Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 01, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2024 | |
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 | 980-9190 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | NTRA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 123,681,432 | |
Entity Central Index Key | 0001604821 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 796,798 | $ 642,095 |
Short-term investments | 90,299 | 236,882 |
Accounts receivable, net of allowance of $7,021 and $6,481 at June 30, 2024 and December 31, 2023, respectively | 335,936 | 278,289 |
Inventory | 40,985 | 40,759 |
Prepaid expenses and other current assets, net | 37,798 | 60,524 |
Total current assets | 1,301,816 | 1,258,549 |
Property and equipment, net | 133,280 | 111,210 |
Operating lease right-of-use assets | 52,582 | 56,537 |
Other assets | 29,311 | 15,403 |
Total assets | 1,516,989 | 1,441,699 |
Current liabilities: | ||
Accounts payable | 33,100 | 14,998 |
Accrued compensation | 41,487 | 45,857 |
Other accrued liabilities | 141,231 | 149,405 |
Deferred revenue, current portion | 18,367 | 16,612 |
Short-term debt financing | 80,389 | 80,402 |
Total current liabilities | 314,574 | 307,274 |
Long-term debt financing | 283,604 | 282,945 |
Deferred revenue, long-term portion and other liabilities | 21,066 | 19,128 |
Operating lease liabilities, long-term portion | 61,225 | 67,025 |
Total liabilities | 680,469 | 676,372 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value: 750,000 shares authorized at both June 30, 2024 and December 31, 2023; 123,365 and 119,581 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 12 | 11 |
Additional paid-in capital | 3,320,365 | 3,145,837 |
Accumulated deficit | (2,482,499) | (2,377,436) |
Accumulated other comprehensive loss | (1,358) | (3,085) |
Total stockholders' equity | 836,520 | 765,327 |
Total liabilities and stockholders' equity | $ 1,516,989 | $ 1,441,699 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Allowances on accounts receivable | $ 7,021 | $ 6,481 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000 | 750,000 |
Common stock, shares issued | 123,365 | 119,581 |
Common stock, shares outstanding | 123,365 | 119,581 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues | ||||
Total revenues | $ 413,351,000 | $ 261,404,000 | $ 781,092,000 | $ 503,160,000 |
Cost and expenses | ||||
Research and development | 89,109,000 | 78,173,000 | 177,746,000 | 160,479,000 |
Selling, general and administrative | 197,965,000 | 152,508,000 | 392,243,000 | 302,135,000 |
Total cost and expenses | 457,253,000 | 373,830,000 | 899,308,000 | 753,887,000 |
Loss from operations | (43,902,000) | (112,426,000) | (118,216,000) | (250,727,000) |
Interest expense | (3,127,000) | (3,177,000) | (6,251,000) | (6,238,000) |
Interest and other income, net | 10,457,000 | 4,518,000 | 20,724,000 | 9,103,000 |
Loss before income taxes | (36,572,000) | (111,085,000) | (103,743,000) | (247,862,000) |
Income tax (expense) benefit | (892,000) | 282,000 | (1,320,000) | 122,000 |
Net loss | (37,464,000) | (110,803,000) | (105,063,000) | (247,740,000) |
Unrealized gain on available-for-sale securities, net of tax | 834,000 | 2,595,000 | 1,727,000 | 7,159,000 |
Comprehensive loss | $ (36,630,000) | $ (108,208,000) | $ (103,336,000) | $ (240,581,000) |
Net loss per share (Note 12): | ||||
Basic (in dollars per share) | $ (0.30) | $ (0.97) | $ (0.86) | $ (2.20) |
Diluted (in dollars per share) | $ (0.30) | $ (0.97) | $ (0.86) | $ (2.20) |
Weighted-average number of shares used in computing basic and diluted net loss per share: | ||||
Basic (in shares) | 122,853 | 113,690 | 121,834 | 112,734 |
Diluted (in shares) | 122,853 | 113,690 | 121,834 | 112,734 |
Product | ||||
Revenues | ||||
Total revenues | $ 411,364,000 | $ 258,256,000 | $ 776,036,000 | $ 496,053,000 |
Cost and expenses | ||||
Cost of revenues | 169,850,000 | 142,808,000 | 328,683,000 | 290,562,000 |
Licensing and other | ||||
Revenues | ||||
Total revenues | 1,987,000 | 3,148,000 | 5,056,000 | 7,107,000 |
Cost and expenses | ||||
Cost of revenues | $ 329,000 | $ 341,000 | $ 636,000 | $ 711,000 |
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 Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2022 | $ 11 | $ 2,664,730 | $ (16,362) | $ (1,942,635) | $ 705,744 |
Balance (in shares) at Dec. 31, 2022 | 111,255 | ||||
Issuance of common stock upon exercise of stock options | 2,939 | 2,939 | |||
Issuance of common stock upon exercise of stock options (in shares) | 217 | ||||
Issuance of common stock under the employee stock purchase plan | 8,674 | 8,674 | |||
Issuance of common stock under the employee stock purchase plan (in shares) | 219 | ||||
Issuance of common stock for bonuses | 19,771 | 19,771 | |||
Issuance of common stock for bonuses (in shares) | 349 | ||||
Issuance of common stock for IPR&D milestone | 14,435 | 14,435 | |||
Issuance of common stock for IPR&D milestone (in shares) | 336 | ||||
Vesting of restricted stock units (in shares) | 1,675 | ||||
Stock based compensation | 85,165 | 85,165 | |||
Unrealized gain on available-for sale securities | 7,159 | 7,159 | |||
Net loss | (247,740) | (247,740) | |||
Balance at Jun. 30, 2023 | $ 11 | 2,795,714 | (9,203) | (2,190,375) | 596,147 |
Balance (in shares) at Jun. 30, 2023 | 114,051 | ||||
Balance at Mar. 31, 2023 | $ 11 | 2,741,932 | (11,798) | (2,079,572) | 650,573 |
Balance (in shares) at Mar. 31, 2023 | 113,359 | ||||
Issuance of common stock upon exercise of stock options | 638 | 638 | |||
Issuance of common stock upon exercise of stock options (in shares) | 48 | ||||
Issuance of common stock under the employee stock purchase plan | 8,674 | 8,674 | |||
Issuance of common stock under the employee stock purchase plan (in shares) | 219 | ||||
Vesting of restricted stock units (in shares) | 425 | ||||
Stock based compensation | 44,470 | 44,470 | |||
Unrealized gain on available-for sale securities | 2,595 | 2,595 | |||
Net loss | (110,803) | (110,803) | |||
Balance at Jun. 30, 2023 | $ 11 | 2,795,714 | (9,203) | (2,190,375) | 596,147 |
Balance (in shares) at Jun. 30, 2023 | 114,051 | ||||
Balance at Dec. 31, 2023 | $ 11 | 3,145,837 | (3,085) | (2,377,436) | $ 765,327 |
Balance (in shares) at Dec. 31, 2023 | 119,581 | 119,581 | |||
Issuance of common stock upon exercise of stock options | 8,648 | $ 8,648 | |||
Issuance of common stock upon exercise of stock options (in shares) | 1,078 | ||||
Issuance of common stock under the employee stock purchase plan | 8,862 | 8,862 | |||
Issuance of common stock under the employee stock purchase plan (in shares) | 263 | ||||
Issuance of common stock for bonuses | 24,071 | 24,071 | |||
Issuance of common stock for bonuses (in shares) | 270 | ||||
Vesting of restricted stock units | $ 1 | 1 | |||
Vesting of restricted stock units (in shares) | 2,173 | ||||
Stock based compensation | 132,947 | 132,947 | |||
Unrealized gain on available-for sale securities | 1,727 | 1,727 | |||
Net loss | (105,063) | (105,063) | |||
Balance at Jun. 30, 2024 | $ 12 | 3,320,365 | (1,358) | (2,482,499) | $ 836,520 |
Balance (in shares) at Jun. 30, 2024 | 123,365 | 123,365 | |||
Balance at Mar. 31, 2024 | $ 12 | 3,241,326 | (2,192) | (2,445,035) | $ 794,111 |
Balance (in shares) at Mar. 31, 2024 | 122,234 | ||||
Issuance of common stock upon exercise of stock options | 2,182 | 2,182 | |||
Issuance of common stock upon exercise of stock options (in shares) | 286 | ||||
Issuance of common stock under the employee stock purchase plan | 8,862 | 8,862 | |||
Issuance of common stock under the employee stock purchase plan (in shares) | 263 | ||||
Vesting of restricted stock units (in shares) | 582 | ||||
Stock based compensation | 67,995 | 67,995 | |||
Unrealized gain on available-for sale securities | 834 | 834 | |||
Net loss | (37,464) | (37,464) | |||
Balance at Jun. 30, 2024 | $ 12 | $ 3,320,365 | $ (1,358) | $ (2,482,499) | $ 836,520 |
Balance (in shares) at Jun. 30, 2024 | 123,365 | 123,365 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Operating activities: | ||
Net loss | $ (105,063) | $ (247,740) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 14,978 | 10,201 |
Expensed in-process research and development | 2,679 | |
Premium amortization and discount accretion on investment securities | (556) | 1,450 |
Stock-based compensation | 131,858 | 84,789 |
Non-cash lease expense | 7,204 | 7,451 |
Amortization of debt discount and issuance cost | 658 | 642 |
Foreign exchange adjustment | 377 | 265 |
Non-cash interest expense | (13) | 68 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (57,647) | (15,680) |
Inventory | (225) | (7,281) |
Prepaid expenses and other assets | 20,874 | 12,590 |
Accounts payable | 16,668 | (9,018) |
Accrued compensation | 19,701 | 9,936 |
Operating lease liabilities | (8,269) | (5,196) |
Other accrued liabilities | (10,598) | (11,175) |
Deferred revenue | 1,044 | 6,368 |
Cash provided by (used in) operating activities | 30,991 | (159,651) |
Investing activities: | ||
Purchases of investments | (72,810) | |
Proceeds from maturity of investments | 221,500 | 83,250 |
Purchases of property and equipment, net | (31,993) | (20,190) |
Cash paid for acquisition of intangible assets | (10,495) | |
Cash provided by investing activities | 106,202 | 63,060 |
Financing activities: | ||
Proceeds from exercise of stock options | 8,648 | 2,939 |
Proceeds from the issuance of common stock under the employee stock purchase plan | 8,862 | 8,674 |
Cash provided by financing activities | 17,510 | 11,613 |
Net change in cash, cash equivalents and restricted cash | 154,703 | (84,978) |
Cash, cash equivalents and restricted cash, beginning of period | 642,095 | 466,091 |
Cash, cash equivalents and restricted cash, end of period | 796,798 | 381,113 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 5,592 | 5,596 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment in accounts payable and accruals | 2,245 | 103 |
Acquisition of warrants | 1,884 | |
Amounts accrued for acquisition of intangible assets | 1,400 | |
Issuance of common stock for IPR&D acquisition | 14,435 | |
Issuance of common stock for bonuses | 24,071 | 19,771 |
Stock-based compensation included in capitalized software development costs | $ 1,089 | $ 376 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2024 | |
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 focuses on applying its technology to three main areas of healthcare – women’s health, oncology and organ health. In the women’s health space, the Company 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. In oncology, the Company commercializes, among others, a personalized blood-based DNA test to detect molecular residual disease and monitor for disease recurrence across a broad range of cancer types. The Company’s third area of focus is organ health, with tests to assess kidney, heart, and lung transplant rejection as well as genetic testing for chronic kidney disease. The Company operates laboratories in Austin, Texas and San Carlos, California certified under the Clinical Laboratory Improvement Amendments of 1988 (“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’s key product offerings include its Panorama Non-Invasive Prenatal Test (“Panorama”) that screens for chromosomal abnormalities of a fetus as well as in twin pregnancies, typically with a blood draw from the mother; Horizon Carrier Screening (“Horizon”) to determine carrier status for a large number of severe genetic diseases that could be passed on to the carrier’s children; its Signatera molecular residual disease test (“Signatera”) to detect circulating tumor DNA in patients previously diagnosed with cancer to assess molecular residual disease, monitor for recurrence, and evaluate treatment response; and its Prospera test, to assess organ transplant rejection in patients who have undergone kidney, heart, or lung transplantation. 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, 2024 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies During the six months ended June 30, 2024, there were no material changes to the Company’s significant accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (filed on February 29, 2024). 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 Company’s results of operations, financial position, changes in stockholders’ equity, and cash flows. The results of operations for the six months ended June 30, 2024, 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, 2023 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, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2024. Some items in the prior period financial statements were reclassified to conform to the current presentation. Liquidity Matters The Company has incurred net losses since its inception and anticipates net losses for the near future. The Company had a net loss of $105.1 million for the six months ended June 30, 2024 and an accumulated deficit of $2.5 billion as of June 30, 2024. As of June 30, 2024, the Company had $796.8 million in cash, cash equivalents, and restricted cash, $90.3 million in marketable securities, an $80.4 million outstanding balance on its Credit Line (as defined in Note 10, Debt While the Company has introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations and business plans. Accordingly, the Company has funded the portion of operating costs that exceeds revenues through a combination of equity issuances, debt issuances, and other financings. The Company continues to invest in the development and commercialization of its existing and future products and, consequently, it will need to generate additional revenues to achieve future profitability and may need to raise additional equity or debt financing. If the Company raises additional funds by issuing equity securities, its stockholders will experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and requires significant debt service payments, which diverts resources from other activities. Additional financing may not be available when necessary, 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 July 19, 2024, the Company announced its decision to redeem all of its outstanding 2.25% Convertible Senior Notes due 2027. The redemption is scheduled for October 11, 2024 (the “Redemption Date”). The redemption price for the Convertible Notes is equal to 100% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest to, but excluding, the Redemption Date. The Company elected physical settlement with shares of its common stock as the settlement method to apply to all conversions of the Convertible Notes. Based on the conversion terms of the Convertible Notes and the market price of its common stock, the Company expects that substantially all outstanding Convertible Notes will be converted into shares of the Company’s common stock prior to the Redemption Date. As a result, the Company does not expect that its decision to redeem the Convertible Notes will have a material effect on its liquidity. In September 2023, the Company completed an underwritten equity offering and sold 4,550,000 shares of its common stock at a price of $55 per share to the public. Before estimated offering expenses of $0.4 million, the Company received proceeds of approximately $235.8 million net of the underwriting discount. 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 Accounting Standards Update (“ASU”) 2017-01 Business Combinations (Topic 805): Clarifying the Definition of Business Further, additional consideration aggregating up to approximately $35.0 million was estimated to be paid via issuance of an estimated 269,547 additional shares of the Company’s common stock, consistent with the registration statement filed with the SEC on September 10, 2021, upon achievement of defined milestones relating to product development, commercial launch and continued employment of certain selling shareholders, each of which was revalued at each reporting date and amount of compensation expense was adjusted accordingly and reported in research and development expenses. In November 2022, the terms of the payment for any remaining consideration were modified, resulting in $10.0 million of consideration paid in December 2022 and $15.0 million of consideration paid in March 2023, with such consideration primarily consisting of the Company’s common stock. 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 8, 2024. Principles of Consolidation The accompanying condensed consolidated financial statements include all the accounts of the Company and its subsidiaries. The Company established a subsidiary that operates in the state of Texas to support the Company’s laboratory and operational functions. The Company established a subsidiary that operates in Canada following the acquisition of the IPR&D asset. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) in the United States requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include the allowance for doubtful accounts, the operating right-of-use assets and the associated lease liabilities, the average useful life for property and equipment including impairment estimates, deferred revenues associated with unsatisfied performance obligations, accrued liability for potential refund requests, stock-based compensation, the fair value of options, income tax uncertainties, and the expected consideration to be received from contracts with customers, insurance payors, and patients. These estimates and assumptions are based on management's best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors, including contractual terms and statutory limits; however, actual results could differ from these estimates and could have an adverse effect on the Company's financial statements. 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. Available-for-sale debt securities. Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments losses for available-for-sale debt securities held at the reporting date over the remaining life based on historical experience, current conditions, and reasonable and supportable forecasts. The Company evaluated its investment portfolio under the available-for-sale debt securities impairment model guidance and determined the Company’s investment portfolio is composed of low-risk, investment grade securities and thus has not recorded an expected credit loss for its investment portfolio. Further, gross unrealized losses on available for sale securities were not material at June 30, 2024. Accounts Receivable Trade accounts receivable and other receivables. Balance Sheet Components Revenue from Contracts with Customers Inventory Inventory is recorded at the lower of cost or net realizable value, determined on a first-in, first-out basis. Inventory consists entirely of supplies, which the Company consumes when providing its test reports, and therefore, the Company does not maintain any finished goods inventory. The Company enters into inventory purchases commitments so that it can meet future delivery schedules based on forecasted demand for its tests. Other Assets In January 2024, the Company acquired from Invitae Corp. (“Invitae”) certain assets relating to Invitae’s non-invasive prenatal screening and carrier screening business. The transaction price of $10.5 million consisted of $10.0 million in upfront payment costs and approximately $0.5 million of other transaction costs which were capitalized as intangible assets over an estimated useful life of ten years. An additional payment of up to $42.5 million may be made should the Company achieve certain customer volume retention targets and based on certain legal outcomes. 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, 2024 2023 2024 2023 (in thousands) Beginning balance $ (2,192) $ (11,798) $ (3,085) $ (16,362) Net unrealized gain on available-for-sale securities, net of tax and foreign currency translation adjustment 834 2,595 1,727 7,159 Ending balance $ (1,358) $ (9,203) $ (1,358) $ (9,203) The change 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 loss was not necessary. Revenue Recognition The Company recognizes revenue under, ASC 606, using the following five step process: ● Identification of a contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Revenue recognition when, or as, the performance obligations are satisfied. Revenue Recognition, 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). 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 does not hold a seat on MyOme’s board of directors. The Company’s investment in MyOme is recorded at cost and no impairment was identified as of June 30, 2024. 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 26.5% of the outstanding shares of MyOme on a fully dilutive basis; ● 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 Lead Independent Director of the Company’s board of directors, is a managing member of Sequoia Capital. Certain funds affiliated with Sequoia Capital also participated in MyOme’s series B financing. None of the related party investments in MyOme by our executives and directors noted above were at the behest of the Company nor funded by the Company. In February 2024, the Company entered into a collaboration and commercialization agreement (the “Collaboration Agreement”) with MyOme pursuant to which the parties will partner to offer certain genetic testing services to be developed and funded solely by MyOme and overseen by a joint steering committee. The Company will assist MyOme with commercial activities. In connection with the Collaboration Agreement, the Company received a 10-year warrant to purchase 3,058,485 shares of MyOme's common stock at an exercise price of $0.25 per share, which will vest upon a MyOme liquidity event (as such terms are defined in MyOme's certificate of incorporation). The warrants were valued using the Black-Scholes valuation model on the date of acquisition and are accounted for using the measurement alternative. No impairment was identified as of June 30, 2024. The warrants have been included within other assets and deferred revenue, long-term portion and other liabilities, which will be recognized as a reduction of selling and marketing expense upon commercialization and sale of the products contemplated under the Collaboration Agreement. Subject to the Company's achievement of certain commercialization milestones, the Company may receive additional warrants to purchase MyOme’s Series B Preferred Stock. To the extent the genetic testing services are successfully commercialized, the Company will owe certain royalty payments to MyOme. Should the Company exercise all its MyOme common stock warrants, the Company would hold an accumulated 12.4% of MyOme on a fully diluted basis. Risk and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, and restricted cash, accounts receivable and investments. The Company limits its exposure to 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. For the three and six months ended June 30, 2024, and 2023, there were no customers exceeding 10% of total revenues on an individual basis. As of June 30, 2024 and December 31, 2023, there were no customers with an outstanding balance exceeding 10% of net accounts receivable. For the three months ended June 30, 2024 and 2023, approximately 10.3% and 12.5%, respectively, of total revenue were paid by Medicare on behalf of multiple customers. For the six months ended June 30, 2024 and 2023, approximately 10.9% and 13.2%, respectively, of total revenue were paid by Medicare on behalf of multiple customers. As of June 30, 2024 and December 31, 2023, approximately 8.8% and 10.2%, respectively, of accounts receivable are expected to be paid by Medicare on behalf of multiple customers. 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) Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 In November 2023, ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In December 2023, ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2024 | |
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 by performing genetic testing services and the Company’s performance obligation is complete when test results are delivered to a clinic or patient, who are considered the customer for such services as further discussed below. 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 services and the testing of patient samples to detect cancer mutations using its Signatera test. In addition to performing Signatera tests, these agreements typically include certain activities to fulfill the contract, such as customer data setup and management and ongoing reporting. Each test result is billable to customers upon delivery 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. Accordingly, the Company recognizes test processing revenue as individual test results are delivered to customers. For certain contracts with pharmaceutical companies where the Company is developing a companion diagnostic test in addition to performing regular testing services, revenue is primarily recognized proportionally as services are performed and/or tests are delivered. 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 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, percent of patient responsibility collected, refunds and reserves, and is estimated using the most likely amount method. For insurance carriers and product types 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 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 expected to be received from insurance carriers and patients, a certain percentage of revenues is further constrained for estimated refunds. The Company enters into contracts with insurance carriers with primarily payment terms related to tests provided to 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. 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. The Company may or may not get reimbursed for the full amount billed. Further, the Company 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) expected to be received at a point in time when the test results are delivered. Approximately 90% of cash collections attributable to such product revenue occurs within nine months with the remaining collections generally taking an additional six months. During this time, management routinely reassesses its estimates of actual to expected cash collections, which are based on historical collection rates and adjusted for current information and trends. To the extent cash collections for tests delivered in prior periods are trending higher than expectations, the Company will increase revenue recognized when sufficient evidence is obtained to conclude the additional revenue will not result in a reversal of revenue in a future period. If cash collections for tests delivered in prior periods are trending below expectations, the Company will reduce revenue to the amount expected to be collected based on the latest information and expectations. Increases or decreases to the amount of cash expected to be collected for tests delivered in prior periods are recognized in product revenue with a corresponding impact to accounts receivable during the period such determination is made. During the three months ended June 30, 2024 and 2023, the Company increased revenue by a net of $39.9 million and $3.4 million, respectively, for collections related to tests delivered in prior periods that were fully collected (including an estimate of unapplied receipts). The increased revenue and decreased net loss net loss net loss As of June 30, 2024, the Company had $16.6 million in cash receipts which had not yet been applied to specific accounts receivables primarily due to the disruption to Change Healthcare’s network that occurred in February 2024. The Company reviewed the historical unapplied payment trends. Based on the historical estimation, within the unapplied cash receipt of $16.6 million, the Company estimated approximately $1.3 million was related to tests delivered in prior periods that were fully collected. Additionally, as overpayments were not material in prior periods, the Company accounted for temporary unapplied balances as of June 30, 2024, as contra accounts receivable on the Balance Sheet. As of December 31, 2023, the unapplied accounts receivable balance was $1.3 million. Product revenue is constrained for refunds estimated to be paid to insurance carriers. Certain refunds are recognized in accrued liabilities until they are either paid to the respective insurance carrier or it is determined the refund will not ultimately be paid, at which time the related accrual is reduced with a corresponding increase to revenue. During the three months ended June 30, 2024 and 2023, the reserves for refunds to insurance carriers were reduced and product revenue increased by $1.7 million and $0.8 million, respectively, for amounts the Company determined would not be refunded to insurance carriers. The increased revenue and corresponding decreased net loss decreased net loss In addition, certain other refunds are recognized as a reduction to accounts receivable until they are either paid to the respective insurance carrier or it is determined the refund will not ultimately be paid, at which time the related reserve is reduced with a corresponding increase to revenue. During the three months ended June 30, 2024, the reserves for refunds to insurance carriers were reduced and product revenue increased by $1.9 million for amounts the Company determined would not be refunded to insurance carriers. The increased revenue and corresponding decreased net loss net loss 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 in vitro diagnostic (“IVD”) kits. The Company also recognizes revenues from its strategic collaboration agreements, such as those with BGI Genomics Co., Ltd. (“BGI Genomics”) and Foundation Medicine, Inc. (“Foundation Medicine”). The Company recognizes licensing and other revenues through agreements with pharmaceutical companies in support of potential clinical trials managed by the pharmaceutical companies. 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. BGI Genomics In February 2019, the Company entered into a License Agreement (the “BGI Genomics Agreement”) with BGI Genomics to develop, manufacture, and commercialize next generation sequencing-based genetic testing assays for clinical and commercial use. The BGI Genomics Agreement has a term of ten years and expires in February 2029. Pursuant to the BGI Genomics Agreement, the Company licensed its intellectual property to and provided development services for BGI Genomics. Following completion of development services, the Company began providing assay interpretation services over the term of the agreement. According to the BGI Genomics Agreement, the Company is entitled to a total of $50.0 million, comprised of upfront technology license fees, prepaid royalties relating to future sales of licensed products and performance of assay interpretation services, and milestone payments. Due to uncertainties in achieving certain milestones, $6.0 million of the $50.0 million was constrained. A net of $44.0 million has been collected by the Company in cash, which includes $20.0 million in prepaid royalties. The Company concluded that the license is not a distinct performance obligation as it does not have a stand-alone value to BGI Genomics apart from the related development services. Therefore, license and related development services, for each of the non-invasive prenatal tests (“NIPTs”) and Oncology products, representing two separate performance obligations, to which $24.0 million of transaction consideration was allocated. This performance obligation was fully satisfied in March 2023 and no further related amounts will be recognized as revenue. As of December 31, 2023, the Company's performance obligation to provide ongoing NIPT assay interpretation services was removed. Therefore, the Company now has a single remaining performance obligation related to Oncology assay interpretation services, to which $20.0 million of transaction consideration was allocated and prepaid by BGI Genomics. During the six months ended June 30, 2023, the Company recognized $0.6 million related to oncology assay interpretation services, of which $0.2 million was recognized against deferred royalties. During the six months ended June 30, 2024, the Company did not record any material amounts related to oncology assay interpretation services. The Company currently has $18.9 million in deferred revenue as of June 30, 2024. As required by the BGI Genomics Agreement, in June 2019 the Company prepaid $6.0 million to BGI Genomics for future sequencing services and $4.0 million for future sequencing equipment. These advance payments are for equipment and services to be received in future periods, which was assessed as a standalone transaction that did not reduce revenue, aggregated to $10.0 million and was originally recorded in long-term advances on the Company’s Consolidated Balance Sheet and will be periodically assessed for impairment. During both the three and six months ended June 30, 2024, $0.4 million in equipment and services was received. During the three and six months ended June 30, 2023, $1.0 million and $2.6 million, respectively, in equipment and services was received. As of June 30, 2024, the remaining advanced payments were $4.5 million, with $0.6 million recorded in prepaid expenses and other current assets and $3.8 million recorded in other assets. 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 Company 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 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. The Company and Foundation Medicine have elected not to renew the agreement beyond the initial term. Pursuant to the Foundation Medicine Agreement, the Company will provide development services that are required to customize its proprietary Signatera test to work with Foundation Medicine’s FoundationOne CDx in conjunction with granting the use of the Company’s intellectual property. Following completion of those development services, the Company is currently providing assay testing services over the term of the agreement. 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. The Company is entitled to a total of $32.0 million, comprised of upfront technology license fees, prepaid royalties relating to future sales of licensed products and performance of assay interpretation services, and milestone payments. $7.7 million is constrained due to uncertainties in achieving certain milestones. A net of $24.3 million has been collected by the Company in cash, which includes $5.0 million of prepaid royalties. The Company concluded that the license is not a distinct performance obligation as it does not have a stand-alone value to Foundation Medicine apart from the related development services. Therefore, license and related development services, for Oncology products, represent a single performance obligation, to which $19.3 million of transaction consideration was allocated. Of this amount, $0.2 million was recognized in the three months ended March 31, 2023. This performance obligation was fully satisfied in March 2023 and no further related amounts will be recognized as revenue. Royalties related to assay interpretation services represent separate performance obligations for Oncology products, to which $5.0 million of transaction consideration was allocated and prepaid by Foundation Medicine. During the three and six months ended June 30, 2023, the Company recognized $0.1 million and $0.4 million, respectively, related to oncology assay interpretation services. During the three and six months ended June 30, 2024, the Company recognized $0.2 million related to oncology assay interpretation services. The Company currently has $3.0 million in deferred revenue related to this agreement as of June 30, 2024. 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, 2024 2023 2024 2023 (in thousands) Insurance carriers $ 384,128 $ 226,521 $ 725,156 $ 436,899 Laboratory and other partners 22,254 27,449 42,530 50,254 Patients 6,969 7,434 13,406 16,007 Total revenues $ 413,351 $ 261,404 $ 781,092 $ 503,160 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, 2024 2023 2024 2023 (in thousands) United States $ 404,872 $ 253,296 $ 764,285 $ 486,550 Americas, excluding U.S. 1,601 1,206 3,082 2,364 Europe, Middle East, India, Africa 5,439 5,620 10,617 10,816 Asia Pacific and Other 1,439 1,282 3,108 3,430 Total revenues $ 413,351 $ 261,404 $ 781,092 $ 503,160 The following table summarizes the Company’s beginning and ending balances of accounts receivable and deferred revenues: Balance at June 30, December 31, 2024 2023 (in thousands) Assets: Accounts receivable, net $ 335,936 $ 278,289 Liabilities: Deferred revenue, current portion $ 18,367 $ 16,612 Deferred revenue, long-term portion 18,416 19,128 Total deferred revenues $ 36,783 $ 35,740 The following table summarizes the changes in the balance of deferred revenues during the six months ended June 30, 2024 and 2023: Balance at June 30, 2024 2023 (in thousands) Beginning balance $ 35,740 $ 30,778 Increase in deferred revenues 14,826 17,402 Revenue recognized during the period that was included in deferred revenues at the beginning of the period (9,646) (7,521) Revenue recognized from performance obligations satisfied within the same period (4,137) (3,513) Ending balance $ 36,783 $ 37,146 During the six months ended June 30, 2024, revenue recognized that was included in the deferred revenue balance at the beginning of the period totaled $9.6 million. This balance consisted of approximately a net $0.1 million related to BGI Genomics and Foundation Medicine and $9.5 million related to genetic testing services. The current portion of deferred revenue includes $14.8 million from genetic testing services, $0.5 million from BGI Genomics, and $3.0 million from the Foundation Medicine Agreement as of June 30, 2024. The non-current portion of deferred revenue consists of $18.4 million from the BGI Genomics Agreement as of June 30, 2024. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2024 | |
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; and 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 The following table represents the fair value hierarchy for the Company’s financial assets and financial liabilities measured at fair value on a recurring basis: June 30, 2024 December 31, 2023 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Cash, cash equivalents and restricted cash (1) $ 796,798 $ — $ — $ 796,798 $ 642,095 $ — $ — $ 642,095 U.S. Treasury securities 58,814 — — 58,814 200,418 — — 200,418 Municipal securities — 31,485 — 31,485 — 36,464 — 36,464 Total financial assets $ 855,612 $ 31,485 $ — $ 887,097 $ 842,513 $ 36,464 $ — $ 878,977 (1) Cash equivalents includes money market deposits and liquid demand deposits. Fair Value of Short-Term and Long-Term Debt: As of June 30, 2024 and December 31, 2023, the estimated fair value of the total principal outstanding and accrued interest of the Credit Line was $80.4 million, and were based upon observable Level 2 inputs, including the interest rate based on the 30-day Secured Overnight Financing Rate (“SOFR”) average, plus 0.5%. The estimated fair value approximates the carrying value due to the short term duration and variable interest rate. As of June 30, 2024 and December 31, 2023, the estimated fair value of the Convertible Notes was $800.7 million and $491.8 million, respectively, based upon observable, Level 2 inputs, including pricing information from recent trades of the Convertible Notes. See Note 10, Debt |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2024 | |
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, cash equivalents, restricted cash and investments, which are classified as available-for-sale securities, consisted of the following: June 30, 2024 December 31, 2023 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value (in thousands) Cash, cash equivalents and restricted cash (2) $ 796,798 $ — $ — $ 796,798 $ 642,095 $ — $ — $ 642,095 U.S. Treasury securities (1) 58,923 — (109) 58,814 201,522 14 (1,118) 200,418 Municipal securities (1) 32,556 — (1,071) 31,485 38,091 — (1,627) 36,464 Total $ 888,277 $ — $ (1,180) $ 887,097 $ 881,708 $ 14 $ (2,745) $ 878,977 Classified as: Cash, cash equivalents and restricted cash (2) 796,798 642,095 Short-term investments 90,299 236,882 Total $ 887,097 $ 878,977 (1) Per the Company’s investment policy, all debt securities are classified as short-term investments irrespective of holding period. (2) Cash equivalents includes liquid demand deposits, and money market 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 an allowance for expected credit losses of its investments was not necessary and will continue to recognize unrealized gains and losses in other comprehensive income (loss). During the six months ended June 30, 2024, the Company did not sell any investments. The Company uses the specific investment identification method to calculate realized gains and losses and amounts reclassified out of other comprehensive income (loss) to net loss. As of June 30, 2024, the Company had 15 investments in an unrealized loss position in its portfolio. Gross unrealized losses were not material as of June 30, 2024. Gross unrealized losses were primarily due to declines in the value of fixed rate instruments as interest rates in the broader market increased, and were not indictive of a decline in the credit worthiness of the underlying issuer, and as such, the Company did not record a credit loss reserve as of June 30, 2024. The following table presents debt securities available-for-sale that were in an unrealized loss position as of June 30, 2024, aggregated by major security type in a continuous loss position. Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (in thousands) U.S. Treasury securities $ 23,923 $ — $ 34,891 $ (109) $ 58,814 $ (109) Municipal securities — — 31,485 (1,071) 31,485 (1,071) Total $ 23,923 $ — $ 66,376 $ (1,180) $ 90,299 $ (1,180) The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of June 30, 2024: June 30, 2024 Amortized Cost Fair Value (in thousands) Less than or equal to one year $ 75,440 $ 75,003 Greater than one year but less than five years 16,039 15,296 Total $ 91,479 $ 90,299 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2024 | |
Balance Sheet Components | |
Balance Sheet Components | 6. Balance Sheet Components Allowance for doubtful accounts The following is a roll-forward of the allowances for doubtful accounts related to trade accounts receivable for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, 2024 2023 (in thousands) Beginning balance $ 7,252 $ 5,134 (Reversal of) Provision for doubtful accounts (185) 446 Write-offs (46) — Total $ 7,021 $ 5,580 Six Months Ended June 30, 2024 2023 (in thousands) Beginning balance $ 6,481 $ 3,830 Provision for doubtful accounts 744 1,750 Write-offs (204) — Total $ 7,021 $ 5,580 Property and Equipment, net The Company’s property and equipment consisted of the following: June 30, December 31, Useful Life 2024 2023 (in thousands) Machinery and equipment 3- 5 $ 94,785 $ 85,626 Computer equipment 3 years 3,040 1,850 Purchased and capitalized software held for internal use 3 years 10,672 11,636 Leasehold improvements Lesser of useful life or lease term 47,666 38,999 Construction-in-process 41,577 29,392 197,740 167,503 Less: Accumulated depreciation and amortization (64,460) (56,293) Total Property and Equipment, net $ 133,280 $ 111,210 The Company’s long-lived assets are located in the United States. During the six months ended June 30, 2024, the increase in net property and equipment was due to expansion projects and purchases of new equipment for the Company’s laboratories located in Texas and California to expand testing capabilities, offset by depreciation expense of $13.3 million recorded in the six months ended June 30, 2024. Depreciation expense of $10.2 million was recorded in the six months ended June 30, 2023. The Company did not incur any impairment charges during the six months ended June 30, 2024 or 2023. Other Accrued Liabilities The Company’s other accrued liabilities consisted of the following: June 30, December 31, 2024 2023 (in thousands) Reserves for refunds to insurance carriers $ 16,465 $ 23,245 Accrued charges for third-party testing 10,574 14,823 Testing and laboratory materials from suppliers 14,142 11,229 Marketing and corporate affairs 11,792 10,085 Short term advances 13,899 — Legal, audit and consulting fees 31,979 43,897 Accrued shipping charges 1,800 3,646 Sales and income tax payable 4,053 3,731 Accrued third-party service fees 8,173 7,111 Clinical trials and studies 7,502 12,126 Operating lease liabilities, current portion 12,384 11,621 Property and equipment purchases 5,330 4,316 Other accrued interest 1,078 1,078 Other accrued expenses 2,060 2,497 Total other accrued liabilities $ 141,231 $ 149,405 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 ending June 30, 2024 and 2023: June 30, 2024 2023 (in thousands) Beginning balance $ 23,245 $ 18,948 Additional reserves 1,065 5,148 Refunds to carriers (3,095) (963) Reserves released to revenue (4,750) (7,653) Ending balance $ 16,465 $ 15,480 As of June 30, 2024, the Company had $13.9 million in short term advances obtained as a result of the disruption to Change Healthcare’s network in February 2024 which are due and payable within ten days of demand. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases. | |
Leases | 7. Leases Operating Leases In September 2015, the Company entered into a long-term lease agreement for laboratory and office space totaling approximately 94,000 square feet in Austin, Texas. The original lease term was 132 months beginning in December 2015 and expiring in November 2026 with monthly payments beginning in December 2016. In December 2021, the Company entered into an amendment of the Austin lease agreement which extended the lease of the current premises through March 2033. The amendment also includes two additional office spaces (the “First Expansion Premises” and the “Second Expansion Premises”). The First Expansion Premises consists of 32,500 rentable square feet and commenced in February 2022. The Second Expansion Premises consists of 65,222 rentable square feet and commenced in September 2022. The terms of the First and Second Expansion Premises expire in March 2033. In October 2016, the Company entered into a lease directly with its landlord for laboratory and office spaces at its facilities located in San Carlos, California. The Company currently occupies approximately 136,000 square feet comprised of two office spaces (the “First Space” and the “Second Space”). The First Space covers approximately 88,000 square feet, and the Second Space totals approximately 48,000 square feet. In January 2021, the Company entered into an amendment of the lease to extend the term for 48 months to October 2027. The combined annual rent for the First Space and Second Space is $9.3 million which commenced in October 2023. The Company entered into a lease agreement commencing June 2018 for its cord blood tissue storage facility in Tukwila, Washington that covers approximately 10,000 square feet. The lease term is 62 months and expired in July 2023. The Company had the option to extend this lease for five years, and the fair market rent upon renewal was not determinable. However, since the Company sold its business related to cord blood and tissue storage in September 2019, the Company has subleased the facility and did not exercise its option to renew the facility upon expiration. The Company entered into a lease agreement in November 2020 to lease 11,395 square feet of space located in South San Francisco, California over a 36 The Company entered into a lease agreement in September 2023 to lease 16,319 square feet of space located in Pleasanton, California over a 60-month term. The premises are used for laboratory and research use and commenced in December 2023. The annual lease payment starts at $0.5 million and escalates annually. As part of the IPR&D asset acquisition in September 2021, the Company inherited a 24 The Company has also historically entered into leases of individual workspaces and storage spaces at various locations on both a month-to-month basis without an established lease term, and more recently for certain locations, has committed to terms approximating one For the six months ended June 30, 2024, the Company had $0.6 million in noncash operating activities related to additional right-of-use assets accounted from a new lease and extending existing leases under ASC, Topic 842, Leases (“ASC 842”). For the six months ended June 30, 2023, the Company did not have any noncash operating activities related to additional right-of-use assets. 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, 2024 2023 (in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 12,384 $ 11,621 Operating lease liabilities, long-term portion 61,225 67,025 Total operating lease liabilities $ 73,609 $ 78,646 The initial recognition of the operating lease liabilities was measured as the present value of the future minimum lease payments using a discount rate determined as of January 1, 2019. The operating right-of-use assets was calculated as the operating lease liabilities discounted at the present value, less the amount of unamortized tenant improvement allowance and deferred rent. The discount rate used was the Company’s incremental borrowing rate given that the implicit rate to each lease was not readily determinable. In accordance with ASC 842, the incremental borrowing rate was estimated as the annual percentage yield resulting from a corporate debt financing over a loan term approximating the remaining term of each lease, with the effect of certain credit risk rating. As of June 30, 2024, the weighted-average remaining lease term was 6.30 The Company continues to recognize lease expense on a straight-line basis. The lease expense includes the amortization of the right-of-use assets with the associated interest component estimated by applying the effective interest method. For the three months ended June 30, 2024 and 2023, total lease expense of $3.6 million and $3.7 million was recognized in the condensed statements of operations and comprehensive loss, respectively. For the six months ended June 30, 2024 and 2023, total lease expense of $7.2 million and $7.5 million was recognized in the condensed statements of operations and comprehensive loss, respectively. Cash paid for amounts in the measurement of operating lease liabilities totaled $4.1 million and $3.0 million for the three months ended June 30, 2024 and 2023, respectively. Cash paid for amounts in the measurement of operating lease liabilities totaled $8.3 million and $5.2 million for the six months ended June 30, 2024 and 2023, respectively. The present value of the future annual minimum lease payments under all non-cancellable operating leases as of June 30, 2024 are as follows: Operating Leases (in thousands) As of June 30, 2024 2024 (remaining 6 months) $ 8,449 2025 17,155 2026 17,450 2027 14,345 2028 6,675 2029 and thereafter 27,928 92,002 Less: imputed interest (18,393) Operating lease liabilities $ 73,609 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Legal Proceedings The Company is involved in legal matters, including investigations, subpoenas, demands, disputes, litigation, requests for information, and other regulatory or administrative actions or proceedings, including those with respect to intellectual property, testing and test performance, billing, reimbursement, marketing, short seller and media allegations, employment, and other matters. The Company is responding to ongoing regulatory and governmental investigations, subpoenas and inquiries, and contesting its current legal matters, but cannot provide any assurance as to the ultimate outcome with respect to any of the foregoing. There are many uncertainties associated with these matters. Such matters may cause the Company to incur costly litigation and/or substantial settlement charges, divert management attention, result in adverse judgments, fines, penalties, injunctions or other relief, and may result in loss of customer or investor confidence regardless of their merit or ultimate outcome. 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 any of the foregoing were to occur, the Company’s business, financial condition, results of operations, cash flows, prospects, or stock price 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 its financial condition. 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 CareDx Patent Case, CareDx alleged, in a complaint filed jointly with the Board of Trustees of the Leland Stanford Junior University in March 2019 and amended in March 2020, that the Company infringed three patents (the “CareDx 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 CareDx Patents invalid. This finding was affirmed on appeal by the United States Court of Appeals for the Federal Circuit. CareDx’s petition for rehearing by the Federal Circuit, and its subsequent petition for certiorari to the United States Supreme Court, were both denied. In the second CareDx Patent Case, the Company alleged, in suits filed in January 2020 and May 2022, infringement by CareDx of certain of the Company’s patents, seeking unspecified damages and injunctive relief. In January 2024, after trial, the jury returned a verdict in favor of the Company, finding both asserted patents valid and one patent infringed by CareDx. The jury awarded damages to the Company for lost profits and past royalties totaling $96.3 million. In January 2020, the Company filed suit against ArcherDX, Inc. (“ArcherDX”) in the United States District Court for the District of Delaware. In January 2021, the Company named an additional Archer DX entity, ArcherDx LLC, and Invitae as defendants. The Company alleged, among other things, that certain ArcherDX products, including the Personalized Cancer Monitoring (“PCM”) test, infringed three of the Company’s patents (the “ArcherDX Case”) and sought unspecified monetary damages and injunctive relief. Following a jury trial in May 2023 and a bench trial in June 2023, all three asserted patents were found to be valid and infringed by ArcherDX and Invitae, and the jury awarded damages totaling $19.35 million to the Company. In November 2023, the Court granted in part the Company’s motion for a permanent injunction against the PCM test, which the defendants have appealed. In February 2024, Invitae and ArcherDX filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of New Jersey, resulting in an automatic bankruptcy stay in the case. 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 and seeking monetary damages and injunctive relief. In January 2024, after trial, the jury returned a verdict of non-willful infringement by the Company and found damages of $57 million. The Company intends to appeal certain of the rulings. In addition, various parties, including the Company, have filed petitions challenging the validity of the asserted patents with the United States Patent and Trademark Office, all of which were instituted for review, and some of which were decided in favor of upholding the challenged claims. The petitions filed by the Company and certain others remain pending. 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. The case has been stayed pending the entry of a final judgment in the ArcherDX Case, in which the subject patent is also asserted. In February 2024, Genosity filed a voluntary Chapter 11 petiion in the U.S. Bankruptcy Court for the District of New Jersey. The Company is the subject of lawsuits filed against it by 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. The parties have filed cross-motions for summary judgment, which motions are currently pending before the Court. In February 2024, subsequent to Invitae’s voluntary Chapter 11 petition described above, the Court granted Invitae’s request to continue the trial, which is now scheduled for September 2025. The Company filed suits against Inivata, Inc. and Inivata Ltd. (collectively “Inivata”) in the United States District Court for the District of Delaware in January 2021 and December 2022, alleging that certain of Inivata’s oncology products infringe certain of the Company’s patents and seeking unspecified monetary damages and injunctive relief. The two suits have been consolidated. Inivata has filed a motion to dismiss the Company’s complaint with respect to one patent, which motion is currently pending before the Court. In March 2024, the Court stayed the case in light of the Company’s case against NeoGenomics Laboratories, Inc. (“NeoGenomics”), which acquired Inivata in 2021, discussed below. In July 2023, the Company filed suit against NeoGenomics in the United States District Court for the Middle District of North Carolina (the “District Court”), alleging infringement of certain Natera patents by NeoGenomics’ commercialization of the RaDaR test. The complaint seeks monetary damages and injunctive relief. In December 2023, the Court denied NeoGenomics’ motion to dismiss the complaint, and granted the Company’s motion for preliminary injunction. The injunction went into effect as of January 12, 2024. NeoGenomics filed a motion to modify and stay the injunction, which was denied by the District Court and affirmed on appeal in July 2024 by the Federal Circuit Court of Appeals. NeoGenomics has also filed petitions challenging the validity of both of the asserted patents with the United States Patent and Trademark Office. One of the petitions has been denied. Other Litigation Matters. 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. 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 the Company 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. In July 2023, the Court granted in part the Company’s motion for judgment as a matter of law requesting that the Court set aside the portions of the jury verdict adverse to the Company, ruling that CareDx is not entitled to any damages. The jury verdict of false advertising by CareDx remains in place. Both parties are appealing. In May 2021, Guardant. Inc. (“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. Also in May 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 and has asserted the claims from the Texas action as counterclaims in the California action, 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. Both parties filed cross-motions for summary judgment, which were granted in part and denied in part. Trial is currently scheduled for November 2024. 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. In May 2023, the Court granted the Company’s motion to dismiss the lawsuit, and the case was dismissed without prejudice. In July 2023, the plaintiff filed analogous claims in the Superior Court of California, County of San Mateo, and subsequently filed an amended claim with an additional plaintiff. Based on the additional plaintiff, the case was transferred back to the United States District Court for the Northern District of California. The parties subsequently agreed that claims brought by the original plaintiff be remanded back to the Superior Court of California, County of San Mateo, and that the action be stayed pending the outcome of the action in the United States District Court for the Northern District of California. 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. These matters have been consolidated. The Company filed a motion to dismiss the consolidated lawsuit, which resulted in the plaintiffs filing an amended complaint in April 2023. 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. This matter has been dismissed and the claims raised in this matter have been included in the lawsuit discussed below. 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, filed in April 2022 and amended in October 2022 (to include, among others, the claims raised in the lawsuit discussed in the preceding paragraph), 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. The Company filed a motion to dismiss this lawsuit, which was granted in part and denied in part. In each of October 2023 and January 2024, shareholder derivative complaints were filed in the United States District Court for the Western District of Texas and the United States District Court for the District of Delaware, respectively, against the Company as nominal defendant and certain of the Company’s management. Each 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. Each 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 if probable and estimable. Contractual Commitments The following table sets forth the Company’s material contractual commitments as of June 30, 2024: Party Commitments Expiry Date (in thousands) Laboratory instruments supplier $ 4,404 December 2024 Material suppliers 35,581 December 2024 Application service providers 4,191 March 2026 Cloud platform service provider 36,599 December 2028 Leases (1) 420 March 2029 Other material suppliers 22,323 Various Total $ 103,518 (1) Leases |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock-Based Compensation Stock-Based Compensation Expense The following tables present the stock-based compensation expense recorded for equity classified awards on selected statements of operations line items for the three and six months ended June 30, 2024 and 2023. Three months ended June 30, 2024 2023 (in thousands) Cost of revenues $ 4,046 $ 2,838 Research and development 21,957 15,337 Selling, general and administrative 41,408 26,137 Total $ 67,411 $ 44,312 Six months ended June 30, 2024 2023 (in thousands) Cost of revenues $ 7,823 $ 5,394 Research and development 42,606 29,977 Selling, general and administrative 81,429 49,418 Total $ 131,858 $ 84,789 Stock Options The following table summarizes option activity for the six months ended June 30, 2024: Weighted- Number of Average Shares Exercise Outstanding Price (in thousands, except for per share data) December 31, 2023 5,501 $ 23.65 Options exercised (1,078) $ 8.02 June 30, 2024 4,423 $ 27.45 Restricted Stock Units and Performance-Based Awards The following table summarizes unvested RSU and performance-based awards for the six months ended June 30, 2024: Weighted- Average Grant Date Shares Fair Value (in thousands, except for per share data) Balance at December 31, 2023 9,248 $ 49.50 Granted 4,786 $ 68.59 Vested (2,443) $ 54.93 Cancelled/forfeited (253) $ 54.27 Balance at June 30, 2024 11,338 $ 56.59 The Company grants certain senior-level executives performance stock units which vest based on performance and time-based service conditions, which are referred to herein as performance-based awards. During the six months ended June 30, 2024, the Company granted 0.8 million performance-based awards with an aggregate grant date fair value of $55.0 million. Achievement at 200% of target is deemed probable and as a result, the Company expects to recognize a total of $110.0 million over the requisite service period of which $9.4 million and $16.0 million has been recognized for the three and six months ended June 30, 2024, respectively. The Company has recognized $22.1 million and $10.2 million in stock-based compensation for performance-based awards for the three months ended June 30, 2024 and 2023, respectively. The Company has recognized $42.8 million and $17.5 million in stock-based compensation for performance-based awards for the six months ended June 30, 2024 and 2023, respectively. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
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 interest rate was subsequently changed to the 30-day SOFR average, plus 1.21%. The SOFR rate is variable. The interest rate as of June 30, 2024 was 5.84%. The Credit Line was subsequently increased from $50.0 million to $150.0 million in 2020. In November 2022, the Company drew down $30.0 million from the $100.0 million available from the Credit Line. 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. The Company is required to maintain a minimum of at least $150.0 million in its UBS accounts as collateral. UBS has the right to demand full or partial payment of the Credit Line obligations and terminate the Credit Line, in its discretion and without cause, at any time. In June 2023, the Credit Line decreased from $150.0 million to $100.0 million. In October 2023, the interest rate for the Credit Line was subsequently changed to the 30-day SOFR average, plus 0.5%. As of June 30, 2024, the Company has drawn down a total of $80.0 million and there is $20.0 million remaining and available on the Credit Line. For both the three months ended June 30, 2024 and 2023, the Company recorded interest expense on the Credit Line of $1.2 million. For both the six months ended June 30, 2024 and 2023, the Company recorded interest expense on the Credit Line of $2.4 million. Interest payments on the Credit Line were made within the same periods. As of June 30, 2024 and December 31, 2023, the total principal amount outstanding with accrued interest was $80.4 million. Convertible Notes In April 2020, the Company issued $287.5 million aggregate principal amount of Convertible Notes due 2027 in a private placement offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 2.25% per year, payable in cash semi-annually. The Convertible Notes mature in May 2027, unless earlier converted, repurchased or redeemed in accordance with their terms. Upon conversion, the Convertible Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The Company received net proceeds from the Convertible Notes of $278.3 million, after deducting the initial purchasers’ discounts and debt issuance costs. In 2020, the Company used approximately $79.2 million of the net proceeds from the Convertible Notes offering to repay its obligations under its credit agreement with OrbiMed Royalty Opportunities II, LP. The holders of the Convertible Notes may convert all or a portion of their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding February 1, 2027 in multiples of $1,000 principal amount, under any the following circumstances: ● During any fiscal quarter commencing after September 30, 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. The first circumstance has been met as of June 30, 2024. However, there were no conversions for the period ending June 30, 2024. The Convertible Notes are convertible into shares of the Company’s common stock, par value $0.0001 per share, at an initial conversion rate of 25.7785 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $38.79 per share of common stock, convertible to 7,411,704 shares of common stock. The conversion rate and corresponding conversion price are subject to adjustment upon the occurrence of certain events but will not be adjusted for any accrued or unpaid interest. The holders of the Convertible Notes who redeem their Convertible Notes in connection with a make-whole fundamental change are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change, the holders of the Convertible Notes may require the Company to repurchase for cash all or a portion of their Convertible Notes at a price equal to 100% of the principal amount, plus any accrued and unpaid interest. The Company may not redeem the Convertible Notes prior to May 2024, and no sinking fund is provided for the Convertible Notes. The Company may redeem for cash all or any portion of the Convertible Notes, at the Company’s option, on or after May 2024, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest. Upon adoption of ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivative and Heading-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in Entity’s Own Equity June 30, 2024 December 31, 2023 (in thousands) Long-Term Debt Outstanding Principal $ 287,500 $ 287,500 Unamortized debt discount and issuance cost (3,896) (4,555) Net carrying amount $ 283,604 $ 282,945 The following tables present total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2024 and 2023: Three months ended June 30, 2024 2023 (in thousands) Cash interest expense Contractual interest expense $ 1,617 $ 1,617 Non-cash interest expense Amortization of debt discount and debt issuance cost 330 322 Total interest expense $ 1,947 $ 1,939 Six months ended June 30, 2024 2023 (in thousands) Cash interest expense Contractual interest expense $ 3,234 $ 3,234 Non-cash interest expense Amortization of debt discount and debt issuance cost 658 642 Total interest expense $ 3,892 $ 3,876 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Taxes | |
Income Taxes | 11. Income Taxes During the three months ended June 30, 2024 and 2023, the Company recorded total income tax expense (benefit) of approximately $892,000 and ($282,000), respectively. During the six months ended June 30, 2024 and 2023, the Company recorded total income tax expense (benefit) of approximately $1,320,000 and ($122,000), respectively. The income tax expense is primarily attributable to state income tax and foreign income tax. Due to the Company’s history of cumulative operating losses, the Company concluded that, after considering all the available objective evidence, it is not more likely than not that all of the Company’s net deferred tax assets will be realized. Accordingly, all of the Company’s deferred tax assets, which includes net operating loss carryforwards and tax credits related primarily to research and development, continue to be subjected to a full valuation allowance as of June 30, 2024. The Company will continue to maintain a full valuation allowance until there is sufficient evidence to support recoverability of its deferred tax assets. Interest and/or penalties related to income tax matters are recognized as a component of income tax expense. As of June 30, 2024 and December 31, 2023, 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, 2024 | |
Net Loss per Share | |
Net Loss per Share | 12. Net Loss per Share The Convertible Notes are convertible by the holders as of June 30, 2024. 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 fair value of the shares issued to settle the Convertible Notes would exceed the Convertible Note principle by $504.2 million based on the closing price of the Company’s common stock as of June 30, 2024. 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 have been excluded from the calculation of diluted earnings per share. If converted, the Company does not intend to settle the obligation in cash. 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, 2024 and 2023: June 30, 2024 2023 (in thousands) Options to purchase common stock 4,423 5,427 Performance-based awards and restricted stock units 11,338 9,658 Employee stock purchase plan 41 72 Convertible Notes 7,411 7,411 Total 23,213 22,568 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events redemption of the Convertible Notes is October 11, 2024 (the “Redemption Date”). The redemption price for the Convertible Notes is equal to 100% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest to, but excluding, the Redemption Date. The Company elected physical settlement with the Company’s shares of common stock as the settlement method to apply to all conversions of the Convertible Notes. All terms and conditions associated with physical settlement are noted within the terms of the original Indenture Agreement.The conversion rate for holders who convert their Convertible Notes in connection with the Company’s election to redeem the Convertible Notes will be increased by 0.4284 additional shares pursuant to the Indenture Agreement. Based on the conversion terms of the Convertible Notes and the market price of its common stock, the Company expects that substantially all outstanding Convertible Notes will be converted into shares of its common stock prior to the Redemption Date. Should all holders elect to convert their Convertible Notes, approximately 7,534,000 shares of common stock would be issued for settlement. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (37,464) | $ (110,803) | $ (105,063) | $ (247,740) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
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 Company’s results of operations, financial position, changes in stockholders’ equity, and cash flows. The results of operations for the six months ended June 30, 2024, 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, 2023 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, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2024. Some items in the prior period financial statements were reclassified to conform to the current presentation. |
Liquidity Matters | Liquidity Matters The Company has incurred net losses since its inception and anticipates net losses for the near future. The Company had a net loss of $105.1 million for the six months ended June 30, 2024 and an accumulated deficit of $2.5 billion as of June 30, 2024. As of June 30, 2024, the Company had $796.8 million in cash, cash equivalents, and restricted cash, $90.3 million in marketable securities, an $80.4 million outstanding balance on its Credit Line (as defined in Note 10, Debt While the Company has introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations and business plans. Accordingly, the Company has funded the portion of operating costs that exceeds revenues through a combination of equity issuances, debt issuances, and other financings. The Company continues to invest in the development and commercialization of its existing and future products and, consequently, it will need to generate additional revenues to achieve future profitability and may need to raise additional equity or debt financing. If the Company raises additional funds by issuing equity securities, its stockholders will experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and requires significant debt service payments, which diverts resources from other activities. Additional financing may not be available when necessary, 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 July 19, 2024, the Company announced its decision to redeem all of its outstanding 2.25% Convertible Senior Notes due 2027. The redemption is scheduled for October 11, 2024 (the “Redemption Date”). The redemption price for the Convertible Notes is equal to 100% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest to, but excluding, the Redemption Date. The Company elected physical settlement with shares of its common stock as the settlement method to apply to all conversions of the Convertible Notes. Based on the conversion terms of the Convertible Notes and the market price of its common stock, the Company expects that substantially all outstanding Convertible Notes will be converted into shares of the Company’s common stock prior to the Redemption Date. As a result, the Company does not expect that its decision to redeem the Convertible Notes will have a material effect on its liquidity. In September 2023, the Company completed an underwritten equity offering and sold 4,550,000 shares of its common stock at a price of $55 per share to the public. Before estimated offering expenses of $0.4 million, the Company received proceeds of approximately $235.8 million net of the underwriting discount. 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 Accounting Standards Update (“ASU”) 2017-01 Business Combinations (Topic 805): Clarifying the Definition of Business Further, additional consideration aggregating up to approximately $35.0 million was estimated to be paid via issuance of an estimated 269,547 additional shares of the Company’s common stock, consistent with the registration statement filed with the SEC on September 10, 2021, upon achievement of defined milestones relating to product development, commercial launch and continued employment of certain selling shareholders, each of which was revalued at each reporting date and amount of compensation expense was adjusted accordingly and reported in research and development expenses. In November 2022, the terms of the payment for any remaining consideration were modified, resulting in $10.0 million of consideration paid in December 2022 and $15.0 million of consideration paid in March 2023, with such consideration primarily consisting of the Company’s common stock. 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 8, 2024. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include all the accounts of the Company and its subsidiaries. The Company established a subsidiary that operates in the state of Texas to support the Company’s laboratory and operational functions. The Company established a subsidiary that operates in Canada following the acquisition of the IPR&D asset. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) in the United States requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Significant items subject to such estimates include the allowance for doubtful accounts, the operating right-of-use assets and the associated lease liabilities, the average useful life for property and equipment including impairment estimates, deferred revenues associated with unsatisfied performance obligations, accrued liability for potential refund requests, stock-based compensation, the fair value of options, income tax uncertainties, and the expected consideration to be received from contracts with customers, insurance payors, and patients. These estimates and assumptions are based on management's best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors, including contractual terms and statutory limits; however, actual results could differ from these estimates and could have an adverse effect on the Company's financial statements. |
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. Available-for-sale debt securities. Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments losses for available-for-sale debt securities held at the reporting date over the remaining life based on historical experience, current conditions, and reasonable and supportable forecasts. The Company evaluated its investment portfolio under the available-for-sale debt securities impairment model guidance and determined the Company’s investment portfolio is composed of low-risk, investment grade securities and thus has not recorded an expected credit loss for its investment portfolio. Further, gross unrealized losses on available for sale securities were not material at June 30, 2024. |
Accounts Receivable | Accounts Receivable Trade accounts receivable and other receivables. Balance Sheet Components Revenue from Contracts with Customers |
Inventory | Inventory Inventory is recorded at the lower of cost or net realizable value, determined on a first-in, first-out basis. Inventory consists entirely of supplies, which the Company consumes when providing its test reports, and therefore, the Company does not maintain any finished goods inventory. The Company enters into inventory purchases commitments so that it can meet future delivery schedules based on forecasted demand for its tests. |
Other Assets | Other Assets In January 2024, the Company acquired from Invitae Corp. (“Invitae”) certain assets relating to Invitae’s non-invasive prenatal screening and carrier screening business. The transaction price of $10.5 million consisted of $10.0 million in upfront payment costs and approximately $0.5 million of other transaction costs which were capitalized as intangible assets over an estimated useful life of ten years. An additional payment of up to $42.5 million may be made should the Company achieve certain customer volume retention targets and based on certain legal outcomes. |
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, 2024 2023 2024 2023 (in thousands) Beginning balance $ (2,192) $ (11,798) $ (3,085) $ (16,362) Net unrealized gain on available-for-sale securities, net of tax and foreign currency translation adjustment 834 2,595 1,727 7,159 Ending balance $ (1,358) $ (9,203) $ (1,358) $ (9,203) The change 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 loss was not necessary. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under, ASC 606, using the following five step process: ● Identification of a contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Revenue recognition when, or as, the performance obligations are satisfied. Revenue Recognition, |
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). |
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 does not hold a seat on MyOme’s board of directors. The Company’s investment in MyOme is recorded at cost and no impairment was identified as of June 30, 2024. 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 26.5% of the outstanding shares of MyOme on a fully dilutive basis; ● 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 Lead Independent Director of the Company’s board of directors, is a managing member of Sequoia Capital. Certain funds affiliated with Sequoia Capital also participated in MyOme’s series B financing. None of the related party investments in MyOme by our executives and directors noted above were at the behest of the Company nor funded by the Company. In February 2024, the Company entered into a collaboration and commercialization agreement (the “Collaboration Agreement”) with MyOme pursuant to which the parties will partner to offer certain genetic testing services to be developed and funded solely by MyOme and overseen by a joint steering committee. The Company will assist MyOme with commercial activities. In connection with the Collaboration Agreement, the Company received a 10-year warrant to purchase 3,058,485 shares of MyOme's common stock at an exercise price of $0.25 per share, which will vest upon a MyOme liquidity event (as such terms are defined in MyOme's certificate of incorporation). The warrants were valued using the Black-Scholes valuation model on the date of acquisition and are accounted for using the measurement alternative. No impairment was identified as of June 30, 2024. The warrants have been included within other assets and deferred revenue, long-term portion and other liabilities, which will be recognized as a reduction of selling and marketing expense upon commercialization and sale of the products contemplated under the Collaboration Agreement. Subject to the Company's achievement of certain commercialization milestones, the Company may receive additional warrants to purchase MyOme’s Series B Preferred Stock. To the extent the genetic testing services are successfully commercialized, the Company will owe certain royalty payments to MyOme. Should the Company exercise all its MyOme common stock warrants, the Company would hold an accumulated 12.4% of MyOme on a fully diluted basis. |
Risk and Uncertainties | Risk and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, and restricted cash, accounts receivable and investments. The Company limits its exposure to 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. For the three and six months ended June 30, 2024, and 2023, there were no customers exceeding 10% of total revenues on an individual basis. As of June 30, 2024 and December 31, 2023, there were no customers with an outstanding balance exceeding 10% of net accounts receivable. For the three months ended June 30, 2024 and 2023, approximately 10.3% and 12.5%, respectively, of total revenue were paid by Medicare on behalf of multiple customers. For the six months ended June 30, 2024 and 2023, approximately 10.9% and 13.2%, respectively, of total revenue were paid by Medicare on behalf of multiple customers. As of June 30, 2024 and December 31, 2023, approximately 8.8% and 10.2%, respectively, of accounts receivable are expected to be paid by Medicare on behalf of multiple customers. |
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) Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 In November 2023, ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In December 2023, ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Summary of Significant Accounting Policies | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023 (in thousands) Beginning balance $ (2,192) $ (11,798) $ (3,085) $ (16,362) Net unrealized gain on available-for-sale securities, net of tax and foreign currency translation adjustment 834 2,595 1,727 7,159 Ending balance $ (1,358) $ (9,203) $ (1,358) $ (9,203) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue Recognition | |
Schedule of disaggregation of revenues by payer types | Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023 (in thousands) Insurance carriers $ 384,128 $ 226,521 $ 725,156 $ 436,899 Laboratory and other partners 22,254 27,449 42,530 50,254 Patients 6,969 7,434 13,406 16,007 Total revenues $ 413,351 $ 261,404 $ 781,092 $ 503,160 |
Schedule of total revenue by geographic area | Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023 (in thousands) United States $ 404,872 $ 253,296 $ 764,285 $ 486,550 Americas, excluding U.S. 1,601 1,206 3,082 2,364 Europe, Middle East, India, Africa 5,439 5,620 10,617 10,816 Asia Pacific and Other 1,439 1,282 3,108 3,430 Total revenues $ 413,351 $ 261,404 $ 781,092 $ 503,160 |
Schedule of beginning and ending balances of accounts receivable and deferred revenues | Balance at June 30, December 31, 2024 2023 (in thousands) Assets: Accounts receivable, net $ 335,936 $ 278,289 Liabilities: Deferred revenue, current portion $ 18,367 $ 16,612 Deferred revenue, long-term portion 18,416 19,128 Total deferred revenues $ 36,783 $ 35,740 |
Schedule of changes in the balance of deferred revenues | Balance at June 30, 2024 2023 (in thousands) Beginning balance $ 35,740 $ 30,778 Increase in deferred revenues 14,826 17,402 Revenue recognized during the period that was included in deferred revenues at the beginning of the period (9,646) (7,521) Revenue recognized from performance obligations satisfied within the same period (4,137) (3,513) Ending balance $ 36,783 $ 37,146 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Measurements | |
Summary of financial assets and liabilities measured on recurring basis | June 30, 2024 December 31, 2023 Level I Level II Level III Total Level I Level II Level III Total (in thousands) Financial Assets: Cash, cash equivalents and restricted cash (1) $ 796,798 $ — $ — $ 796,798 $ 642,095 $ — $ — $ 642,095 U.S. Treasury securities 58,814 — — 58,814 200,418 — — 200,418 Municipal securities — 31,485 — 31,485 — 36,464 — 36,464 Total financial assets $ 855,612 $ 31,485 $ — $ 887,097 $ 842,513 $ 36,464 $ — $ 878,977 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Financial Instruments | |
Schedule of available-for-sale securities | June 30, 2024 December 31, 2023 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value (in thousands) Cash, cash equivalents and restricted cash (2) $ 796,798 $ — $ — $ 796,798 $ 642,095 $ — $ — $ 642,095 U.S. Treasury securities (1) 58,923 — (109) 58,814 201,522 14 (1,118) 200,418 Municipal securities (1) 32,556 — (1,071) 31,485 38,091 — (1,627) 36,464 Total $ 888,277 $ — $ (1,180) $ 887,097 $ 881,708 $ 14 $ (2,745) $ 878,977 Classified as: Cash, cash equivalents and restricted cash (2) 796,798 642,095 Short-term investments 90,299 236,882 Total $ 887,097 $ 878,977 (1) Per the Company’s investment policy, all debt securities are classified as short-term investments irrespective of holding period. (2) Cash equivalents includes liquid demand deposits, and money market funds. |
Schedule of debt securities available-for-sale in unrealized loss position | Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss (in thousands) U.S. Treasury securities $ 23,923 $ — $ 34,891 $ (109) $ 58,814 $ (109) Municipal securities — — 31,485 (1,071) 31,485 (1,071) Total $ 23,923 $ — $ 66,376 $ (1,180) $ 90,299 $ (1,180) |
Summarized portfolio of available-for-sale securities by contractual maturity | June 30, 2024 Amortized Cost Fair Value (in thousands) Less than or equal to one year $ 75,440 $ 75,003 Greater than one year but less than five years 16,039 15,296 Total $ 91,479 $ 90,299 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Balance Sheet Components | |
Schedule of allowances for credit losses related to trade accounts receivable and other receivables | The following is a roll-forward of the allowances for doubtful accounts related to trade accounts receivable for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, 2024 2023 (in thousands) Beginning balance $ 7,252 $ 5,134 (Reversal of) Provision for doubtful accounts (185) 446 Write-offs (46) — Total $ 7,021 $ 5,580 Six Months Ended June 30, 2024 2023 (in thousands) Beginning balance $ 6,481 $ 3,830 Provision for doubtful accounts 744 1,750 Write-offs (204) — Total $ 7,021 $ 5,580 |
Schedule of property and equipment | June 30, December 31, Useful Life 2024 2023 (in thousands) Machinery and equipment 3- 5 $ 94,785 $ 85,626 Computer equipment 3 years 3,040 1,850 Purchased and capitalized software held for internal use 3 years 10,672 11,636 Leasehold improvements Lesser of useful life or lease term 47,666 38,999 Construction-in-process 41,577 29,392 197,740 167,503 Less: Accumulated depreciation and amortization (64,460) (56,293) Total Property and Equipment, net $ 133,280 $ 111,210 |
Schedule of other accrued liabilities | June 30, December 31, 2024 2023 (in thousands) Reserves for refunds to insurance carriers $ 16,465 $ 23,245 Accrued charges for third-party testing 10,574 14,823 Testing and laboratory materials from suppliers 14,142 11,229 Marketing and corporate affairs 11,792 10,085 Short term advances 13,899 — Legal, audit and consulting fees 31,979 43,897 Accrued shipping charges 1,800 3,646 Sales and income tax payable 4,053 3,731 Accrued third-party service fees 8,173 7,111 Clinical trials and studies 7,502 12,126 Operating lease liabilities, current portion 12,384 11,621 Property and equipment purchases 5,330 4,316 Other accrued interest 1,078 1,078 Other accrued expenses 2,060 2,497 Total other accrued liabilities $ 141,231 $ 149,405 |
Summary of reserve balance and activities for refunds to insurance carriers | June 30, 2024 2023 (in thousands) Beginning balance $ 23,245 $ 18,948 Additional reserves 1,065 5,148 Refunds to carriers (3,095) (963) Reserves released to revenue (4,750) (7,653) Ending balance $ 16,465 $ 15,480 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases. | |
Schedule of lease liabilities | June 30, December 31, 2024 2023 (in thousands) Operating lease liabilities, current portion included in other accrued liabilities $ 12,384 $ 11,621 Operating lease liabilities, long-term portion 61,225 67,025 Total operating lease liabilities $ 73,609 $ 78,646 |
Schedule of annual minimum lease payments | Operating Leases (in thousands) As of June 30, 2024 2024 (remaining 6 months) $ 8,449 2025 17,155 2026 17,450 2027 14,345 2028 6,675 2029 and thereafter 27,928 92,002 Less: imputed interest (18,393) Operating lease liabilities $ 73,609 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies | |
Schedule of material contractual commitments | Contractual Commitments The following table sets forth the Company’s material contractual commitments as of June 30, 2024: Party Commitments Expiry Date (in thousands) Laboratory instruments supplier $ 4,404 December 2024 Material suppliers 35,581 December 2024 Application service providers 4,191 March 2026 Cloud platform service provider 36,599 December 2028 Leases (1) 420 March 2029 Other material suppliers 22,323 Various Total $ 103,518 (1) Leases |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Stock-Based Compensation | |
Summary of stock-based compensation expenses | The following tables present the stock-based compensation expense recorded for equity classified awards on selected statements of operations line items for the three and six months ended June 30, 2024 and 2023. Three months ended June 30, 2024 2023 (in thousands) Cost of revenues $ 4,046 $ 2,838 Research and development 21,957 15,337 Selling, general and administrative 41,408 26,137 Total $ 67,411 $ 44,312 Six months ended June 30, 2024 2023 (in thousands) Cost of revenues $ 7,823 $ 5,394 Research and development 42,606 29,977 Selling, general and administrative 81,429 49,418 Total $ 131,858 $ 84,789 |
Summary of stock option activity | Weighted- Number of Average Shares Exercise Outstanding Price (in thousands, except for per share data) December 31, 2023 5,501 $ 23.65 Options exercised (1,078) $ 8.02 June 30, 2024 4,423 $ 27.45 |
RSU and performance-based awards | Weighted- Average Grant Date Shares Fair Value (in thousands, except for per share data) Balance at December 31, 2023 9,248 $ 49.50 Granted 4,786 $ 68.59 Vested (2,443) $ 54.93 Cancelled/forfeited (253) $ 54.27 Balance at June 30, 2024 11,338 $ 56.59 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt | |
Schedule of outstanding Convertible Notes | June 30, 2024 December 31, 2023 (in thousands) Long-Term Debt Outstanding Principal $ 287,500 $ 287,500 Unamortized debt discount and issuance cost (3,896) (4,555) Net carrying amount $ 283,604 $ 282,945 |
Summary of interest expense | Three months ended June 30, 2024 2023 (in thousands) Cash interest expense Contractual interest expense $ 1,617 $ 1,617 Non-cash interest expense Amortization of debt discount and debt issuance cost 330 322 Total interest expense $ 1,947 $ 1,939 Six months ended June 30, 2024 2023 (in thousands) Cash interest expense Contractual interest expense $ 3,234 $ 3,234 Non-cash interest expense Amortization of debt discount and debt issuance cost 658 642 Total interest expense $ 3,892 $ 3,876 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Net Loss per Share | |
Total outstanding potentially dilutive shares | June 30, 2024 2023 (in thousands) Options to purchase common stock 4,423 5,427 Performance-based awards and restricted stock units 11,338 9,658 Employee stock purchase plan 41 72 Convertible Notes 7,411 7,411 Total 23,213 22,568 |
Description of Business (Detail
Description of Business (Details) | 6 Months Ended |
Jun. 30, 2024 segment | |
Description of Business | |
Number of operating segments | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Jul. 19, 2024 | Apr. 30, 2020 | Sep. 30, 2023 | Apr. 30, 2020 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Policies | ||||||||||
Net Income (Loss) | $ (37,464) | $ (110,803) | $ (105,063) | $ (247,740) | ||||||
Accumulated deficit | 2,482,499 | 2,482,499 | $ 2,377,436 | |||||||
Cash, cash equivalents and restricted cash | 796,798 | $ 381,113 | 796,798 | $ 381,113 | 642,095 | $ 466,091 | ||||
Marketable securities | 90,299 | 90,299 | 236,882 | |||||||
Short-term Credit Line, outstanding balance | 80,389 | 80,389 | $ 80,402 | |||||||
Collateral amount | 150,000 | 150,000 | ||||||||
Remaining borrowing capacity | $ 20,000 | $ 20,000 | ||||||||
Common stock, shares issued | 123,365,000 | 123,365,000 | 119,581,000 | |||||||
Payment of offering expenses | $ 400 | |||||||||
Proceeds from issuance of common stock | $ 235,800 | |||||||||
Convertible Notes | ||||||||||
Policies | ||||||||||
Outstanding principal balance | $ 287,500 | $ 287,500 | $ 287,500 | $ 287,500 | ||||||
Per annum interest rate (as a percent) | 2.25% | 2.25% | ||||||||
Percentage of principal amount converted | 100% | |||||||||
Convertible Notes | Subsequent event | ||||||||||
Policies | ||||||||||
Per annum interest rate (as a percent) | 2.25% | |||||||||
Percentage of principal amount converted | 100% | |||||||||
Equity offering | ||||||||||
Policies | ||||||||||
Common stock, shares issued | 4,550,000 | |||||||||
Stock issued (in dollars per share) | $ 55 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Other Assets (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Sep. 10, 2021 | Jan. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2022 | |
In-process research and development acquisition | ||||
Asset Acquisition [Line Items] | ||||
Asset acquisition, consideration | $ 35.6 | $ 15 | $ 10 | |
Issuance of common stock | 276,346 | |||
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 | |||
Assets acquired from Invitae | ||||
Asset Acquisition [Line Items] | ||||
Asset acquisition, consideration | $ 10.5 | |||
Cash consideration | 10 | |||
Potential milestone payments | 42.5 | |||
Acquisition related costs | $ 0.5 | |||
Estimated useful life (in years) | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - AOCIL (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ (2,192) | $ (11,798) | $ (3,085) | $ (16,362) |
Ending balance | (1,358) | (9,203) | (1,358) | (9,203) |
Net unrealized gain 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 | $ 834 | $ 2,595 | $ 1,727 | $ 7,159 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Related Party (Details) - MyOme, Inc. - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | |
Feb. 29, 2024 | Jun. 30, 2024 | 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 | ||
Warrants term | 10 years | ||
Warrants convertible into number of common stock shares | 3,058,485 | ||
Warrants exercise price (in dollars per share) | $ 0.25 | ||
Warrants impairment | $ 0 | ||
Ownership percentage if warrants are exercised | 12.40% | ||
Executive chairman | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 26.50% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Risks and Uncertainties (Details) - Customer - customer | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Sales | |||||
Risk and Uncertainties | |||||
Number of customers exceeding 10% of benchmark | 0 | 0 | 0 | 0 | |
Sales | Medicare | |||||
Risk and Uncertainties | |||||
Concentration risk (as a percent) | 10.30% | 12.50% | 10.90% | 13.20% | |
Accounts receivable | |||||
Risk and Uncertainties | |||||
Number of customers exceeding 10% of benchmark | 0 | 0 | |||
Accounts receivable | Medicare | |||||
Risk and Uncertainties | |||||
Concentration risk (as a percent) | 8.80% | 10.20% |
Revenue Recognition (Details)
Revenue Recognition (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Mar. 31, 2023 USD ($) item | Aug. 31, 2019 | Feb. 28, 2019 USD ($) | Jun. 30, 2024 USD ($) $ / shares | Jun. 30, 2023 USD ($) $ / shares | Mar. 31, 2023 USD ($) | Jun. 30, 2024 USD ($) $ / shares | Jun. 30, 2023 USD ($) $ / shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2019 USD ($) | |
Allowances on accounts receivable | $ 1,300 | ||||||||||
Other assets | $ 29,311 | $ 29,311 | 15,403 | ||||||||
Deferred revenue | 36,783 | $ 37,146 | 36,783 | $ 37,146 | 35,740 | $ 30,778 | |||||
Disruption at Change Healthcare | |||||||||||
Allowances on accounts receivable | 16,600 | $ 16,600 | |||||||||
Product | |||||||||||
Approximate percentage of revenue collected within 9 months | 90% | ||||||||||
Billing collection period (in months) | 9 months | ||||||||||
Extended billing collection period (in months) | 6 months | ||||||||||
Increased (decreased) revenues | 1,700 | 800 | $ 3,800 | 6,500 | |||||||
(Increased) decreased net loss | $ 1,700 | $ 800 | $ 3,800 | $ 6,500 | |||||||
(Increased) decreased net loss per share | $ / shares | $ 0.01 | $ 0.01 | $ 0.03 | $ 0.06 | |||||||
Tests delivered in prior periods that were fully collected | |||||||||||
Increased (decreased) revenues | $ 39,900 | $ 3,400 | $ 73,700 | $ (5,800) | |||||||
(Increased) decreased net loss | $ 39,900 | $ 3,400 | $ 73,700 | $ (5,800) | |||||||
(Increased) decreased net loss per share | $ / shares | $ 0.32 | $ 0.03 | $ 0.60 | $ (0.05) | |||||||
Tests delivered in prior periods that were fully collected | Disruption at Change Healthcare | |||||||||||
Allowances on accounts receivable | $ 1,300 | $ 1,300 | |||||||||
Amounts not refunded to insurance carriers | |||||||||||
Increased (decreased) revenues | 1,900 | 4,100 | |||||||||
(Increased) decreased net loss | $ 1,900 | $ 4,100 | |||||||||
(Increased) decreased net loss per share | $ / shares | $ 0.02 | $ 0.03 | |||||||||
BGI Genomics | |||||||||||
Revenue recognized | $ 44,000 | ||||||||||
Agreement term | 10 years | ||||||||||
Revenue, remaining performance obligation | $ 6,000 | ||||||||||
Transaction price | 50,000 | ||||||||||
Contract asset | $ 4,500 | $ 4,500 | |||||||||
Other assets | 3,800 | 3,800 | |||||||||
Prepaid expenses and other current assets | 600 | 600 | |||||||||
Prepaid royalties | $ 20,000 | ||||||||||
BGI Genomics | License and related development services | |||||||||||
Number of performance obligations | item | 2 | ||||||||||
Revenue, remaining performance obligation | $ 24,000 | $ 24,000 | |||||||||
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 | Oncology assay interpretation services | |||||||||||
Revenue recognized | $ 600 | ||||||||||
Revenue, remaining performance obligation | $ 20,000 | ||||||||||
Deferred revenue | 18,900 | $ 200 | 18,900 | 200 | |||||||
BGI Genomics | Equipment and Services | |||||||||||
Equipment and services received | 400 | 1,000 | 400 | 2,600 | |||||||
Foundation Medicine ("FMI") | |||||||||||
Revenue recognized | 24,300 | ||||||||||
Agreement term | 5 years | ||||||||||
Automatic renewals, successive period thereafter | 1 year | ||||||||||
Revenue, remaining performance obligation | 7,700 | 7,700 | |||||||||
Transaction price | 32,000 | 32,000 | |||||||||
Prepaid royalties | 5,000 | 5,000 | |||||||||
Foundation Medicine ("FMI") | Oncology assay interpretation services | |||||||||||
Revenue recognized | 200 | $ 100 | 200 | $ 400 | |||||||
Revenue, remaining performance obligation | 5,000 | 5,000 | |||||||||
Deferred revenue | $ 3,000 | $ 3,000 | |||||||||
Foundation Medicine ("FMI") | Oncology products | |||||||||||
Revenue recognized | 200 | ||||||||||
Revenue, remaining performance obligation | $ 19,300 | $ 19,300 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 413,351 | $ 261,404 | $ 781,092 | $ 503,160 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 404,872 | 253,296 | 764,285 | 486,550 |
Americas, excluding U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,601 | 1,206 | 3,082 | 2,364 |
Europe, Middle East, India, Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 5,439 | 5,620 | 10,617 | 10,816 |
Asia Pacific and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,439 | 1,282 | 3,108 | 3,430 |
Insurance carriers | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 384,128 | 226,521 | 725,156 | 436,899 |
Laboratory partners | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 22,254 | 27,449 | 42,530 | 50,254 |
Patients | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 6,969 | 7,434 | 13,406 | 16,007 |
Licensing and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 1,987 | $ 3,148 | $ 5,056 | $ 7,107 |
Revenue Recognition - Accounts
Revenue Recognition - Accounts Receivable and Deferred Revenue (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||||
Accounts receivable, net | $ 335,936 | $ 278,289 | ||
Liabilities: | ||||
Deferred revenue, current portion | 18,367 | 16,612 | ||
Deferred revenue, long-term portion | 18,416 | 19,128 | ||
Total deferred revenues | $ 36,783 | $ 35,740 | $ 37,146 | $ 30,778 |
Revenue Recognition - Changes i
Revenue Recognition - Changes in Balance of Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue Recognition | ||
Beginning balance | $ 35,740 | $ 30,778 |
Increase in deferred revenues | 14,826 | 17,402 |
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | (9,646) | (7,521) |
Revenue recognized from performance obligations satisfied within the same period | (4,137) | (3,513) |
Ending Balance | $ 36,783 | $ 37,146 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | $ 9,646 | $ 7,521 | |
Deferred revenue, current portion | 18,367 | $ 16,612 | |
Deferred revenue, Long-term | 18,416 | $ 19,128 | |
BGI Genomics | |||
Deferred revenue, current portion | 500 | ||
Deferred revenue, Long-term | 18,400 | ||
Foundation Medicine ("FMI") | |||
Deferred revenue, current portion | 3,000 | ||
BGI Genomics and Foundation Medicine ("FMI") | |||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | 100 | ||
Genetic testing services | |||
Revenue recognized during the period that was included in deferred revenues at the beginning of the period | 9,500 | ||
Deferred revenue, current portion | $ 14,800 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 21 Months Ended | |
Oct. 31, 2023 | Jun. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | |
Line Of Credit-UBS | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Line of credit facility, fair value of amount outstanding | $ 80,400 | $ 80,400 | ||
Line Of Credit-UBS | SOFR | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Spread on interest rate (as a percent) | 0.50% | 0.50% | 1.21% | |
Level 2 | Convertible Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of long-term debt | $ 800,700 | 491,800 | ||
Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | 887,097 | 878,977 | ||
Recurring | Cash, cash equivalents, and restricted cash | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | 796,798 | 642,095 | ||
Recurring | U.S. Treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | 58,814 | 200,418 | ||
Recurring | Municipal securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | 31,485 | 36,464 | ||
Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | 855,612 | 842,513 | ||
Recurring | Level 1 | Cash, cash equivalents, and restricted cash | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | 796,798 | 642,095 | ||
Recurring | Level 1 | U.S. Treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | 58,814 | 200,418 | ||
Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | 31,485 | 36,464 | ||
Recurring | Level 2 | Municipal securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets | $ 31,485 | $ 36,464 |
Financial Instruments (Details)
Financial Instruments (Details) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2024 USD ($) position | Dec. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||||
Amortized Cost | $ 888,277 | $ 881,708 | ||
Gross Unrealized Gain | 14 | |||
Gross Unrealized Loss | (1,180) | (2,745) | ||
Estimated Fair Value | 887,097 | 878,977 | ||
Cash, cash equivalents and restricted cash | 796,798 | 642,095 | $ 381,113 | $ 466,091 |
Short-term investments | 90,299 | 236,882 | ||
Securities Sold | $ 0 | |||
Number of investments, unrealized loss position | position | 15 | |||
Credit loss reserve | $ 0 | |||
Less than 12 Months, Fair value | 23,923 | |||
12 Months or Longer, Fair value | 66,376 | |||
Fair value | 90,299 | |||
12 Months or Longer, Unrealized loss | (1,180) | |||
Unrealized loss | (1,180) | |||
Amortized Cost | ||||
Less than or equal to one year | 75,440 | |||
Greater than one year but less than five years | 16,039 | |||
Total | 91,479 | |||
Fair Value | ||||
Less than or equal to one year | 75,003 | |||
Greater than one year but less than five years | 15,296 | |||
Total | 90,299 | |||
Cash, cash equivalents, and restricted cash | ||||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||||
Amortized Cost | 796,798 | 642,095 | ||
Estimated Fair Value | 796,798 | 642,095 | ||
U.S. Treasury securities | ||||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||||
Amortized Cost | 58,923 | 201,522 | ||
Gross Unrealized Gain | 14 | |||
Gross Unrealized Loss | (109) | (1,118) | ||
Estimated Fair Value | 58,814 | 200,418 | ||
Less than 12 Months, Fair value | 23,923 | |||
12 Months or Longer, Fair value | 34,891 | |||
Fair value | 58,814 | |||
12 Months or Longer, Unrealized loss | (109) | |||
Unrealized loss | (109) | |||
Municipal securities | ||||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||||
Amortized Cost | 32,556 | 38,091 | ||
Gross Unrealized Loss | (1,071) | (1,627) | ||
Estimated Fair Value | 31,485 | $ 36,464 | ||
12 Months or Longer, Fair value | 31,485 | |||
Fair value | 31,485 | |||
12 Months or Longer, Unrealized loss | (1,071) | |||
Unrealized loss | $ (1,071) |
Balance Sheet Components - Allo
Balance Sheet Components - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Balance Sheet Components | ||||
Beginning balance | $ 7,252 | $ 5,134 | $ 6,481 | $ 3,830 |
(Reversal of) Provision for doubtful accounts | (185) | 446 | 744 | 1,750 |
Write-offs | (46) | (204) | ||
Total | $ 7,021 | $ 5,580 | $ 7,021 | $ 5,580 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, net (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Property and Equipment, net | |||
Property and equipment, gross | $ 197,740 | $ 167,503 | |
Less: Accumulated depreciation and amortization | (64,460) | (56,293) | |
Total Property and Equipment, net | 133,280 | 111,210 | |
Depreciation expense | 13,300 | $ 10,200 | |
Impairment charge | 0 | ||
Equipment pledged | 150,000 | ||
Machinery and equipment | |||
Property and Equipment, net | |||
Property and equipment, gross | 94,785 | 85,626 | |
Computer equipment | |||
Property and Equipment, net | |||
Property and equipment, gross | $ 3,040 | 1,850 | |
Useful Life | 3 years | ||
Software held for internal use | |||
Property and Equipment, net | |||
Property and equipment, gross | $ 10,672 | 11,636 | |
Useful Life | 3 years | ||
Leasehold improvements | |||
Property and Equipment, net | |||
Property and equipment, gross | $ 47,666 | 38,999 | |
Construction-in-process | |||
Property and Equipment, net | |||
Property and equipment, gross | $ 41,577 | $ 29,392 | |
Minimum | Machinery and equipment | |||
Property and Equipment, net | |||
Useful Life | 3 years | ||
Maximum | Machinery and equipment | |||
Property and Equipment, net | |||
Useful Life | 5 years |
Balance Sheet Components - Othe
Balance Sheet Components - Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Components | ||||
Reserves for refunds to insurance carriers | $ 16,465 | $ 23,245 | $ 15,480 | $ 18,948 |
Accrued charges for third-party testing | 10,574 | 14,823 | ||
Testing and laboratory materials from suppliers | 14,142 | 11,229 | ||
Marketing and corporate affairs | 11,792 | 10,085 | ||
Short term advances | 13,899 | |||
Legal, audit and consulting fees | 31,979 | 43,897 | ||
Accrued shipping charges | 1,800 | 3,646 | ||
Sales and income tax payable | 4,053 | 3,731 | ||
Accrued third-party service fees | 8,173 | 7,111 | ||
Clinical trials and studies | 7,502 | 12,126 | ||
Operating lease liabilities, current portion | 12,384 | 11,621 | ||
Property and equipment purchases | 5,330 | 4,316 | ||
Other accrued interest | 1,078 | 1,078 | ||
Other accrued expenses | 2,060 | 2,497 | ||
Total other accrued liabilities | $ 141,231 | $ 149,405 |
Balance Sheet Components - Rese
Balance Sheet Components - Reserve Balance and Activities for Refunds (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Balance Sheet Components | ||
Beginning balance | $ 23,245 | $ 18,948 |
Additional reserves | 1,065 | 5,148 |
Refunds to carriers | (3,095) | (963) |
Reserves released to revenue | (4,750) | (7,653) |
Ending balance | 16,465 | $ 15,480 |
Short term advances | $ 13,900 |
Leases (Details)
Leases (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Oct. 31, 2027 USD ($) | Sep. 30, 2023 USD ($) ft² | Sep. 30, 2021 USD ($) ft² | Jun. 30, 2024 USD ($) ft² | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) ft² lease item | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||||
Operating lease liabilities, current portion included in other accrued liabilities | $ 12,384 | $ 12,384 | $ 11,621 | |||||
Operating lease liabilities, long-term portion | 61,225 | 61,225 | 67,025 | |||||
Operating lease liabilities | $ 73,609 | 73,609 | $ 78,646 | |||||
Noncash operating activities related to right-of-use assets | $ 600 | $ 0 | ||||||
Weighted average remaining lease term | 6 years 3 months 18 days | 6 years 3 months 18 days | ||||||
Weighted average discount rate (as a percent) | 6.80% | 6.80% | ||||||
Lease expense | $ 3,600 | $ 3,700 | $ 7,200 | 7,500 | ||||
Operating lease payments | $ 4,100 | $ 3,000 | $ 8,300 | $ 5,200 | ||||
Austin TX, Long-term Lease | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease space (area) | ft² | 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] | ||||||||
Lease space (area) | ft² | 32,500 | 32,500 | ||||||
Second Expansion Premises | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease space (area) | ft² | 65,222 | 65,222 | ||||||
Corporate Headquarters Lease | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease space (area) | ft² | 136,000 | 136,000 | ||||||
Number of office space locations | item | 2 | |||||||
"First Space" Sublease | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Number of office space locations | ft² | 88,000 | |||||||
"Second Space" Sublease | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Number of office space locations | ft² | 48,000 | |||||||
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] | ||||||||
Lease space (area) | ft² | 10,000 | 10,000 | ||||||
Term of lease | 62 months | 62 months | ||||||
Renewal term of lease | 5 years | 5 years | ||||||
San Carlos, CA Sublease Amendment | Forecast | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Annual lease payment | $ 10,600 | |||||||
South San Francisco, CA Lease | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease space (area) | ft² | 11,395 | 11,395 | ||||||
Annual lease payment | $ 900 | |||||||
Term of lease | 36 months | 36 months | ||||||
Renewal term of lease | 3 years | 3 years | ||||||
Pleasanton, CA Lease | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease space (area) | ft² | 16,319 | |||||||
Annual lease payment | $ 500 | |||||||
Term of lease | 60 months | |||||||
Laboratory space in Canada | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease space (area) | ft² | 7,107 | |||||||
Annual lease payment | $ 200 | |||||||
Term of lease | 24 months | |||||||
Certain workspaces and storage spaces | Minimum | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Term of lease | 1 year | 1 year | ||||||
Certain workspaces and storage spaces | Maximum | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Term of lease | 5 years | 5 years |
Leases - Payments (Details)
Leases - Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Leases. | ||
2024 (remaining 6 months) | $ 8,449 | |
2025 | 17,155 | |
2026 | 17,450 | |
2027 | 14,345 | |
2028 | 6,675 | |
2029 and thereafter | 27,928 | |
Total future minimum lease payments | 92,002 | |
Less: imputed interest | (18,393) | |
Operating lease liabilities | $ 73,609 | $ 78,646 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | |||||||
Jan. 31, 2024 USD ($) patent | Jun. 30, 2023 USD ($) patent | Dec. 31, 2022 patent lawsuit | Mar. 31, 2022 USD ($) | Oct. 31, 2020 patent | Mar. 31, 2020 lawsuit patent | Jun. 30, 2024 USD ($) | Feb. 28, 2022 lawsuit | |
Other commitments | ||||||||
Loss contingency, patents allegedly infringed, number | patent | 2 | |||||||
Amount awarded to other party | $ 57,000 | |||||||
Total commitments | $ 103,518 | |||||||
Laboratory instruments supplier | ||||||||
Other commitments | ||||||||
Total commitments | 4,404 | |||||||
Material suppliers | ||||||||
Other commitments | ||||||||
Total commitments | 35,581 | |||||||
Application service providers | ||||||||
Other commitments | ||||||||
Total commitments | 4,191 | |||||||
Cloud platform service provider | ||||||||
Other commitments | ||||||||
Total commitments | 36,599 | |||||||
Leases | ||||||||
Other commitments | ||||||||
Total commitments | 420 | |||||||
Other material suppliers | ||||||||
Other commitments | ||||||||
Total commitments | $ 22,323 | |||||||
CareDX Patent Case | ||||||||
Other commitments | ||||||||
Loss contingency, patents allegedly infringed, number | patent | 3 | |||||||
Number of invalid patents | patent | 3 | |||||||
Gain contingency, patents allegedly infringed, number | patent | 1 | |||||||
Number of lawsuits | lawsuit | 2 | |||||||
Amount awarded to other party | $ 44,900 | |||||||
Amount awarded from other party | $ 96,300 | |||||||
ArcherDX Case | ||||||||
Other commitments | ||||||||
Gain contingency, patents allegedly infringed, number | patent | 3 | |||||||
Amount awarded from other party | $ 19,350 | |||||||
Genosity Inc. Patent Case | ||||||||
Other commitments | ||||||||
Gain contingency, patents allegedly infringed, number | patent | 1 | |||||||
Inivata Patent Case | ||||||||
Other commitments | ||||||||
Gain contingency, patents allegedly infringed, number | patent | 1 | |||||||
Number of lawsuits | lawsuit | 2 | |||||||
Class action | ||||||||
Other commitments | ||||||||
Number of lawsuits | lawsuit | 2 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Stock based compensation expense | ||||
Stock-based compensation expense | $ 67,411 | $ 44,312 | $ 131,858 | $ 84,789 |
Cost of revenues | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 4,046 | 2,838 | 7,823 | 5,394 |
Research and development | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 21,957 | 15,337 | 42,606 | 29,977 |
Selling, general and administrative | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | 41,408 | 26,137 | 81,429 | 49,418 |
Liability classified awards | ||||
Stock based compensation expense | ||||
Stock-based compensation expense | $ 200 | $ 300 | $ 400 | $ 500 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Stock Based Compensation | |||||
Stock-based compensation expense | $ 67,411 | $ 44,312 | $ 131,858 | $ 84,789 | |
Performance-based awards | |||||
Stock Based Compensation | |||||
Stock-based compensation expense | $ 22,100 | 10,200 | $ 42,800 | 17,500 | |
Shares granted | 800 | ||||
Options to purchase common stock | |||||
Stock Based Compensation | |||||
Options outstanding (in shares) | 4,423 | 4,423 | 5,501 | ||
Liability classified awards | |||||
Stock Based Compensation | |||||
Stock-based compensation expense | $ 200 | $ 300 | $ 400 | $ 500 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - Options to purchase common stock shares in Thousands | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Number of shares Outstanding | |
Outstanding, beginning balance (in shares) | shares | 5,501 |
Options exercised (in shares) | shares | (1,078) |
Outstanding, end balance (in shares) | shares | 4,423 |
Weighted-Average Exercise Price | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 23.65 |
Exercised (in dollars per share) | $ / shares | 8.02 |
Outstanding, end balance (in dollars per share) | $ / shares | $ 27.45 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - RSU and performance-based awards shares in Thousands | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Shares | |
Balance (in shares) | shares | 9,248 |
Granted (in shares) | shares | 4,786 |
Vested (in shares) | shares | (2,443) |
Canceled/Forfeited (in shares) | shares | (253) |
Balance (in shares) | shares | 11,338 |
Weighted Average Grant Date Fair Value | |
Balance (in dollars per share) | $ / shares | $ 49.50 |
Granted (in dollars per share) | $ / shares | 68.59 |
Vested (in dollars per share) | $ / shares | 54.93 |
Canceled/Forfeited (in dollars per share) | $ / shares | 54.27 |
Balance (in dollars per share) | $ / shares | $ 56.59 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance-based Awards (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 67,411 | $ 44,312 | $ 131,858 | $ 84,789 |
Performance-based awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 0.8 | |||
Aggregate value | 55,000 | $ 55,000 | ||
Aggregate value recognized | 9,400 | $ 16,000 | ||
Target (percentage) | 200% | |||
Expected compensation expense recognition over requisite service period | $ 110,000 | |||
Stock-based compensation expense | $ 22,100 | $ 10,200 | $ 42,800 | $ 17,500 |
Debt (Details)
Debt (Details) $ / shares in Units, shares in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 21 Months Ended | |||||||||
Apr. 30, 2020 USD ($) $ / shares | Oct. 31, 2023 | Nov. 30, 2022 USD ($) | Apr. 30, 2020 USD ($) D $ / shares | Jul. 31, 2017 | Jun. 30, 2024 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) | Sep. 30, 2023 | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | Sep. 30, 2015 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||
Remaining borrowing capacity | $ 20,000,000 | $ 20,000,000 | |||||||||||
Collateral amount | $ 150,000,000 | $ 150,000,000 | |||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Common stock, shares issued | shares | 123,365 | 123,365 | 119,581 | ||||||||||
Accrued Interest | $ 1,078,000 | $ 1,078,000 | $ 1,078,000 | ||||||||||
Amortization of debt discount and issuance cost | 658,000 | $ 642,000 | |||||||||||
Interest expense | 3,127,000 | $ 3,177,000 | 6,251,000 | 6,238,000 | |||||||||
Convertible Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
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 | $ 1,947,000 | 1,939,000 | $ 3,892,000 | 3,876,000 | |||||||||
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 | $ 283,604,000 | $ 283,604,000 | 282,945,000 | ||||||||||
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 | 800,700,000 | 800,700,000 | 491,800,000 | ||||||||||
Line Of Credit-UBS | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 100,000,000 | 100,000,000 | 100,000,000 | $ 150,000,000 | $ 50,000,000 | ||||||||
Outstanding balance | 80,400,000 | 80,400,000 | $ 80,400,000 | ||||||||||
Credit facility drawn down | 80,000,000 | ||||||||||||
Remaining borrowing capacity | 20,000,000 | 20,000,000 | |||||||||||
Borrowings under credit facility | $ 30,000,000 | ||||||||||||
Collateral amount | $ 150,000,000 | 150,000,000 | |||||||||||
Interest expense | $ 2,400,000 | $ 2,400,000 | |||||||||||
Interest rate (as a percent) | 5.84% | 5.84% | |||||||||||
Interest expense | $ 1,200,000 | $ 1,200,000 | |||||||||||
Line Of Credit-UBS | LIBOR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Spread on interest rate (as a percent) | 1.10% | ||||||||||||
Line Of Credit-UBS | SOFR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Spread on interest rate (as a percent) | 0.50% | 0.50% | 1.21% | ||||||||||
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, 2024 | |
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, 2024 | Dec. 31, 2023 |
Outstanding principle | $ 287,500 | $ 287,500 |
Unamortized debt discount and issuance cost | (3,896) | (4,555) |
Net carrying amount | $ 283,604 | $ 282,945 |
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, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
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 | 330 | 322 | 658 | 642 |
Total interest expense | $ 1,947 | $ 1,939 | $ 3,892 | $ 3,876 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Income Taxes | |||||
Income tax expense | $ 892,000 | $ (282,000) | $ 1,320,000 | $ (122,000) | |
Interest and penalties accrued | $ 0 | $ 0 | $ 0 |
Net Loss per Share - Loss per S
Net Loss per Share - Loss per Share (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Convertible Notes | |
Earnings or Loss per Share [Line Items] | |
Convertible, If-converted value in excess of principal | $ 504.2 |
Net Loss per Share - Potentiall
Net Loss per Share - Potentially Dilutive Shares (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 23,213 | 22,568 |
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 | 4,423 | 5,427 |
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 | 11,338 | 9,658 |
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 | 41 | 72 |
Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares not included in diluted per share calculation | 7,411 | 7,411 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | ||||
Jul. 19, 2024 | Apr. 30, 2020 | Oct. 31, 2027 | Apr. 30, 2020 | Jun. 30, 2024 | Jul. 31, 2024 | |
San Carlos, CA Sublease Amendment | Forecast | ||||||
Subsequent Event [Line Items] | ||||||
Annual lease payment | $ 10.6 | |||||
Convertible Notes | ||||||
Subsequent Event [Line Items] | ||||||
Per annum interest rate (as a percent) | 2.25% | 2.25% | ||||
Percentage of principal amount converted | 100% | |||||
Subsequent event | San Carlos, CA Sublease Amendment | ||||||
Subsequent Event [Line Items] | ||||||
Renewal term of lease | 60 months | |||||
Subsequent event | Convertible Notes | ||||||
Subsequent Event [Line Items] | ||||||
Convertible, if converted common shares aggregate value | $ 287.5 | |||||
Per annum interest rate (as a percent) | 2.25% | |||||
Percentage of principal amount converted | 100% | |||||
Conversion rate increase | 0.4284 | |||||
Subsequent event | Convertible Notes | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Conversion, shares to be issued | 7,534,000 |