Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 01, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
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 $0.0001 per share | |
Trading Symbol | NTRA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 96,957,360 | |
Entity Central Index Key | 0001604821 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 91,298 | $ 84,386 |
Restricted cash | 86 | 228 |
Short-term investments | 547,353 | 829,896 |
Accounts receivable, net of allowance of $3,561 in 2022 and $2,429 in 2021 | 208,312 | 122,074 |
Inventory | 30,465 | 26,909 |
Prepaid expenses and other current assets, net | 24,041 | 29,645 |
Total current assets | 901,555 | 1,093,138 |
Property and equipment, net | 81,772 | 65,516 |
Operating lease right-of-use assets | 62,147 | 59,013 |
Other assets | 21,502 | 18,820 |
Total assets | 1,066,976 | 1,236,487 |
Current liabilities: | ||
Accounts payable | 28,192 | 27,206 |
Accrued compensation | 32,959 | 40,941 |
Other accrued liabilities | 124,372 | 93,353 |
Deferred revenue, current portion | 16,009 | 7,404 |
Short-term debt financing | 50,086 | 50,052 |
Total current liabilities | 251,618 | 218,956 |
Long-term debt financing | 281,020 | 280,394 |
Deferred revenue, long-term portion | 20,721 | 21,318 |
Operating lease liabilities, long-term portion | 65,417 | 61,036 |
Other long-term liabilities | 3,618 | 1,479 |
Total liabilities | 622,394 | 583,183 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value: 750,000 shares authorized at both June 30, 2022 and December 31, 2021, respectively; 96,903 and 95,140 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 10 | 10 |
Additional paid in capital | 2,139,551 | 2,050,417 |
Accumulated deficit | (1,678,582) | (1,394,836) |
Accumulated other comprehensive loss | (16,397) | (2,287) |
Total stockholders' equity | 444,582 | 653,304 |
Total liabilities and stockholders' equity | $ 1,066,976 | $ 1,236,487 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Condensed Consolidated Balance Sheets | ||
Allowances on accounts receivable | $ 3,561 | $ 2,429 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000 | 750,000 |
Common stock, shares issued | 96,903 | 95,140 |
Common stock, shares outstanding | 96,903 | 95,140 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues | ||||
Total revenues | $ 198,200,000 | $ 142,026,000 | $ 392,333,000 | $ 294,342,000 |
Cost and expenses | ||||
Research and development | 82,580,000 | 53,752,000 | 162,994,000 | 93,940,000 |
Selling, general and administrative | 149,468,000 | 127,456,000 | 297,102,000 | 235,788,000 |
Total cost and expenses | 341,285,000 | 257,320,000 | 672,548,000 | 472,653,000 |
Loss from operations | (143,085,000) | (115,294,000) | (280,215,000) | (178,311,000) |
Interest expense | (2,150,000) | (2,075,000) | (4,237,000) | (4,148,000) |
Interest and other income, net | 277,000 | 1,585,000 | 1,078,000 | 2,956,000 |
Loss before income taxes | (144,958,000) | (115,784,000) | (283,374,000) | (179,503,000) |
Income tax expense | (193,000) | (242,000) | (372,000) | (376,000) |
Net loss | (145,151,000) | (116,026,000) | (283,746,000) | (179,879,000) |
Unrealized loss on available-for-sale securities, net of tax | (2,493,000) | (756,000) | (14,110,000) | (1,818,000) |
Comprehensive loss | $ (147,644,000) | $ (116,782,000) | $ (297,856,000) | $ (181,697,000) |
Net loss per share (Note 12): | ||||
Basic (in dollars per share) | $ (1.50) | $ (1.32) | $ (2.95) | $ (2.06) |
Diluted (in dollars per share) | $ (1.50) | $ (1.32) | $ (2.95) | $ (2.06) |
Weighted-average number of shares used in computing basic and diluted net loss per share: | ||||
Basic (in shares) | 96,579 | 88,077 | 96,081 | 87,387 |
Diluted (in shares) | 96,579 | 88,077 | 96,081 | 87,387 |
Product | ||||
Revenues | ||||
Total revenues | $ 194,582,000 | $ 139,647,000 | $ 384,584,000 | $ 260,031,000 |
Cost and expenses | ||||
Cost of revenues | 108,756,000 | 75,527,000 | 211,426,000 | 141,359,000 |
Licensing and other | ||||
Revenues | ||||
Total revenues | 3,618,000 | 2,379,000 | 7,749,000 | 34,311,000 |
Cost and expenses | ||||
Cost of revenues | $ 481,000 | $ 585,000 | $ 1,026,000 | $ 1,566,000 |
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, 2020 | $ 9 | $ 1,411,286 | $ 4,259 | $ (929,318) | $ 486,236 |
Balance (in shares) at Dec. 31, 2020 | 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 gain (loss) on available-for sale securities | (1,818) | (1,818) | |||
Cumulative-effect adjustment upon adoption of ASU 2020-06 | (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 | ||||
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 gain (loss) 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 | ||||
Balance at Dec. 31, 2021 | $ 10 | 2,050,417 | (2,287) | (1,394,836) | $ 653,304 |
Balance (in shares) at Dec. 31, 2021 | 95,140 | 95,140 | |||
Issuance of common stock upon exercise of stock options | 4,578 | $ 4,578 | |||
Issuance of common stock upon exercise of stock options (in shares) | 701 | ||||
Issuance of common stock under employee stock purchase plan | 8,496 | 8,496 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 285 | ||||
Vesting of restricted stock units (in shares) | 777 | ||||
Stock based compensation | 76,060 | 76,060 | |||
Unrealized gain (loss) on available-for sale securities | (14,110) | (14,110) | |||
Net loss | (283,746) | (283,746) | |||
Balance at Jun. 30, 2022 | $ 10 | 2,139,551 | (16,397) | (1,678,582) | $ 444,582 |
Balance (in shares) at Jun. 30, 2022 | 96,903 | 96,903 | |||
Balance at Mar. 31, 2022 | $ 10 | 2,089,660 | (13,904) | (1,533,431) | $ 542,335 |
Balance (in shares) at Mar. 31, 2022 | 96,259 | ||||
Issuance of common stock upon exercise of stock options | 422 | 422 | |||
Issuance of common stock upon exercise of stock options (in shares) | 70 | ||||
Issuance of common stock under employee stock purchase plan | 8,496 | 8,496 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 285 | ||||
Vesting of restricted stock units (in shares) | 289 | ||||
Stock based compensation | 40,973 | 40,973 | |||
Unrealized gain (loss) on available-for sale securities | (2,493) | (2,493) | |||
Net loss | (145,151) | (145,151) | |||
Balance at Jun. 30, 2022 | $ 10 | $ 2,139,551 | $ (16,397) | $ (1,678,582) | $ 444,582 |
Balance (in shares) at Jun. 30, 2022 | 96,903 | 96,903 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities: | ||
Net loss | $ (283,746) | $ (179,879) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 7,631 | 5,262 |
Premium amortization and discount accretion on investment securities | 2,960 | 3,790 |
Stock-based compensation | 76,060 | 58,335 |
Non-cash lease expense | 6,652 | 5,357 |
Amortization of debt discount and issuance cost | 625 | 610 |
Inventory reserve adjustments | 181 | 612 |
Other non-cash benefits | 39 | 117 |
Provision for credit losses | 1,501 | 63 |
Gain (loss) on investments | 203 | (35) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (87,738) | (21,628) |
Inventory | (3,737) | (8,991) |
Prepaid expenses and other current assets | 4,727 | (2,497) |
Accounts payable | 2,492 | 12,313 |
Accrued compensation | (7,982) | 471 |
Operating lease liabilities | (5,528) | (4,992) |
Other accrued liabilities | 29,525 | 24,374 |
Deferred revenue | 8,009 | (38,721) |
Cash used in operating activities | (248,126) | (145,439) |
Investing activities: | ||
Purchases of investments | (79,956) | (71,054) |
Proceeds from sale of investments | 191,939 | 31,144 |
Proceeds from maturity of investments | 153,500 | 205,510 |
Purchases of property and equipment, net | (23,661) | (18,891) |
Cash provided by investing activities | 241,822 | 146,709 |
Financing activities: | ||
Proceeds from exercise of stock options | 4,578 | 6,829 |
Proceeds from issuance of common stock under employee stock purchase plan | 8,496 | 6,085 |
Cash provided by financing activities | 13,074 | 12,914 |
Net increase in cash, cash equivalents and restricted cash | 6,770 | 14,184 |
Cash, cash equivalents and restricted cash, beginning of period | 84,614 | 48,855 |
Cash, cash equivalents and restricted cash, end of period | 91,384 | 63,039 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 3,612 | 3,538 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment in accounts payable and accruals | $ 2,035 | $ 4,688 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2022 | |
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 high 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 has three subsidiaries. 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 their own tests based on the Company’s technology. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
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 six months ended June 30, 2022, 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, 2021 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, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2022. 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 $283.7 million for the six months ended June 30, 2022 and an accumulated deficit of $1.7 billion as of June 30, 2022. As of June 30, 2022, the Company had $91.4 million in cash, cash equivalents, and restricted cash, $547.4 million in marketable securities, $50.1 million of outstanding balance of the Credit Line (as defined in Note 10, Debt The Company continues to develop and commercialize future products and invest in the growth of its business and, consequently, it will need to generate additional revenues to achieve future profitability and will 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. On September 10, 2021, the Company entered into an agreement with a third party for an asset acquisition where the acquired asset was in-process research and development primarily in exchange for an equity consideration payment. In addition, pursuant to the agreement, certain employees of the third party became employees of the Company. The third party was a biotechnology company focused on oncology. The total upfront acquisition consideration amounts to $35.6 million composed of the issuance of 276,346 shares of the Company's common stock with a fair value of $30.9 million, approximately $3.9 million of cash consideration, assumed net liabilities of $0.2 million, as well as $0.6 million of acquisition related legal and accounting costs directly attributable to the acquisition of the asset. The Company accounted for the transaction as an asset acquisition as substantially all of the estimated fair value of the gross assets acquired was concentrated in a single identified in-process research and development asset (“IPR&D”) thus satisfying the requirements of the screen test in ASU 2017-01. The estimated fair value of the acquired workforce was not significant. The Company concluded the acquired IPR&D has no alternative-future use and accordingly expensed approximately $35.6 million, on the day the transaction closed as research and development expense, which is reflected in its consolidated statement of operations. Further, additional consideration aggregating up to approximately $35.0 million may be paid in an estimated 269,547 of additional shares, consistent with the registration statement filed with the SEC on September 10, 2021, that are potentially issuable to legacy shareholders of this third party upon the achievement of defined milestones relating to product development, commercial launch and continued employment of certain selling shareholders, each of which will be revalued at each reporting date and amount of compensation expense will be adjusted accordingly. The Company assessed these milestones as probable as of June 30, 2022 . As achievement of all milestones is contingent upon the continued employment of certain selling shareholders, the Company accounted for the consideration related to all of the milestones as compensation expenses and recognized these expenses ratably over the estimated performance period of 24 months , to approximately August 2023. 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 estimated offering expenses of $0.4 million, the Company received proceeds of approximately $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 4, 2022. Principles of Consolidation Use of Estimates Revenue The total consideration which the Company expects to be entitled to from patients and insurance carriers in exchange for the Company's products is a significant estimate determined by calculating the average selling price based on the contractual pricing agreed to with each insurance carrier for each test (CPT code) performed adjusted for variable consideration related to historical percent of cases allowed, historical percent of patient responsibility collected, and historical percent of contract price collected from insurance carriers. The Company uses the expected-value approach of estimating variable consideration. The Company also considers recent trends, past events not expected to recur, and future known changes such as anticipated contractual pricing changes or insurance coverages. For insurance carriers with similar reimbursement characteristics, the Company uses a portfolio approach to estimate the effects of variable consideration. The Company also applies a constraint to the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue may occur in future periods. When assessing the total consideration for insurance carriers and patients, a certain percentage of revenues is further constrained for estimated refunds. Stock-based compensation The Company’s stock-based compensation relates to stock options, restricted stock units (“RSUs”), performance-based awards, market-based awards, and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”). Stock based compensation granted to the Company’s employees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period or estimated performance period of the respective awards. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options issued to employees and non-employees. Stock-based compensation expense for stock-based awards is based on their grant date fair value. The fair value of stock option awards is generally recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are estimated based on historical trends at the time of grant and revised as necessary for service-based grants. If awards have both a service condition and performance or market condition, then an accelerated expense method is used. Stock option awards that include a service condition and a performance condition are considered expected to vest when the performance condition is probable of being met. The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include the per share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected annual dividend yield and the expected stock price volatility over the expected term. For all stock options granted, we calculate the expected term using the simplified method for “plain vanilla” stock option awards. The Company determines expected volatility using the historical volatility of the stock price of similar publicly traded peer companies. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award. The Company determines the fair value of RSUs based on the closing price of our stock price, which is listed on Nasdaq, at the date of the grant. For stock options and performance-based awards that vest upon meeting performance conditions or market conditions in combination with performance conditions, the Company derives the requisite service period from the grant date to the date it is probable that the vesting conditions will be met. The requisite service period is considered to be a significant accounting estimate. For stock options with market conditions, the Company derives the requisite service period using the Monte Carlo simulation model. The Monte Carlo simulation model is used to estimate the fair value of market-based condition awards. The model requires the input of the Company's expected stock price and peer stock price volatility, the expected term of the awards, and a risk-free interest rate. Determining these assumptions requires significant judgment. See further discussion on the valuation assumptions used under Note 9, Stock Based Compensation Income Taxes Income taxes are recorded in accordance with Financial Accounting Standards Board ASC Topic 740, Income Taxes Income Taxes Allowance for doubtful accounts The allowance for doubtful accounts for trade accounts receivable and other receivables is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. Inventory The Company’s inventory balance primarily consists of raw materials and supplies. Inventory is recorded at the lower of cost or net realizable value, determined on a first-in, first-out basis. The Company uses judgment to analyze and determine if the composition of its inventory is obsolete, slow-moving or unsalable and frequently reviews such determinations. A write down of specifically identified unusable, obsolete, slow-moving or known unsalable inventory in the period is first recognized by using a number of factors including product expiration dates and scrapped inventory. Any write-down of inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded to cost of revenue on our consolidated statements of operations. The Company makes assumptions about future demand, market conditions and the release of new products that may supersede older products. However, if actual market conditions are less favorable than anticipated, additional inventory write-downs may be required. Investments and financial instruments The Company classifies its investments as Level 1 or 2 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets that the Company has the ability to access. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. The Company holds Level 2 securities which are initially valued at the transaction price and subsequently valued by a third-party service provider using inputs other than quoted prices that are observable either directly or indirectly, such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. The Company performs certain procedures to corroborate the fair value of these holdings. Right-of-use assets The incremental borrowing rate is used to determine the present value of the minimum future lease payments. The Company estimates the incremental borrowing rate of its leases based on the weighted-average annual percentage yield of corporate bonds with a similar credit rating as the Company and a similar bond term as the lease term as of the approximate lease commencement date. Property and equipment Property and equipment, including purchased and internally developed software, are stated at cost. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets, which are generally three to five years determined by the classification of the property and equipment class in accordance with the Company’s fixed asset policy. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the assets or the remaining term of the lease, whichever is shorter. The Company periodically reviews the useful lives assigned to property and equipment placed in service in accordance with the Company’s fixed asset policy and changes the estimates of useful lives to reflect the results of such reviews. The Company amortizes its internal-use software over the estimated useful lives of three years. Other accrued liabilities The Company's uses estimates, judgments, and assumptions in several areas including, but not limited to, estimates of progress to date for certain contracts with vendors, liabilities related to clinical trials, payroll and related expenses, marketing liabilities, reserves associated with insurance and general overpayments, tax-related liabilities, and other operating expenses. Estimates consist of historical trends, analytical procedures, review of supporting documentation, inquiries with supply partners and vendors, and other relevant assumptions. Although the Company believe its estimates, assumptions, and judgment are reasonable, it is based upon information presently available and are subject to change. Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market deposits with financial institutions. Restricted Cash Restricted cash is currently presented as a separate line item in the Company’s balance sheet. In the statements of cash flows, it is included together with cash and cash equivalents and considered as part of the total ending cash balance. Credit Losses Appropriate provision has been made for lifetime expected credit losses in accordance with ASC Topic 326-20, Financial Instruments—Credit Losses The following is a roll-forward of the allowances for credit losses related to trade accounts receivable and other receivables for the three and six months ended June 30, 2022 and 2021: Three Months Ended June 30, 2022 2021 (in thousands) Beginning balance $ 2,392 $ 4,110 Provision for credit losses 1,170 63 Write-offs (1) (385) Total $ 3,561 $ 3,788 Six Months Ended June 30, 2022 2021 (in thousands) Beginning balance $ 2,429 $ 4,220 Provision for credit losses 1,501 63 Write-offs (369) (495) Total $ 3,561 $ 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. Related Party On December 6, 2021, the Company participated along with certain other investors in the series B financing of MyOme, Inc. (“MyOme”), and purchased preferred shares and warrants in exchange for a cash payment of approximately $4.0 million. The Company’s investment in MyOme is recorded at cost and no impairment was identified as of June 30, 2022. The following are the Company’s related persons and the basis of each such related person’s relationship with MyOme: ● Matthew Rabinowitz, the Company’s executive chairman and co-founder, is the chairman of the board and founder of MyOme, and a beneficial holder of approximately 35.5% of the outstanding shares of MyOme; ● Jonathan Sheena, the Company’s co-founder and a member of the Company’s board of directors, is a stockholder and a member of the board of directors of Myome; ● Daniel Rabinowitz, the Company’s Secretary and Chief Legal Officer, is a stockholder of Myome; and ● Roelof Botha, the Company’s Lead Independent Director, is a managing member of Sequoia Capital Operations, LLC. Two funds affiliated with Sequoia Capital Operations, LLC also participated in MyOme’s series B financing, and purchased MyOme series B preferred shares for an aggregate purchase price of approximately $1.7 million. Fair Value The Company discloses the fair value of financial instruments for financial assets and liabilities for which the value is practicable to estimate. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). 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 our business, our operations, and the global economy as a whole is not yet known. While the Company’s test volumes and overall average selling prices increased in the six months ended June 30, 2022 compared to the six months ended June 30, 2021, the Company cannot predict the potential nature, magnitude and duration of the effects of the COVID-19 pandemic on the macroeconomic environment. Further, in our operations as a public company, prolonged government disruptions, global pandemics and other natural disasters or geopolitical actions, for example the geopolitical instability due to the ongoing military conflict between Russia and Ukraine, have resulted in significant economic uncertainty. These macroeconomic conditions could affect our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. 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 of $250,000 per customer. The Company performs evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. The Company performs evaluations of financial conditions for insurance carriers, patients, clinics and laboratory partners and generally does not require collateral to support credit sales. For the three and six months ended June 30, 2022, and 2021, there were no customers exceeding 10% of total revenues on an individual basis. As of June 30, 2022 and December 31, 2021, 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 and foreign currency translation adjustments. Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Beginning balance $ (13,904) $ 3,197 $ (2,287) $ 4,259 Net unrealized loss on available-for-sale securities, net of tax and foreign currency translation adjustment (2,493) (756) (14,110) (1,818) Ending balance $ (16,397) $ 2,441 $ (16,397) $ 2,441 The increase in net unrealized loss on available-for-sale securities is due to increased market volatility. The Company has assessed the unrealized loss position for available-for-sale securities and determined that an allowance for credit losses was not necessary. 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. 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, 2022 | |
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. Additionally, 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. 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 may not get reimbursed at all for tests performed if such tests are not covered under the insurance carrier’s reimbursement policies or the Company is not a qualified provider to the insurance carrier, or if the tests were not previously authorized. 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, 2022 and 2021, $1.8 million and $1.7 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, 2022 and 2021, $3.4 million and $3.0 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 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. Qiagen 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 research use only 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 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. 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, 2022 2021 2022 2021 (in thousands) Insurance carriers $ 167,822 $ 118,396 $ 332,564 $ 218,795 Laboratory and other partners 22,142 15,599 42,879 60,134 Patients 8,236 8,031 16,890 15,413 Total revenues $ 198,200 $ 142,026 $ 392,333 $ 294,342 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, 2022 2021 2022 2021 (in thousands) United States $ 191,886 $ 134,814 $ 379,103 $ 279,771 Americas, excluding U.S. 530 992 1,271 1,805 Europe, Middle East, India, Africa 3,736 4,265 7,427 8,724 Asia Pacific and Other 2,048 1,955 4,532 4,042 Total revenues $ 198,200 $ 142,026 $ 392,333 $ 294,342 Balance at Balance at June 30, December 31, (in thousands) 2022 2021 Assets: Accounts receivable $ 208,312 $ 122,074 Liabilities: Deferred revenue, current portion $ 16,009 $ 7,404 Deferred revenue, long-term portion 20,721 21,318 Total deferred revenues $ 36,730 $ 28,722 June 30, June 30, 2022 2021 (in thousands) Beginning balance $ 28,722 $ 72,930 Increase in deferred revenues 14,974 3,474 Refunds of revenues previously deferred — (10,000) Revenue recognized during the period that was included in (5,757) (30,839) Revenue recognized from performance obligations satisfied (1,209) (1,356) Ending balance $ 36,730 $ 34,209 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
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, 2022 December 31, 2021 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Money market deposits $ 40,268 $ — $ — $ 40,268 $ 10,041 $ — $ — $ 10,041 U.S. Treasury securities 447,004 — — 447,004 688,097 — — 688,097 Corporate bonds and notes — 33,441 — 33,441 — 52,337 — 52,337 Municipal securities — 66,908 — 66,908 — 89,462 — 89,462 Total financial assets $ 487,272 $ 100,349 $ — $ 587,621 $ 698,138 $ 141,799 $ — $ 839,937 Fair Value of Debt: As of June 30, 2022, 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, 2022 and December 31, 2021, was $359.6 million and $715.7 million, respectively, based upon observable, Level 2 inputs, including pricing information from recent trades of the Convertible Notes. As of June 30, 2022 and December 31, 2021, the fair value of the UBS Credit Line, consisting of the total principal amount outstanding with accrued interest, was $50.1 million. See Note 10, Debt |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
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, 2022 December 31, 2021 Amortized Cost Gross Unrealized Loss Estimated Fair Value Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value (in thousands) Money market deposits $ 40,268 $ — $ 40,268 $ 10,041 $ — $ — $ 10,041 U.S. Treasury securities (1) 459,509 (12,505) 447,004 689,640 1,081 (2,624) 688,097 Corporate bonds and notes (1) 34,280 (839) 33,441 52,729 — (392) 52,337 Municipal securities 69,749 (2,841) 66,908 89,814 261 (613) 89,462 Total $ 603,806 $ (16,185) $ 587,621 $ 842,224 $ 1,342 $ (3,629) $ 839,937 Classified as: Cash equivalents (2) 40,268 10,041 Short-term investments 547,353 829,896 Total $ 587,621 $ 839,937 (1) Per the Company’s investment policy, all U.S. Treasury securities and 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, 2022, the Company sold $191.9 million of investments. During the six months ended June 30, 2022, the amount of net realized losses upon sales of investments was $0.2 million. 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, 2022, the Company had 70 investments in an unrealized loss position in its portfolio. An allowance for credit losses was not necessary 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, 2022 was $547.4 million. The aggregate amount of unrealized losses of these securities was $16.2 million, and the impact of the securities in a continuous loss position to the condensed consolidated statements of operations and comprehensive loss was not material as of June 30, 2022. June 30, 2022 Amortized Cost Fair Value (in thousands) Less than or equal to one year $ 187,392 $ 184,947 Greater than one year but less than five years 376,146 362,406 Total $ 563,538 $ 547,353 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2022 | |
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 2022 2021 (in thousands) Machinery and equipment 3- 5 years $ 54,265 $ 33,722 Computer equipment 3 years 1,138 4,893 Capitalized software held for internal use 3 years 3,112 2,395 Leasehold improvements Lesser of useful life or lease term 27,814 13,640 Construction-in-process 22,000 30,279 108,329 84,929 Less: Accumulated depreciation and amortization (26,557) (19,413) Total Property and Equipment, net $ 81,772 $ 65,516 The Company’s long-lived assets are primarily located in the United States. During the six months ended June 30, 2022, 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 $7.3 million recorded in the six months ended June 30, 2022 compared to 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, 2022 or June 30, 2021. Accrued Compensation The Company’s accrued compensation consisted of the following: June 30, December 31, 2022 2021 (in thousands) Accrued paid time off $ 2,930 $ 2,567 Accrued commissions 12,454 15,726 Accrued bonuses 11,324 15,854 Other accrued compensation 6,251 6,794 Total accrued compensation $ 32,959 $ 40,941 Other Accrued Liabilities The Company’s other accrued liabilities consisted of the following: June 30, December 31, 2022 2021 (in thousands) Reserves for refunds to insurance carriers $ 15,912 $ 17,210 Accrued charges for third-party testing 23,142 5,849 Testing and laboratory materials from suppliers 13,997 3,799 Marketing and corporate affairs 6,449 7,853 Legal, audit and consulting fees 21,374 11,758 Accrued shipping charges 2,157 969 Sales tax payable 1,857 2,230 Accrued third-party service fees 1,354 13,442 Clinical trials and studies 21,166 11,218 Operating lease liabilities, current portion 5,636 5,752 Fixed asset purchases 5,608 1,853 Other accrued interest 1,078 1,078 Other accrued expenses 4,642 10,342 Total other accrued liabilities $ 124,372 $ 93,353 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 condensed 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, 2022 or June 30, 2021: June 30, June 30, 2022 2021 (in thousands) Beginning balance $ 17,210 $ 17,366 Additional reserves 8,576 10,960 Refunds to carriers (6,491) (3,054) Reserves released to revenue (3,383) (2,971) Ending balance $ 15,912 $ 22,301 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases. | |
Leases | 7. Leases Operating Leases 36-month The operating lease right-of-use assets are classified as noncurrent assets in the balance sheet. The corresponding lease liabilities are separated into current and long-term portions as follows: June 30, December 31, 2022 2021 (in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 5,636 $ 5,752 Operating lease liabilities, long-term portion 65,417 61,036 Total operating lease liabilities $ 71,053 $ 66,788 4.77 The present value of the future annual minimum lease payments under all non-cancellable operating leases as of June 30, 2022 are as follows: Operating Leases (in thousands) Year ending December 31: 2022 (remaining 6 months) $ 4,524 2023 11,701 2024 13,169 2025 13,437 2026 13,816 2027 and thereafter 34,100 90,747 Less: imputed interest (19,694) Operating lease liabilities $ 71,053 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
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 or proceedings, including those with respect to intellectual property, employment, testing, billing, reimbursement and other matters. These 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 responding to, aggressively defending, and/or prosecuting its current legal 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. Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. During the periods presented, the Company does not believe there are such matters that will have a material effect on the financial statements. Intellectual Property Litigation Matters. The Company has been involved in two patent litigations against CareDx, Inc. (“CareDx”) in the United States District Court for the District of Delaware (“CareDx Patent Cases”). In the first suit, CareDx alleged, in a complaint filed jointly with the Board of Trustees of the Leland Stanford Junior University (“Stanford”) in March 2019 and amended in March 2020, that the Company infringed three patents. The complaint sought unspecified damages and injunctive relief. In September 2021, the Court granted the Company’s motion for summary judgment, finding all three patents invalid. This finding was affirmed on appeal in July 2022 by the United States Court of Appeals for the Federal Circuit. The Company filed the second suit in January 2020, in which the Company alleges infringement by CareDx of two of the Company’s patents, seeking unspecified damages and injunctive relief. The case is currently pending and is scheduled for trial in July 2023. The Company has filed suit against ArcherDX, Inc. (“ArcherDX”) in the United States District Court for the District of Delaware, alleging, in complaints and amended complaints filed in January, April, and August of 2020, which cases were consolidated in September 2020, that certain ArcherDX products infringe five of the Company’s patents (the “ArcherDX case”). 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. 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. Various parties, including Natera, have filed challenges to the validity of the asserted patents with the United States Patent and Trademark Office, which challenges have been instituted for review. The case has been stayed pending the outcome of these validity challenges. The Company was involved in litigation against Progenity, Inc. (“Progenity”), in which the Company alleged that Progenity’s NIPT test infringes six of the Company’s patents. Progenity sought declaratory judgment of non-infringement of the Company’s asserted patents, and petitioned the Patent Trial and Appeal Board 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 products infringe one of the Company’s patents and seeking unspecified monetary damages and injunctive relief. In April 2022, the Court granted the parties’ stipulated request to stay the case pending the entry of a final judgment in the ArcherDX Litigation, in which the subject patent is also asserted. 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. The complaint, amended by the Company in May 2021, alleges that various Inivata oncology products infringe two of the Company’s patents and seeks unspecified monetary damages and injunctive relief. Inivata filed a motion to dismiss the Company’s amended complaint, which the Court denied in March 2022. The Company is the subject of lawsuits filed against it by Invitae Corp. (“Invitae”) in the United States District Court of the District of Delaware alleging, in complaints filed in May and November of 2021, infringement of three patents and seeking monetary damages and injunctive relief. 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 involved in litigation with CareDx. CareDx filed suit against the Company in April 2019 in the United States District Court for the District of Delaware, alleging false advertising, and related claims based on statements describing studies that concern the Company’s technology and CareDx’s technology, seeking unspecified damages and injunctive relief. 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. In March 2022, after trial, the jury returned a verdict that Natera was liable to CareDx and found damages of $44.9 million. The jury also returned a verdict against CareDx, finding that CareDx had engaged in false advertising. The Company has filed a motion for judgment as a matter of law, requesting that the Court set aside the portions of the jury verdict adverse to Natera and issue a judgment accordingly. Because the Court has not issued an order of judgment, and because the motion for judgment as a matter of law remains pending, Natera does not consider a loss related to this matter to be probable and estimable. 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 the claims from the action it dismissed in Texas as counterclaims, seeking unspecified damages and injunctive relief. In August 2021, Guardant moved to dismiss the Company’s counterclaims, which motion was denied in all material respects. In November 2021, a purported class action lawsuit was filed against the Company in the United States District Court for the Northern District of California, by a patient alleging various causes of action relating to the Company’s patient billing and seeks, among other relief, class certification, injunctive relief, restitution and/or disgorgement, attorneys’ fees, and costs. The Company has filed a motion to dismiss the lawsuit, on which a hearing is scheduled for August 2022. In February 2022, two purported class action lawsuits were filed against the Company in the United States District Court for the Northern District of California. Each suit was filed by an individual patient alleging various causes of action related to the marketing of Panorama and seeking, among other relief, class certification, monetary damages, attorneys’ fees, and costs. In May 2022, these matters were consolidated into one lawsuit. The Company has filed a motion to dismiss the consolidated lawsuit, a hearing for which has not yet been scheduled. In March 2022, a purported class action lawsuit was filed against the Company and certain of its management in the Supreme Court of the State of New York, County of New York, asserting claims under Sections 11, 12, and 15 of the Securities Act of 1933. The complaint alleges, among other things, that the Company failed to disclose certain information regarding its Panorama test. The complaint seeks, among other relief, monetary damages, attorneys’ fees, and costs. In July 2022, the parties filed a request for dismissal of the lawsuit. The Company expects these claims to be included in the lawsuit discussed below. In April 2022, a purported class action lawsuit was filed against the Company and certain of its management in the United States District Court for the Western District of Texas, asserting claims under Sections 10(b) and 20(a) of the Securities Act of 1934 and Rule 10b-5 thereunder. The complaint alleges, among other things, that the management defendants made materially false or misleading statements, and/or omitted material information that was required to be disclosed, about certain of the Company’s products and operations. The complaint seeks, among other relief, monetary damages, attorneys’ fees, and costs. 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 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 standard retention amounts 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, 2022 with a remaining term of at least one year: Party Commitments Expiry Date (in thousands) Laboratory instruments supplier $ 16,900 December 2024 Material suppliers 23,232 June 2026 Application service providers 34,126 March 2026 Earnouts for development with acquired Canadian entity (1) 16,218 September 2023 Software development provider 352 December 2024 Leases (2) 19,422 March 2033 Other material suppliers 23,766 Various Total $ 134,016 (1) Represents the earnouts for asset development with the acquired Canadian entity consisting of three milestones which are achieved upon the satisfaction of certain contractual conditions less the portion accrued on the Company’s Condensed Consolidated Balance Sheet. Upon achievement, the earnout consideration will primarily be paid in the Company’s common stock. (2) Represents executed leases which have not commenced. Please refer to Note 7, Leases , for additional information. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
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. Employee Stock Purchase Plan During the period ended June 30, 2022, 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, 2021. The Company has made 3,455,128 shares available for issuance under the Plan as of June 30, 2022, a number that is automatically increased on the first business day of each fiscal year of the Company during the term of the ESPP 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 the ESPP), or (iii) a number of shares of common stock determined by the Company’s board of directors. The first offering period of 2022 started on November 1, 2021 and ended on April 30, 2022 , and 284,583 shares were purchased for proceeds of $8.5 million. The second offering period of 2022 began on May 1, 2022 and will end on October 31, 2022. As of June 30, 2022 , no shares have been purchased in the second offering period. Stock Options and Restricted Stock Units The following table summarizes option and RSU activity for the six months ended June 30, 2022: Outstanding Options and RSUs 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, 2021 4,319 5,900 $ 17.54 5.40 $ 451,505 Additional shares authorized 3,500 — Options granted (264) 264 $ 61.49 Options exercised — (701) $ 6.53 Options forfeited/cancelled 28 (28) $ 36.77 RSUs granted (4,698) — RSUs forfeited/cancelled 308 — Balance at June 30, 2022 3,193 5,435 $ 21.00 5.39 $ 112,272 Exercisable at June 30, 2022 4,550 $ 12.00 4.79 $ 108,487 Vested and expected to vest at June 30, 2022 5,380 $ 20.55 5.36 $ 112,049 Performance-based Awards Period Granted Options Granted RSUs Granted Options Vested RSUs Vested Milestone Valuation Method (in thousands) Q1 2019 200 300 200 300 (1) Monte-Carlo Simulation Q2 2019 — 188 — 140 (2) Grant Date Stock Price Q3 2019 — 50 — 50 (1) Monte-Carlo Simulation Q1 2020 150 300 150 300 (1) Monte-Carlo Simulation Q1 2020 — 436 — 408 (3) Grant Date Stock Price Q1 2020 129 — 129 — (3) Black-Scholes-Merton Q2 2020 — 21 — 21 (3) Grant Date Stock Price Q3 2020 10 — 10 — (4) Black-Scholes-Merton Q3 2020 — 27 — 17 (3) Grant Date Stock Price Q4 2020 — 32 — 19 (1) Monte-Carlo Simulation Q4 2020 — 22 — 2 (5) Grant Date Stock Price Q1 2021 150 125 — — (1) Monte-Carlo Simulation Q1 2021 — 279 — 15 (3) Grant Date Stock Price Q2 2021 163 — — — (1) Monte-Carlo Simulation Q2 2021 29 — — — (3) Black-Scholes-Merton Q2 2021 — 7 — 2 (3) Grant Date Stock Price Q4 2021 — 20 — — (1) Monte-Carlo Simulation Q4 2021 — 205 — 3 (3) Grant Date Stock Price Q1 2022 110 — — — (3) Black-Scholes-Merton Q1 2022 — 849 — — (3) Grant Date Stock Price Q2 2022 — 103 — — (3) Grant Date Stock Price ________________________________ (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 vest based on achievement of certain revenue targets, units, and system implementation, contingent upon the completion of requisite service through the date of such vesting. (4) The awards have vested based on a change of coverage. (5) The awards will vest based on achievement of certain revenue and recruiting targets. The Company has recognized $14.1 million and $27.5 million in stock-based compensation for performance-based awards for the three and six months ended June 30, 2022. 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. Restricted Stock Units The following table summarizes unvested RSU for the six months ended June 30, 2022: Weighted- Average Grant Date (in thousands, except for grant date fair value) Shares Fair Value Balance at December 31, 2021 3,988 $ 74.33 Granted 4,698 $ 43.60 Vested (777) $ 56.05 Cancelled/forfeited (308) $ 59.83 Balance at June 30, 2022 7,601 $ 58.05 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. If awards have both a service condition and performance or market condition, then an accelerated expense method is used. 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, 2022 and 2021. Three months ended June 30, 2022 2021 Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 2,063 $ — $ 2,063 $ 1,275 $ — $ 1,275 Research and development 11,938 520 12,458 6,276 340 6,616 Selling, general and administrative 26,296 156 26,452 27,146 66 27,212 Total $ 40,297 $ 676 $ 40,973 $ 34,697 $ 406 $ 35,103 Six months ended June 30, 2022 2021 Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 3,779 $ — $ 3,779 $ 1,983 $ — $ 1,983 Research and development 20,944 935 21,879 9,926 564 10,490 Selling, general and administrative 50,171 231 50,402 45,751 111 45,862 Total $ 74,894 $ 1,166 $ 76,060 $ 57,660 $ 675 $ 58,335 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 and six months ended June 30, 2022, 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, 2022 2021 2022 2021 Expected term (years) 10.00 5.11 — 10.00 5.12 — 10.00 5.11 — 10.00 Expected volatility 56.15 % — 56.38 % 56.01 % — 63.30 % 55.91 % — 62.30 % 55.33 % — 63.30 % Expected dividend rate 0.00 % 0.00 % 0.00 % 0.00 % Risk-free interest rate 2.72 % — 2.74 % 0.81 % — 1.67 % 1.62 % — 2.74 % 0.81 % — 1.67 % |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
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 which was fully drawn down in 2016. 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 both the three months ended June 30, 2022 and 2021, the Company recorded interest expense on the Credit Line of $0.2 million. For both the six months ended June 30, 2022 and 2021, the Company recorded interest expense on the Credit Line of $0.3 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. June 30, December 31, 2022 2021 (in thousands) Long-Term Debt Outstanding Principal $ 287,500 $ 287,500 Unamortized debt discount and issuance cost (6,480) (7,106) Net carrying amount $ 281,020 $ 280,394 Three months ended June 30, June 30, 2022 2021 (in thousands) Cash interest expense Contractual interest expense $ 1,617 $ 1,617 Non-cash interest expense Amortization of debt discount and debt issuance cost 312 306 Total interest expense $ 1,929 $ 1,923 Six months ended June 30, June 30, 2022 2021 (in thousands) Cash interest expense Contractual interest expense $ 3,234 $ 3,234 Non-cash interest expense Amortization of debt discount and debt issuance cost 625 610 Total interest expense $ 3,860 $ 3,844 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | 11. Income Taxes During the three months ended June 30, 2022 and 2021, the Company recorded total income tax expense of approximately $193,000 and $242,000, respectively. During the six months ended June 30, 2022 and 2021 , the Company recorded total income tax expense of approximately $372,000 and $376,000 , respectively. Interest and/or penalties related to income tax matters are recognized as a component of income tax expense. As of June 30, 2022 and December 31, 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, 2022 | |
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 not convertible by the holders as of June 30, 2022. 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 principal value of the Convertible Notes would exceed the value based on contractual settlement provisions by $23.1 million as of June 30, 2022. 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 three and six months ended June 30, 2022 and 2021. Three months ended Six months ended June 30, June 30, (in thousands, except per share data) 2022 2021 2022 2021 Numerator: Net loss, basic and diluted $ (145,151) $ (116,026) $ (283,746) $ (179,879) Denominator: Weighted-average number of shares used in computing net loss per share, basic and diluted 96,579 88,077 96,081 87,387 Net loss per share, basic and diluted $ (1.50) $ (1.32) $ (2.95) $ (2.06) 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, 2022 and 2021: June 30, 2022 2021 (in thousands) Options to purchase common stock 5,435 6,284 Performance-based awards and restricted stock units 7,601 3,992 Employee stock purchase plan 112 31 Convertible Notes 7,411 7,411 Earnouts for development with acquired Canadian entity 931 — Total 21,490 17,718 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events None. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
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 six months ended June 30, 2022, 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, 2021 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, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2022. |
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 $283.7 million for the six months ended June 30, 2022 and an accumulated deficit of $1.7 billion as of June 30, 2022. As of June 30, 2022, the Company had $91.4 million in cash, cash equivalents, and restricted cash, $547.4 million in marketable securities, $50.1 million of outstanding balance of the Credit Line (as defined in Note 10, Debt The Company continues to develop and commercialize future products and invest in the growth of its business and, consequently, it will need to generate additional revenues to achieve future profitability and will 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. On September 10, 2021, the Company entered into an agreement with a third party for an asset acquisition where the acquired asset was in-process research and development primarily in exchange for an equity consideration payment. In addition, pursuant to the agreement, certain employees of the third party became employees of the Company. The third party was a biotechnology company focused on oncology. The total upfront acquisition consideration amounts to $35.6 million composed of the issuance of 276,346 shares of the Company's common stock with a fair value of $30.9 million, approximately $3.9 million of cash consideration, assumed net liabilities of $0.2 million, as well as $0.6 million of acquisition related legal and accounting costs directly attributable to the acquisition of the asset. The Company accounted for the transaction as an asset acquisition as substantially all of the estimated fair value of the gross assets acquired was concentrated in a single identified in-process research and development asset (“IPR&D”) thus satisfying the requirements of the screen test in ASU 2017-01. The estimated fair value of the acquired workforce was not significant. The Company concluded the acquired IPR&D has no alternative-future use and accordingly expensed approximately $35.6 million, on the day the transaction closed as research and development expense, which is reflected in its consolidated statement of operations. Further, additional consideration aggregating up to approximately $35.0 million may be paid in an estimated 269,547 of additional shares, consistent with the registration statement filed with the SEC on September 10, 2021, that are potentially issuable to legacy shareholders of this third party upon the achievement of defined milestones relating to product development, commercial launch and continued employment of certain selling shareholders, each of which will be revalued at each reporting date and amount of compensation expense will be adjusted accordingly. The Company assessed these milestones as probable as of June 30, 2022 . As achievement of all milestones is contingent upon the continued employment of certain selling shareholders, the Company accounted for the consideration related to all of the milestones as compensation expenses and recognized these expenses ratably over the estimated performance period of 24 months , to approximately August 2023. 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 estimated offering expenses of $0.4 million, the Company received proceeds of approximately $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 4, 2022. |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates Revenue The total consideration which the Company expects to be entitled to from patients and insurance carriers in exchange for the Company's products is a significant estimate determined by calculating the average selling price based on the contractual pricing agreed to with each insurance carrier for each test (CPT code) performed adjusted for variable consideration related to historical percent of cases allowed, historical percent of patient responsibility collected, and historical percent of contract price collected from insurance carriers. The Company uses the expected-value approach of estimating variable consideration. The Company also considers recent trends, past events not expected to recur, and future known changes such as anticipated contractual pricing changes or insurance coverages. For insurance carriers with similar reimbursement characteristics, the Company uses a portfolio approach to estimate the effects of variable consideration. The Company also applies a constraint to the estimated variable consideration when it assesses it is probable that a significant reversal in the amount of cumulative revenue may occur in future periods. When assessing the total consideration for insurance carriers and patients, a certain percentage of revenues is further constrained for estimated refunds. Stock-based compensation The Company’s stock-based compensation relates to stock options, restricted stock units (“RSUs”), performance-based awards, market-based awards, and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”). Stock based compensation granted to the Company’s employees is measured at the grant date based on the fair value of the award. The fair value is recognized as expense over the requisite service period, which is generally the vesting period or estimated performance period of the respective awards. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options issued to employees and non-employees. Stock-based compensation expense for stock-based awards is based on their grant date fair value. The fair value of stock option awards is generally recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are estimated based on historical trends at the time of grant and revised as necessary for service-based grants. If awards have both a service condition and performance or market condition, then an accelerated expense method is used. Stock option awards that include a service condition and a performance condition are considered expected to vest when the performance condition is probable of being met. The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards. These variables include the per share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected annual dividend yield and the expected stock price volatility over the expected term. For all stock options granted, we calculate the expected term using the simplified method for “plain vanilla” stock option awards. The Company determines expected volatility using the historical volatility of the stock price of similar publicly traded peer companies. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award. The Company determines the fair value of RSUs based on the closing price of our stock price, which is listed on Nasdaq, at the date of the grant. For stock options and performance-based awards that vest upon meeting performance conditions or market conditions in combination with performance conditions, the Company derives the requisite service period from the grant date to the date it is probable that the vesting conditions will be met. The requisite service period is considered to be a significant accounting estimate. For stock options with market conditions, the Company derives the requisite service period using the Monte Carlo simulation model. The Monte Carlo simulation model is used to estimate the fair value of market-based condition awards. The model requires the input of the Company's expected stock price and peer stock price volatility, the expected term of the awards, and a risk-free interest rate. Determining these assumptions requires significant judgment. See further discussion on the valuation assumptions used under Note 9, Stock Based Compensation Income Taxes Income taxes are recorded in accordance with Financial Accounting Standards Board ASC Topic 740, Income Taxes Income Taxes Allowance for doubtful accounts The allowance for doubtful accounts for trade accounts receivable and other receivables is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. Inventory The Company’s inventory balance primarily consists of raw materials and supplies. Inventory is recorded at the lower of cost or net realizable value, determined on a first-in, first-out basis. The Company uses judgment to analyze and determine if the composition of its inventory is obsolete, slow-moving or unsalable and frequently reviews such determinations. A write down of specifically identified unusable, obsolete, slow-moving or known unsalable inventory in the period is first recognized by using a number of factors including product expiration dates and scrapped inventory. Any write-down of inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded to cost of revenue on our consolidated statements of operations. The Company makes assumptions about future demand, market conditions and the release of new products that may supersede older products. However, if actual market conditions are less favorable than anticipated, additional inventory write-downs may be required. Investments and financial instruments The Company classifies its investments as Level 1 or 2 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets that the Company has the ability to access. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. The Company holds Level 2 securities which are initially valued at the transaction price and subsequently valued by a third-party service provider using inputs other than quoted prices that are observable either directly or indirectly, such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. The Company performs certain procedures to corroborate the fair value of these holdings. Right-of-use assets The incremental borrowing rate is used to determine the present value of the minimum future lease payments. The Company estimates the incremental borrowing rate of its leases based on the weighted-average annual percentage yield of corporate bonds with a similar credit rating as the Company and a similar bond term as the lease term as of the approximate lease commencement date. Property and equipment Property and equipment, including purchased and internally developed software, are stated at cost. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets, which are generally three to five years determined by the classification of the property and equipment class in accordance with the Company’s fixed asset policy. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the assets or the remaining term of the lease, whichever is shorter. The Company periodically reviews the useful lives assigned to property and equipment placed in service in accordance with the Company’s fixed asset policy and changes the estimates of useful lives to reflect the results of such reviews. The Company amortizes its internal-use software over the estimated useful lives of three years. Other accrued liabilities The Company's uses estimates, judgments, and assumptions in several areas including, but not limited to, estimates of progress to date for certain contracts with vendors, liabilities related to clinical trials, payroll and related expenses, marketing liabilities, reserves associated with insurance and general overpayments, tax-related liabilities, and other operating expenses. Estimates consist of historical trends, analytical procedures, review of supporting documentation, inquiries with supply partners and vendors, and other relevant assumptions. Although the Company believe its estimates, assumptions, and judgment are reasonable, it is based upon information presently available and are subject to change. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market deposits with financial institutions. |
Restricted Cash | Restricted Cash Restricted cash is currently presented as a separate line item in the Company’s balance sheet. In the statements of cash flows, it is included together with cash and cash equivalents and considered as part of the total ending cash balance. |
Credit Losses | Credit Losses Appropriate provision has been made for lifetime expected credit losses in accordance with ASC Topic 326-20, Financial Instruments—Credit Losses The following is a roll-forward of the allowances for credit losses related to trade accounts receivable and other receivables for the three and six months ended June 30, 2022 and 2021: Three Months Ended June 30, 2022 2021 (in thousands) Beginning balance $ 2,392 $ 4,110 Provision for credit losses 1,170 63 Write-offs (1) (385) Total $ 3,561 $ 3,788 Six Months Ended June 30, 2022 2021 (in thousands) Beginning balance $ 2,429 $ 4,220 Provision for credit losses 1,501 63 Write-offs (369) (495) Total $ 3,561 $ 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. |
Related Party | Related Party On December 6, 2021, the Company participated along with certain other investors in the series B financing of MyOme, Inc. (“MyOme”), and purchased preferred shares and warrants in exchange for a cash payment of approximately $4.0 million. The Company’s investment in MyOme is recorded at cost and no impairment was identified as of June 30, 2022. The following are the Company’s related persons and the basis of each such related person’s relationship with MyOme: ● Matthew Rabinowitz, the Company’s executive chairman and co-founder, is the chairman of the board and founder of MyOme, and a beneficial holder of approximately 35.5% of the outstanding shares of MyOme; ● Jonathan Sheena, the Company’s co-founder and a member of the Company’s board of directors, is a stockholder and a member of the board of directors of Myome; ● Daniel Rabinowitz, the Company’s Secretary and Chief Legal Officer, is a stockholder of Myome; and ● Roelof Botha, the Company’s Lead Independent Director, is a managing member of Sequoia Capital Operations, LLC. Two funds affiliated with Sequoia Capital Operations, LLC also participated in MyOme’s series B financing, and purchased MyOme series B preferred shares for an aggregate purchase price of approximately $1.7 million. |
Fair Value | Fair Value The Company discloses the fair value of financial instruments for financial assets and liabilities for which the value is practicable to estimate. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). |
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 our business, our operations, and the global economy as a whole is not yet known. While the Company’s test volumes and overall average selling prices increased in the six months ended June 30, 2022 compared to the six months ended June 30, 2021, the Company cannot predict the potential nature, magnitude and duration of the effects of the COVID-19 pandemic on the macroeconomic environment. Further, in our operations as a public company, prolonged government disruptions, global pandemics and other natural disasters or geopolitical actions, for example the geopolitical instability due to the ongoing military conflict between Russia and Ukraine, have resulted in significant economic uncertainty. These macroeconomic conditions could affect our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. 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 of $250,000 per customer. The Company performs evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. The Company performs evaluations of financial conditions for insurance carriers, patients, clinics and laboratory partners and generally does not require collateral to support credit sales. For the three and six months ended June 30, 2022, and 2021, there were no customers exceeding 10% of total revenues on an individual basis. As of June 30, 2022 and December 31, 2021, 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 and foreign currency translation adjustments. Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Beginning balance $ (13,904) $ 3,197 $ (2,287) $ 4,259 Net unrealized loss on available-for-sale securities, net of tax and foreign currency translation adjustment (2,493) (756) (14,110) (1,818) Ending balance $ (16,397) $ 2,441 $ (16,397) $ 2,441 The increase in net unrealized loss on available-for-sale securities is due to increased market volatility. The Company has assessed the unrealized loss position for available-for-sale securities and determined that an allowance for credit losses was not necessary. |
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. 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, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of allowances for credit losses related to 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 three and six months ended June 30, 2022 and 2021: Three Months Ended June 30, 2022 2021 (in thousands) Beginning balance $ 2,392 $ 4,110 Provision for credit losses 1,170 63 Write-offs (1) (385) Total $ 3,561 $ 3,788 Six Months Ended June 30, 2022 2021 (in thousands) Beginning balance $ 2,429 $ 4,220 Provision for credit losses 1,501 63 Write-offs (369) (495) Total $ 3,561 $ 3,788 |
Schedule of Accumulated Other Comprehensive Income (Loss) | Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Beginning balance $ (13,904) $ 3,197 $ (2,287) $ 4,259 Net unrealized loss on available-for-sale securities, net of tax and foreign currency translation adjustment (2,493) (756) (14,110) (1,818) Ending balance $ (16,397) $ 2,441 $ (16,397) $ 2,441 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition | |
Schedule of disaggregation of revenues by payer types | Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 (in thousands) Insurance carriers $ 167,822 $ 118,396 $ 332,564 $ 218,795 Laboratory and other partners 22,142 15,599 42,879 60,134 Patients 8,236 8,031 16,890 15,413 Total revenues $ 198,200 $ 142,026 $ 392,333 $ 294,342 |
Schedule of total revenue by geographic area | Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 (in thousands) United States $ 191,886 $ 134,814 $ 379,103 $ 279,771 Americas, excluding U.S. 530 992 1,271 1,805 Europe, Middle East, India, Africa 3,736 4,265 7,427 8,724 Asia Pacific and Other 2,048 1,955 4,532 4,042 Total revenues $ 198,200 $ 142,026 $ 392,333 $ 294,342 |
Schedule of beginning and ending balances of accounts receivable and deferred revenues | Balance at Balance at June 30, December 31, (in thousands) 2022 2021 Assets: Accounts receivable $ 208,312 $ 122,074 Liabilities: Deferred revenue, current portion $ 16,009 $ 7,404 Deferred revenue, long-term portion 20,721 21,318 Total deferred revenues $ 36,730 $ 28,722 |
Schedule of changes in the balance of deferred revenues | June 30, June 30, 2022 2021 (in thousands) Beginning balance $ 28,722 $ 72,930 Increase in deferred revenues 14,974 3,474 Refunds of revenues previously deferred — (10,000) Revenue recognized during the period that was included in (5,757) (30,839) Revenue recognized from performance obligations satisfied (1,209) (1,356) Ending balance $ 36,730 $ 34,209 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Summary of financial assets and liabilities measured on recurring basis | June 30, 2022 December 31, 2021 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Money market deposits $ 40,268 $ — $ — $ 40,268 $ 10,041 $ — $ — $ 10,041 U.S. Treasury securities 447,004 — — 447,004 688,097 — — 688,097 Corporate bonds and notes — 33,441 — 33,441 — 52,337 — 52,337 Municipal securities — 66,908 — 66,908 — 89,462 — 89,462 Total financial assets $ 487,272 $ 100,349 $ — $ 587,621 $ 698,138 $ 141,799 $ — $ 839,937 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Financial Instruments | |
Schedule of available-for-sale securities | June 30, 2022 December 31, 2021 Amortized Cost Gross Unrealized Loss Estimated Fair Value Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value (in thousands) Money market deposits $ 40,268 $ — $ 40,268 $ 10,041 $ — $ — $ 10,041 U.S. Treasury securities (1) 459,509 (12,505) 447,004 689,640 1,081 (2,624) 688,097 Corporate bonds and notes (1) 34,280 (839) 33,441 52,729 — (392) 52,337 Municipal securities 69,749 (2,841) 66,908 89,814 261 (613) 89,462 Total $ 603,806 $ (16,185) $ 587,621 $ 842,224 $ 1,342 $ (3,629) $ 839,937 Classified as: Cash equivalents (2) 40,268 10,041 Short-term investments 547,353 829,896 Total $ 587,621 $ 839,937 (1) Per the Company’s investment policy, all U.S. Treasury securities and 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. |
Summarized portfolio of available-for-sale securities by contractual maturity | June 30, 2022 Amortized Cost Fair Value (in thousands) Less than or equal to one year $ 187,392 $ 184,947 Greater than one year but less than five years 376,146 362,406 Total $ 563,538 $ 547,353 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Balance Sheet Components | |
Schedule of property and equipment | June 30, December 31, Useful Life 2022 2021 (in thousands) Machinery and equipment 3- 5 years $ 54,265 $ 33,722 Computer equipment 3 years 1,138 4,893 Capitalized software held for internal use 3 years 3,112 2,395 Leasehold improvements Lesser of useful life or lease term 27,814 13,640 Construction-in-process 22,000 30,279 108,329 84,929 Less: Accumulated depreciation and amortization (26,557) (19,413) Total Property and Equipment, net $ 81,772 $ 65,516 |
Schedule of accrued compensation | June 30, December 31, 2022 2021 (in thousands) Accrued paid time off $ 2,930 $ 2,567 Accrued commissions 12,454 15,726 Accrued bonuses 11,324 15,854 Other accrued compensation 6,251 6,794 Total accrued compensation $ 32,959 $ 40,941 |
Schedule of other accrued liabilities | June 30, December 31, 2022 2021 (in thousands) Reserves for refunds to insurance carriers $ 15,912 $ 17,210 Accrued charges for third-party testing 23,142 5,849 Testing and laboratory materials from suppliers 13,997 3,799 Marketing and corporate affairs 6,449 7,853 Legal, audit and consulting fees 21,374 11,758 Accrued shipping charges 2,157 969 Sales tax payable 1,857 2,230 Accrued third-party service fees 1,354 13,442 Clinical trials and studies 21,166 11,218 Operating lease liabilities, current portion 5,636 5,752 Fixed asset purchases 5,608 1,853 Other accrued interest 1,078 1,078 Other accrued expenses 4,642 10,342 Total other accrued liabilities $ 124,372 $ 93,353 |
Summary of reserve balance and activities for refunds to insurance carriers | June 30, June 30, 2022 2021 (in thousands) Beginning balance $ 17,210 $ 17,366 Additional reserves 8,576 10,960 Refunds to carriers (6,491) (3,054) Reserves released to revenue (3,383) (2,971) Ending balance $ 15,912 $ 22,301 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases. | |
Schedule of lease liabilities | June 30, December 31, 2022 2021 (in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 5,636 $ 5,752 Operating lease liabilities, long-term portion 65,417 61,036 Total operating lease liabilities $ 71,053 $ 66,788 |
Schedule of annual minimum lease payments | Operating Leases (in thousands) Year ending December 31: 2022 (remaining 6 months) $ 4,524 2023 11,701 2024 13,169 2025 13,437 2026 13,816 2027 and thereafter 34,100 90,747 Less: imputed interest (19,694) Operating lease liabilities $ 71,053 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Schedule of material contractual commitments | Party Commitments Expiry Date (in thousands) Laboratory instruments supplier $ 16,900 December 2024 Material suppliers 23,232 June 2026 Application service providers 34,126 March 2026 Earnouts for development with acquired Canadian entity (1) 16,218 September 2023 Software development provider 352 December 2024 Leases (2) 19,422 March 2033 Other material suppliers 23,766 Various Total $ 134,016 (1) Represents the earnouts for asset development with the acquired Canadian entity consisting of three milestones which are achieved upon the satisfaction of certain contractual conditions less the portion accrued on the Company’s Condensed Consolidated Balance Sheet. Upon achievement, the earnout consideration will primarily be paid in the Company’s common stock. (2) Represents executed leases which have not commenced. Please refer to Note 7, Leases , for additional information. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 200 300 200 300 (1) Monte-Carlo Simulation Q2 2019 — 188 — 140 (2) Grant Date Stock Price Q3 2019 — 50 — 50 (1) Monte-Carlo Simulation Q1 2020 150 300 150 300 (1) Monte-Carlo Simulation Q1 2020 — 436 — 408 (3) Grant Date Stock Price Q1 2020 129 — 129 — (3) Black-Scholes-Merton Q2 2020 — 21 — 21 (3) Grant Date Stock Price Q3 2020 10 — 10 — (4) Black-Scholes-Merton Q3 2020 — 27 — 17 (3) Grant Date Stock Price Q4 2020 — 32 — 19 (1) Monte-Carlo Simulation Q4 2020 — 22 — 2 (5) Grant Date Stock Price Q1 2021 150 125 — — (1) Monte-Carlo Simulation Q1 2021 — 279 — 15 (3) Grant Date Stock Price Q2 2021 163 — — — (1) Monte-Carlo Simulation Q2 2021 29 — — — (3) Black-Scholes-Merton Q2 2021 — 7 — 2 (3) Grant Date Stock Price Q4 2021 — 20 — — (1) Monte-Carlo Simulation Q4 2021 — 205 — 3 (3) Grant Date Stock Price Q1 2022 110 — — — (3) Black-Scholes-Merton Q1 2022 — 849 — — (3) Grant Date Stock Price Q2 2022 — 103 — — (3) Grant Date Stock Price ________________________________ (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 vest based on achievement of certain revenue targets, units, and system implementation, contingent upon the completion of requisite service through the date of such vesting. (4) The awards have vested based on a change of coverage. (5) The awards will vest based on achievement of certain revenue and recruiting targets. |
Summary of stock option activity | Outstanding Options and RSUs 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, 2021 4,319 5,900 $ 17.54 5.40 $ 451,505 Additional shares authorized 3,500 — Options granted (264) 264 $ 61.49 Options exercised — (701) $ 6.53 Options forfeited/cancelled 28 (28) $ 36.77 RSUs granted (4,698) — RSUs forfeited/cancelled 308 — Balance at June 30, 2022 3,193 5,435 $ 21.00 5.39 $ 112,272 Exercisable at June 30, 2022 4,550 $ 12.00 4.79 $ 108,487 Vested and expected to vest at June 30, 2022 5,380 $ 20.55 5.36 $ 112,049 |
Restricted stock units | Weighted- Average Grant Date (in thousands, except for grant date fair value) Shares Fair Value Balance at December 31, 2021 3,988 $ 74.33 Granted 4,698 $ 43.60 Vested (777) $ 56.05 Cancelled/forfeited (308) $ 59.83 Balance at June 30, 2022 7,601 $ 58.05 |
Summary of stock-based compensation expenses | 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, 2022 and 2021. Three months ended June 30, 2022 2021 Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 2,063 $ — $ 2,063 $ 1,275 $ — $ 1,275 Research and development 11,938 520 12,458 6,276 340 6,616 Selling, general and administrative 26,296 156 26,452 27,146 66 27,212 Total $ 40,297 $ 676 $ 40,973 $ 34,697 $ 406 $ 35,103 Six months ended June 30, 2022 2021 Employee Non-Employee Total Employee Non-Employee Total (in thousands) Cost of revenues $ 3,779 $ — $ 3,779 $ 1,983 $ — $ 1,983 Research and development 20,944 935 21,879 9,926 564 10,490 Selling, general and administrative 50,171 231 50,402 45,751 111 45,862 Total $ 74,894 $ 1,166 $ 76,060 $ 57,660 $ 675 $ 58,335 |
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, 2022 2021 2022 2021 Expected term (years) 10.00 5.11 — 10.00 5.12 — 10.00 5.11 — 10.00 Expected volatility 56.15 % — 56.38 % 56.01 % — 63.30 % 55.91 % — 62.30 % 55.33 % — 63.30 % Expected dividend rate 0.00 % 0.00 % 0.00 % 0.00 % Risk-free interest rate 2.72 % — 2.74 % 0.81 % — 1.67 % 1.62 % — 2.74 % 0.81 % — 1.67 % |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Schedule of outstanding Convertible Notes | June 30, December 31, 2022 2021 (in thousands) Long-Term Debt Outstanding Principal $ 287,500 $ 287,500 Unamortized debt discount and issuance cost (6,480) (7,106) Net carrying amount $ 281,020 $ 280,394 |
Summary of interest expense | Three months ended June 30, June 30, 2022 2021 (in thousands) Cash interest expense Contractual interest expense $ 1,617 $ 1,617 Non-cash interest expense Amortization of debt discount and debt issuance cost 312 306 Total interest expense $ 1,929 $ 1,923 Six months ended June 30, June 30, 2022 2021 (in thousands) Cash interest expense Contractual interest expense $ 3,234 $ 3,234 Non-cash interest expense Amortization of debt discount and debt issuance cost 625 610 Total interest expense $ 3,860 $ 3,844 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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) 2022 2021 2022 2021 Numerator: Net loss, basic and diluted $ (145,151) $ (116,026) $ (283,746) $ (179,879) Denominator: Weighted-average number of shares used in computing net loss per share, basic and diluted 96,579 88,077 96,081 87,387 Net loss per share, basic and diluted $ (1.50) $ (1.32) $ (2.95) $ (2.06) |
Total outstanding potentially dilutive shares | June 30, 2022 2021 (in thousands) Options to purchase common stock 5,435 6,284 Performance-based awards and restricted stock units 7,601 3,992 Employee stock purchase plan 112 31 Convertible Notes 7,411 7,411 Earnouts for development with acquired Canadian entity 931 — Total 21,490 17,718 |
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 | Apr. 30, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Policies | ||||||||
Net (loss) income | $ (145,151) | $ (116,026) | $ (283,746) | $ (179,879) | ||||
Accumulated deficit | 1,678,582 | 1,678,582 | $ 1,394,836 | |||||
Cash, cash equivalents and restricted cash | 91,384 | $ 63,039 | 91,384 | $ 63,039 | 84,614 | $ 48,855 | ||
Marketable securities | 547,353 | 547,353 | 829,896 | |||||
Short-term Credit Line, outstanding balance | $ 50,086 | $ 50,086 | $ 50,052 | |||||
Common stock, shares issued | 96,903,000 | 96,903,000 | 95,140,000 | |||||
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 | 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 - Asset acquisition (Details) - In-process research and development acquisition - USD ($) $ in Millions | 6 Months Ended | |
Sep. 10, 2021 | Jun. 30, 2022 | |
Asset Acquisition [Line Items] | ||
Asset acquisition, consideration transferred | $ 35.6 | |
Issuance of common stock | 276,346 | |
Fair value of common stock issued | $ 30.9 | |
Cash consideration | 3.9 | |
Net liabilities assumed | 0.2 | |
Acquisition related costs | 0.6 | |
Value of additional shares potentially issuable | $ 35 | |
Number of additional shares potentially issuable | 269,547 | |
Estimated milestone performance period | 24 months |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||||
Beginning balance | $ 2,392 | $ 4,110 | $ 2,429 | $ 4,220 |
Provision for credit losses | 1,170 | 63 | 1,501 | 63 |
Write-offs | (1) | (385) | (369) | (495) |
Total | $ 3,561 | $ 3,788 | $ 3,561 | $ 3,788 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Related Party (Details) - MyOme, Inc. - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 06, 2021 |
Related Party Transaction [Line Items] | ||
Investment in equity securities without readily determinable fair value | $ 4 | |
Equity securities without readily determinable fair value, impairment loss | $ 0 | |
Executive chairman | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 35.50% | |
Director | ||
Related Party Transaction [Line Items] | ||
Investment in equity securities without readily determinable fair value | $ 1.7 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Concentration (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) customer | Jun. 30, 2021 USD ($) | Dec. 31, 2021 customer | |
Sales | Customer | |||||
Risk and Uncertainties | |||||
Number of customers exceeding 10% of benchmark | $ | 0 | 0 | 0 | 0 | |
Accounts receivable | Credit | |||||
Risk and Uncertainties | |||||
Number of customers exceeding 10% of benchmark | customer | 0 | 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - AOCIL (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ (13,904) | $ 3,197 | $ (2,287) | $ 4,259 |
Ending balance | (16,397) | 2,441 | (16,397) | 2,441 |
Net unrealized loss on available-for-sale securities, net of tax and foreign currency translation adjustment | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Increase (decrease) in other comprehensive loss | $ (2,493) | $ (756) | $ (14,110) | $ (1,818) |
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, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2019 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2019 | Aug. 31, 2019 | |
Refunds of revenues previously deferred | $ 10,000 | ||||||||||||||
Deferred revenue, Long-term | $ 20,721 | $ 20,721 | $ 21,318 | ||||||||||||
Other assets | 21,502 | 21,502 | 18,820 | ||||||||||||
Deferred revenue | 36,730 | $ 34,209 | 36,730 | 34,209 | 28,722 | $ 72,930 | |||||||||
Deferred revenue, current portion | 16,009 | 16,009 | 7,404 | ||||||||||||
Total revenues | 198,200 | 142,026 | 392,333 | 294,342 | |||||||||||
Deferred revenue, long-term portion | 20,721 | 20,721 | 21,318 | ||||||||||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | 5,757 | 30,839 | |||||||||||||
Product | |||||||||||||||
Revenue recognized | 1,800 | 1,700 | 3,400 | 3,000 | |||||||||||
Cost of revenues | 108,756 | 75,527 | 211,426 | 141,359 | |||||||||||
Total revenues | 194,582 | 139,647 | $ 384,584 | 260,031 | |||||||||||
Product | Minimum | |||||||||||||||
Billing collection period (in months) | 9 months | ||||||||||||||
Product | Maximum | |||||||||||||||
Billing collection period (in months) | 12 months | ||||||||||||||
Licensing and other | |||||||||||||||
Cost of revenues | 481 | 585 | $ 1,026 | 1,566 | |||||||||||
Total revenues | 3,618 | $ 2,379 | 7,749 | $ 34,311 | |||||||||||
Genetic testing services | |||||||||||||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 1,900 | ||||||||||||||
Qiagen | |||||||||||||||
Proceeds from license agreement | $ 5,000 | ||||||||||||||
Agreement term | 10 years | ||||||||||||||
Revenue, remaining performance obligation | 40,000 | ||||||||||||||
Qiagen | Volume, regulatory and commercial milestones | |||||||||||||||
Revenue, remaining performance obligation | $ 10,000 | ||||||||||||||
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 | 6,400 | $ 6,400 | |||||||||||||
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 | ||||||||||||||
BGI Genomics | Milestone payments | |||||||||||||||
Receivable | $ 5,000 | ||||||||||||||
Foundation Medicine ("FMI") | |||||||||||||||
Proceeds from license agreement | $ 16,300 | ||||||||||||||
Deferred revenue, current portion | 1,400 | 1,400 | |||||||||||||
Foundation Medicine ("FMI") | Milestone payments | |||||||||||||||
Proceeds from license agreement | $ 1,000 | ||||||||||||||
Receivable | $ 2,000 | ||||||||||||||
Deferred revenue, current portion | $ 1,000 | $ 1,000 | $ 2,000 | ||||||||||||
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 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 198,200 | $ 142,026 | $ 392,333 | $ 294,342 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 191,886 | 134,814 | 379,103 | 279,771 |
Americas, excluding U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 530 | 992 | 1,271 | 1,805 |
Europe, Middle East, India, Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 3,736 | 4,265 | 7,427 | 8,724 |
Asia Pacific and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2,048 | 1,955 | 4,532 | 4,042 |
Insurance carriers | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 167,822 | 118,396 | 332,564 | 218,795 |
Laboratory partners | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 22,142 | 15,599 | 42,879 | 60,134 |
Patients | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 8,236 | 8,031 | 16,890 | 15,413 |
Licensing and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 3,618 | $ 2,379 | $ 7,749 | $ 34,311 |
Revenue Recognition - Accounts
Revenue Recognition - Accounts Receivable and Deferred Revenue (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Assets | ||||
Accounts receivable | $ 208,312 | $ 122,074 | ||
Liabilities: | ||||
Deferred revenue, current portion | 16,009 | 7,404 | ||
Deferred revenue, long-term portion | 20,721 | 21,318 | ||
Total deferred revenues | $ 36,730 | $ 28,722 | $ 34,209 | $ 72,930 |
Revenue Recognition - Changes i
Revenue Recognition - Changes in Balance of Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue Recognition | ||
Beginning balance | $ 28,722 | $ 72,930 |
Increase in deferred revenues | 14,974 | 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 | (5,757) | (30,839) |
Revenue recognized from performance obligations satisfied within the same period | (1,209) | (1,356) |
Ending Balance | $ 36,730 | $ 34,209 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 5,757 | $ 30,839 | ||
Deferred revenue, current portion | 16,009 | $ 7,404 | ||
Deferred revenue, Long-term | 20,721 | 21,318 | ||
Deferred revenue | 36,730 | $ 34,209 | $ 28,722 | $ 72,930 |
BGI Genomics | ||||
Deferred revenue, current portion | 6,400 | |||
Foundation Medicine ("FMI") | ||||
Deferred revenue, current portion | 1,400 | |||
BGI Genomics and Foundation Medicine ("FMI") | ||||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 3,900 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Level 2 | Line Of Credit-UBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long-term debt | $ 50,100 | $ 50,100 |
Level 2 | Convertible Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long-term debt | 359,600 | 715,700 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 587,621 | 839,937 |
Recurring | Money market deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 40,268 | 10,041 |
Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 447,004 | 688,097 |
Recurring | Corporate bonds and notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 33,441 | 52,337 |
Recurring | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 66,908 | 89,462 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 487,272 | 698,138 |
Recurring | Level 1 | Money market deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 40,268 | 10,041 |
Recurring | Level 1 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 447,004 | 688,097 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 100,349 | 141,799 |
Recurring | Level 2 | Corporate bonds and notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 33,441 | 52,337 |
Recurring | Level 2 | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 66,908 | $ 89,462 |
Financial Instruments (Details)
Financial Instruments (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) position | Dec. 31, 2021 USD ($) | |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 603,806 | $ 842,224 |
Gross Unrealized Gain | 1,342 | |
Gross Unrealized Loss | (16,185) | (3,629) |
Estimated Fair Value | 587,621 | 839,937 |
Proceeds from investments sold | 191,900 | |
Realized gain | 200 | |
Other than temporary impairment | $ 0 | |
Number of investments, unrealized loss position | position | 70 | |
Amortized Cost | ||
Less than or equal to one year | $ 187,392 | |
Greater than one year but less than five years | 376,146 | |
Total | 563,538 | |
Fair Value | ||
Less than or equal to one year | 184,947 | |
Greater than or equal to one year but less than five years | 362,406 | |
Total | 547,353 | |
Money market deposits | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 40,268 | 10,041 |
Estimated Fair Value | 40,268 | 10,041 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 459,509 | 689,640 |
Gross Unrealized Gain | 1,081 | |
Gross Unrealized Loss | (12,505) | (2,624) |
Estimated Fair Value | 447,004 | 688,097 |
Corporate bonds and notes | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 34,280 | 52,729 |
Gross Unrealized Loss | (839) | (392) |
Estimated Fair Value | 33,441 | 52,337 |
Municipal securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 69,749 | 89,814 |
Gross Unrealized Gain | 261 | |
Gross Unrealized Loss | (2,841) | (613) |
Estimated Fair Value | 66,908 | 89,462 |
Available-for-sale securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Gross Unrealized Loss | (16,200) | |
Unrealized loss position | 547,400 | |
Cash equivalents | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Estimated Fair Value | 40,268 | 10,041 |
Short-term investments | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Estimated Fair Value | $ 547,353 | $ 829,896 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, net (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Property and Equipment, net | |||
Property and equipment, gross | $ 108,329 | $ 84,929 | |
Less: Accumulated depreciation and amortization | (26,557) | (19,413) | |
Total Property and Equipment, net | 81,772 | 65,516 | |
Depreciation expense | 7,300 | $ 5,300 | |
Impairment charge | 0 | $ 0 | |
Machinery and equipment | |||
Property and Equipment, net | |||
Property and equipment, gross | 54,265 | 33,722 | |
Computer equipment | |||
Property and Equipment, net | |||
Property and equipment, gross | $ 1,138 | 4,893 | |
Useful Life | 3 years | ||
Capitalized software held for internal use | |||
Property and Equipment, net | |||
Property and equipment, gross | $ 3,112 | 2,395 | |
Useful Life | 3 years | ||
Leasehold improvements | |||
Property and Equipment, net | |||
Property and equipment, gross | $ 27,814 | 13,640 | |
Construction-in-process | |||
Property and Equipment, net | |||
Property and equipment, gross | $ 22,000 | $ 30,279 | |
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, 2022 | Dec. 31, 2021 |
Balance Sheet Components | ||
Accrued paid time off | $ 2,930 | $ 2,567 |
Accrued commissions | 12,454 | 15,726 |
Accrued bonuses | 11,324 | 15,854 |
Other accrued compensation | 6,251 | 6,794 |
Total accrued compensation | $ 32,959 | $ 40,941 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Balance Sheet Components | ||||
Reserves for refunds to insurance carriers | $ 15,912 | $ 17,210 | $ 22,301 | $ 17,366 |
Accrued charges for third-party testing | 23,142 | 5,849 | ||
Testing and laboratory materials from suppliers | 13,997 | 3,799 | ||
Marketing and corporate affairs | 6,449 | 7,853 | ||
Legal, audit and consulting fees | 21,374 | 11,758 | ||
Accrued shipping charges | 2,157 | 969 | ||
Sales tax payable | 1,857 | 2,230 | ||
Accrued third-party service fees | 1,354 | 13,442 | ||
Clinical trials and studies | 21,166 | 11,218 | ||
Operating lease liabilities, current portion | 5,636 | 5,752 | ||
Fixed asset purchases | 5,608 | 1,853 | ||
Other accrued interest | 1,078 | 1,078 | ||
Other accrued expenses | 4,642 | 10,342 | ||
Total other accrued liabilities | $ 124,372 | $ 93,353 |
Balance Sheet Components - Rese
Balance Sheet Components - Reserve Balance and Activities for Refunds (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Balance Sheet Components | ||
Beginning balance | $ 17,210 | $ 17,366 |
Additional reserves | 8,576 | 10,960 |
Refunds to carriers | (6,491) | (3,054) |
Reserves released to revenue | (3,383) | (2,971) |
Ending balance | $ 15,912 | $ 22,301 |
Leases (Details)
Leases (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2021 USD ($) ft² | Jun. 30, 2022 USD ($) ft² | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) ft² item lease | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||
Operating lease liabilities, current portion included in other accrued liabilities | $ | $ 5,636 | $ 5,636 | $ 5,752 | |||
Operating lease liabilities, long-term portion | $ | 65,417 | 65,417 | 61,036 | |||
Operating lease liabilities | $ | $ 71,053 | 71,053 | $ 66,788 | |||
Noncash investing activities related to right-of-use assets | $ | $ 7,500 | $ 30,100 | ||||
Weighted average remaining lease term | 4 years 10 months 20 days | 4 years 10 months 20 days | ||||
Weighted average discount rate (as a percent) | 6.20% | 6.20% | ||||
Lease expense | $ | $ 3,300 | $ 2,700 | $ 6,500 | 5,400 | ||
Operating lease payments | $ | $ 2,800 | $ 2,500 | $ 5,528 | $ 4,992 | ||
Austin TX, Long-term Lease | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Office space (area) | 94,000 | 94,000 | ||||
Number of office space locations | lease | 2 | |||||
Term of lease | 132 months | 132 months | ||||
First Expansion Premises | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Office space (area) | 32,500 | 32,500 | ||||
Second Expansion Premises | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Office space (area) | 65,222 | 65,222 | ||||
Corporate Headquarters Lease | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Office space (area) | 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 | 88,000 | |||||
"Second Space" Sublease | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of office space locations | 25,000 | |||||
Corporate Headquarters Lease Amendment | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Annual lease payment | $ | $ 9,300 | |||||
Term of lease | 48 months | 48 months | ||||
Tukwila, WA Lease | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Office space (area) | 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) | 25,879 | 25,879 | ||||
Term of lease | 48 months | 48 months | ||||
Sublease receivable | $ | $ 1,900 | $ 1,900 | ||||
San Carlos, CA Sublease Amendment | Rentable square feet surrendered in lease amendment | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Office space (area) | 25,879 | 25,879 | ||||
South San Francisco, CA Lease | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Office space (area) | 11,395 | 11,395 | ||||
Annual lease payment | $ | $ 900 | |||||
Term of lease | 36 months | 36 months | ||||
Laboratory space in Canada | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Office space (area) | 7,107 | |||||
Annual lease payment | $ | $ 200 | |||||
Term of lease | 24 months |
Leases - Payments (Details)
Leases - Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Leases. | ||
2022 (remaining 6 months) | $ 4,524 | |
2023 | 11,701 | |
2024 | 13,169 | |
2025 | 13,437 | |
2026 | 13,816 | |
2027 and thereafter | 34,100 | |
Total | 90,747 | |
Less: imputed interest | (19,694) | |
Operating lease liabilities | $ 71,053 | $ 66,788 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | ||||||||
Sep. 28, 2021 patent | Mar. 31, 2022 USD ($) | Nov. 30, 2021 patent | Jan. 31, 2021 patent | Sep. 30, 2020 patent | Jun. 30, 2020 patent | Mar. 31, 2020 patent lawsuit | Jun. 30, 2022 USD ($) | Feb. 28, 2022 lawsuit | |
Other commitments | |||||||||
Total commitments | $ 134,016 | ||||||||
Material suppliers | |||||||||
Other commitments | |||||||||
Total commitments | 23,232 | ||||||||
Application service providers | |||||||||
Other commitments | |||||||||
Total commitments | 34,126 | ||||||||
Earnouts for development with acquired Canadian entity | |||||||||
Other commitments | |||||||||
Total commitments | 16,218 | ||||||||
Software development provider | |||||||||
Other commitments | |||||||||
Total commitments | 352 | ||||||||
Lease commitments | |||||||||
Other commitments | |||||||||
Total commitments | 19,422 | ||||||||
Other material suppliers | |||||||||
Other commitments | |||||||||
Total commitments | 23,766 | ||||||||
Laboratory instruments supplier | |||||||||
Other commitments | |||||||||
Total commitments | $ 16,900 | ||||||||
CareDX Patent Case | |||||||||
Other commitments | |||||||||
Number of patent litigations | lawsuit | 2 | ||||||||
Loss contingency, patents allegedly infringed, number | patent | 3 | ||||||||
Number of invalid patents | patent | 3 | ||||||||
Gain contingency, patents allegedly infringed, number | patent | 2 | ||||||||
Amount awarded to other party | $ 44,900 | ||||||||
ArcherDX Patent Case | |||||||||
Other commitments | |||||||||
Gain contingency, patents allegedly infringed, number | patent | 5 | ||||||||
Ravgen Patent Case | |||||||||
Other commitments | |||||||||
Loss contingency, patents allegedly infringed, number | patent | 2 | ||||||||
Progenity Patent Case | |||||||||
Other commitments | |||||||||
Gain contingency, patents allegedly infringed, number | patent | 6 | ||||||||
Inivitae Patent Case | |||||||||
Other commitments | |||||||||
Loss contingency, patents allegedly infringed, number | patent | 3 | ||||||||
Gain contingency, patents allegedly infringed, number | patent | 2 | ||||||||
Class action | |||||||||
Other commitments | |||||||||
Number of claims | lawsuit | 2 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Apr. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Jun. 30, 2015 | |
Employee Stock [Member] | ||||||||
Stock Based Compensation | ||||||||
Shares reserved for issuance | 3,455,128 | 3,455,128 | 3,455,128 | 3,451,495 | ||||
Shares granted | 0 | 284,583 | ||||||
Proceeds from shares purchased | $ 8,500 | |||||||
Shares reserved for issuance as a proportion of common stock outstanding (as a percent) | 4% | |||||||
Employee Stock [Member] | 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% | |||||||
Performance-based awards | ||||||||
Stock Based Compensation | ||||||||
Stock-based compensation expense | $ 14,100 | $ 19,000 | $ 27,500 | $ 30,000 | ||||
Options to purchase common stock | ||||||||
Stock Based Compensation | ||||||||
Stock-based compensation expense | $ 40,973 | $ 35,103 | $ 76,060 | $ 58,335 | ||||
Shares granted | 4,698,000 | |||||||
Shares available for issuance | 3,193,000 | 3,193,000 | 3,193,000 | 4,319,000 | ||||
Restricted stock units | ||||||||
Stock Based Compensation | ||||||||
Number of shares vested | 777,000 | |||||||
Shares granted | 4,698,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Options to purchase common stock | ||
Stock Based Compensation | ||
Shares available for grant, beginning balance | 4,319,000 | |
Additional shares authorized | 3,500,000 | |
Options granted (in shares) | (264,000) | |
Options forfeited (in shares) | 28,000 | |
RSUs granted (in shares) | (4,698,000) | |
RSUs forfeited/cancelled (in shares) | 308,000 | |
Shares available for grant, end balance | 3,193,000 | 4,319,000 |
Number of shares | ||
Outstanding, beginning balance (in shares) | 5,900,000 | |
Options granted (in shares) | 264,000 | |
Options exercised (in shares) | (701,000) | |
Options forfeited (in shares) | (28,000) | |
Outstanding, end balance (in shares) | 5,435,000 | 5,900,000 |
Exercisable (in shares) | 4,550,000 | |
Vested and expected to vest (in shares) | 5,380,000 | |
Weighted-Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ 17.54 | |
Granted (in dollars per share) | 61.49 | |
Exercised (in dollars per share) | 6.53 | |
Forfeited (in dollars per share) | 36.77 | |
Outstanding, end balance (in dollars per share) | 21 | $ 17.54 |
Exercisable (in dollars per share) | 12 | |
Vested and expected to vest (in dollars per share) | $ 20.55 | |
Additional disclosures | ||
Weighted average contractual term, options outstanding | 5 years 4 months 20 days | 5 years 4 months 24 days |
Exercisable (in years) | 4 years 9 months 14 days | |
Vested and expected to vest (in years) | 5 years 4 months 9 days | |
Aggregate intrinsic value, options outstanding | $ 112,272 | $ 451,505 |
Aggregate intrinsic value, options exercisable | 108,487 | |
Aggregate intrinsic value, vested and expected to vest | $ 112,049 | |
Non-employee stock options | ||
Stock Based Compensation | ||
Options granted (in shares) | (28,053) | |
Number of shares | ||
Options granted (in shares) | 28,053 | |
Restricted stock units | ||
Stock Based Compensation | ||
RSUs granted (in shares) | (4,698,000) | |
RSUs forfeited/cancelled (in shares) | 308,000 |
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, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | 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, 2022 | Jun. 30, 2021 | |
Grant Date Stock Price | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Valuation Method | Grant Date Stock Price | Grant Date Stock Price | Grant Date Stock Price | Grant Date Stock Price | Grant Date Stock Price | Grant Date Stock Price | Grant Date Stock Price | Grant Date Stock Price | Grant Date Stock Price | Grant Date Stock Price | ||||
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 | 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 | Monte-Carlo Simulation | |||||||
Performance-based awards | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Stock-based compensation expense | $ 14,100 | $ 19,000 | $ 27,500 | $ 30,000 | ||||||||||
Restricted stock units | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
RSUs Granted (in shares) | 4,698 | |||||||||||||
Vested (in shares) | 777 | |||||||||||||
Restricted stock units | Grant Date Stock Price | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
RSUs Granted (in shares) | 103 | 849 | 205 | 7 | 279 | 22 | 27 | 21 | 436 | 188 | ||||
Vested (in shares) | 3 | 2 | 15 | 2 | 17 | 21 | 408 | 140 | ||||||
Restricted stock units | Monte-Carlo | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
RSUs Granted (in shares) | 20 | 125 | 32 | 300 | 50 | 300 | ||||||||
Vested (in shares) | 19 | 300 | 50 | 300 | ||||||||||
Options to purchase common stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options Granted (in shares) | 264 | |||||||||||||
RSUs Granted (in shares) | 4,698 | |||||||||||||
Stock-based compensation expense | $ 40,973 | $ 35,103 | $ 76,060 | $ 58,335 | ||||||||||
Options to purchase common stock | Black-Scholes Merton | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options Granted (in shares) | 110 | 29 | 10 | 129 | ||||||||||
Options Vested (in shares) | 10 | 129 | ||||||||||||
Options to purchase common stock | 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) | 150 | 200 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Options to purchase common stock | ||||
Stock Based Compensation | ||||
Options granted (in shares) | 264,000 | |||
Valuation of Stock Option Grants to Employees | ||||
Expected term (years) | 10 years | |||
Expected volatility, minimum | 56.15% | 56.01% | 55.91% | 55.33% |
Expected volatility, maximum | 56.38% | 63.30% | 62.30% | 63.30% |
Expected dividend yield | 0% | 0% | 0% | 0% |
Risk free interest rate, minimum | 2.72% | 0.81% | 1.62% | 0.81% |
Risk free interest rate, maximum | 2.74% | 1.67% | 2.74% | 1.67% |
Options to purchase common stock | Minimum | ||||
Valuation of Stock Option Grants to Employees | ||||
Expected term (years) | 5 years 1 month 9 days | 5 years 1 month 13 days | 5 years 1 month 9 days | |
Options to purchase common stock | 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) | 28,053 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted stock units shares in Thousands | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Shares | |
Balance (in shares) | shares | 3,988 |
Granted (in shares) | shares | 4,698 |
Vested (in shares) | shares | (777) |
Canceled/Forfeited (in shares) | shares | (308) |
Balance (in shares) | shares | 7,601 |
Weighted Average Grant Date Fair Value | |
Balance (in dollars per share) | $ / shares | $ 74.33 |
Granted (in dollars per share) | $ / shares | 43.60 |
Vested (in dollars per share) | $ / shares | 56.05 |
Canceled/Forfeited (in dollars per share) | $ / shares | 59.83 |
Balance (in dollars per share) | $ / shares | $ 58.05 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Options to purchase common stock | ||||
Stock based compensation expense | ||||
Options granted (in shares) | 264,000 | |||
Stock-based compensation expense | $ 40,973 | $ 35,103 | $ 76,060 | $ 58,335 |
Unrecognized compensation expense | 344,500 | $ 344,500 | ||
Unrecognized compensation expense, weighted average period of recognition | 2 years 9 months 18 days | |||
Options to purchase common stock | Cost of revenues | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 2,063 | 1,275 | $ 3,779 | 1,983 |
Options to purchase common stock | Research and development | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 12,458 | 6,616 | 21,879 | 10,490 |
Options to purchase common stock | Selling, general and administrative | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 26,452 | 27,212 | 50,402 | 45,862 |
Employee stock options | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 40,297 | 34,697 | 74,894 | 57,660 |
Employee stock options | Cost of revenues | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 2,063 | 1,275 | 3,779 | 1,983 |
Employee stock options | Research and development | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 11,938 | 6,276 | 20,944 | 9,926 |
Employee stock options | Selling, general and administrative | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 26,296 | 27,146 | $ 50,171 | 45,751 |
Non-employee stock options | ||||
Stock based compensation expense | ||||
Options granted (in shares) | 28,053 | |||
Stock-based compensation expense | 676 | 406 | $ 1,166 | 675 |
Non-employee stock options | Research and development | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 520 | 340 | 935 | 564 |
Non-employee stock options | Selling, general and administrative | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | $ 156 | $ 66 | $ 231 | $ 111 |
Debt (Details)
Debt (Details) $ / shares in Units, shares in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Apr. 30, 2020 USD ($) $ / shares | Apr. 30, 2020 USD ($) D $ / shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) $ / shares shares | Sep. 30, 2015 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares issued | shares | 96,903 | 96,903 | 95,140 | |||||
Accrued Interest | $ 1,078,000 | $ 1,078,000 | $ 1,078,000 | |||||
Amortization of debt discount and issuance cost | 625,000 | $ 610,000 | ||||||
Interest expense | 2,150,000 | $ 2,075,000 | 4,237,000 | 4,148,000 | ||||
Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 287,500,000 | $ 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 | $ 1,929,000 | 1,923,000 | $ 3,860,000 | 3,844,000 | ||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 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 | $ 38.79 | ||||||
Initial conversion rate | 25.7785 | |||||||
Convertible to shares of common stock | 7,411,704 | |||||||
Percentage of principal amount converted | 100% | |||||||
Carrying value | $ 281,020,000 | $ 281,020,000 | 280,394,000 | |||||
5 consecutive trading day period | Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | D | 5 | |||||||
Percentage of conversion price | 98% | |||||||
20 trading days period | Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Threshold trading days | D | 20 | |||||||
Percentage of conversion price | 130% | |||||||
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% | |||||||
Percentage of principal amount converted | 100% | |||||||
Level 2 | Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Fair value of long-term debt | 359,600,000 | 359,600,000 | 715,700,000 | |||||
Line Of Credit-UBS | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 50,000,000 | |||||||
Outstanding balance | 50,100,000 | 50,100,000 | 50,100,000 | |||||
Interest expense | 200,000 | $ 200,000 | 300,000 | $ 300,000 | ||||
Line Of Credit-UBS | Level 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Fair value of long-term debt | $ 50,100,000 | $ 50,100,000 | $ 50,100,000 | |||||
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, 2022 | |
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, 2022 | Dec. 31, 2021 |
Outstanding principle | $ 287,500 | $ 287,500 |
Unamortized debt discount and debt issuance cost | (6,480) | (7,106) |
Net carrying amount | $ 281,020 | $ 280,394 |
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, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Cash interest expense | ||||
Contractual interest expense | $ 1,617 | $ 1,617 | $ 3,234 | $ 3,234 |
Non-cash interest expense | ||||
Amortization of debt discount and debt issuance cost | 312 | 306 | 625 | 610 |
Total interest expense | $ 1,929 | $ 1,923 | $ 3,860 | $ 3,844 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income Taxes | |||||
Income tax expense | $ 193,000 | $ 242,000 | $ 372,000 | $ 376,000 | |
Interest and penalties accrued | $ 0 | $ 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, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net loss used to compute net loss per share, basic and diluted | $ (145,151) | $ (116,026) | $ (283,746) | $ (179,879) |
Denominator: | ||||
Weighted-average number of shares used in computing net loss per share, basic | 96,579 | 88,077 | 96,081 | 87,387 |
Weighted-average number of shares used in computing net loss per share, diluted | 96,579 | 88,077 | 96,081 | 87,387 |
Net loss per share, basic (in dollars per share) | $ (1.50) | $ (1.32) | $ (2.95) | $ (2.06) |
Net loss per share, diluted (in dollars per share) | $ (1.50) | $ (1.32) | $ (2.95) | $ (2.06) |
Convertible Notes | ||||
Denominator: | ||||
Convertible, If-converted value in excess of principal | $ 23,100 |
Net Loss per Share - Potentiall
Net Loss per Share - Potentially Dilutive Shares (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 21,490 | 17,718 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 5,435 | 6,284 |
Performance-based awards and restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 7,601 | 3,992 |
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 | 112 | 31 |
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 |
Earnouts for development with acquired Canadian entity | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 931 |