Senseonics (SENS) 10-Q 8 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 07, 2018
Document and Entity Information
Entity Registrant Name	Senseonics Holdings, Inc.
Entity Central Index Key	1,616,543
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Entity Common Stock, Shares Outstanding		176,026,760

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 183,928	$ 16,150
Marketable securities	7,954	20,300
Accounts receivable, primarily from a related party	2,988	3,382
Inventory, net	8,400	2,991
Prepaid expenses and other current assets	4,195	2,092
Total current assets	207,465	44,915
Deposits and other assets	205	176
Property and equipment, net	998	853
Total assets	208,668	45,944
Current liabilities:
Accounts payable	5,172	7,712
Accrued expenses and other current liabilities	9,863	5,428
Notes payable, current portion	10,000	10,000
Total current liabilities	25,035	23,140
Notes payable, net of discount	9,619	14,414
Convertible senior notes, net of discount	34,469
Derivative liability	32,312
Notes payable, accrued interest	1,444	1,054
Other liabilities	73	69
Total liabilities	102,952	38,677
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock, $0.001 par value per share; 450,000,000 and 250,000,000 shares authorized, 175,897,790 and 136,882,735 shares issued and outstanding as of June 30, 2018 and December 31, 2017	177	137
Additional paid-in capital	424,131	270,953
Accumulated deficit	(318,592)	(263,823)
Total stockholders' equity	105,716	7,267
Total liabilities and stockholders’ equity	$ 208,668	$ 45,944

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Class of stock information
Common stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	450,000,000	250,000,000
Common stock, shares issued	175,897,790	136,882,735
Common stock, shares outstanding	175,897,790	136,882,735

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Condensed Consolidated Statements of Operations and Comprehensive Loss
Revenue, primarily from a related party	$ 3,623	$ 814	$ 6,569	$ 1,367
Cost of sales	3,839	1,714	7,147	2,759
Gross profit	(216)	(900)	(578)	(1,392)
Expenses:
Sales and marketing expenses	6,177	1,249	9,618	2,389
Research and development expenses	8,289	5,604	16,402	12,602
General and administrative expenses	5,382	3,888	9,393	7,655
Operating loss	(20,064)	(11,641)	(35,991)	(24,038)
Other income (expense), net:
Interest income	241	37	425	58
Interest expense	(2,236)	(767)	(4,007)	(1,451)
Change in fair value of 2023 derivative	(10,166)		(15,013)
Other expense	(271)	(3)	(183)	(16)
Total other expense, net	(12,432)	(733)	(18,778)	(1,409)
Net loss	(32,496)	(12,374)	(54,769)	(25,447)
Total comprehensive loss	$ (32,496)	$ (12,374)	$ (54,769)	$ (25,447)
Basic and diluted net loss per common share	$ (0.23)	$ (0.12)	$ (0.40)	$ (0.26)
Basic and diluted weighted-average shares outstanding (in shares)	138,767,873	103,689,994	137,923,135	98,825,088

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Net loss	$ (54,769)	$ (25,447)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	104	92
Non-cash interest expense (debt discount and deferred costs)	1,519	226
Change in fair value of derivative liability	15,012
Stock-based compensation expense	3,058	1,719
Provision for lower of cost or net realizable value	202	263
Net realized gain on marketable securities	(69)
Changes in assets and liabilities:
Accounts receivable	394	(549)
Prepaid expenses and other current assets	(2,103)	(197)
Inventory	(5,611)	(3,169)
Deposits and other assets	(76)	(36)
Accounts payable	(2,540)	(88)
Accrued expenses and other current liabilities	4,118	2,616
Accrued interest	390	358
Deferred rent	4	11
Net cash used in operating activities	(40,367)	(24,201)
Cash flows from investing activities
Capital expenditures	(176)	(196)
Purchases of marketable securities	(7,935)	(7,981)
Sales and maturities of marketable securities	20,350	7,300
Net cash provided by (used in) investing activities	12,239	(877)
Cash flows from financing activities
Proceeds from issuance of common stock, net of issuance costs	149,379	40,343
Proceeds from exercise of stock options	813	186
Proceeds from notes payable, net of costs		4,896
Proceeds from issuance of warrants		104
Proceeds from convertible senior notes, net of costs	50,734
Principal payments of notes payable	(5,000)
Principal payments under capital lease obligations	(20)	(40)
Net cash provided by financing activities	195,906	45,489
Net increase in cash and cash equivalents	167,778	20,411
Cash and cash equivalents, at beginning of period	16,150	13,047
Cash and cash equivalents, at end of period	183,928	33,458
Supplemental disclosure of cash flow information
Cash paid during the period for interest	954	$ 811
Supplemental disclosure of non-cash investing and financing activities
Common stock offering costs incurred	282
Convertible debt offering costs incurred	29
Capital expenditures	$ 73

Organization

Organization	6 Months Ended
	Jun. 30, 2018
Organization
Organization	1. Senseonics Holdings, Inc., a Delaware corporation, is a medical technology company focused on the development and commercialization of glucose monitoring products to improve the lives of people with diabetes by enhancing their ability to manage their disease with relative ease and accuracy. ASN Technologies, Inc. (“ASN”) was incorporated in Nevada on June 26, 2014. On December 4, 2015, ASN reincorporated in Delaware and changed its name to Senseonics Holdings, Inc. On December 7, 2015, Senseonics Holdings, Inc. acquired 100% of the outstanding capital stock of Senseonics, Incorporated (the "Acquisition"). Senseonics, Incorporated was originally incorporated on October 30, 1996 and commenced operations on January 15, 1997. Senseonics Holdings, Inc. and its wholly-owned subsidiary Senseonics, Incorporated are hereinafter referred to as the “Company” unless the context requires otherwise.

Liquidity

Liquidity	6 Months Ended
	Jun. 30, 2018
Liquidity
Liquidity	2. The Company’s operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, lack of operating history and uncertainty of future profitability. Since inception, the Company has incurred substantial operating losses, principally from expenses associated with the Company’s research and development programs. The Company has not generated significant revenues from the sale of products and its ability to generate revenue and achieve profitability largely depends on the Company’s ability, alone or with others, to complete the development of its products or product candidates, and to obtain necessary regulatory approvals for the manufacture, marketing and sales of those products. These activities will require significant uses of working capital through the remainder of 2018 and beyond. On March 23, 2016, the Company effected the initial closing of its public offering of 15,800,000 shares of its common stock at a price to the public of $2.85 per share (the “March 2016 Offering”). The Company received aggregate net proceeds from the March 2016 Offering, including proceeds from the underwriters’ subsequent partial exercise of their option to purchase additional shares, of $44.8 million. On June 30, 2016, the Company entered into Amended and Restated Loan and Security Agreement with Oxford Finance LLC (“Oxford”) and Silicon Valley Bank (“SVB”) resulting in borrowings of an aggregate principal amount of $25.0 million. On June 1, 2017, the Company effected the closing of its offering of 29,078,014 shares of its common stock at a price of $1.41 per share (the “May 2017 Offering”). The Company received aggregate net proceeds from the May 2017 Offering of $40.4 million. On August 23, 2017, the Company effected the closing of its offering of 13,383,125 shares of its common stock at a price of $2.15 per share (the “August 2017 Offering”). The Company received aggregate net proceeds from the August 2017 Offering of $26.5 million. In January 2018, the Company issued $50.0 million in aggregate principal amount of convertible senior subordinated notes, and in February 2018, the Company issued an additional $3.0 million in aggregate principal amount of convertible senior subordinated notes (collectively, the “2023 Notes”) upon the partial exercise of the underwriters’ over-allotment option. On June 28, 2018, the Company effected the closing of its offering of 38,076,561 shares of its common stock at a price of $3.93 per share (the “June 2018 Offering”). The Company received aggregate net proceeds from the June 2018 Offering of $149.1 million. Management has concluded that, based on the Company’s current operating plans, its existing cash, cash equivalents, and marketable securities available for sale will be sufficient to meet the Company’s anticipated operating needs through 2020. Accordingly, management has concluded that the doubt about the Company’s ability to continue as a going concern through March 31, 2019 that existed at May 10, 2018 has been alleviated. Historically, the Company has financed its operating activities through the sale of equity and equity linked securities and the issuance of debt. The Company plans to continue financing its operations with external capital for the foreseeable future. However, the Company may not be able to raise additional funds on acceptable terms, or at all. If the Company is unable to secure sufficient capital to fund its research and development and other operating activities, the Company may be required to delay or suspend operations, enter into collaboration agreements with partners that could require the Company to share commercial rights to its products to a greater extent or at earlier stages in the product development process than is currently intended, merge or consolidate with other entities, or liquidate.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	3. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the Company’s opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly its financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2017, has been derived from audited financial statements as of that date. The interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the U.S. Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. In the accompanying consolidated financial statements, estimates are used for, but not limited to, inventory valuation, inputs used to value stock-based compensation, recoverability of long-lived assets, fair value of financial instruments, income taxes, depreciable lives of property and equipment, reserves for expected warranty costs, and estimated accruals for clinical and preclinical study costs, which are accrued based on estimates of work performed under contracts. Actual results could differ from those estimates; however management does not believe that such differences would be material. Segment Information Operating segments are defined as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment, glucose monitoring products. Comprehensive Loss Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the three and six months ended June 30, 2018 and 2017, the Company’s net loss equaled its comprehensive loss and, accordingly, no additional disclosure is presented. Cash and Cash Equivalents and Concentration of Credit Risk The Company considers highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. These investments are carried at cost, which approximates fair value. The Company’s cash and cash equivalents potentially subject the Company to credit and liquidity risk. The Company maintains cash deposits at major financial institutions with high credit quality and, at times, the balances of those deposits may exceed the Federal Deposit Insurance Corporation limits of $250,000. The Company has not experienced and does not anticipate any losses on deposits with commercial banks and financial institutions that exceed the federally insured amounts. Concentration of Revenues and Customers At any given time, the Company’s trade receivables are concentrated among a small number of principal customers. If any of the Company’s customers fail to pay their obligations under the terms of these financial instruments, the Company’s maximum exposure to potential losses would be equal to amounts reported on its consolidated balance sheets. During the three and six months ended June 2018 and 2017, the Company derived substantially all of its revenue from two customers. Total revenues from those customers was as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Roche Diabetes Care (related party) $ 3,070 $ 698 $ 5,638 $ 1,163 Rubin Medical $ 529 $ 116 $ 897 $ 204 Marketable Securities Marketable securities consist of government and agency securities and corporate debt securities. The Company’s investments are classified as available for sale. Such securities are carried at fair value, with any unrealized holding gains or losses reported, net of any tax effects reported, as accumulated other comprehensive income. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in consolidated results of operations. A decline in the market value of any available for sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value, which is charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income is recognized when earned. The cost of securities sold is calculated using the specific identification method. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date as non-current assets. Inventory Inventory is valued at the lower of cost or net realizable value. Cost is determined using the standard cost method that approximates first in, first out. The Company periodically reviews inventory to determine if a write-down is necessary for inventory that has become obsolete, inventory that has a cost basis less than net realizable value, and inventory in excess of future demand taking into consideration the product shelf life. Accounts Receivable The Company grants credit to various customers in the normal course of business. Accounts receivable consist of amounts due from distributors. The Company records an allowance for doubtful accounts at the time potential collection risk is identified. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. Property and Equipment Property and equipment are stated at cost. Depreciation is computed by use of the straight-line method over the estimated useful lives of the assets, which is between three to five years for laboratory equipment, between five to seven years for office furniture and equipment, and the shorter of lease term or useful life for leasehold improvements. Upon disposition of the assets, the costs and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations. Repairs and maintenance costs are included as expense in the accompanying statement of operations. Management reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If the undiscounted cash flows are less than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Management did not identify any indicators of impairment through June 30, 2018. Derivative Financial Instruments In connection with the Company’s issuance of the 2023 Notes in January 2018, the Company bifurcated the embedded conversion option, along with the interest make-whole provision and make-whole fundamental change provision, and recorded the embedded conversion option as a derivative liability in the Company’s consolidated balance sheets in accordance with Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging . The financial instrument is remeasured at the end of each reporting period with changes in fair value recorded in the consolidated statements of operations in other income (expense) as change in fair value of 2023 derivative. Warranty Reserve The Company may replace Eversense system components that do not function in accordance with the product specifications. Estimated replacement costs associated with a product are recorded at the time of shipment. The Company estimates future replacement costs by analyzing historical replacement experience for the timing and amount of returned product, and the Company evaluates the reserve quarterly and makes adjustments when appropriate. Revenue Recognition Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers , using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company generates product revenue from sales of the Eversense system and related components and supplies at a fixed price to third-party distributors (the “Customers”) who resell the products to health care providers and patients in the European Union. The Company is paid for its sales directly to the Customers, regardless of whether or not the Customers resell the products to health care providers and patients. Revenues from product sales are recognized when the Customers obtain control of the Company’s product, which occurs at a point in time, based upon the delivery terms as defined in the distributor agreement. The Company is typically paid within 60 days of invoicing subsequent to the Customers obtaining control of the Company’s product. The Company offers no discounts, rebates, rights of return, or other allowances to the Customers which would result in the establishment of reserves against product revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a Customer contract. Cost of Sales The Company uses third-party contract manufacturers to manufacture Eversense and related components and supplies. Cost of sales includes raw materials, contract manufacturing service fees, reserves for expected warranty costs, reserves for inventory valuation, scrap, and shipping and handling expenses associated with product delivery. Shipping and Handling Expenses Shipping and handling expenses associated with product delivery are included within cost of sales in the Company’s consolidated statements of operations. Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses include costs related to employee compensation, preclinical studies and clinical trials, supplies, outsource testing, consulting and depreciation and other facilities‑related expenses. Stock‑Based Compensation The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options, based on the fair value of those awards at the date of grant. The estimated fair value of stock options on the date of grant is amortized on a straight‑line basis over the requisite service period for each separately vesting portion of the award for those awards with service conditions only. For awards that also contain performance conditions, expense is recognized beginning at the time the performance condition is considered probable of being met over the remaining vesting period. The Company accounts for forfeitures in the period in which they occur. The Company uses the Black‑Scholes option pricing model to determine the fair value of stock‑option awards. Valuation of stock awards requires management to make assumptions and to apply judgment to determine the fair value of the awards. These assumptions and judgments include estimating the fair value of the Company’s common stock, future volatility of the Company’s stock price, dividend yields, future employee turnover rates, and future employee stock option exercise behaviors. Changes in these assumptions can affect the fair value estimate. Under ASC Topic 718, the cumulative amount of compensation cost recognized for instruments classified as equity that ordinarily would result in a future tax deduction under existing tax law shall be considered to be a deductible difference in applying ASC Topic 740, Income Taxes . The deductible temporary difference is based on the compensation cost recognized for financial reporting purposes; however, these provisions currently do not impact the Company, as all the deferred tax assets have a full valuation allowance. Since the Company had net operating loss (“NOL”) carryforwards as of June 30, 2018, no excess tax benefits for the tax deductions related to stock-based awards were recognized in the statements of operations and comprehensive loss. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Management uses a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and penalties and financial statement reporting disclosures. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. In the ordinary course of business, transactions occur for which the ultimate outcome may be uncertain. Management does not expect the outcome related to accrued uncertain tax provisions to have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company recognizes interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense. The Company did not have any amounts accrued relating to interest and penalties as of June 30, 2018 and December 31, 2017. The Company is subject to taxation in various jurisdictions in the United States and remains subject to examination by taxing jurisdictions for the year 1998 and all subsequent periods due to the availability of NOL carryforwards. In addition, all of the NOLs and research and development credit carryforwards that may be used in future years are still subject to adjustment. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of their short maturities. The Company’s term notes and 2023 Notes are recorded at historical cost, net of discounts, and are not remeasured at fair value. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. For periods of net loss, diluted net loss per share is calculated similarly to basic loss per share because the impact of all potential common shares is anti-dilutive. At June 30, 2018 and 2017, the total number of anti-dilutive shares, consisting of common stock options, stock purchase warrants, and the 2023 Notes using the if-converted method, which have been excluded from the computation of diluted loss per share, were as follows: June 30, 2018 2017 Stock-based awards 21,305,247 15,348,333 2023 Notes 15,499,998 — Warrants 4,082,544 4,570,902 Total anti-dilutive shares outstanding 40,887,789 19,919,235 For periods of net income, and when the effects are not anti-dilutive, diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options and stock purchase warrants using the treasury stock method, and the 2023 Notes using the if-converted method. Recent Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and creates a new ASC Topic 606, Revenue from Contracts with Customers . In 2015 and 2016, the FASB issued additional ASUs related to ASC Topic 606 that delayed the effective date of the guidance and clarified various aspects of the new revenue guidance, including principal versus agent considerations, identifying performance obligations, and licensing, and they include other improvements and practical expedients. The Company adopted this new standard on January 1, 2018 using the full retrospective transition method. The adoption of the new standard did not materially impact the amounts reported in the Company’s consolidated financial statements and there were no other significant changes impacting the timing or measurement of revenues or the Company’s business process and controls. In August 2016, the FASB issued ASU 2016-15, guidance on the classification of certain cash receipts and cash payments in the statements of cash flows, including those related to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, and distributions received from equity method investees. The Company adopted this new standard on January 1, 2018 on a retrospective basis. The adoption of the new standard did not impact the amounts reported in the Company’s consolidated statements of cash flows. Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. In July 2018, the FASB issued ASU 2018-11 to provide another transition method, allowing a cumulative effect adjustment to the opening balance of retained earnings during the period of adoption. The guidance is effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. The Company plans to adopt the guidance on January 1, 2019. The Company is in the process of reviewing of its lease agreements and evaluating the impact of the lease guidance on the Company’s consolidated financial statements. The Company anticipates recording additional assets and corresponding liabilities on its consolidated balances sheets related to operating leases within its lease portfolio upon adoption of the guidance. The Company has evaluated all other issued unadopted Accounting Standards Updates and believes the adoption of these standards will not have a material impact on its consolidated statements of earnings, balance sheets, or cash flows.

Marketable Securities

Marketable Securities	6 Months Ended
	Jun. 30, 2018
Marketable Securities
Marketable Securities	4. Marketable Securities Marketable securities available for sale, consisting of government and agency securities and corporate debt securities, were as follows (in thousands): June 30, 2018 Gross Gross Estimated Amortized Unrealized Unrealized Market Cost Gains Losses Value Corporate debt securities $ 7,954 $ — $ — $ 7,954 Total $ 7,954 $ — $ — $ 7,954 December 31, 2017 Gross Gross Estimated Amortized Unrealized Unrealized Market Cost Gains Losses Value Government and agency securities $ 5,990 $ — $ — $ 5,990 Corporate debt securities 14,310 — — 14,310 Total $ 20,300 $ — $ — $ 20,300

Inventory, net

Inventory, net	6 Months Ended
	Jun. 30, 2018
Inventory, net
Inventory, net	5. Inventory, net Inventory, net consisted of the following (in thousands): June 30, December 31, 2018 2017 Finished goods $ 401 $ 375 Work-in-process 7,065 2,150 Raw materials 934 466 Total $ 8,400 $ 2,991

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	6 Months Ended
	Jun. 30, 2018
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets	6. Prepaid Expenses and Other Current Assets June 30, December 31, 2018 2017 Contract manufacturing $ 2,920 $ 1,601 Clinical and preclinical 37 35 Marketing 594 93 Software 150 214 Insurance 199 77 Other 295 72 Total prepaid expenses and other current assets $ 4,195 $ 2,092

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	6 Months Ended
	Jun. 30, 2018
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities	7. Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Contract manufacturing $ 3,439 $ 1,209 Compensation and benefits 2,376 2,209 Product warranty 403 813 Legal 577 627 Interest on notes payable and 2023 Notes 1,302 180 Audit and tax related 373 315 Clinical and preclinical 159 55 Other 1,234 20 Total accrued expenses and other current liabilities $ 9,863 $ 5,428

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	8. The Company leases approximately 33,000 square feet of research and office space under a non‑cancelable operating lease expiring in 2023. The Company has an option to renew the lease for one additional five‑year term. Additionally, the Company leases approximately 12,000 square feet of office space under a cancelable operating lease expiring in December 2018. The Company can terminate the lease agreement upon 60 days’ prior written notice. The Company has an option to renew the lease for three additional two-month terms. Expense recognition is based upon a straight‑line basis and was $0.2 million for each of the three months ended June 30, 2018 and 2017 and $0.3 million for each of the six months ended June 30, 2018 and 2017. On March 31, 2016, the Company amended a corporate development agreement with a supplier to include a minimum purchase commitment per year. Total research and development expense related to the minimum payment was $0.2 million and $0.5 million for the three months ended June 30, 2018 and 2017, respectively, and $0.5 million and $0.6 million for the six months ended June 30, 2018 and 2017, respectively. There were approximately $0.6 million of future minimum payments under this commitment at June 30, 2018.

401(k) Plan

401(k) Plan	6 Months Ended
	Jun. 30, 2018
401(k) Plan
401(k) Plan	9 . 401 (k) Plan The Company has a defined contribution 401(k) plan available to all full-time employees. Employee contributions are voluntary and are determined on an individual basis subject to the maximum allowable under federal income tax regulations. Participants are fully vested in their contributions. There have been no employer contributions to this plan. Administrative expenses for the plan, which are paid by the Company, were not material in the three or six months ended June 30, 2018 or 2017.

Notes Payable

Notes Payable	6 Months Ended
	Jun. 30, 2018
Notes Payable
Notes Payable	10. Convertible Senior Notes In January 2018, the Company issued $50.0 million in aggregate principal amount of the 2023 Notes. In February 2018, the Company issued an additional $3.0 million in aggregate principal amount of the 2023 Notes, pursuant to the partial exercise of the overallotment option by the underwriter. The net proceeds from the issuance of the 2023 Notes, after deducting transaction costs, were $50.7 million. The 2023 Notes are general, unsecured, senior subordinated obligations of the Company. The Company pays interest semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2018. As the 2023 Notes have a maturity date of February 1, 2023, they are classified as a long-term liability on the Company’s consolidated balance sheet at June 30, 2018. Each $1,000 of principal of the 2023 Notes is initially convertible into 294.1176 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $3.40 per share, subject to adjustment upon the occurrence of specified events. Holders may convert at any time prior to February 1, 2023. Holders who convert on or after the date that is six months after the last date of original issuance of the 2023 Notes but prior to February 1, 2021, may also be entitled to receive, under certain circumstances, an interest make-whole payment payable in shares of common stock. If specific corporate events occur prior to the maturity date, the Company would increase the conversion rate pursuant to the make-whole fundamental change provision for a holder who elects to convert their 2023 Notes in connection with such an event in certain circumstances. Additionally, if a fundamental change occurs prior to the maturity date, holders of the 2023 Notes may require the Company to repurchase all or a portion of their 2023 Notes for cash at a repurchase price equal to 100% of the principal amount plus any accrued and unpaid interest. In accordance with GAAP relating to embedded conversion features, the Company bifurcated the embedded conversion option, along with the interest make-whole provision and make-whole fundamental change provision, and in January 2018 recorded the embedded conversion option as a debt discount and derivative liability in the Company’s consolidated balance sheets at its initial fair value of $17.3 million. Additionally, the Company incurred transaction costs of $2.2 million. The debt discount, embedded conversion option and transaction costs, are being amortized to interest expense over the term of the 2023 Notes at an effective interest rate of 9.30%. The derivative liability will be remeasured at each reporting period with changes in fair value recorded in the consolidated statements of operations in other income (expense). In the second quarter of 2018, the Company issued 73,529 shares of common stock upon the conversion of $250,000 in aggregate principal amount of the 2023 Notes. Term Notes Payable On June 30, 2016, the Company entered into an Amended and Restated Loan and Security Agreement with Oxford and SVB (the “Lenders”). Pursuant to the Amended and Restated Loan and Security Agreement, the Company has borrowed an aggregate principal amount of $25.0 million in the following three tranches: $15.0 million (“Tranche 1 Term Loan”); $5.0 million (“Tranche 2 Term Loan”); and $5.0 million (“Tranche 3 Term Loan”) (each, a “Term Loan,” and collectively, the “Term Loans”). The funding conditions for the Tranche 1 Term Loan were satisfied as of June 30, 2016. Therefore, the Company issued secured notes to the Lenders for aggregate gross proceeds of $15.0 million (the “Notes”) on June 30, 2016. The Company used approximately $11.0 million from the proceeds from the Notes to repay the outstanding balance under the Company’s previously existing Loan and Security Agreement with Oxford. The Company borrowed the Tranche 2 Term Loan in November 2016 upon the Lenders’ confirmation that the Company received positive data in its U.S. pivotal trial of Eversense, and the Company submitted a pre-market approval (“PMA”) application for Eversense in the United States with the FDA. The Company borrowed the Tranche 3 Term Loan in March 2017 upon completion of the first commercial sale of its second-generation transmitter in the European Union. The maturity date for all Term Loans is June 1, 2020 (the “Maturity Date”). The Term Loans bear interest at a floating annual rate of 6.31% plus the greater of (i) 90-day U.S. Dollar LIBOR reported in the Wall Street Journal or (ii) 0.64%, provided that the minimum floor interest rate is 6.95%, and require monthly payments. The monthly payments initially consisted of interest-only through December 31, 2017. In January 2018, the Company began to make monthly principal payments that will continue until the Maturity Date. The Company may elect to prepay all Term Loans prior to the Maturity Date subject to a prepayment fee equal to 3.00% if the prepayment occurs within one year of the funding date of any Term Loan, 2.00% if the prepayment occurs during the second year following the funding date of any Term Loan, and 1.00% if the prepayment occurs more than two years after the funding date of any Term Loan and prior to the Maturity Date. The Amended and Restated Loan and Security Agreement contains customary events of default, including bankruptcy, the failure to make payments when due, the occurrence of a material impairment on the Lenders’ security interest over the collateral, a material adverse change, the occurrence of a default under certain other agreements entered into by the Company, the rendering of certain types of judgments against the Company, the revocation of certain government approvals of the Company, violation of covenants, and incorrectness of representations and warranties in any material respect. Upon the occurrence of an event of default, subject to specified cure periods, all amounts owed by the Company would begin to bear interest at a rate that is 5.00% above the rate effective immediately before the event of default, and may be declared immediately due and payable by Lenders. Pursuant to the Amended and Restated Loan and Security Agreement, the Company also issued 10-year stock purchase warrants to purchase an aggregate of 116,581, 63,025 and 80,645 shares of common stock at an exercise price of $3.86, $2.38 and $1.86 per share, respectively (see Note 11, “Stockholders’ Equity”). The Notes are collateralized by all of the Company’s consolidated assets. The Notes also contain certain restrictive covenants that limit the Company’s ability to incur additional indebtedness and liens, merge with other companies or consummate certain changes of control, acquire other companies, engage in new lines of business, make certain investments, pay dividends, transfer or dispose of assets, amend certain material agreements or enter into various specified transactions, as well as financial reporting requirements. The Company incurred issuance costs related to the Notes of approximately $0.6 million that are being amortized as additional interest expense over the term of the Notes using the effective interest method. The fair value of the stock purchase warrants, which was estimated to be $0.5 million, was recorded as a discount to the Notes, which is also being amortized as additional interest expense over the term of the Notes using the effective interest method. At maturity (or earlier prepayment), the Company is also required to make a final payment equal to 9.00% of the aggregate principal balances of the funded Term Loans. This fee is being accrued as additional interest expense over the term of the Notes using the effective interest method. At June 30, 2018 and December 31, 2017, the final payment fee accrual was $1.4 million and $1.1 million, respectively. The following are the scheduled maturities of the 2023 Notes and Term Loans as of June 30, 2018 (in thousands): 2018 (remaining six months) $ 5,000 2019 10,000 2020 5,000 2021 — 2022 — After 2022 52,700 Total $ 72,700 The Company estimates the fair value of the term notes based on borrowing rates currently available for loans with similar terms (Level 2). The Company believes that the fair value of its term notes approximate their carrying value. The Company estimates the fair value of the 2023 Notes using commonly accepted valuation methodologies and market-risk measurements that are indirectly observable, such as credit risk (Level 2). At June 30, 2018, the fair value of the 2023 Notes, excluding the derivative liability, was $42.5 million.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2018
Stockholders' Equity
Stockholders' Equity	11. Preferred Stock As of June 30, 2018 and December 31, 2017, the Company’s authorized capital stock included 5,000,000 shares of undesignated preferred stock, par value $0.001 per share. No shares of preferred stock were outstanding as of June 30, 2018 or December 31, 2017. Common Stock As of June 30, 2018 and December 31, 2017, the Company’s authorized capital stock included 450,000,000 and 250,000,000 shares of common stock, respectively, par value $0.001 per share. The Company had 175,897,790 and 136,882,735 shares of common stock issued and outstanding at June 30, 2018 and December 31, 2017, respectively. Stock Purchase Warrants In connection with the issuance of the Notes, the Company also issued to the Lenders 10-year stock purchase warrants to purchase an aggregate of 116,581, 63,025 and 80,645 shares of common stock at an exercise price of $3.86, $2.38 and $1.86 per share, respectively. The cumulative fair value of the warrants, which the Company estimated to be $0.5 million, was recorded as a discount to the Notes. These warrants expire on June 30, 2026, November 22, 2026, and March 29, 2027, respectively, and are classified in equity. In connection with the Company’s original Loan and Security Agreement with Oxford in 2014, the Company issued to Oxford 10-year stock purchase warrants to purchase an aggregate of 167,570 shares of common stock at an exercise price of $1.79 per share. The fair value of the warrants, which the Company estimated to be $0.2 million, was recorded as a discount to the promissory notes issued to Oxford in connection with the original Loan and Security Agreement. These warrants expire on November 2, 2020, July 14, 2021 and August 19, 2021, and are classified in equity. The unamortized deferred financing fees and debt discount related to the notes rollover amount will be amortized along with the deferred financing costs and the discount created by the new issuance of the warrants over the term of the loan using the effective interest method. For each of the three and six months ended June 30, 2018 and 2017, the Company recorded amortization of discount of debt of $0.1 million within interest expense in the accompanying statements of operations and comprehensive loss. Stock‑Based Compensation In December 2015, the Company adopted the 2015 Equity Incentive Plan (the “2015 Plan”) under which incentive stock options, non-qualified stock options, and restricted stock awards may be granted to the Company’s employees and certain other persons in accordance with the 2015 Plan provisions. In connection with the March 2016 Offering, the Company’s board of directors adopted and the Company’s stockholders approved an Amended and Restated 2015 Equity Incentive Plan (the “amended and restated 2015 Plan”). The amended and restated 2015 Plan became effective as of the date of the pricing of the March 2016 Offering. The Company’s board of directors may terminate the amended and restated 2015 Plan at any time. Options granted under the amended and restated 2015 Plan expire ten years after the date of grant. Pursuant to the amended and restated 2015 Plan, the number of shares initially reserved for issuance pursuant to equity awards was 17,251,115 shares, representing 8,000,000 shares plus up to an additional 9,251,115 shares in the event that options that were outstanding under the Company’s equity incentive plans as of February 16, 2016 expire or otherwise terminate without having been exercised (in such case, the shares not acquired will revert to and become available for issuance under the amended and restated 2015 Plan). The number of shares of the Company’s common stock reserved for issuance under the amended and restated 2015 Plan will automatically increase on January 1 of each year, beginning on January 1, 2017 and ending on January 1, 2026, by 3.5% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Company’s board of directors. As of June 30, 2018, 1,906,380 shares remained available for grant under the amended and restated 2015 Plan. On May 8, 1997, the Company adopted the 1997 Stock Option Plan (the “1997 Plan”), under which incentive stock options, non‑qualified stock options, and restricted stock awards may be granted to the Company’s employees and certain other persons in accordance with the 1997 Plan provisions. Approximately 7,844,281 shares of the Company’s common stock underlying options have vested or are expected to vest under the 1997 Plan. Upon the effectiveness of the 2015 Plan, the Company no longer grants any awards under the 1997 Plan. The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options, based on the fair value of those awards at the date of grant. The estimated fair value of stock options on the date of grant is amortized on a straight-line basis over the requisite service period for each separately vesting portion of the award for those awards with service conditions only. For awards that also contain performance conditions, expense is recognized beginning at the time the performance condition is considered probable of being met over the remaining vesting period.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2018
Fair Value Measurements
Fair Value Measurements	12. The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use to price the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: · Level 1—Quoted prices for identical assets or liabilities in active markets. · Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company classifies money market funds within Level 1 in the fair value hierarchy because the Company uses quoted prices in active markets. The Company classifies government agency securities and corporate debt securities within Level 2 in the fair value hierarchy because the Company uses pricing sources utilizing market observable inputs to determine fair value. The Company values the embedded conversion option through a Monte Carlo analysis utilizing future stock prices modeled using geometric Brownian motion; option pricing models utilizing using inputs such as the Company’s stock price, volatility of the Company’s common stock and guideline public companies, dividend yield, and risk-free rate; and management assumptions concerning the likelihood of the occurrence of certain corporate events. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company has segregated its financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. The following table represents the fair value hierarchy of the Company’s financial assets and liabilities measured at fair value on a recurring basis as follows (in thousands): June 30, 2018 Total Level 1 Level 2 Level 3 Assets Money market funds $ 14,218 $ 14,218 $ — $ — Corporate debt securities 7,954 — 7,954 — Liabilities Embedded conversion option 32,312 — — 32,312 December 31, 2017 Total Level 1 Level 2 Level 3 Money market funds $ 4,706 $ 4,706 $ — $ — Government and agency securities 7,987 — 7,987 — Corporate debt securities 17,708 — 17,708 — The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands): Embedded Conversion Option December 31, 2017 $ — Issuance of the 2023 Notes 17,300 Change in fair value included in other income (expense) 15,012 June 30, 2018 $ 32,312 The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain financial instruments within the fair value hierarchy. The Company’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the end of the fiscal quarter in which the actual event or change in circumstances that caused the transfer occurs. There were no transfers between Level 1, Level 2, or Level 3 during the three and six months ended June 30, 2018 and 2017. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis The Company has no financial assets and liabilities that are measured at fair value on a non-recurring basis. Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company has no non-financial assets and liabilities that are measured at fair value on a recurring basis. Non‑Financial Assets and Liabilities Measured at Fair Value on a Non‑Recurring Basis The Company measures its long‑lived assets, including property and equipment, at fair value on a non‑recurring basis. These assets are recognized at fair value when they are deemed to be impaired. No such fair value impairment was recognized in the three and six months ended June 30, 2018 and 2017.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Taxes
Income Taxes	13. The Company has not recorded any tax provision or benefit for the three and six months ended June 30, 2018 or June 30, 2017. The Company has provided a valuation allowance for the full amount of its net deferred tax assets since realization of any future benefit from deductible temporary differences, NOL carryforwards and research and development credits is not more-likely-than-not to be realized at June 30, 2018 and December 31, 2017. On December 22, 2017, the Tax Cuts and Jobs Acts was enacted into law. The new legislation contains several key tax provisions that will impact the Company, including the reduction of the corporate income tax rate to 21% effective January 1, 2018. The new legislation also includes a variety of other changes, such as a one-time repatriation tax on accumulated foreign earnings, a limitation on the tax deductibility of interest expense, acceleration of business asset expensing, and reduction in the amount of executive pay that could qualify as a tax deduction, among others. The lower corporate income tax rate required the Company to remeasure its U.S. deferred tax assets and liabilities as well as reassess the realizability of its deferred tax assets and liabilities. ASC Topic 740 requires the Company to recognize the effect of the tax law changes in the period of enactment. However, the SEC staff has issued Staff Accounting Bulletin No. 118 which allows the Company to record provisional amounts during a measurement period which is similar to the measurement period used when accounting for business combinations. While no adjustments has been made in the current period, the Company will continue to assess the impact of the recently enacted tax law on its business and financial statements and will reflect the provisional impact of the tax law change in the period when such analysis is complete.

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the Company’s opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly its financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2017, has been derived from audited financial statements as of that date. The interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the U.S. Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. In the accompanying consolidated financial statements, estimates are used for, but not limited to, inventory valuation, inputs used to value stock-based compensation, recoverability of long-lived assets, fair value of financial instruments, income taxes, depreciable lives of property and equipment, reserves for expected warranty costs, and estimated accruals for clinical and preclinical study costs, which are accrued based on estimates of work performed under contracts. Actual results could differ from those estimates; however management does not believe that such differences would be material.
Segment Information	Segment Information Operating segments are defined as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment, glucose monitoring products.
Comprehensive Loss	Comprehensive Loss Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the three and six months ended June 30, 2018 and 2017, the Company’s net loss equaled its comprehensive loss and, accordingly, no additional disclosure is presented.
Cash and Cash Equivalents and Concentration of Credit Risk	Cash and Cash Equivalents and Concentration of Credit Risk The Company considers highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. These investments are carried at cost, which approximates fair value. The Company’s cash and cash equivalents potentially subject the Company to credit and liquidity risk. The Company maintains cash deposits at major financial institutions with high credit quality and, at times, the balances of those deposits may exceed the Federal Deposit Insurance Corporation limits of $250,000. The Company has not experienced and does not anticipate any losses on deposits with commercial banks and financial institutions that exceed the federally insured amounts.
Concentration of Revenues and Customers	Concentration of Revenues and Customers At any given time, the Company’s trade receivables are concentrated among a small number of principal customers. If any of the Company’s customers fail to pay their obligations under the terms of these financial instruments, the Company’s maximum exposure to potential losses would be equal to amounts reported on its consolidated balance sheets. During the three and six months ended June 2018 and 2017, the Company derived substantially all of its revenue from two customers. Total revenues from those customers was as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Roche Diabetes Care (related party) $ 3,070 $ 698 $ 5,638 $ 1,163 Rubin Medical $ 529 $ 116 $ 897 $ 204
Marketable Securities	Marketable Securities Marketable securities consist of government and agency securities and corporate debt securities. The Company’s investments are classified as available for sale. Such securities are carried at fair value, with any unrealized holding gains or losses reported, net of any tax effects reported, as accumulated other comprehensive income. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in consolidated results of operations. A decline in the market value of any available for sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value, which is charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income is recognized when earned. The cost of securities sold is calculated using the specific identification method. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date as non-current assets.
Inventory	Inventory Inventory is valued at the lower of cost or net realizable value. Cost is determined using the standard cost method that approximates first in, first out. The Company periodically reviews inventory to determine if a write-down is necessary for inventory that has become obsolete, inventory that has a cost basis less than net realizable value, and inventory in excess of future demand taking into consideration the product shelf life.
Accounts Receivable	Accounts Receivable The Company grants credit to various customers in the normal course of business. Accounts receivable consist of amounts due from distributors. The Company records an allowance for doubtful accounts at the time potential collection risk is identified. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible.
Property and Equipment	Property and Equipment Property and equipment are stated at cost. Depreciation is computed by use of the straight-line method over the estimated useful lives of the assets, which is between three to five years for laboratory equipment, between five to seven years for office furniture and equipment, and the shorter of lease term or useful life for leasehold improvements. Upon disposition of the assets, the costs and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations. Repairs and maintenance costs are included as expense in the accompanying statement of operations. Management reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If the undiscounted cash flows are less than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Management did not identify any indicators of impairment through June 30, 2018.
Derivative Financial Instruments	Derivative Financial Instruments In connection with the Company’s issuance of the 2023 Notes in January 2018, the Company bifurcated the embedded conversion option, along with the interest make-whole provision and make-whole fundamental change provision, and recorded the embedded conversion option as a derivative liability in the Company’s consolidated balance sheets in accordance with Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging . The financial instrument is remeasured at the end of each reporting period with changes in fair value recorded in the consolidated statements of operations in other income (expense) as change in fair value of 2023 derivative.
Warranty Reserve	Warranty Reserve The Company may replace Eversense system components that do not function in accordance with the product specifications. Estimated replacement costs associated with a product are recorded at the time of shipment. The Company estimates future replacement costs by analyzing historical replacement experience for the timing and amount of returned product, and the Company evaluates the reserve quarterly and makes adjustments when appropriate.
Revenue Recognition	Revenue Recognition Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers , using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company generates product revenue from sales of the Eversense system and related components and supplies at a fixed price to third-party distributors (the “Customers”) who resell the products to health care providers and patients in the European Union. The Company is paid for its sales directly to the Customers, regardless of whether or not the Customers resell the products to health care providers and patients. Revenues from product sales are recognized when the Customers obtain control of the Company’s product, which occurs at a point in time, based upon the delivery terms as defined in the distributor agreement. The Company is typically paid within 60 days of invoicing subsequent to the Customers obtaining control of the Company’s product. The Company offers no discounts, rebates, rights of return, or other allowances to the Customers which would result in the establishment of reserves against product revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a Customer contract.
Cost of Sales and Shipping and Handling Expenses	Cost of Sales The Company uses third-party contract manufacturers to manufacture Eversense and related components and supplies. Cost of sales includes raw materials, contract manufacturing service fees, reserves for expected warranty costs, reserves for inventory valuation, scrap, and shipping and handling expenses associated with product delivery. Shipping and Handling Expenses Shipping and handling expenses associated with product delivery are included within cost of sales in the Company’s consolidated statements of operations.
Research and Development Costs	Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses include costs related to employee compensation, preclinical studies and clinical trials, supplies, outsource testing, consulting and depreciation and other facilities‑related expenses.
Stock-Based Compensation	Stock‑Based Compensation The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options, based on the fair value of those awards at the date of grant. The estimated fair value of stock options on the date of grant is amortized on a straight‑line basis over the requisite service period for each separately vesting portion of the award for those awards with service conditions only. For awards that also contain performance conditions, expense is recognized beginning at the time the performance condition is considered probable of being met over the remaining vesting period. The Company accounts for forfeitures in the period in which they occur. The Company uses the Black‑Scholes option pricing model to determine the fair value of stock‑option awards. Valuation of stock awards requires management to make assumptions and to apply judgment to determine the fair value of the awards. These assumptions and judgments include estimating the fair value of the Company’s common stock, future volatility of the Company’s stock price, dividend yields, future employee turnover rates, and future employee stock option exercise behaviors. Changes in these assumptions can affect the fair value estimate. Under ASC Topic 718, the cumulative amount of compensation cost recognized for instruments classified as equity that ordinarily would result in a future tax deduction under existing tax law shall be considered to be a deductible difference in applying ASC Topic 740, Income Taxes . The deductible temporary difference is based on the compensation cost recognized for financial reporting purposes; however, these provisions currently do not impact the Company, as all the deferred tax assets have a full valuation allowance. Since the Company had net operating loss (“NOL”) carryforwards as of June 30, 2018, no excess tax benefits for the tax deductions related to stock-based awards were recognized in the statements of operations and comprehensive loss.
Income Taxes	Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Management uses a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and penalties and financial statement reporting disclosures. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. In the ordinary course of business, transactions occur for which the ultimate outcome may be uncertain. Management does not expect the outcome related to accrued uncertain tax provisions to have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company recognizes interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense. The Company did not have any amounts accrued relating to interest and penalties as of June 30, 2018 and December 31, 2017. The Company is subject to taxation in various jurisdictions in the United States and remains subject to examination by taxing jurisdictions for the year 1998 and all subsequent periods due to the availability of NOL carryforwards. In addition, all of the NOLs and research and development credit carryforwards that may be used in future years are still subject to adjustment.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of their short maturities. The Company’s term notes and 2023 Notes are recorded at historical cost, net of discounts, and are not remeasured at fair value.
Net Loss per Share	Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. For periods of net loss, diluted net loss per share is calculated similarly to basic loss per share because the impact of all potential common shares is anti-dilutive. At June 30, 2018 and 2017, the total number of anti-dilutive shares, consisting of common stock options, stock purchase warrants, and the 2023 Notes using the if-converted method, which have been excluded from the computation of diluted loss per share, were as follows: June 30, 2018 2017 Stock-based awards 21,305,247 15,348,333 2023 Notes 15,499,998 — Warrants 4,082,544 4,570,902 Total anti-dilutive shares outstanding 40,887,789 19,919,235 For periods of net income, and when the effects are not anti-dilutive, diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options and stock purchase warrants using the treasury stock method, and the 2023 Notes using the if-converted method.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and creates a new ASC Topic 606, Revenue from Contracts with Customers . In 2015 and 2016, the FASB issued additional ASUs related to ASC Topic 606 that delayed the effective date of the guidance and clarified various aspects of the new revenue guidance, including principal versus agent considerations, identifying performance obligations, and licensing, and they include other improvements and practical expedients. The Company adopted this new standard on January 1, 2018 using the full retrospective transition method. The adoption of the new standard did not materially impact the amounts reported in the Company’s consolidated financial statements and there were no other significant changes impacting the timing or measurement of revenues or the Company’s business process and controls. In August 2016, the FASB issued ASU 2016-15, guidance on the classification of certain cash receipts and cash payments in the statements of cash flows, including those related to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, and distributions received from equity method investees. The Company adopted this new standard on January 1, 2018 on a retrospective basis. The adoption of the new standard did not impact the amounts reported in the Company’s consolidated statements of cash flows. Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. In July 2018, the FASB issued ASU 2018-11 to provide another transition method, allowing a cumulative effect adjustment to the opening balance of retained earnings during the period of adoption. The guidance is effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. The Company plans to adopt the guidance on January 1, 2019. The Company is in the process of reviewing of its lease agreements and evaluating the impact of the lease guidance on the Company’s consolidated financial statements. The Company anticipates recording additional assets and corresponding liabilities on its consolidated balances sheets related to operating leases within its lease portfolio upon adoption of the guidance. The Company has evaluated all other issued unadopted Accounting Standards Updates and believes the adoption of these standards will not have a material impact on its consolidated statements of earnings, balance sheets, or cash flows.

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Schedule of revenue by major customers	Total revenues from those customers was as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Roche Diabetes Care (related party) $ 3,070 $ 698 $ 5,638 $ 1,163 Rubin Medical $ 529 $ 116 $ 897 $ 204
Schedule of anti-dilutive shares which have been excluded from the computation of diluted loss per share	June 30, 2018 2017 Stock-based awards 21,305,247 15,348,333 2023 Notes 15,499,998 — Warrants 4,082,544 4,570,902 Total anti-dilutive shares outstanding 40,887,789 19,919,235

Marketable Securities (Tables)

Marketable Securities (Tables)	6 Months Ended
	Jun. 30, 2018
Marketable Securities
Schedule of marketable debt securities available for sale	Marketable securities available for sale, consisting of government and agency securities and corporate debt securities, were as follows (in thousands): June 30, 2018 Gross Gross Estimated Amortized Unrealized Unrealized Market Cost Gains Losses Value Corporate debt securities $ 7,954 $ — $ — $ 7,954 Total $ 7,954 $ — $ — $ 7,954 December 31, 2017 Gross Gross Estimated Amortized Unrealized Unrealized Market Cost Gains Losses Value Government and agency securities $ 5,990 $ — $ — $ 5,990 Corporate debt securities 14,310 — — 14,310 Total $ 20,300 $ — $ — $ 20,300

Inventory, net (Tables)

Inventory, net (Tables)	6 Months Ended
	Jun. 30, 2018
Inventory, net
Schedule of Inventory, net	Inventory, net consisted of the following (in thousands): June 30, December 31, 2018 2017 Finished goods $ 401 $ 375 Work-in-process 7,065 2,150 Raw materials 934 466 Total $ 8,400 $ 2,991

Prepaid Expenses and Other Cu23

Prepaid Expenses and Other Current Assets (Tables)	6 Months Ended
	Jun. 30, 2018
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets	Prepaid expenses and other current assets consisted of the following (in thousands): June 30, December 31, 2018 2017 Contract manufacturing $ 2,920 $ 1,601 Clinical and preclinical 37 35 Marketing 594 93 Software 150 214 Insurance 199 77 Other 295 72 Total prepaid expenses and other current assets $ 4,195 $ 2,092

Accrued Expenses and Other Cu24

Accrued Expenses and Other Current Liabilities (Tables)	6 Months Ended
	Jun. 30, 2018
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses and other current liabilities	Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Contract manufacturing $ 3,439 $ 1,209 Compensation and benefits 2,376 2,209 Product warranty 403 813 Legal 577 627 Interest on notes payable and 2023 Notes 1,302 180 Audit and tax related 373 315 Clinical and preclinical 159 55 Other 1,234 20 Total accrued expenses and other current liabilities $ 9,863 $ 5,428

Notes Payable (Tables)

Notes Payable (Tables)	6 Months Ended
	Jun. 30, 2018
Notes Payable
Schedule of future maturities	The following are the scheduled maturities of the 2023 Notes and Term Loans as of June 30, 2018 (in thousands): 2018 (remaining six months) $ 5,000 2019 10,000 2020 5,000 2021 — 2022 — After 2022 52,700 Total $ 72,700

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2018
Fair Value Measurements
Schedule of fair value hierarchy of the Company’s financial assets and liabilities measured at fair value on a recurring basis	The following table represents the fair value hierarchy of the Company’s financial assets and liabilities measured at fair value on a recurring basis as follows (in thousands): June 30, 2018 Total Level 1 Level 2 Level 3 Assets Money market funds $ 14,218 $ 14,218 $ — $ — Corporate debt securities 7,954 — 7,954 — Liabilities Embedded conversion option 32,312 — — 32,312 December 31, 2017 Total Level 1 Level 2 Level 3 Money market funds $ 4,706 $ 4,706 $ — $ — Government and agency securities 7,987 — 7,987 — Corporate debt securities 17,708 — 17,708 —
Schedule of changes in the fair value of Level 3 derivative liability measured at fair value on a recurring basis	The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands): Embedded Conversion Option December 31, 2017 $ — Issuance of the 2023 Notes 17,300 Change in fair value included in other income (expense) 15,012 June 30, 2018 $ 32,312

Organization - Acquisition (Det

Organization - Acquisition (Details)	Dec. 07, 2015
ASN Technologies, Inc. | Senseonics Reverse Merger Agreement | Capital Stock, Senseonics, Inc.
Significant Transaction
Interest in capital stock acquired (as a percent)	100.00%

Liquidity - Offering (Details)

Liquidity - Offering (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 28, 2018	Aug. 23, 2017	Jun. 01, 2017	Mar. 23, 2016	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2016
Recent Significant Transaction
Proceeds from issuance of common stock, net of issuance costs					$ 149,379	$ 40,343
March 2016 Offering
Recent Significant Transaction
Shares issued (in shares)				15,800,000
Price per share (in dollars per share)				$ 2.85
May 2017 Offering
Recent Significant Transaction
Shares issued (in shares)			29,078,014
Price per share (in dollars per share)			$ 1.41
Proceeds from issuance of common stock, net of issuance costs			$ 40,400
August 2017 Offering
Recent Significant Transaction
Shares issued (in shares)		13,383,125
Price per share (in dollars per share)		$ 2.15
Proceeds from issuance of common stock, net of issuance costs		$ 26,500
June 2018 Offering
Recent Significant Transaction
Shares issued (in shares)	38,076,561
Price per share (in dollars per share)	$ 3.93
Proceeds from issuance of common stock, net of issuance costs	$ 149,100
March 2016 IPO and Underwriters' Option
Recent Significant Transaction
Proceeds from issuance of common stock, net of issuance costs				$ 44,800
Term Notes Payable | Amended and Restated Loan and Security Agreement
Recent Significant Transaction
Maximum amount available under facility							$ 25,000

Liquidity - 2023 Notes (Details

Liquidity - 2023 Notes (Details) - 2023 Notes - USD ($) $ in Millions	Feb. 28, 2018	Jan. 31, 2018
Convertible Notes
Principal amount	$ 3	$ 50
Third Amendment to Amended and Restated Loan Agreement
Convertible Notes
Principal amount	$ 3	$ 50

Summary of Significant Accoun30

Summary of Significant Accounting Policies - Segment Information (Details)	6 Months Ended
	Jun. 30, 2018segment
Segment Information
Number of operating segments	1

Summary of Significant Accoun31

Summary of Significant Accounting Policies - Concentration of Revenues and Customers (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)customer	Jun. 30, 2017USD ($)customer	Jun. 30, 2018USD ($)customer	Jun. 30, 2017USD ($)customer
Estimated total revenues from major customers
FDIC maximum			$ 250,000
Number of customers | customer	2	2	2	2
Revenue	$ 3,623,000	$ 814,000	$ 6,569,000	$ 1,367,000
Revenue | Customer Concentration Risk | Roche Diabetes Care (related party)
Estimated total revenues from major customers
Revenue	3,070,000	698,000	5,638,000	1,163,000
Revenue | Customer Concentration Risk | Rubin Medical
Estimated total revenues from major customers
Revenue	$ 529,000	$ 116,000	$ 897,000	$ 204,000

Summary of Significant Accoun32

Summary of Significant Accounting Policies - Property and Equipment (Details)	6 Months Ended
	Jun. 30, 2018
Laboratory equipment | Minimum
Property and Equipment, net
Useful lives	3 years
Laboratory equipment | Maximum
Property and Equipment, net
Useful lives	5 years
Office furniture and equipment | Minimum
Property and Equipment, net
Useful lives	5 years
Office furniture and equipment | Maximum
Property and Equipment, net
Useful lives	7 years

Summary of Significant Accoun33

Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
Summary of Significant Accounting Policies
Payment period	60 days
Discounts, rebates, rights of return or other allowances	$ 0

Summary of Significant Accoun34

Summary of Significant Accounting Policies - Stock-Based Compensation and Income Taxes (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Stock-Based Compensation
Excess tax benefits recognized in statements of operations	$ 0
Income Taxes
Accrued for income tax penalties and interest	$ 0	$ 0

Summary of Significant Accoun35

Summary of Significant Accounting Policies - Net Loss per Share (Details) - shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Net Loss per Share
Total anti-dilutive shares outstanding	40,887,789	19,919,235
Stock-based awards
Net Loss per Share
Total anti-dilutive shares outstanding	21,305,247	15,348,333
2023 Notes
Net Loss per Share
Total anti-dilutive shares outstanding	15,499,998
Warrants
Net Loss per Share
Total anti-dilutive shares outstanding	4,082,544	4,570,902

Marketable Securities - AFS Deb

Marketable Securities - AFS Debt Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Marketable securities available for sale, consisting of debt securities:
Amortized Cost	$ 7,954	$ 20,300
Estimated Market Value	7,954	20,300
Government and agency securities
Marketable securities available for sale, consisting of debt securities:
Amortized Cost		5,990
Estimated Market Value		5,990
Corporate debt securities
Marketable securities available for sale, consisting of debt securities:
Amortized Cost	7,954	14,310
Estimated Market Value	$ 7,954	$ 14,310

Inventory, Net - Summary (Detai

Inventory, Net - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Inventory, net
Finished goods	$ 401	$ 375
Work-in-process	7,065	2,150
Raw materials	934	466
Total	$ 8,400	$ 2,991

Prepaid Expenses and Other Cu38

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Prepaid Expenses and Other Current Assets
Contract manufacturing	$ 2,920	$ 1,601
Clinical and preclinical	37	35
Marketing	594	93
Software	150	214
Insurance	199	77
Other	295	72
Total prepaid expenses	$ 4,195	$ 2,092

Accrued Expenses and Other Cu39

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accrued Expenses and Other Current Liabilities
Contract manufacturing	$ 3,439	$ 1,209
Compensation and benefits	2,376	2,209
Product warranty	403	813
Legal	577	627
Interest on notes payable and 2023 Notes	1,302	180
Audit and tax related	373	315
Clinical and preclinical	159	55
Other	1,234	20
Total accrued expenses and other current liabilities	$ 9,863	$ 5,428

Commitments and Contingencies -

Commitments and Contingencies - Operating Lease (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)ft²	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)ft²item	Jun. 30, 2017USD ($)
Operating Leases
Operating lease expense | $	$ 0.2	$ 0.2	$ 0.3	$ 0.3
Research and office space
Operating Leases
Leased space, in square feet | ft²	33,000		33,000
Number of renewal terms | item			1
Renewal term of lease	5 years		5 years
Office space
Operating Leases
Additional leased space, in square feet | ft²	12,000		12,000
Lease termination period			60 days
Number of renewal terms | item			3
Renewal term of lease	2 months		2 months

Commitments and Contingencies41

Commitments and Contingencies - Minimum Payments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Commitments and contingencies
Research and development expense	$ 8,289	$ 5,604	$ 16,402	$ 12,602
Corporate development agreement
Commitments and contingencies
Research and development expense	200	$ 500	500	$ 600
Future maturities
Future minimum payments	$ 600		$ 600

401(k) Plan (Details)

401(k) Plan (Details)	6 Months Ended
	Jun. 30, 2018USD ($)
401(k) Plan
Employer contributions to the 401(k) plan	$ 0

Notes Payable (Details)

Notes Payable (Details) $ in Millions	Jun. 30, 2016USD ($)	Jun. 30, 2016USD ($)tranche	Jun. 30, 2018USD ($)	Dec. 31, 2017USD ($)
Oxford Notes
Notes payable
Amount used to retire existing loans	$ 11
Term Notes Payable | Amended and Restated Loan and Security Agreement
Notes payable
Principal amount	25	$ 25
Maximum amount available under facility	$ 25	$ 25
Number of tranches under facility | tranche		3
Final payment fee, notes			$ 1.4	$ 1.1
Prepayment fee percentage within one year of funding	3.00%
Prepayment period, first year	1 year
Prepayment fee percentage second year after funding date	2.00%
Prepayment period, after two years	2 years
Prepayment fee percentage after second anniversary of funding	1.00%
Debt default, interest rate (as a percent)	5.00%
Term Notes Payable | Amended and Restated Loan and Security Agreement | LIBOR
Notes payable
Floating annual rate, spread (as a percent)	6.31%
90-day U.S. Dollar LIBOR	90-day U.S. Dollar LIBOR
Term Notes Payable | Amended and Restated Loan and Security Agreement | Floor interest rate
Notes payable
Floor interest rate (as a percent)	0.64%
Term Notes Payable | Amended and Restated Loan and Security Agreement | Floor interest rate | Minimum
Notes payable
Floor interest rate (as a percent)	6.95%
Term Notes Payable | Amended and Restated Loan and Security Agreement | Interest only period
Notes payable
Frequency of payment	monthly
Type of payment required	interest-only
Tranche 1 Term Loan | Amended and Restated Loan and Security Agreement
Notes payable
Principal amount	$ 15	$ 15
Proceeds from notes payable	15
Tranche 2 Term Loan | Amended and Restated Loan and Security Agreement
Notes payable
Principal amount	5	5
Tranche 3 Term Loan | Amended and Restated Loan and Security Agreement
Notes payable
Principal amount	$ 5	$ 5

Notes Payable - Term Notes Paya

Notes Payable - Term Notes Payable (Details) - USD ($)	Jun. 30, 2016	Feb. 28, 2018	Jan. 31, 2018	Jun. 30, 2018
Long term debt
Derivative liability				$ 32,312,000
Common Stock
Long term debt
Debt converted, shares issued				73,529
Term Notes Payable | Amended and Restated Loan and Security Agreement
Long term debt
Transaction costs	$ 600,000
Final prepayment fee (as a percent)	9.00%
Principal amount	$ 25,000,000
Term Notes Payable | Amended and Restated Loan and Security Agreement | Warrant liability | Stock Purchase Warrants
Long term debt
Warrant liability	$ 500,000
Term Notes Payable | Amended and Restated Loan and Security Agreement | Warrant liability | Common Stock | Stock Purchase Warrants, $3.86 Exercise Price
Long term debt
Term of stock purchase warrants	10 years
Number of shares called by warrants	116,581
Exercise price of warrant (in dollars per share)	$ 3.86
Term Notes Payable | Amended and Restated Loan and Security Agreement | Warrant liability | Common Stock | Stock Purchase Warrants, $2.38 Exercise Price
Long term debt
Term of stock purchase warrants	10 years
Number of shares called by warrants	63,025
Exercise price of warrant (in dollars per share)	$ 2.38
Term Notes Payable | Amended and Restated Loan and Security Agreement | Warrant liability | Common Stock | Stock Purchase Warrants, $1.86 Exercise Price
Long term debt
Term of stock purchase warrants	10 years
Number of shares called by warrants	80,645
Exercise price of warrant (in dollars per share)	$ 1.86
Tranche 3 Term Loan | Amended and Restated Loan and Security Agreement
Long term debt
Principal amount	$ 5,000,000
2023 Notes
Long term debt
Transaction costs			$ 2,200,000
Principal amount		$ 3,000,000	$ 50,000,000
Proceeds from notes payable		$ 50,700,000
Conversion rate (per $1,000 of principal)			294.1176
Amount of principal which is converted to 294.1176 shares			$ 1,000
Conversion price (in dollars per share)			$ 3.40
Conversion period			6 months
Repurchase price as a percent of principal amount			100.00%
Derivative liability			$ 17,300,000
Amortization percent			9.30%
Debt conversion amount				$ 250,000

Notes Payable - Scheduled Matur

Notes Payable - Scheduled Maturities (Details) $ in Thousands	Jun. 30, 2018USD ($)
Scheduled maturities
2018 (remaining six months)	$ 5,000
2,019	10,000
2,020	5,000
After 2,022	52,700
Total	72,700
2023 Notes
Scheduled maturities
Total	$ 42,500

Stockholders' Equity - Class of

Stockholders' Equity - Class of Stock Disclosures (Details) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Class of stock information
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares outstanding	0	0
Authorized common stock	450,000,000	250,000,000
Common stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Common stock issued	175,897,790	136,882,735
Common stock, shares outstanding	175,897,790	136,882,735

Stockholders' Equity - Stock Pu

Stockholders' Equity - Stock Purchase Warrants (Details) - USD ($) $ / shares in Units, $ in Millions	Jun. 30, 2016	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2014
Stock Purchase Warrants | Interest Expense
Stock Purchase Warrants
Accretion of debt discount		$ 0.1	$ 0.1	$ 0.1	$ 0.1
Amended and Restated Loan and Security Agreement | Term Notes Payable | Stock Purchase Warrants | Warrant liability
Stock Purchase Warrants
Warrant liability	$ 0.5
Amended and Restated Loan and Security Agreement | Term Notes Payable | Stock Purchase Warrants, $3.86 Exercise Price | Warrant liability | Common Stock
Stock Purchase Warrants
Term of stock purchase warrants	10 years
Number of shares called by warrants	116,581
Exercise price of warrant (in dollars per share)	$ 3.86
Amended and Restated Loan and Security Agreement | Term Notes Payable | Stock Purchase Warrants, $2.38 Exercise Price | Warrant liability | Common Stock
Stock Purchase Warrants
Term of stock purchase warrants	10 years
Number of shares called by warrants	63,025
Exercise price of warrant (in dollars per share)	$ 2.38
Amended and Restated Loan and Security Agreement | Term Notes Payable | Stock Purchase Warrants, $1.86 Exercise Price | Warrant liability | Common Stock
Stock Purchase Warrants
Term of stock purchase warrants	10 years
Number of shares called by warrants	80,645
Exercise price of warrant (in dollars per share)	$ 1.86
Oxford Notes | Stock Purchase Warrants | Common Stock
Stock Purchase Warrants
Term of stock purchase warrants						10 years
Number of shares called by warrants						167,570
Exercise price of warrant (in dollars per share)						$ 1.79
Oxford Notes | Stock Purchase Warrants | Warrant liability
Stock Purchase Warrants
Warrant liability						$ 0.2

Stockholders' Equity - Stock-Ba

Stockholders' Equity - Stock-Based Compensation (Details) - shares	Feb. 16, 2016	Dec. 31, 2015	Jun. 30, 2018
2015 Equity Incentive Plan
Stock-based compensation
Expiration period		10 years
Total shares that may be issued	17,251,115
Shares available for grant	8,000,000		1,906,380
Automatic annual increase in shares authorized, percent of common stock outstanding			3.50%
2015 Equity Incentive Plan | Maximum
Stock-based compensation
Additional shares authorized	9,251,115
1997 Stock Option Plan
Stock-based compensation
Options vested and expected to vest			7,844,281

Fair Value Measurements - Recur

Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Fair Value Measurements
Money market funds	$ 183,928		$ 183,928		$ 16,150
Marketable securities	7,954		7,954		20,300
Embedded conversion option	32,312		32,312
Reconciliation of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3)
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount	0	$ 0	0	$ 0
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount	0	0	0	0
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount	0	0	0	0
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount	0	0	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers out of Level 3	0	0	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	0	$ 0	0	$ 0
Recurring | Embedded conversion option
Fair Value Measurements
Embedded conversion option	32,312		32,312
Recurring | Money market funds
Fair Value Measurements
Money market funds	14,218		14,218		4,706
Recurring | Government and agency securities
Fair Value Measurements
Marketable securities					7,987
Recurring | Corporate debt securities
Fair Value Measurements
Marketable securities	7,954		7,954		17,708
Recurring | Level 1 | Money market funds
Fair Value Measurements
Money market funds	14,218		14,218		4,706
Recurring | Level 2 | Government and agency securities
Fair Value Measurements
Marketable securities					7,987
Recurring | Level 2 | Corporate debt securities
Fair Value Measurements
Marketable securities	7,954		7,954		$ 17,708
Recurring | Level 3 | Embedded conversion option
Fair Value Measurements
Embedded conversion option	32,312		32,312
Reconciliation of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3)
Issuance of the 2023 Notes			17,300
Change in fair value included in other income (expense)			15,012
Balance at the end of the period	$ 32,312		$ 32,312

Fair Value Measurements - Nonre

Fair Value Measurements - Nonrecurring (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Recurring
Fair Value Measurements
Fair value of non-financial assets	$ 0		$ 0		$ 0
Fair value of non-financial liabilities	0		0		0
Nonrecurring
Fair Value Measurements
Assets, fair value	0		0		0
Liabilities, fair value	0		0		$ 0
Fair value impairment recognized on long-lived assets	$ 0	$ 0	$ 0	$ 0

Income Taxes - Tax Provision (D

Income Taxes - Tax Provision (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Taxes
Income tax provision	$ 0	$ 0	$ 0	$ 0
Corporate income tax rate (as a percent)			21.00%