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 June 30, 2021 and 2020: June 30, 2021 2020 (in thousands) Options to purchase common stock 6,284 7,822 Restricted stock units 3,992 4,051 Employee stock purchase plan 31 51 Convertible Notes 7,411 7,411 Total 17,718 19,335 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
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 (“U.S. GAAP”) 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 stockholders’ equity, and cash flows. The results of operations for the three and six months ended June 30, 2021, 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, 2020 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, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2021. |
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 $179.9 million for the six months ended June 30, 2021 and an accumulated deficit of $1.1 billion as of June 30, 2021. As of June 30, 2021, the Company had $63.0 million in cash, cash equivalents, and restricted cash, $517.4 million in marketable securities, $50.0 million of outstanding balance of the Credit Line (as defined in Note 10, 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 May 2021, the Company entered into a development and option agreement with a third party that requires the third party to use its best efforts to perform an agreed upon development plan and provides the Company with an exclusive option to purchase the third party’s assets. The Company paid the third party $10 million in the second quarter of 2021 In April 2019, the Company completed an underwritten equity offering and sold 6,052,631 shares of its common stock at a price of $19 per share to the public. 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 of $35 per share to the public. Before offering expenses of $0.4 million, the Company received proceeds of $216.2 million net of the underwriting discount. In September 2020, the Company completed an additional underwritten equity offering and sold 4,791,665 shares of its common stock at a price of $60.00 per share to the public. Before offering expenses of $0.3 million, the Company received proceeds of $271.0 million net of the underwriting discount. In July 2021, the Company completed an underwritten equity offering and sold 5,175,000 shares of its common stock at a price of $113 per share to the public. Before offering expenses of $0.4 million, the Company received proceeds of $551.2 million net of the underwriting discount. Based on the Company’s current business plan, the Company believes that its existing cash and marketable securities will be sufficient to meet its anticipated cash requirements for at least 12 months after August 5, 2021. |
Principles of Consolidation | Principles of Consolidation 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 Company’s 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 calculated based on the average selling price expected to be received from insurance payors, the operating right-of-use assets and the associated lease liabilities, deferred revenues associated with unsatisfied performance obligations, accrued liability for potential refund requests, the valuation of the Convertible Notes, 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. |
Credit Losses | Credit Losses Trade accounts receivable and other receivables. The following is a roll-forward of the allowances for credit losses related to trade accounts receivable and other receivables for the six months ended June 30, 2021: Six Months Ended June 30, 2021 (in thousands) Beginning balance $ 4,220 Provision for credit losses 63 Write-offs (495) Total $ 3,788 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, irrespective of maturity date. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity. |
Risk and Uncertainties | Risk and Uncertainties The Company 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, and the full extent and duration of the impact of the COVID-19 pandemic on its business, its operations, and the global economy as a whole is not yet known. While the Company’s test volumes and overall average selling prices for its tests increased during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, the Company cannot predict the potential nature, magnitude and duration of the effects of the COVID-19 pandemic on the macroeconomic environment or its business. 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 six months ended June 30, 2021, and 2020, there were no customers exceeding 10% of total revenues on an individual basis. As of June 30, 2021 and December 31, 2020, there were no customers with an outstanding balance exceeding 10% of net accounts receivable. |
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. Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 (in thousands) (in thousands) Beginning balance $ 3,197 $ 5,666 $ 4,259 $ 919 Net unrealized gain (loss) on available-for-sale securities, net of tax (756) 104 (1,818) 4,851 Ending balance $ 2,441 $ 5,770 $ 2,441 $ 5,770 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) 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 Framework—Changes to the Disclosure Requirements for Fair Value Measurement changes in assets and liabilities categorized within Level III of the fair value hierarchy, as well as quantitative information about significant unobservable inputs used to value such assets and liabilities. It eliminates the requirement to disclose the reasons for the transfers of assets and liabilities measured in fair value on a recurring basis between Level I and Level II. The Company has adopted this ASU as of January 1, 2020, which did not have a material impact on its consolidated financial statements. Goodwill - Internal-Use Software Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 ‑ 40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments Collaborative Arrangements Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 Income Taxes Simplifying the Accounting for Income Taxes (Topic 740) Codification Improvements as of January 1, 2021, which did not have a material impact on its condensed consolidated financial statements upon the adoption. Debt In August 2020, ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) December 31, ASU 2020-06 January 1, 2020 Adoption Adjustment 2021 (in thousands) Liabilities Outstanding Principal $ 287,500 $ — $ 287,500 Unamortized debt discount and issuance cost (85,007) 76,674 (8,333) Net carrying amount $ 202,493 $ 76,674 $ 279,167 Equity Additional paid-in-capital $ (1,411,286) $ 82,872 $ (1,328,414) Accumulated deficit (929,318) 6,198 (923,120) New Accounting Pronouncements Not Yet Adopted In March 2020, ASU 2020-04, Reference Rate Reform (Topic 848) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Summary Of Significant Accounting Policies [Line Items] | |
Schedule of allowances for credit losses | Six Months Ended June 30, 2021 (in thousands) Beginning balance $ 4,220 Provision for credit losses 63 Write-offs (495) Total $ 3,788 |
Schedule of Accumulated Other Comprehensive Income (Loss) | Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 (in thousands) (in thousands) Beginning balance $ 3,197 $ 5,666 $ 4,259 $ 919 Net unrealized gain (loss) on available-for-sale securities, net of tax (756) 104 (1,818) 4,851 Ending balance $ 2,441 $ 5,770 $ 2,441 $ 5,770 |
Accounting Standards Update 2020-06 | |
Summary Of Significant Accounting Policies [Line Items] | |
Schedule of new accounting pronouncements and changes in accounting principle | December 31, ASU 2020-06 January 1, 2020 Adoption Adjustment 2021 (in thousands) Liabilities Outstanding Principal $ 287,500 $ — $ 287,500 Unamortized debt discount and issuance cost (85,007) 76,674 (8,333) Net carrying amount $ 202,493 $ 76,674 $ 279,167 Equity Additional paid-in-capital $ (1,411,286) $ 82,872 $ (1,328,414) Accumulated deficit (929,318) 6,198 (923,120) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue Recognition | |
Schedule of disaggregation of revenues by payer types | Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 (in thousands) Insurance carriers $ 118,396 $ 67,630 $ 218,795 $ 138,302 Laboratory and other partners 15,599 13,041 60,134 28,724 Patients 8,031 5,801 15,413 13,458 Total revenues $ 142,026 $ 86,472 $ 294,342 $ 180,484 |
Schedule of total revenue by geographic area | Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 (in thousands) United States $ 134,814 $ 80,757 $ 279,771 $ 167,488 Americas, excluding U.S. 992 721 1,805 1,503 Europe, Middle East, India, Africa 4,265 3,584 8,724 7,060 Asia Pacific and Other 1,955 1,410 4,042 4,433 Total revenues $ 142,026 $ 86,472 $ 294,342 $ 180,484 |
Schedule of beginning and ending balances of accounts receivable and deferred revenues | Balance at Balance at June 30, December 31, (in thousands) 2021 2020 Assets: Accounts receivable $ 100,130 $ 78,565 Liabilities: Deferred revenue, current portion $ 10,647 $ 50,125 Deferred revenue, long-term portion 23,562 22,805 Total deferred revenues $ 34,209 $ 72,930 |
Schedule of changes in the balance of deferred revenues | Deferred Revenues (in thousands) Balance at December 31, 2020 $ 72,930 Increase in deferred revenues 3,474 Refunds of revenues previously deferred (10,000) Revenue recognized during the period that was included in (30,839) Revenue recognized from performance obligations satisfied (1,356) Balance at June 30, 2021 $ 34,209 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements | |
Summary of financial assets and liabilities measured on recurring basis | June 30, 2021 December 31, 2020 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Money market deposits $ 5,509 $ — $ — $ 5,509 $ 28,990 $ — $ — $ 28,990 U.S. Treasury securities 434,639 — — 434,639 597,744 — — 597,744 Corporate bonds and notes — 14,248 — 14,248 — 12,328 — 12,328 Municipal securities — 68,545 — 68,545 — 78,534 — 78,534 Total financial assets $ 440,148 $ 82,793 $ — $ 522,941 $ 626,734 $ 90,862 $ — $ 717,596 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Financial Instruments | |
Schedule of available-for-sale securities | June 30, 2021 December 31, 2020 Amortized Gross Gross Estimated Fair Value Amortized Gross Gross Estimated Fair Value (in thousands) Money market deposits $ 5,509 $ — $ — $ 5,509 $ 28,990 $ — $ — $ 28,990 U.S. Treasury securities (1) 432,610 2,180 (151) 434,639 594,252 3,512 (20) 597,744 Corporate bonds and notes (1) 14,284 2 (38) 14,248 12,331 2 (5) 12,328 Municipal securities 68,097 505 (57) 68,545 77,764 796 (26) 78,534 Total $ 520,500 $ 2,687 $ (246) $ 522,941 $ 713,337 $ 4,310 $ (51) $ 717,596 Classified as: Cash equivalents (2) $ 5,509 $ 28,990 Short-term investments 517,432 688,606 Total $ 522,941 $ 717,596 |
Summarized portfolio of available-for-sale securities by contractual maturity | June 30, 2021 Amortized Fair (in thousands) Less than or equal to one year $ 213,114 $ 213,493 Greater than one year but less than five years 301,877 303,939 Total $ 514,991 $ 517,432 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Balance Sheet Components | |
Schedule of property and equipment | June 30, December 31, Useful Life 2021 2020 (in thousands) Machinery and equipment 3- 5 years $ 58,432 $ 51,001 Furniture and fixtures 3 years 1,376 1,376 Computer equipment 3 years 2,772 2,428 Capitalized software held for internal use 3 years 7,582 7,417 Leasehold improvements Lesser of useful life or lease term 14,952 14,810 Construction-in-process 19,087 6,370 104,201 83,402 Less: Accumulated depreciation and amortization (55,317) (50,054) Total Property and Equipment, net $ 48,884 $ 33,348 |
Schedule of accrued compensation | June 30, December 31, 2021 2020 (in thousands) Accrued paid time off $ 2,439 $ 2,260 Accrued commissions 14,104 12,686 Accrued bonuses 7,984 9,635 Other accrued compensation 6,315 5,790 Total accrued compensation $ 30,842 $ 30,371 |
Schedule of other accrued liabilities | June 30, December 31, 2021 2020 (in thousands) Reserves for refunds to insurance carriers 22,301 $ 17,366 Accrued charges for third-party testing 10,422 5,141 Testing and laboratory materials from suppliers 7,805 2,720 Marketing and corporate affairs 5,374 3,325 Legal, audit and consulting fees 4,364 4,189 Accrued shipping charges 1,276 1,604 Sales tax payable 1,501 1,723 Accrued third-party service fees 2,482 2,355 Clinical trials and studies 2,419 2,353 Operating lease liabilities, current portion 6,330 7,300 Fixed asset purchases 1,740 1,691 Other accrued interest 1,078 1,078 Deposits held for sublease 10 — Other accrued expenses 19,041 9,562 Total other accrued liabilities $ 86,143 $ 60,407 |
Summary of reserve balance and activities for refunds to insurance carriers | June 30, June 30, 2021 2020 (in thousands) Beginning balance $ 17,366 9,410 Additional reserves 10,960 8,563 Refunds to carriers (3,054) (3,251) Reserves released to revenue (2,971) (1,622) Ending balance $ 22,301 $ 13,100 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases | |
Schedule of lease liabilities | June 30, 2021 (in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 6,330 Operating lease liabilities, long-term portion 49,519 Total operating lease liabilities $ 55,849 |
Schedule of annual minimum lease payments | Operating Leases (in thousands) Year ending December 31: 2021 (remaining 6 months) $ 5,086 2022 10,404 2023 11,071 2024 11,889 2025 12,186 2026 and thereafter 20,064 70,700 Less: imputed interest (14,851) Operating lease liabilities $ 55,849 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies | |
Schedule of material contractual commitments | Party Commitments Expiry Date (in thousands) Material supplier $ 14,207 June 2026 Application service providers 31,853 March 2026 Other material suppliers 16,662 Various Total $ 62,722 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of performance-based awards | Period Granted Options Granted RSUs Granted Options Vested RSUs Vested Milestone Valuation Method (in thousands) Q1 2019 200 300 169 260 (1) Monte-Carlo Simulation Q2 2019 — 188 — 81 (2) Fair Market Value Q3 2019 — 50 — 38 (1) Monte-Carlo Simulation Q1 2020 150 300 94 216 (1) Monte-Carlo Simulation Q1 2020 — 436 — 404 (3) Fair Market Value Q1 2020 129 — 129 — (3) Black-Scholes-Merton Q2 2020 — 21 — 21 (3) Fair Market Value Q3 2020 10 — 10 — (4) Black-Scholes-Merton Q3 2020 — 27 — 13 (3) Fair Market Value Q4 2020 — 32 — 6 (1) Monte-Carlo Simulation Q4 2020 — 22 — 2 (5) Fair Market Value Q1 2021 150 125 — — (1) Monte-Carlo Simulation Q1 2021 — 279 — 10 (3) Fair Market Value Q2 2021 163 — — — (1) Monte-Carlo Simulation Q2 2021 29 — — — (3) Black-Scholes-Merton Q2 2021 — 7 — — (3) Fair Market Value ________________________________ (1) The awards will vest based on the achievement of certain values of the Company’s common stock at multiple thresholds within certain periods and are contingent upon the completion of requisite service through the date of such vesting. (2) The vesting of the awards will be triggered after the end of the achievement milestone, as measured by the Company. (3) The awards will vest based on achievement of a revenue target and are contingent upon the completion of requisite service through the date of such vesting. (4) The awards vest based on achievement of a reimbursement target. (5) The awards will vest based on achievement of certain revenue and recruiting targets. |
Summary of stock option activity | Outstanding Options Weighted- Weighted- Average Shares Average Remaining Aggregate Available for Number of Exercise Contractual Intrinsic (in thousands, except for contractual life and exercise price) Grant Shares Price Life Value (in years) Balance at December 31, 2020 3,197 6,707 $ 11.19 6.04 $ 592,468 Additional shares authorized 3,446 — Options granted (390) 390 $ 104.01 Options exercised — (782) $ 8.73 Options forfeited/cancelled 31 (31) $ 13.80 RSUs granted (1,355) — RSUs forfeited/cancelled 164 — Balance at June 30, 2021 5,093 6,284 $ 17.25 5.93 $ 605,986 Exercisable at June 30, 2021 4,823 $ 9.93 5.23 $ 499,683 Vested and expected to vest at June 30, 2021 6,194 $ 16.90 5.90 $ 599,432 |
Restricted stock units | Weighted- Average Grant Date (in thousands, except for grant date fair value) Shares Fair Value Balance at December 31, 2020 4,188 $ 34.02 Granted 1,355 $ 103.67 Vested (1,387) $ 26.50 Cancelled/forfeited (164) $ 41.33 Balance at June 30, 2021 3,992 $ 59.73 |
Summary of stock-based compensation expenses | Three months ended June 30, 2021 2020 Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 1,275 $ — $ 1,275 $ 441 $ — $ 441 Research and development 6,276 340 6,616 2,631 282 2,913 Selling, general and administrative 27,146 66 27,212 8,527 76 8,603 Total $ 34,697 $ 406 $ 35,103 $ 11,599 $ 358 $ 11,957 Six months ended June 30, 2021 2020 Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 1,983 $ — $ 1,983 $ 755 $ — $ 755 Research and development 9,926 564 10,490 4,313 442 4,755 Selling, general and administrative 45,751 111 45,862 13,779 85 13,864 Total $ 57,660 $ 675 $ 58,335 $ 18,847 $ 527 $ 19,374 |
Performance-based awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used in valuation of fair value | June 30, 2021 Risk-free interest rate 0.80 % — 1.42 % Expected dividend yield 0.00 % Expected volatility 60 % Expected term (years) 7.25 — 10.00 |
Employee stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used in valuation of fair value | Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Expected term (years) 5.11 — 10.00 10.00 5.11 — 10.00 5.27 — 10.00 Expected volatility 56.01 % — 63.30 % 53.94 % 55.33 % — 63.30 % 49.94 % — 58.53 % Expected dividend rate 0.00 % 0.00 % 0.00 % 0.00 % Risk-free interest rate 0.81 % — 1.67 % 0.71 % 0.81 % — 1.67 % 0.44 % — 1.70 % |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt | |
Schedule of outstanding Convertible Notes | June 30, 2021 (in thousands) Long-Term Debt Outstanding Principal $ 287,500 Unamortized debt discount and issuance cost (7,723) Net carrying amount $ 279,777 |
Summary of interest expense | Three months ended Six months ended June 30, June 30, 2021 2021 (in thousands) Cash interest expense Contractual interest expense $ 1,617 $ 3,234 Non-cash interest expense Amortization of debt discount and debt issuance cost 306 610 Total interest expense $ 1,923 $ 3,844 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Net Loss per Share | |
Basic and diluted net loss per share | Three months ended Six months ended June 30, June 30, (in thousands, except per share data) 2021 2020 2021 2020 Numerator: Net loss, basic and diluted $ (116,026) $ (59,637) $ (179,879) $ (95,009) Denominator: Weighted-average number of shares used in computing net loss per share, basic and diluted 88,077 79,069 87,387 78,681 Net loss per share, basic and diluted $ (1.32) $ (0.75) $ (2.06) $ (1.21) |
Total outstanding potentially dilutive shares | June 30, 2021 2020 (in thousands) Options to purchase common stock 6,284 7,822 Restricted stock units 3,992 4,051 Employee stock purchase plan 31 51 Convertible Notes 7,411 7,411 Total 17,718 19,335 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Liquidity Matters (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Jul. 31, 2021 | May 31, 2021 | Sep. 30, 2020 | Apr. 30, 2020 | Oct. 31, 2019 | Apr. 30, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Policies | ||||||||||||
Net (loss) income | $ (116,026) | $ (59,637) | $ (179,879) | $ (95,009) | ||||||||
Accumulated deficit | 1,102,999 | 1,102,999 | $ 929,318 | |||||||||
Cash, cash equivalents and restricted cash | 63,039 | 77,377 | 63,039 | 77,377 | 48,855 | $ 61,981 | ||||||
Marketable securities | 517,432 | 517,432 | 688,606 | |||||||||
Short-term Credit Line, outstanding balance | $ 50,049 | $ 50,049 | $ 50,054 | |||||||||
Contractual commitment for development and option agreement | $ 10,000 | |||||||||||
Payment for third party assets if purchase option is exercised | $ 290,000 | |||||||||||
Common stock, shares issued | 88,498,000 | 88,498,000 | 86,223,000 | |||||||||
Net proceeds | 278,317 | |||||||||||
Loss on Debt Extinguishment | $ 5,848 | $ 5,848 | ||||||||||
Convertible Notes | ||||||||||||
Policies | ||||||||||||
Outstanding principal balance | $ 287,500 | $ 287,500 | $ 287,500 | |||||||||
Per annum interest rate (as a percent) | 2.25% | 2.25% | ||||||||||
Net proceeds | $ 278,300 | |||||||||||
Equity offering | ||||||||||||
Policies | ||||||||||||
Common stock, shares issued | 4,791,665 | 6,571,428 | 6,052,631 | |||||||||
Stock issued (in dollars per share) | $ 60 | $ 35 | $ 19 | |||||||||
Payment of offering expenses | $ 300 | $ 400 | $ 600 | |||||||||
Proceeds from issuance of common stock | $ 271,000 | $ 216,200 | $ 108,100 | |||||||||
Equity offering | Subsequent Event | ||||||||||||
Policies | ||||||||||||
Common stock, shares issued | 5,175,000 | |||||||||||
Stock issued (in dollars per share) | $ 113 | |||||||||||
Payment of offering expenses | $ 400 | |||||||||||
Proceeds from issuance of common stock | $ 551,200 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Credit Losses (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Summary of Significant Accounting Policies | |
Beginning balance | $ 4,220 |
Provision for credit losses | 63 |
Write-offs | (495) |
Ending balance | $ 3,788 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Concentration (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($)customer | Jun. 30, 2020USD ($) | Dec. 31, 2020customer | |
Sales | Customer | |||
Risk and Uncertainties | |||
Number of customers exceeding 10% of benchmark | $ | 0 | 0 | |
Accounts receivable | Credit | |||
Risk and Uncertainties | |||
Number of customers exceeding 10% of benchmark | customer | 0 | 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - AOCIL (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 3,197 | $ 5,666 | $ 4,259 | $ 919 |
Ending balance | 2,441 | 5,770 | 2,441 | 5,770 |
Net unrealized gain (loss) on available-for-sale securities, net of tax | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Increase (decrease) in other comprehensive loss | $ (756) | $ 104 | $ (1,818) | $ 4,851 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Accounting Pronouncements (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accumulated deficit | $ (1,102,999) | $ (1,102,999) | $ (929,318) | ||
Convertible Notes | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Interest expense | 1,923 | 3,844 | |||
Outstanding principle | 287,500 | 287,500 | $ 287,500 | ||
Net carrying amount | 279,777 | 279,777 | |||
Previously reported | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Interest expense | $ 2,300 | $ 4,600 | |||
Previously reported | Convertible Notes | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Outstanding principle | 287,500 | ||||
Unamortized debt discount and issuance cost | (85,007) | ||||
Net carrying amount | 202,493 | ||||
Additional paid-in-capital | (1,411,286) | ||||
Accumulated deficit | (929,318) | ||||
ASU 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect adjustment | $ 400 | ||||
Accounting Standards Update 2020-06 | Convertible Notes | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Outstanding principle | 287,500 | ||||
Unamortized debt discount and issuance cost | (8,333) | ||||
Net carrying amount | 279,167 | ||||
Additional paid-in-capital | (1,328,414) | ||||
Accumulated deficit | (923,120) | ||||
Accounting Standards Update 2020-06 | Adoption Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Reduction in net loss from continuing operations per share | $ 0.02 | $ 0.05 | |||
Accounting Standards Update 2020-06 | Adoption Adjustment | Convertible Notes | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Unamortized debt discount and issuance cost | 76,674 | ||||
Net carrying amount | 76,674 | ||||
Additional paid-in-capital | 82,872 | ||||
Accumulated deficit | $ 6,198 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2021 | Feb. 28, 2019 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Sep. 30, 2019 | Aug. 31, 2019 | |
Refunds of revenues previously deferred | $ 10,000 | ||||||||||||
Deferred revenue, Long-term | $ 23,562 | 23,562 | $ 22,805 | ||||||||||
Other assets | 12,847 | 12,847 | 14,743 | ||||||||||
Deferred revenue | 34,209 | 34,209 | 72,930 | ||||||||||
Deferred revenue, current portion | 10,647 | 10,647 | 50,125 | ||||||||||
Total revenues | 142,026 | $ 86,472 | 294,342 | $ 180,484 | |||||||||
Deferred revenue, long-term portion | 23,562 | 23,562 | 22,805 | ||||||||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | 30,839 | ||||||||||||
Product | |||||||||||||
Revenue recognized | 1,700 | 600 | 3,000 | 1,600 | |||||||||
Cost of revenues | 73,227 | 42,731 | 134,549 | 84,251 | |||||||||
Total revenues | 137,232 | 80,414 | $ 255,614 | 167,460 | |||||||||
Product | Minimum | |||||||||||||
Billing collection period (in months) | 9 months | ||||||||||||
Product | Maximum | |||||||||||||
Billing collection period (in months) | 12 months | ||||||||||||
Licensing and other | |||||||||||||
Cost of revenues | 2,885 | 4,208 | $ 8,376 | 7,666 | |||||||||
Total revenues | 4,794 | $ 6,058 | 38,728 | $ 13,024 | |||||||||
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 | ||||||||||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 28,600 | ||||||||||||
Qiagen | Volume, regulatory and commercial milestones | |||||||||||||
Revenue, remaining performance obligation | $ 10,000 | ||||||||||||
Qiagen | Other licensing and other revenue | |||||||||||||
Refunds of revenues previously deferred | $ 10,000 | ||||||||||||
Deferred revenue | $ 28,600 | ||||||||||||
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 Genomics | |||||||||||||
Proceeds from license agreement | $ 50,000 | $ 35,600 | |||||||||||
Receivable | $ 2,500 | ||||||||||||
Agreement term | 10 years | ||||||||||||
Deferred revenue, current portion | 3,200 | $ 3,200 | |||||||||||
BGI Genomics | Sequencing services | |||||||||||||
Other assets | $ 6,000 | ||||||||||||
BGI Genomics | Sequencing products | |||||||||||||
Other assets | 4,000 | ||||||||||||
BGI Genomics | Sequencing products and services | |||||||||||||
Other assets | $ 10,000 | ||||||||||||
Foundation Medicine ("FMI") | |||||||||||||
Proceeds from license agreement | $ 16,300 | ||||||||||||
Deferred revenue, current portion | 5,100 | 5,100 | |||||||||||
Prepaid royalties | $ 2,500 | ||||||||||||
Foundation Medicine ("FMI") | Milestone payments | |||||||||||||
Deferred revenue, current portion | 1,000 | 1,000 | |||||||||||
Foundation Medicine ("FMI") | Milestone payments | Subsequent Event | |||||||||||||
Proceeds from license agreement | $ 1,000 | ||||||||||||
Foundation Medicine ("FMI") | Upfront licensing fees and prepaid revenues | |||||||||||||
Initial transaction price | $ 13,300 | ||||||||||||
Foundation Medicine ("FMI") | Developmental, regulatory, and commercial milestones | |||||||||||||
Initial transaction price | $ 32,000 | ||||||||||||
Foundation Medicine ("FMI") | Developmental performance milestones | |||||||||||||
Proceeds from license agreement | 3,000 | ||||||||||||
Foundation Medicine ("FMI") | Licensing fees and prepaid revenue | |||||||||||||
Proceeds from license agreement | $ 13,300 | ||||||||||||
Foundation Medicine ("FMI") | Clinical trial studies | |||||||||||||
Revenue recognized | $ 0 | ||||||||||||
BGI and FMI | Genetic testing services | |||||||||||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 2,000 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 142,026 | $ 86,472 | $ 294,342 | $ 180,484 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 134,814 | 80,757 | 279,771 | 167,488 |
Americas, excluding U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 992 | 721 | 1,805 | 1,503 |
Europe, Middle East, India, Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,265 | 3,584 | 8,724 | 7,060 |
Asia Pacific and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,955 | 1,410 | 4,042 | 4,433 |
Insurance carriers | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 118,396 | 67,630 | 218,795 | 138,302 |
Laboratory partners | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 15,599 | 13,041 | 60,134 | 28,724 |
Patients | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 8,031 | 5,801 | 15,413 | 13,458 |
Licensing and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 4,794 | $ 6,058 | $ 38,728 | $ 13,024 |
Revenue Recognition - Accounts
Revenue Recognition - Accounts Receivable and Deferred Revenue (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Accounts receivable | $ 100,130 | $ 78,565 |
Liabilities: | ||
Deferred revenue, current portion | 10,647 | 50,125 |
Deferred revenue, long-term portion | 23,562 | 22,805 |
Total deferred revenues | $ 34,209 | $ 72,930 |
Revenue Recognition - Changes i
Revenue Recognition - Changes in Balance of Deferred Revenues (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Revenue Recognition | |
Balance | $ 72,930 |
Increase in deferred revenues | 3,474 |
Refunds of revenues previously deferred | (10,000) |
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | (30,839) |
Revenue recognized from performance obligations satisfied within the same period | (1,356) |
Balance | $ 34,209 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 30,839 | |
Deferred revenue, current portion | 10,647 | $ 50,125 |
Deferred revenue, Long-term | 23,562 | 22,805 |
Deferred revenue | 34,209 | $ 72,930 |
BGI Genomics | ||
Deferred revenue, current portion | 3,200 | |
Foundation Medicine ("FMI") | ||
Deferred revenue, current portion | 5,100 | |
Qiagen | ||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 28,600 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financial Assets: | ||
Total financial assets | $ 522,941 | $ 717,596 |
Money market deposits | ||
Financial Assets: | ||
Total financial assets | 5,509 | 28,990 |
U.S. Treasury securities | ||
Financial Assets: | ||
Total financial assets | 434,639 | 597,744 |
Corporate bonds and notes | ||
Financial Assets: | ||
Total financial assets | 14,248 | 12,328 |
Municipal securities | ||
Financial Assets: | ||
Total financial assets | 68,545 | 78,534 |
Level 1 | ||
Financial Assets: | ||
Total financial assets | 440,148 | 626,734 |
Level 1 | Money market deposits | ||
Financial Assets: | ||
Total financial assets | 5,509 | 28,990 |
Level 1 | U.S. Treasury securities | ||
Financial Assets: | ||
Total financial assets | 434,639 | 597,744 |
Level 2 | ||
Financial Assets: | ||
Total financial assets | 82,793 | 90,862 |
Level 2 | Convertible Notes | ||
Liabilities: | ||
Fair value of financial liabilities | 871,000 | |
Level 2 | Corporate bonds and notes | ||
Financial Assets: | ||
Total financial assets | 14,248 | 12,328 |
Level 2 | Municipal securities | ||
Financial Assets: | ||
Total financial assets | $ 68,545 | $ 78,534 |
Financial Instruments (Details)
Financial Instruments (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2021USD ($)position | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Estimated Fair Value | $ 517,432 | $ 688,606 | |
Proceeds from investments sold | 31,100 | $ 11,500 | |
Other than temporary impairment | $ 0 | ||
Number of investments, unrealized loss position | position | 23 | ||
Amortized Cost | |||
Less than or equal to one year | $ 213,114 | ||
Greater than one year but less than five years | 301,877 | ||
Total | 514,991 | ||
Fair Value | |||
Less than or equal to one year | 213,493 | ||
Greater than or equal to one year but less than five years | 303,939 | ||
Total | 517,432 | ||
Available-for-sale securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 520,500 | 713,337 | |
Unrealized Gain | 2,687 | 4,310 | |
Unrealized Loss | (246) | (51) | |
Estimated Fair Value | 522,941 | 717,596 | |
Unrealized loss position | 158,800 | ||
Money market deposits | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 5,509 | 28,990 | |
Estimated Fair Value | 5,509 | 28,990 | |
U.S. Treasury securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 432,610 | 594,252 | |
Unrealized Gain | 2,180 | 3,512 | |
Unrealized Loss | (151) | (20) | |
Estimated Fair Value | 434,639 | 597,744 | |
Corporate bonds and notes | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 14,284 | 12,331 | |
Unrealized Gain | 2 | 2 | |
Unrealized Loss | (38) | (5) | |
Estimated Fair Value | 14,248 | 12,328 | |
Municipal securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Amortized Cost | 68,097 | 77,764 | |
Unrealized Gain | 505 | 796 | |
Unrealized Loss | (57) | (26) | |
Estimated Fair Value | 68,545 | 78,534 | |
Cash equivalents | Available-for-sale securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Estimated Fair Value | 5,509 | 28,990 | |
Short-term investments | Available-for-sale securities | |||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | |||
Estimated Fair Value | $ 517,432 | $ 688,606 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property and Equipment, net | ||
Property and equipment, gross | $ 104,201 | $ 83,402 |
Less: Accumulated depreciation and amortization | (55,317) | (50,054) |
Total Property and Equipment, net | 48,884 | 33,348 |
Depreciation expense | 5,300 | |
Impairment | 0 | |
Machinery and equipment | ||
Property and Equipment, net | ||
Property and equipment, gross | 58,432 | 51,001 |
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 | $ 2,772 | 2,428 |
Useful Life | 3 years | |
Capitalized software held for internal use | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 7,582 | 7,417 |
Useful Life | 3 years | |
Leasehold improvements | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 14,952 | 14,810 |
Construction-in-process | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 19,087 | $ 6,370 |
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 - Accr
Balance Sheet Components - Accrued Compensation (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Balance Sheet Components | ||
Accrued paid time off | $ 2,439 | $ 2,260 |
Accrued commissions | 14,104 | 12,686 |
Accrued bonuses | 7,984 | 9,635 |
Other accrued compensation | 6,315 | 5,790 |
Total accrued compensation | $ 30,842 | $ 30,371 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Components | ||||
Reserves for refunds to insurance carriers | $ 22,301 | $ 17,366 | $ 13,100 | $ 9,410 |
Accrued charges for third-party testing | 10,422 | 5,141 | ||
Testing and laboratory materials from suppliers | 7,805 | 2,720 | ||
Marketing and corporate affairs | 5,374 | 3,325 | ||
Legal, audit and consulting fees | 4,364 | 4,189 | ||
Accrued shipping charges | 1,276 | 1,604 | ||
Sales tax payable | 1,501 | 1,723 | ||
Accrued third-party service fees | 2,482 | 2,355 | ||
Clinical trials and studies | 2,419 | 2,353 | ||
Operating lease liabilities, current portion | 6,330 | 7,300 | ||
Fixed asset purchases | 1,740 | 1,691 | ||
Other accrued interest | 1,078 | 1,078 | ||
Deposits held for sublease | 10 | |||
Other accrued expenses | 19,041 | 9,562 | ||
Total other accrued liabilities | $ 86,143 | $ 60,407 |
Balance Sheet Components - Rese
Balance Sheet Components - Reserve Balance and Activities for Refunds (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Balance Sheet Components | ||
Beginning balance | $ 17,366 | $ 9,410 |
Additional reserves | 10,960 | 8,563 |
Refunds to carriers | (3,054) | (3,251) |
Reserves released to revenue | (2,971) | (1,622) |
Ending balance | $ 22,301 | $ 13,100 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($)ft² | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)ft²item | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Operating lease liabilities, current portion included in other accrued liabilities | $ 6,330 | $ 6,330 | $ 7,300 | ||
Operating lease liabilities, long-term portion | 49,519 | 49,519 | $ 21,246 | ||
Operating lease liabilities | $ 55,849 | 55,849 | |||
Noncash investing activities related to right-of-use assets | $ 30,100 | ||||
Weighted average discount rate (as a percent) | 7.49% | 7.49% | |||
Lease expense | $ 2,700 | $ 1,900 | $ 5,400 | $ 3,900 | |
Operating lease payments | $ 2,500 | $ 2,200 | $ 5,000 | $ 4,400 | |
Corporate Headquarters Lease | |||||
Lessee, Lease, Description [Line Items] | |||||
Office space (area) | ft² | 113,000 | 113,000 | |||
Number of office space locations | item | 2 | ||||
Term of lease | 84 months | 84 months | |||
Renewal term of lease | 5 years | 5 years | |||
"First Space" Sublease | |||||
Lessee, Lease, Description [Line Items] | |||||
Number of office space locations | ft² | 88,000 | ||||
"Second Space" Sublease | |||||
Lessee, Lease, Description [Line Items] | |||||
Number of office space locations | ft² | 25,000 | ||||
Corporate Headquarters Lease Amendment | |||||
Lessee, Lease, Description [Line Items] | |||||
Annual lease payment | $ 9,300 | ||||
Term of lease | 48 months | 48 months | |||
Austin TX, Long-term Lease | |||||
Lessee, Lease, Description [Line Items] | |||||
Office space (area) | ft² | 94,000 | 94,000 | |||
Term of lease | 132 months | 132 months | |||
Tukwila, WA Lease | |||||
Lessee, Lease, Description [Line Items] | |||||
Office space (area) | ft² | 10,000 | 10,000 | |||
Term of lease | 62 months | 62 months | |||
Renewal term of lease | 5 years | 5 years | |||
San Carlos, CA Sublease | |||||
Lessee, Lease, Description [Line Items] | |||||
Office space (area) | ft² | 25,879 | 25,879 | |||
Term of lease | 48 months | 48 months | |||
Sublease receivable | $ 1,900 | $ 1,900 | |||
San Carlos, CA Sublease Amendment | |||||
Lessee, Lease, Description [Line Items] | |||||
Noncash investing activities related to right-of-use assets | $ 29,700 | ||||
San Carlos, CA Sublease Amendment | Rentable square feet surrendered in lease amendment | |||||
Lessee, Lease, Description [Line Items] | |||||
Office space (area) | ft² | 25,879 | 25,879 | |||
South San Francisco, CA Lease | |||||
Lessee, Lease, Description [Line Items] | |||||
Office space (area) | ft² | 11,395 | 11,395 | |||
Annual lease payment | $ 900 | ||||
Term of lease | 36 months | 36 months |
Leases - Payments (Details)
Leases - Payments (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Leases | |
2021 (remaining 6 months) | $ 5,086 |
2022 | 10,404 |
2023 | 11,071 |
2024 | 11,889 |
2025 | 12,186 |
2026 and therafter | 20,064 |
Total | 70,700 |
Less: imputed interest | (14,851) |
Operating lease liabilities | $ 55,849 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | |||||
May 31, 2021USD ($) | Jan. 31, 2021patent | Sep. 30, 2020patent | Jun. 30, 2020patent | Mar. 31, 2020patent | Jun. 30, 2021USD ($) | |
Other commitments | ||||||
Contractual commitment for development and option agreement | $ | $ 10,000 | |||||
Payment for third party assets if purchase option is exercised | $ | $ 290,000 | |||||
Total commitments | $ | $ 62,722 | |||||
Material supplier | ||||||
Other commitments | ||||||
Total commitments | $ | 14,207 | |||||
Application service provider | ||||||
Other commitments | ||||||
Total commitments | $ | 31,853 | |||||
Other material suppliers | ||||||
Other commitments | ||||||
Total commitments | $ | 16,662 | |||||
Securities related claims | ||||||
Other commitments | ||||||
Estimate of possible loss | $ | $ 2,500 | |||||
CareDX Patent Case | ||||||
Other commitments | ||||||
Loss contingency, patents allegedly infringed, number | 3 | |||||
Gain contingency, patents allegedly infringed, number | 2 | |||||
ArcherDX Patent Case | ||||||
Other commitments | ||||||
Gain contingency, patents allegedly infringed, number | 5 | |||||
Ravgen Patent Case | ||||||
Other commitments | ||||||
Loss contingency, patents allegedly infringed, number | 2 | |||||
Progenity Patent Case | ||||||
Other commitments | ||||||
Gain contingency, patents allegedly infringed, number | 6 | |||||
Inivita Patent Case | ||||||
Other commitments | ||||||
Gain contingency, patents allegedly infringed, number | 2 | |||||
Claims remaining | Progenity Patent Case | ||||||
Other commitments | ||||||
Gain contingency, patents allegedly infringed, number | 3 | |||||
Claims dropped or dismissed | Progenity Patent Case | ||||||
Other commitments | ||||||
Gain contingency, patents allegedly infringed, number | 3 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Apr. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2015 | |
Performance-based awards | ||||||||
Stock Based Compensation | ||||||||
Stock-based compensation expense | $ 19,000 | $ 3,800 | $ 30,000 | $ 5,200 | ||||
Employee and non-employee stock options | ||||||||
Stock Based Compensation | ||||||||
Stock-based compensation expense | $ 35,103 | $ 11,957 | $ 58,335 | $ 19,374 | ||||
Shares granted | 1,355,000 | |||||||
Shares available for issuance | 5,093,000 | 5,093,000 | 5,093,000 | 3,197,000 | ||||
Restricted stock units | ||||||||
Stock Based Compensation | ||||||||
Number of shares vested | 1,387,000 | |||||||
Shares granted | 1,355,000 | |||||||
2015 Employee Stock Purchase Plan | ||||||||
Stock Based Compensation | ||||||||
Shares reserved for issuance | 2,940,084 | 2,940,084 | 2,940,084 | 3,451,495 | ||||
Shares granted | 0 | 106,435 | ||||||
Proceeds from shares purchased | $ 6,100 | |||||||
Shares reserved for issuance as a proportion of common stock outstanding (as a percent) | 4.00% | |||||||
2015 Employee Stock Purchase Plan | Minimum | ||||||||
Stock Based Compensation | ||||||||
Shares reserved for issuance | 880,000 | 880,000 | 880,000 | |||||
Additional shares reserved for issuance | 3,500,000 | 3,500,000 | 3,500,000 | |||||
Shares reserved for issuance as a proportion of common stock outstanding (as a percent) | 1.00% |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance-based Awards (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Market Value | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Valuation Method | Fair Market Value | Fair Market Value | Fair Market Value | Fair Market Value | Fair Market Value | 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 | Black-Scholes-Merton | 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 | 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 | $ 19,000 | $ 3,800 | $ 30,000 | $ 5,200 | |||||||
Restricted stock units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
RSUs Granted (in shares) | 1,355 | ||||||||||
Vested (in shares) | 1,387 | ||||||||||
Restricted stock units | Fair Market Value | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
RSUs Granted (in shares) | 7 | 279 | 22 | 27 | 21 | 436 | 188 | ||||
Vested (in shares) | 10 | 2 | 13 | 21 | 404 | 81 | |||||
Restricted stock units | Monte-Carlo | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
RSUs Granted (in shares) | 125 | 32 | 300 | 50 | 300 | ||||||
Vested (in shares) | 6 | 216 | 38 | 260 | |||||||
Employee and non-employee stock options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Options Granted (in shares) | 390 | ||||||||||
RSUs Granted (in shares) | 1,355 | ||||||||||
Stock-based compensation expense | $ 35,103 | $ 11,957 | $ 58,335 | $ 19,374 | |||||||
Employee and non-employee stock options | Black-Scholes Merton | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Options Granted (in shares) | 29 | 10 | 129 | ||||||||
Options Vested (in shares) | 10 | 129 | |||||||||
Employee and non-employee stock options | Monte-Carlo | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Options Granted (in shares) | 163 | 150 | 150 | 200 | |||||||
Options Vested (in shares) | 94 | 169 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Performance-based awards | ||||
Valuation of Stock Option Grants to Employees | ||||
Expected volatility, maximum | 60.00% | |||
Risk free interest rate, minimum | 0.80% | |||
Risk free interest rate, maximum | 1.42% | |||
Performance-based awards | Minimum | ||||
Valuation of Stock Option Grants to Employees | ||||
Expected term (years) | 7 years 3 months | |||
Performance-based awards | Maximum | ||||
Valuation of Stock Option Grants to Employees | ||||
Expected term (years) | 10 years | |||
Expected dividend yield | 0.00% | |||
Employee and non-employee stock options | ||||
Stock Based Compensation | ||||
Options granted (in shares) | 390,000 | |||
Valuation of Stock Option Grants to Employees | ||||
Expected term (years) | 10 years | |||
Expected volatility | 53.94% | |||
Expected volatility, minimum | 56.01% | 55.33% | 49.94% | |
Expected volatility, maximum | 63.30% | 63.30% | 58.53% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk free interest rate | 0.71% | |||
Risk free interest rate, minimum | 0.81% | 0.81% | 0.44% | |
Risk free interest rate, maximum | 1.67% | 1.67% | 1.70% | |
Employee and non-employee stock options | Minimum | ||||
Valuation of Stock Option Grants to Employees | ||||
Expected term (years) | 5 years 1 month 9 days | 5 years 1 month 9 days | 5 years 3 months 7 days | |
Employee and non-employee stock options | Maximum | ||||
Valuation of Stock Option Grants to Employees | ||||
Expected term (years) | 10 years | 10 years | 10 years | |
Non-employee stock options | ||||
Stock Based Compensation | ||||
Options granted (in shares) | 32,053 | |||
Options unvested (in shares) | 2,188 | 2,188 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Employee and non-employee stock options | ||
Stock Based Compensation | ||
Shares available for grant, beginning balance | 3,197,000 | |
Additional shares authorized | 3,446,000 | |
Options granted (in shares) | (390,000) | |
Options forfeited (in shares) | 31,000 | |
RSUs granted (in shares) | (1,355,000) | |
RSUs forfeited/cancelled (in shares) | 164,000 | |
Shares available for grant, end balance | 5,093,000 | 3,197,000 |
Number of shares | ||
Outstanding, beginning balance (in shares) | 6,707,000 | |
Options granted (in shares) | 390,000 | |
Options exercised (in shares) | (782,000) | |
Options forfeited (in shares) | (31,000) | |
Outstanding, end balance (in shares) | 6,284,000 | 6,707,000 |
Exercisable (in shares) | 4,823,000 | |
Vested and expected to vest (in shares) | 6,194,000 | |
Weighted-Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ 11.19 | |
Granted (in dollars per share) | 104.01 | |
Exercised (in dollars per share) | 8.73 | |
Forfeited (in dollars per share) | 13.80 | |
Outstanding, end balance (in dollars per share) | 17.25 | $ 11.19 |
Exercisable (in dollars per share) | 9.93 | |
Vested and expected to vest (in dollars per share) | $ 16.90 | |
Additional disclosures | ||
Weighted average contractual term, options outstanding | 5 years 11 months 4 days | 6 years 14 days |
Exercisable (in years) | 5 years 2 months 23 days | |
Vested and expected to vest (in years) | 5 years 10 months 24 days | |
Aggregate intrinsic value, options outstanding | $ 605,986 | $ 592,468 |
Aggregate intrinsic value, options exercisable | 499,683 | |
Aggregate intrinsic value, vested and expected to vest | $ 599,432 | |
Non-employee stock options | ||
Stock Based Compensation | ||
Options granted (in shares) | (32,053) | |
Number of shares | ||
Options granted (in shares) | 32,053 | |
Additional disclosures | ||
Options unvested (in shares) | 2,188 | |
Restricted stock units | ||
Stock Based Compensation | ||
RSUs granted (in shares) | (1,355,000) | |
RSUs forfeited/cancelled (in shares) | 164,000 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted stock units shares in Thousands | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Shares | |
Balance (in shares) | shares | 4,188 |
Granted (in shares) | shares | 1,355 |
Vested (in shares) | shares | (1,387) |
Canceled/Forfeited (in shares) | shares | (164) |
Balance (in shares) | shares | 3,992 |
Weighted Average Grant Date Fair Value | |
Balance (in dollars per share) | $ / shares | $ 34.02 |
Granted (in dollars per share) | $ / shares | 103.67 |
Vested (in dollars per share) | $ / shares | 26.50 |
Canceled/Forfeited (in dollars per share) | $ / shares | 41.33 |
Balance (in dollars per share) | $ / shares | $ 59.73 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Employee and non-employee stock options | ||||
Stock based compensation expense | ||||
Options granted (in shares) | 390,000 | |||
Stock-based compensation expense | $ 35,103 | $ 11,957 | $ 58,335 | $ 19,374 |
Unrecognized compensation expense | 207,400 | $ 207,400 | ||
Unrecognized compensation expense, weighted average period of recognition | 2 years 9 months 18 days | |||
Employee and non-employee stock options | Cost of revenues | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 1,275 | 441 | $ 1,983 | 755 |
Employee and non-employee stock options | Research and development | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 6,616 | 2,913 | 10,490 | 4,755 |
Employee and non-employee stock options | Selling, general and administrative | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 27,212 | 8,603 | 45,862 | 13,864 |
Employee stock options | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 34,697 | 11,599 | 57,660 | 18,847 |
Employee stock options | Cost of revenues | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 1,275 | 441 | 1,983 | 755 |
Employee stock options | Research and development | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 6,276 | 2,631 | 9,926 | 4,313 |
Employee stock options | Selling, general and administrative | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | $ 27,146 | 8,527 | $ 45,751 | 13,779 |
Non-employee stock options | ||||
Stock based compensation expense | ||||
Options granted (in shares) | 32,053 | |||
Options unvested (in shares) | 2,188 | 2,188 | ||
Stock-based compensation expense | $ 406 | 358 | $ 675 | 527 |
Non-employee stock options | Research and development | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 340 | 282 | 564 | 442 |
Non-employee stock options | Selling, general and administrative | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | $ 66 | $ 76 | $ 111 | $ 85 |
Debt (Details)
Debt (Details) $ / shares in Units, shares in Thousands | Mar. 31, 2021USD ($)$ / shares | Apr. 30, 2020USD ($)D | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Sep. 30, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||
Proceeds from Convertible Note, net of issuance costs | $ 278,317,000 | |||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares issued | shares | 88,498 | 88,498 | 86,223 | |||||
Accrued Interest | $ 1,078,000 | $ 1,078,000 | $ 1,078,000 | |||||
Amortization of debt discount and issuance cost | 610,000 | 2,180,000 | ||||||
Interest expense | 2,075,000 | $ 4,038,000 | 4,148,000 | 6,502,000 | ||||
Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 287,500,000 | 287,500,000 | $ 287,500,000 | |||||
Proceeds from Convertible Note, net of issuance costs | $ 278,300,000 | |||||||
Per annum interest rate (as a percent) | 2.25% | 2.25% | ||||||
Interest expense | $ 1,923,000 | $ 3,844,000 | ||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | |||||||
Debt instrument, term | 7 years | |||||||
Effective interest rate (as a percent) | 2.72% | 2.72% | ||||||
Principal amount per convertible note | $ 1,000 | |||||||
Number of threshold consecutive trading days | D | 30 | |||||||
Threshold business days | D | 5 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 38.79 | |||||||
Initial conversion rate | 25.7785 | |||||||
Convertible to shares of common stock | 7,411,704 | |||||||
Percentage of principal amount converted | 100.00% | |||||||
Carrying value | $ 279,777,000 | $ 279,777,000 | ||||||
Convertible Notes | Accounting Standards Update 2020-06 | ||||||||
Debt Instrument [Line Items] | ||||||||
Carrying value | $ 279,167,000 | |||||||
5 consecutive trading day period | Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | D | 5 | |||||||
Percentage of conversion price | 98.00% | |||||||
20 trading days period | Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | D | 20 | |||||||
Percentage of conversion price | 130.00% | |||||||
Redeemable for cash on or after May 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of threshold consecutive trading days | D | 20 | |||||||
Threshold trading days | D | 30 | |||||||
Percentage of conversion price | 130.00% | |||||||
Percentage of principal amount converted | 100.00% | |||||||
Line Of Credit-UBS | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 50,000,000 | |||||||
Outstanding balance | 49,000,000 | 49,000,000 | ||||||
Accrued interest | $ 1,000,000 | 1,000,000 | ||||||
Interest expense | $ 200,000 | $ 300,000 | $ 500,000 | |||||
Line Of Credit-UBS | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on interest rate (as a percent) | 1.10% | |||||||
2017 Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt, repayment amount | $ 79,200,000 |
Debt - Discount and Issuance Co
Debt - Discount and Issuance Costs (Details) - Convertible Notes | 6 Months Ended |
Jun. 30, 2021 | |
Effective interest rate (as a percent) | 2.72% |
Debt instrument, term | 7 years |
Debt - Convertible Notes Balanc
Debt - Convertible Notes Balances (Details) - Convertible Notes - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 |
Debt principal balance | $ 287,500 | $ 287,500 |
Unamortized debt discount and debt issuance cost | (7,723) | |
Net carrying amount | $ 279,777 |
Debt - Interest Expense Recogni
Debt - Interest Expense Recognized Related To Convertible Notes (Details) - Convertible Notes - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Cash interest expense | ||
Contractual interest expense | $ 1,617 | $ 3,234 |
Non-cash interest expense | ||
Amortization of debt discount and debt issuance cost | 306 | 610 |
Total interest expense | $ 1,923 | $ 3,844 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Income Taxes | |||||
Income tax expense | $ 242,000 | $ 15,000 | $ 376,000 | $ 38,000 | |
State income tax expense | $ 0 | $ 0 | |||
Unrecognized tax benefits | 12,900,000 | 12,900,000 | $ 11,500,000 | ||
Interest and penalties accrued | $ 0 | $ 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 | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net loss used to compute net loss per share, basic and diluted | $ (116,026) | $ (59,637) | $ (179,879) | $ (95,009) |
Denominator: | ||||
Weighted-average number of shares used in computing net loss per share, basic and diluted | 88,077 | 79,069 | 87,387 | 78,681 |
Net loss per share, basic and diluted (in dollars per share) | $ (1.32) | $ (0.75) | $ (2.06) | $ (1.21) |
Potentially dilutive shares not included in diluted per share calculation | 17,718 | 19,335 | ||
Convertible Notes | ||||
Denominator: | ||||
Convertible, If-converted value in excess of principal | $ 450,100 | |||
Potentially dilutive shares not included in diluted per share calculation | 7,411 | 7,411 |
Net Loss per Share - Potentiall
Net Loss per Share - Potentially Dilutive Shares (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 17,718 | 19,335 |
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 calculation | 6,284 | 7,822 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 3,992 | 4,051 |
Employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 31 | 51 |
Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 7,411 | 7,411 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | |||||
Jul. 31, 2021 | Sep. 30, 2020 | Oct. 31, 2019 | Apr. 30, 2019 | Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Event [Line Items] | ||||||
Common stock, shares issued | 88,498,000 | 86,223,000 | ||||
Equity offering | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, shares issued | 4,791,665 | 6,571,428 | 6,052,631 | |||
Stock issued (in dollars per share) | $ 60 | $ 35 | $ 19 | |||
Payment of offering expenses | $ 0.3 | $ 0.4 | $ 0.6 | |||
Proceeds from issuance of common stock | $ 271 | $ 216.2 | $ 108.1 | |||
Equity offering | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, shares issued | 5,175,000 | |||||
Stock issued (in dollars per share) | $ 113 | |||||
Payment of offering expenses | $ 0.4 | |||||
Proceeds from issuance of common stock | $ 551.2 |