Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | Vericel Corp | ||
Entity Central Index Key | 887,359 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 43,753,005 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 412,774,169 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 18,286 | $ 26,862 |
Short term investments | 64,638 | 0 |
Accounts receivable (net of allowance for doubtful accounts of $514 and $249, respectively) | 23,454 | 18,270 |
Inventory | 3,558 | 3,793 |
Other current assets | 2,847 | 1,581 |
Total current assets | 112,783 | 50,506 |
Property and equipment, net | 5,906 | 4,071 |
Total assets | 118,689 | 54,577 |
Current liabilities: | ||
Accounts payable | 7,108 | 5,552 |
Accrued expenses | 6,930 | 5,573 |
Deferred rent | 566 | 420 |
Warrant liabilities | 0 | 1,014 |
Current portion of term loan credit agreement (net of deferred costs of $0 and $67, respectively) | 0 | 350 |
Other | 188 | 181 |
Total current liabilities | 14,792 | 13,090 |
Revolving and term loan credit agreement (net of deferred costs of $0 and $196, respectively) | 0 | 16,888 |
Deferred rent | 1,666 | 2,059 |
Total liabilities | 16,458 | 32,037 |
COMMITMENTS AND CONTINGENCIES | ||
Shareholders’ equity: | ||
Common stock, no par value; shares authorized — 75,000; shares issued and outstanding — 43,578 and 35,861, respectively | 471,180 | 383,020 |
Other comprehensive loss | ||
Other comprehensive loss | (39) | 0 |
Warrants | 104 | 397 |
Accumulated deficit | 369,014 | 360,877 |
Total shareholders’ equity | 102,231 | 22,540 |
Total liabilities and shareholders’ equity | $ 118,689 | $ 54,577 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts | $ 514 | $ 249 |
Current portion of revolving and term loan credit agreement, deferred costs | 0 | 67 |
Noncurrent portion of revolving and term loan credit agreement, deferred costs | $ 0 | $ 196 |
Common stock, shares authorized (in shares) | 75,000 | 75,000 |
Common stock, shares issued (in shares) | 43,578 | 35,861 |
Common stock, shares outstanding (in shares) | 43,578 | 35,861 |
Series B-2 | ||
Convertible preferred stock, shares authorized (in shares) | 39 | 39 |
Convertible preferred stock, shares reserved (in shares) | 39 | 39 |
Convertible preferred stock, shares issued (in shares) | 0 | 12 |
Convertible preferred stock, shares outstanding (in shares) | 0 | 12 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Product sales, net | $ 90,857 | $ 62,760 | $ 54,383 |
Other | 0 | 1,164 | 0 |
Total revenue | 90,857 | 63,924 | 54,383 |
Cost of product sales | 32,160 | 30,354 | 28,307 |
Gross profit | 58,697 | 33,570 | 26,076 |
Research and development | 13,599 | 12,944 | 15,295 |
Selling, general and administrative | 49,007 | 35,610 | 27,388 |
Loss on impairment of intangible asset | 0 | 0 | 2,638 |
Total operating expenses | 62,606 | 48,554 | 45,321 |
Loss from operations | (3,909) | (14,984) | (19,245) |
Other income (expense): | |||
Increase in fair value of warrants | (2,524) | (257) | 0 |
Loss on extinguishment of debt | (838) | (860) | 0 |
Interest income | 897 | 14 | 8 |
Interest expense | (1,732) | (1,107) | (314) |
Other income (expense) | (31) | (92) | (15) |
Total other (expense) income | (4,228) | (2,302) | (321) |
Net loss | $ (8,137) | $ (17,286) | $ (19,566) |
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share) | $ (0.52) | $ (1.18) | |
Weighted average number of common shares outstanding (Basic and Diluted) (in shares) | 40,242 | 33,355 | 23,093 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (8,137) | $ (17,286) | $ (19,566) |
Foreign currency translation | (39) | 0 | 0 |
Comprehensive loss | $ (8,176) | $ (17,286) | $ (19,566) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands | Total | Preferred Stock | Common Stock | Treasury Stock | Warrants | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2015 | 13 | 23,789 | (1,250) | ||||
Beginning balance at Dec. 31, 2015 | $ 22,130,000 | $ 41,539,000 | $ 307,766,000 | $ (3,150,000) | $ 0 | $ 0 | $ (324,025,000) |
Increase (Decrease) in Shareholders' Equity | |||||||
Net loss | (19,566,000) | (19,566,000) | |||||
Conversion of preferred stock for common stock (Note 9) (in shares) | (1) | 1,250 | |||||
Conversion of preferred stock for common stock (Note 9) | 0 | $ (3,150,000) | $ 3,150,000 | ||||
Compensation expense related to stock options granted, net of forfeitures | 2,499,000 | $ 2,499,000 | |||||
Issuance of common stock, net of issuance costs (in shares) | 7,538 | ||||||
Issuance of common stock, net of issuance costs | 18,868,000 | $ 18,868,000 | |||||
Stock option exercises (in shares) | 39 | ||||||
Stock option exercises | 120,000 | $ 120,000 | |||||
Shares issued under the Employee Stock Purchase Plan (in shares) | 229 | ||||||
Shares issued under the Employee Stock Purchase Plan | 467,000 | $ 467,000 | |||||
Issuance of warrants | 190,000 | 190,000 | |||||
Ending balance (in shares) at Dec. 31, 2016 | 12 | 31,595 | 0 | ||||
Ending balance at Dec. 31, 2016 | 24,708,000 | $ 38,389,000 | $ 329,720,000 | $ 0 | 190,000 | 0 | (343,591,000) |
Increase (Decrease) in Shareholders' Equity | |||||||
Net loss | (17,286,000) | (17,286,000) | |||||
Conversion of preferred stock for common stock (Note 9) (in shares) | (12) | 1,094 | |||||
Conversion of preferred stock for common stock (Note 9) | 0 | $ (38,389,000) | $ 38,389,000 | ||||
Compensation expense related to stock options granted, net of forfeitures | 2,680,000 | $ 2,680,000 | |||||
Issuance of common stock, net of issuance costs (in shares) | 1,983 | ||||||
Issuance of common stock, net of issuance costs | 7,188,000 | $ 7,188,000 | |||||
Stock option exercises (in shares) | 199 | ||||||
Stock option exercises | 608,000 | $ 608,000 | |||||
Shares issued under the Employee Stock Purchase Plan (in shares) | 173 | ||||||
Shares issued under the Employee Stock Purchase Plan | 425,000 | $ 425,000 | |||||
Issuance of warrants | 207,000 | 207,000 | |||||
Exercise of warrants resulting in the issuance of common stock (Note 11) (in shares) | 817 | ||||||
Exercise of warrants resulting in the issuance of common stock | 4,010,000 | $ 4,010,000 | |||||
Ending balance (in shares) at Dec. 31, 2017 | 0 | 35,861 | 0 | ||||
Ending balance at Dec. 31, 2017 | 22,540,000 | $ 0 | $ 383,020,000 | $ 0 | 397,000 | 0 | (360,877,000) |
Increase (Decrease) in Shareholders' Equity | |||||||
Net loss | (8,137,000) | (8,137,000) | |||||
Compensation expense related to stock options granted, net of forfeitures | 7,223,000 | $ 7,223,000 | |||||
Issuance of common stock, net of issuance costs (in shares) | 5,750 | ||||||
Issuance of common stock, net of issuance costs | 70,028,000 | $ 70,028,000 | |||||
Stock option exercises (in shares) | 1,180 | ||||||
Stock option exercises | 3,705,000 | $ 3,705,000 | |||||
Shares issued under the Employee Stock Purchase Plan (in shares) | 106 | ||||||
Shares issued under the Employee Stock Purchase Plan | 656,000 | $ 656,000 | |||||
Exercise of warrants resulting in the issuance of common stock (Note 11) (in shares) | 681 | ||||||
Exercise of warrants resulting in the issuance of common stock | 6,255,000 | $ 6,548,000 | (293,000) | ||||
Net change in unrealized loss on investments | (39,000) | (39) | |||||
Ending balance (in shares) at Dec. 31, 2018 | 0 | 43,578 | 0 | ||||
Ending balance at Dec. 31, 2018 | $ 102,231,000 | $ 0 | $ 471,180,000 | $ 0 | $ 104,000 | $ (39,000) | $ (369,014,000) |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Issuance of stock, issuance cost | $ 4,700 | $ 311,000 | $ 1,653,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | |||
Net loss | $ (8,137) | $ (17,286) | $ (19,566) |
Adjustments to reconcile net loss to net cash used for operating activities: | |||
Depreciation and amortization | 1,426 | 1,612 | 1,886 |
Impairment of intangible asset | 0 | 0 | 2,638 |
Stock compensation expense | 7,223 | 2,680 | 2,499 |
Change in fair value of warrants | 2,524 | 257 | 0 |
Loss on extinguishment of debt | 838 | 860 | 0 |
Foreign currency translation loss | 51 | 37 | 5 |
Gain (loss) on sale of fixed assets | 22 | (115) | 0 |
Amortization of premiums and discounts on marketable securities | (327) | 0 | 0 |
Changes in operating assets and liabilities: | |||
Inventory | 235 | (305) | (2,108) |
Deferred rent | (247) | 785 | 1,568 |
Accounts receivable | (5,184) | (1,177) | (6,174) |
Prepaid and other current assets | (1,267) | (261) | (701) |
Accounts payable | 899 | (1,361) | (1,076) |
Accrued expenses | 1,493 | 1,050 | 920 |
Other non-current assets and liabilities, net | 39 | 41 | 217 |
Net cash used for operating activities | (412) | (13,183) | (19,892) |
Investing activities: | |||
Purchases of short term investments | (66,549) | 0 | 0 |
Sales and maturities of short term investments | 2,200 | 0 | 0 |
Expenditures for property, plant and equipment | (2,678) | (1,510) | (1,415) |
Net cash used for investing activities | (67,027) | (1,510) | (1,415) |
Financing activities: | |||
Net proceeds from equity offering | 70,028 | 0 | 0 |
Net proceeds from issuance of common stock | 4,361 | 8,220 | 19,455 |
Deferred financing costs | 0 | (30) | (213) |
Proceeds from exercise of warrants | 2,716 | 4,010 | 0 |
Borrowings under revolving and term loan credit agreements | 0 | 14,793 | 12,710 |
Warrants issued in connection with debt arrangement | 0 | 207 | 190 |
Payments on term loan credit agreement | 0 | (889) | (2,400) |
Payments on long-term debt | (17,532) | (7,151) | (38) |
Fee on long-term debt | (710) | (583) | 0 |
Net cash provided by (used in) financing activities | 58,863 | 18,577 | 29,704 |
Net increase (decrease) in cash | (8,576) | 3,884 | 8,397 |
Cash at beginning of period | 26,862 | 22,978 | 14,581 |
Cash at end of period | 18,286 | 26,862 | 22,978 |
Supplemental cash flow information (non-cash): | |||
Shares exchanged between common and preferred stock | 0 | 38,389 | 3,150 |
Additions to equipment in process included in accounts payable | $ 606 | $ 341 | $ 18 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Vericel Corporation, a Michigan corporation (together with its consolidated subsidiaries referred to herein as the Company, Vericel, we, us or our), was incorporated in March 1989 and began employee-based operations in 1991. On May 30, 2014, Vericel completed the acquisition of certain assets and assumed certain liabilities of Sanofi, a French société anonyme (Sanofi), including all of the outstanding equity interests of Genzyme Biosurgery ApS (Genzyme Denmark or the Danish subsidiary) (now known as Vericel Denmark ApS), a wholly-owned subsidiary of Sanofi, and a portfolio of patents and patent applications of Sanofi and certain of its subsidiaries for purposes of acquiring the portion of the cell therapy and regenerative medicine business (the CTRM Business), related to the MACI ® , Carticel ® and Epicel ® products. The Company is a fully integrated, commercial-stage biopharmaceutical company and currently markets MACI ® and Epicel ® in the U.S. The Company is a leader in advanced cell therapies for the sports medicine and severe burn care markets. MACI ® (autologous cultured chondrocytes on porcine collagen membrane) is an autologous cellularized scaffold product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults that was approved by the FDA on December 13, 2016. The first shipment and implantation of MACI occurred on January 31, 2017. At the end of the second quarter of 2017, the Company removed Carticel ® (autologous cultured chondrocytes), an earlier generation ACI product, from the market. The Company also markets Epicel ® (cultured epidermal autografts), a permanent skin replacement Humanitarian Use Device (HUD) for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of total body surface area (TBSA). The Company operates its business primarily in the U.S. in 1 reportable segment — the research, product development, manufacture and distribution of cellular therapies for use in the treatment of specific diseases. The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. As of December 31, 2018 , the Company has an accumulated deficit of $369.0 million and had a net loss of $8.1 million during 2018. The Company had cash and cash equivalents of $18.3 million and short term investments of $64.6 million as of December 31, 2018 . On December 19, 2018, the Company terminated and prepaid in full all outstanding indebtedness under the Loan and Security Agreement dated as of September 9, 2016 as amended, by and between the Company, Silicon Valley Bank as Agent and Silicon Valley Bank, MidCap Financial Trust, MidCap Funding III Trust (SVB and MidCap) and other lenders listed therein as lenders (SVB Loan Agreement). The Company expects that existing cash, cash equivalents and short term investments will be sufficient to support the Company's current operations through at least February 2020. The Company may seek additional funding through debt or equity financings. However, the Company may not be able to obtain financing on acceptable terms or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's shareholders. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of Vericel and its wholly-owned subsidiaries, Marrow Donation, LLC, located in San Diego, California, Vericel Denmark ApS, in Kastrup, Demark and Vericel Security Corporation (collectively, the Company). All inter-company transactions and accounts have been eliminated in consolidation. Marrow Donation, LLC and Vericel Denmark ApS ceased operations in 2015. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported period. Actual results could differ from those estimates. Consolidated Statement of Cash Flows The following table presents certain supplementary cash flows information for the years ended December 31, 2018, 2017, and 2016: Year Ended December 31, (In thousands) 2018 2017 2016 Supplementary Cash Flows information: Non-cash information: Warrant liabilities settled in common stock $ 3,538 $ — $ — Additions to equipment in process included in accounts payable $ 606 $ 341 $ 18 Shares exchanged between common and preferred stock $ — $ (38,389 ) $ (3,150 ) Cash information: Interest paid (net of interest capitalized) $ 2,230 $ 931 $ 226 Income tax withholding paid $ — $ 100 $ — Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase and consist primarily of demand deposits, money market funds, overnight repurchase agreements and short duration agency bonds and commercial paper. Investments Short-term investments consist of debt securities classified as available-for-sale and have maturities greater than 90 days, but less than one year as of the balance sheet date. All investments are carried at fair value based upon quoted market prices. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported as a component of accumulated other comprehensive loss. The cost of available-for-sale securities sold is based on the specific-identification method. Realized gains and losses are included in earnings, and are derived for specific-identification method for determining the costs of investments sold. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is reclassified from accumulated other comprehensive income (loss) to the statements of operations. Realized gains and losses are determined on the specific identification method and are included in investment and other income, net. Inventory Inventories are measured at the lower of cost and net realizable value. Cost is calculated based upon standard-cost which approximates costs determined on the first-in, first-out method. The Company periodically reviews its inventories for excess or obsolescence and write-down obsolete or other unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than that estimated by us, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written down are charged to cost of sales. Accounts Receivable Accounts receivable are initially recorded at the contractual amount owed by the customer or based on expected payments from the insurance provider, hospital or patient. Allowances for doubtful accounts are established when the facts and circumstances indicate that a receivable may not be collectible. Property, Plant and Equipment Property, plant and equipment are initially measured and recognized at acquisition cost, including any directly attributable cost of preparing the asset for its intended use or, in the case of assets acquired in a business combination, at fair value as at the date of the combination. After initial measurement, property, plant and equipment are carried at cost less accumulated depreciation and impairment. Repair and maintenance costs of property, plant and equipment are expensed as incurred. The depreciable value of property, plant and equipment, net of any residual value, is depreciated on a straight line basis over the useful life of the asset. The useful life of an asset is usually equivalent to its economic life. The useful lives of property, plant and equipment are as follows: • Equipment and computers: 3 to 5 years • Furniture and fixtures: 5 years • Building improvements and leasehold improvements: Shorter of the remaining life of the lease or 10 years The costs of assets retired or otherwise disposed of and the accumulated depreciation thereon are removed from the accounts, with any gain or loss realized upon sale or disposal credited or charged to operations. Intangible Assets and Other Long Lived Assets Intangible assets are initially measured at acquisition cost, including any directly attributable costs of preparing the asset for its intended use or, in the case of assets acquired in a business combination at fair value as at the date of the combination. Identifiable intangible assets related to commercial rights are amortized on a straight line basis over their expected useful lives. Amortization of intangible assets is recognized in these financial statements under Cost of product sales. Intangible assets and long-lived assets are assessed for potential impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss would be recognized when an asset’s fair value, determined based on undiscounted cash flows expected to be generated by the asset, is less than its carrying amount. The impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value and recognized in these financial statements. Intangible assets are carried at cost less accumulated amortization and impairment. Upon the approval of MACI in December 2016 and the replacement of Carticel with MACI, it was determined that the Carticel commercial rights intangible asset was fully impaired as of December 31, 2016 resulting in a loss on intangible asset impairment of $2.6 million . The value of the intangible assets was determined using the income approach based on projected cash flows attributed to the commercial rights. Revenue Recognition and Net Product Sales The new revenue standard became effective for the Company on January 1, 2018, and was adopted using the modified retrospective method. Based on the Company's evaluation of all of its product revenue contracts under the new revenue standard there was no cumulative adjustment recorded in the financial statements upon adoption of Accounting Standards Codification 606, Revenue Recognition, (ASC 606) on January 1, 2018. For the year ended December 31, 2018 , the timing and amount of revenue recognized under ASC 606 is not materially different from that under the previous guidance. The Company recognizes product revenue from sales to a customer (distributor or hospital) following the five step model in ASC 606: (i) identify 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 revenues when (or as) the Company satisfies the performance obligation. Under this revenue standard, the Company recognizes revenue when its customer obtains control of the promised goods, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods. There are no contractual rights of returns, refunds or similar obligations related to MACI, kits, or Epicel as of December 31, 2018 ; however, in certain limited cases the Company will accept a product return if a surgery is canceled. Revenue is not recognized in these cases, and historically such amounts have been insignificant. Currently, for MACI, MACI kits and Epicel there are no variable pricing arrangements related to warranties or rebates offered to customers. The majority of orders are due within 60 days of delivery. Shipping and handling fees are included as a component of revenue. The Company recognizes any commission fees as an expense when incurred. These fees are included in selling, general, and administrative expenses. Research and Development Expense Research and development activities represent a significant part of the Company’s business. These expenditures relate to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of consumers and patients. Research and development expenses are expensed as incurred. Stock-Based Compensation The Company’s accounting for stock-based compensation requires it to determine the fair value of common stock issued in the form of stock option awards. The Company uses the value of its common stock at the date of the grant in the calculation of the fair value of its share-based awards. The fair value of stock options held by the employees is determined using a Black-Scholes option valuation method, which is a valuation technique that is acceptable for share-based payment accounting. Key assumptions in determining fair value include volatility, risk-free interest rate, dividend yield and expected term. The assumptions used in calculating the fair value of stock options represent the Company’s best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the stock-based compensation expense could be materially different in the future. In addition, the Company estimates the expected forfeiture rate and only recognize expense for those stock options expected to vest over the service period. The estimated forfeiture rate considers the historical experience of the Company’s stock-based awards. If the actual forfeiture rate is different from the estimate, expense is adjusted accordingly. For certain non-employee consultants, stock option awards continue to vest post-termination. The guidance for non-employee stock compensation accounting for equity-classified awards was updated, and these awards are now subject to fixed grant date fair value principles which eliminates the variable mark-to-market accounting. The options were valued as of the adoption date July 1, 2018. The Company also has an Employee Stock Purchase Plan (ESPP) which is a compensatory plan. Compensation expense is recorded based on the fair value of the purchase options at the grant date, which corresponds to the first day of each purchase period, and is amortized over the purchase period. Comprehensive Loss Comprehensive loss is the change in stockholders’ equity during a period arising from any gain or loss unrealized related to the Company's investments in short-term investments. Income Taxes Deferred tax assets are recognized for deductible temporary differences and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company records uncertain tax positions in the financial statements only if it is more likely than not that the uncertain tax position will be sustained upon examination by the taxing authorities. The Company records interest and penalties related to uncertain tax positions in income tax expense. Net Loss Per Share Attributable to Common Shareholders Basic and diluted earnings (loss) per share is calculated using the two-class method. Basic earnings (loss) per share which is based on an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares and holders of the Series B preferred stock. The Series B preferred stock shares contain participation rights in undistributed earnings, but do not share in the losses of the Company. The accumulated but undeclared dividends on the Series B preferred stock of $7.6 million for the year ended December 31, 2016 is treated as a reduction of earnings attributable to common shareholders. There were no undeclared dividends for the year ended December 31, 2018 or 2017. Diluted earnings (loss) per share includes convertible securities or common equivalent share (stock options and warrants) in addition to the Company's common shares. Common equivalent shares and treasury stock are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. Financial Instruments The Company’s financial instruments include receivables for which the current carrying amounts approximate market value based upon their short-term nature. Warrants Warrants that could be cash settled or have anti-dilution price protection provisions are recorded as liabilities at their estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in other income (expense) in our statement of operations in each subsequent period. Warrants that meet the requirements for equity classification are recorded at fair value with no subsequent remeasurement. In general, warrants are measured using the Black-Scholes valuation model. The methodology is based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent our best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the change in estimated fair value of the warrant liability for those warrants that could be cash settled or have anti-dilution price protection provisions, could be materially different. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance requiring entities to apply a new model for recognizing revenue from contracts with customers and the reporting of principal versus agent considerations. The guidance superseded the then-applicable revenue recognition guidance and requires entities to evaluate their revenue recognition arrangements using a five step model to determine when a customer obtains control of a transferred good or service. The new revenue standard A ccounting Standards Codification 606, Revenue Recognition, (ASC 606), became effective for the Company on January 1, 2018, and was adopted using the modified retrospective method. See note 4 for further discussion. Accounting for Leases The FASB issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In accordance with the updated guidance, lessees are required to recognize the right of use assets and lease liabilities arising from operating leases on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within 2019. The Company has evaluated its leasing arrangements under the issued guidance and determined all leases are classified as operating leases and will be recognized as assets and future payments as liabilities on the balance sheet. Based on the Company's evaluation to date, the Company expects that the adoption of the new leasing standards will result in the recognition of material right-to-use assets and liabilities in the Company's consolidated balance sheet. The adoption of the new leasing standards is not expected to have a material impact to the Company's consolidated statements of income. The Company elected to utilize the practical expedients when adopting the standard. Accounting for Non-Employee Share Based Payment Arrangements The FASB issued guidance to expand the scope of stock compensation guidance to include stock compensation granted to nonemployees. Previously, stock compensation granted to nonemployees was subject to vesting date, as opposed to grant date, fair value principles that required companies to re-measure fair value at each reporting period until settlement for equity classified awards. The guidance for non-employee stock compensation accounting for equity-classified awards was updated, and these awards are now subject to fixed grant date fair value principles which eliminates the variable mark-to-market accounting. The non-employee stock awards granted by the Company have a service condition but no performance condition, each of which is measured using the Black-Scholes valuation model. The guidance was adopted early and applied as of July 1, 2018 and reflected in the Company's financial statements. The impact upon adoption was not material and no cumulative adjustment was recorded. Measuring Credit Losses on Financial Instruments The FASB issued updated guidance on measuring credit losses on financial instruments. The guidance removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Prior to the updated guidance, credit losses are recognized when it is probable that the loss has been incurred. The revised guidance removes all recognition thresholds and requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that a company expected to collect over the instrument’s contractual life. The guidance is effective for annual reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact to its consolidated financial statements. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | 4. Revenue Revenue Recognition and Net Product Sales As disclosed in note 2, the Company recognizes product revenue from sales of MACI Kits, MACI implants and Epicel grafts following the five step model in ASC 606. MACI Kits MACI (and previously Carticel) kits are sold directly to hospitals based on contracted rates in the approved contract or sales order. The Company recognizes MACI (or Carticel) kit revenue upon delivery of the biopsy kit at which time the customer (the doctor) is in control of the kit. The kit provides the doctor the ability to biopsy a sampling of cells to provide to the Company that can be used later to manufacture the implant. The ordering of the kit does not obligate the Company to manufacture an implant nor does the receipt of the cell tissue. The customer’s order of an implant is separate from the process of ordering the kit. Therefore, the sale of the kit and any subsequent sale of an implant are distinct contracts and are accounted for separately. MACI Implants The Company recognizes product revenues from sales of MACI (and previously Carticel) implants upon delivery at which time the customer is in control of the implant and the claim is billable. Prior authorization or confirmation of coverage level by the patient’s private insurance plan, hospital or government payer is a prerequisite to the shipment of product to a patient. Depending upon the type of contract and whom the payer is for the MACI implant, the Company's net product revenues are based on contracted rates or estimated based on expected payments from the insurance provider, hospital or patient. The estimates of such payment amounts vary by customer and payer and are based on either contracted rates, publicly available rates or past payer precedents. Changes in estimates are recorded through revenue in the period such change occurs. Net product revenues from sales to distributors may include a prompt pay discount. On July 25, 2018 and August 10, 2018, the Company entered into amendments to its distribution agreement with Orsini Pharmaceutical Services, Inc. (Orsini). The amendments modified certain payment terms for surgeries after June 15, 2018. In addition, under the revised agreement, the parties agreed to eliminate Orsini's right to serve as the Company's exclusive distributor for MACI as the Company moves to a limited expanded network of distributors. Orsini remains the exclusive pharmacy supplying MACI for only an enumerated list of payers. The amended agreement includes a provision whereby the Company retains the credit and collection risk from the end customer on implants after June 15, 2018. Orsini performs the collection activities. The net product revenues for these cases are based on expected payments from the insurance provider, hospital or patient. The estimates of such payment amounts vary by customer and payer and are based on either contracted rates, publicly available rates or past payer precedents. Changes in estimates are recorded through revenue in the period such change occurs. Pursuant to the revised arrangement, the Company pays Orsini a dispensing fee on a per implant basis. In addition, in consideration of Orsini’s future administrative services related to the amendment, the Company has agreed to pay Orsini an incremental service fee based on a fixed number of MACI cases subsequent to the date of amendment of approximately $1.3 million which is fully expensed as of December 31, 2018. On July 26, 2018, the Company entered into a Dispensing Agreement (Dispensing Agreement) with AllCare Plus Pharmacy, Inc. (AllCare). Pursuant to the Dispensing Agreement, the Company appoints AllCare as a non-exclusive specialty pharmacy provider of MACI. The Company pays AllCare a fee for each patient to whom MACI is dispensed. Under the Dispensing Agreement, the Company retains the credit and collection risk from the end customer on all implants. The net product revenues for these cases are based on contracted rates stated in the approved contract or other documentation with the insurance provider, hospital or patient. Epicel The Company sells Epicel directly to hospitals based on contracted rates stated in the approved contract or purchase order. Similar to MACI, there is no obligation to manufacture skin grafts upon receipt of a skin biopsy, and Vericel has no contractual right to receive payment until the product is delivered to the hospital. The Company recognizes product revenues from sales of Epicel upon delivery to the hospital at which time the customer is in control of the skin grafts and the claim is billable to the hospital. Revenue by Product and Customer The following table and description below shows the products from which the Company generated its revenue: Year Ended December 31, Revenue by product (in thousands) 2018 2017 2016 MACI and Carticel implants and kits Implants - based on contracted rate $ 40,830 $ 30,366 $ 17,027 Implants - based on third party reimbursement 25,096 12,122 20,299 Biopsy kits - direct bill 1,997 1,764 1,545 Change in estimates related to prior periods (182 ) (350 ) — Epicel Direct bill (hospital) 23,116 18,858 15,512 License Revenue — 1,164 — Total revenue $ 90,857 $ 63,924 $ 54,383 Revenue Recognition for License Grants, Milestone and Royalty Payments The Company recognizes other revenue from contracts with customers related to license grants, milestone related payments and royalty based payments by following the five step model described above. On May 10, 2017, the Company announced that it has entered into a License Agreement (License Agreement) with ICT, a leading cell therapy company and developer of CAR-T cell therapy for cancer treatment, for the development, manufacturing and commercialization of the Company's product portfolio in Greater China, South Korea, Singapore, and other countries in Asia. ICT acquired an exclusive license to certain patent rights, know-how and intellectual property relating to Carticel, MACI, ixmyelocel-T, and Epicel for the purpose of developing, manufacturing and commercializing the Company's products in the territory described above. The initiation of the technology transfer, the license grants in the License Agreement and the warrant purchase were contingent upon the Company’s receipt of the upfront payment. ICT will be responsible for funding the development of the programs and manufacturing of the products for commercialization in China and the rest of the territory. On December 21, 2017, the Company received $5.2 million (gross of withholding tax), of which $4.0 million was allocated to the warrant based on the fair value on the date of grant as described in note 12 and the remaining $1.2 million was recognized as described below. Upon adoption of ASC 606 , the Company reassessed the accounting for its license agreement with Innovative Cellular Therapeutics CO., LTD. (ICT). The Company identified its performance obligations under the agreement, which include the license, a training obligation, and supply of certain raw materials for technology transfer. Based on its assessment of this agreement under the new revenue standard the Company determined that the license is distinct and provides ICT with the right to use the Company's technology and accordingly revenue should be recognized at the point in time at which the Company delivered the license (December 2017). This evaluation was based on 1) the rights provided to ICT under the license, including the ability to sublicense, 2) the nature of the technology (primarily rights to technology already commercially approved in the US) and 3) ICT's ability to benefit from the license on its own including using its own existing resources as a manufacturer of autologous cell therapies. The transaction price was determined to be $1.2 million . No milestones or royalties are included in the transaction price as the criteria for including these variable payments have not yet been met. The Company assessed the allocation of arrangement consideration noting no differences in allocation from that determined under ASC 605. The license was delivered in December 2017, and revenue of $1.2 million was recorded in 2017 under the then applicable revenue accounting standard ASC 605. Based upon the Company's evaluation under ASC 606 there was no change in amount or timing of revenue recognized for the agreement, and therefore no cumulative change adjustment was recorded upon adoption of the new revenue standard on January 1, 2018. The Company has no significant performance obligations remaining under the agreement. The ICT license agreement provides for future milestone payments due to the Company upon the achievement of certain developmental and commercial events. The Company evaluates these milestones under the new revenue recognition standard at contract inception and at each reporting period date. Based on the Company’s evaluations to date, the Company has not included any of the future milestones in its determination of the transaction price because the criteria for including these variable payments have not yet been met. This evaluation was based on 1) the pace and eventual achievement of the milestones are largely dependent on ICT’s performance of its contractual obligations and the Company has no prior experience to determine the likelihood of ICT performing those obligations, and 2) the transfer of the funds for each of the milestone payments by ICT to the Company, if achieved, is subject to approval by the State Administration of Foreign Exchange of the People's Republic of China. The Company does not anticipate receiving any milestone payments in the near-term. Furthermore, there can be no assurance that the Company will receive any such milestone or receive any such transfer of funds from ICT ever. The ICT license agreement contains future sales-based royalties to the Company in the low-to-mid double digits. These royalties meet the exception for sales-based or usage-based royalties because they predominantly relate to the license and will be recognized when and if the subsequent sales occur. However, there can be no assurance that the Company will receive any such royalties or receive any such transfer of funds from ICT ever. Concentration of Credit Risk From July 2016 through June 2017, the Company utilized a direct sales model and contracted with Dohmen Life Science Services, LLC (DLSS) to provide administrative services associated with case management and reimbursement support and to provide billing and collection services for MACI. The Company also utilized Vital Care, Inc. (Vital Care) to provide similar billing and collection services for a subset of insurance payers and patients. In the second quarter of 2017, the Company and DLSS mutually terminated their agreement effective June 30, 2017. On May 15, 2017, the Company entered into a distribution agreement with Orsini Pharmaceutical Services, Inc. as a specialty pharmacy distributor of MACI and has engaged a third party services provider to provide the patient support program previously provided by DLSS and to manage patient cases for MACI. The Company’s receivables risk and credit risk became more concentrated from June 30, 2017 through June 15, 2018 due to the shift from DLSS to Orsini. Beginning June 16, 2018, the concentration of risk decreased because the Company retains the credit and collection risk from the end customer on implants after June 15, 2018. The Company sells Epicel directly to hospitals and not through a distributor. The Company's total revenue and accounts receivable balances were comprised of the following concentrations from its largest customers of Carticel, MACI and Epicel, as follows: Revenue Concentration Accounts Receivable Concentration Year Ended December 31, December 31, 2018 2017 2016 2018 2017 Carticel and MACI 16 % 35 % 31 % 2 % 46 % Epicel 7 % 10 % 11 % 4 % 3 % |
Selected Balance Sheet Componen
Selected Balance Sheet Components | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Selected Balance Sheet Components | Selected Balance Sheet Components Inventory Inventory as of December 31, 2018 and 2017 : (In thousands) 2018 2017 Raw materials $ 2,872 $ 3,532 Work-in-process 638 226 Finished goods 48 35 Inventory $ 3,558 $ 3,793 Property and Equipment Property and Equipment, net as of December 31, 2018 and 2017 : (In thousands) 2018 2017 Machinery and equipment $ 1,536 $ 1,249 Furniture, fixtures and office equipment 775 872 Computer equipment and software 3,712 3,536 Leasehold improvements 4,587 4,213 Construction in process 2,801 822 13,411 10,692 Less accumulated depreciation (7,505 ) (6,621 ) Property and Equipment $ 5,906 $ 4,071 Depreciation expense for the years ended December 31, 2018 , 2017 and 2016 were $1.4 million , $1.6 million and $1.6 million , respectively. Accrued Expenses Accrued Expenses as of December 31, 2018 and 2017 : (In thousands) 2018 2017 Bonus $ 5,161 $ 2,693 Employee related accruals 1,559 2,389 Other accrued expenses 210 491 Accrued expenses $ 6,930 $ 5,573 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt On December 19, 2018, the Company prepaid in full all outstanding indebtedness under, and terminated, the Loan and Security Agreement dated as of September 9, 2016, by and between the Company, Silicon Valley Bank as Agent and Silicon Valley Bank, MidCap Financial Trust, MidCap Funding III Trust and other lenders listed therein as lenders (SVB Loan Agreement), as amended December 30, 2016, May 9, 2017 and December 6, 2017, which termination was effective December 19, 2018. The debt financing consisted of a $15.0 million term loan which was drawn at the closing and up to $10.0 million of a revolving line of credit. The term loans were interest only (indexed to Wall Street Journal (WSJ) Prime plus 4.25% ) until December 1, 2018 followed by 36 equal monthly payments of principal plus interest maturing December 6, 2021. Under the terms of the agreement, the revolving credit was limited to a borrowing base calculated using eligible accounts receivable and maturing December 6, 2021 with an interest rate indexed to WSJ Prime plus 1.25% . Warrants were issued to SVB and MidCap in conjunction with the modified debt agreement as discussed in note 12. |
Cash Equivalents and Investment
Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash Equivalents and Investments | Cash Equivalents and Investments During the year ended December 31, 2018, the Company purchased marketable debt securities, which are classified as available-for-sale and carried at fair value in the accompanying consolidated balance sheets on a settlement date basis. The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of December 31, 2018: Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 5,838 $ — $ — $ 5,838 Repurchase agreements 5,000 — — 5,000 Commercial paper 30,710 — — 30,710 Corporate notes 13,168 — (24 ) 13,144 U.S. government securities 10,167 — (1 ) 10,166 U.S. asset-backed securities 10,632 — (14 ) 10,618 $ 75,515 $ — $ (39 ) $ 75,476 Classified as: Cash equivalents $ 10,838 Short-term investments 64,638 $ 75,476 As of the year ended December 31, 2018 , the Company invested $5.0 million in overnight repurchase agreement securities classified as cash equivalents on the balance sheet. There were no marketable securities that the Company considers to be other-than-temporarily impaired as of December 31, 2018 . The Company's investment strategy is to buy short-duration marketable securities with a high credit rating. As of December 31, 2018 , all marketable securities held by the Company had remaining contractual maturities of one year or less. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers all available evidence to evaluate the extent to which the decline is “other than temporary,” including the Company's intention to sell and, if so, mark the investment to market through a charge to our consolidated statement of operations. There have been no impairments of the Company’s assets measured and carried at fair value for the year ended December 31, 2018. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Option and Equity Incentive Plans The Company has historically had various stock incentive plans and agreements that provide for the issuance of nonqualified and incentive stock options as well as other equity awards. Such awards may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants. Options granted under these plans expire no later than ten years from the date of grant, and other than those granted to non-employee directors, generally become exercisable over a four year period, under a graded-vesting methodology, following the date of grant. The Company generally issues new shares upon the exercise of stock options. For certain non-employee consultants, stock option awards continue to vest post-termination. The guidance for non-employee stock compensation accounting for equity-classified awards was updated, and these awards are now subject to fixed grant date fair value principles which eliminates the variable mark-to-market accounting. The options were valued as of the adoption date July 1, 2018. The 2017 Omnibus Incentive Plan (2017 Plan) was approved by the Company's shareholders on May 3, 2017 at the annual meeting of shareholders. The 2017 Plan provides incentives through the grant of stock options, stock appreciation rights, restricted stock awards and restricted stock units. The exercise price of stock options granted under the 2017 Plan shall not be less than the fair market value of the Company’s common stock on the date of grant. The 2017 Plan replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan and the 2009 Second Amended and Restated Omnibus Incentive Plan (Prior Plans), and no new awards have been granted under the Prior Plans. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the awards available for issuance under the 2017 Plan. As of December 31, 2018 , there were 2,983,774 shares available for future grant under the 2017 Plan. Employee Stock Purchase Plan Employees are able to purchase stock under the Vericel Corporation Employee Stock Purchase Plan (ESPP). The ESPP allows for the issuance of an aggregate of 1,000,000 shares of common stock of which 526,020 have been granted since the inception of the benefit in 2015. Participation in this plan is available to substantially all employees. The ESPP is a compensatory plan accounted for under the expense recognition provisions of the share-based payment accounting standards. Compensation expense is recorded based on the fair market value of the purchase options at the grant date, which corresponds to the first day of each purchase period and is amortized over the purchase period. In January 2019, employees purchased 18,407 shares resulting in proceeds from the sale of common stock of $0.2 million under the ESPP for the fourth quarter of 2018. The total share-based compensation expense for the ESPP for the years ended December 31, 2018 , 2017 , and 2016 was approximately $0.3 million , $0.2 million , and $0.2 million , respectively. Service-Based Stock Options During the year ended December 31, 2018 , the Company granted 1,644,160 service-based options to purchase common stock. The exercise price of the options is the fair market value per share of common stock on the grant date, generally vest over four years (other than 105,000 non-employee director options which vest over one year ) and have a term of ten years . The weighted average grant-date fair value of service-based options granted during the years ended December 31, 2018 , 2017 , and 2016 was $6.96 , $1.99 and $2.15 , respectively. The net compensation costs recorded for the service-based stock options related to employees and directors (including the impact of forfeitures) for the years ended December 31, 2018 , 2017 , and 2016 were $6.9 million , $2.5 million and $2.3 million , respectively. Stock Compensation Expense Non-cash stock-based compensation expense (employee stock purchase plan and service-based stock options) is summarized in the following table: Years Ended December 31, (in thousands) 2018 2017 2016 Cost of goods sold $ 1,015 $ 428 $ 427 Research and development 1,672 506 497 General, selling and administrative 4,536 1,746 1,575 Total non-cash stock-based compensation expense $ 7,223 $ 2,680 $ 2,499 The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table. Year Ended December 31, Service-Based Stock Options 2018 2017 2016 Expected dividend rate —% —% —% Expected stock price volatility 82.3-88.3% 79.7 – 88.2% 78.7 – 92.2% Risk-free interest rate 2.4-3.1% 1.39 – 2.3% 1.1 – 2.1% Expected life (years) 5.3 - 6.3 5.5 - 6.3 5.5 – 6.3 The following table summarizes the activity for service-based stock options for the indicated periods: Service-Based Stock Options Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2017 4,528,426 $ 3.77 8.0 $ 10,776,000 Granted 1,644,160 $ 9.64 Exercised (1,180,815 ) $ 3.14 Expired (12,862 ) $ 6.84 Forfeited (188,226 ) $ 5.89 Outstanding at December 31, 2018 4,790,683 $ 5.85 7.7 $ 11,407 Exercisable at December 31, 2018 2,292,065 $ 5.40 $ 4,840 As of December 31, 2018, 4,481,963 shares are vested and expected to vest. As of December 31, 2018 there was approximately $7.2 million , of total unrecognized compensation cost related to non-vested service-based stock options granted under the 2017 Plan and the Prior Plans. That cost is expected to be recognized over a weighted-average period of 3.0 years. The total intrinsic value of stock options exercised for the years ended December 31, 2018 , 2017 , and 2016 was $10.3 million , $0.7 million and $0.1 million , respectively. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity At-the-Market Sales Agreement On October 10, 2016, the Company entered into an at-the-market sales agreement with Cowen (ATM Agreement), pursuant to which the Company sold shares of its common stock through Cowen, as sales agent, in registered transactions from the Company's shelf registration statement filed in June 2015. Shares of common stock were sold under the ATM at market prices. The Company paid 3% of the gross proceeds to Cowen as a commission. A total of 2,340,879 shares of common stock were sold under the ATM Agreement for proceeds of $8.0 million (net of $0.3 million in commission and issuance costs). There were no shares sold under the ATM Agreement during 2018. Effective May 29, 2018, the Company terminated the ATM Agreement and no further sales pursuant to the ATM Agreement will be made following such date of termination Public Equity Offering In June 2018, the Company sold 5,750,000 shares of its common stock in an underwritten public offering at a price of $13.00 per share. The Company received proceeds of $70.1 million , net of $4.7 million of underwriters’ discount and issuance costs consisting primarily of legal and accounting fees. The Company recorded these proceeds as a common stock issuance. Dividends No cash dividends have been declared or paid by the Company since its inception. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock Series B Convertible Preferred Stock On March 9, 2012, the Company completed the sale of 12,308 shares of Series B-1 Non-Voting Convertible Preferred Stock (Series B-1 preferred stock) at an offering price of $3,250 per share. In addition to the Series B-1 preferred stock, which was issued at the closing, the Company also authorized Series B-2 Voting Convertible preferred Stock (Series B-2 preferred stock). The Series B-1 preferred stock and Series B-2 preferred stock collectively are referred to as the Series B preferred stock. The Series B preferred stock is convertible, at the option of the holder thereof at any time after the 5 year anniversary of the closing of the offering, into shares of common stock at a conversion price of $3.25 per share of common stock, at a conversion ratio of one share of preferred stock for 50 shares of common stock. On February 10, 2017, the Company sent notice to Eastern Capital Limited (Eastern), the holder of shares of the Company’s Series B-1 Non-Voting Convertible Preferred Stock or Series B-2 Voting Convertible Preferred Stock (Preferred Stock), informing Eastern of the Company's election to convert all 12,308 of the outstanding shares of Preferred Stock held by Eastern, plus 9,570 shares of Preferred Stock in accumulated but undeclared dividends thereon, into 1,093,892 shares of the Company's common stock pursuant to the terms of the Amended and Restated Certificate of Designations, Preferences and Rights of Series B-1 Non-Voting Preferred Stock and Series B-2 Voting Preferred Stock of the Company (Mandatory Conversion). After the Mandatory Conversion on March 9, 2017, no shares of Preferred Stock of the Company remain outstanding. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Net Loss Per Common Share The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method: Year Ended December 31, (Amounts in thousands, except per share amounts) 2018 2017 2016 Numerator: Net loss $ (8,137 ) $ (17,286 ) $ (19,566 ) Less: earnings attributable to convertible preferred stock — — 7,579 Numerator of basic and diluted EPS $ (8,137 ) $ (17,286 ) $ (27,145 ) Denominator: Denominator for basic and diluted EPS: weighted-average common shares outstanding 40,242 33,355 23,093 Net loss per share attributable to common shareholders (basic and diluted) $ (0.20 ) $ (0.52 ) $ (1.18 ) Common equivalent shares and treasury stock are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. The aggregate number of common equivalent shares (related to options, warrants, and preferred stock) that have been excluded from the computations of diluted net loss per common share for the years ended December 31, 2018 , 2017 and 2016 was 4.8 million , 5.4 million and 5.3 million , respectively. |
Stock Purchase Warrants
Stock Purchase Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |
Stock Purchase Warrants | Stock Purchase Warrants The Company has historically issued warrants to purchase shares of the Company’s common stock in connection with certain of its common stock offerings and in September 2016 and December 2017 the Company issued warrants in connection with the amended SVB Loan Agreement discussed in note 6 (collectively the Debt Warrants) classified in equity. The warrants issued in August 2013 (August 2013 Warrants) expired in August 2018, and included anti-dilution price protection provisions that required cash settlement of the warrants and accordingly required the warrants to be recorded as liabilities of the Company at the estimated fair value at the balance sheet date, with changes in estimated fair value recorded as income or expense (non-cash) in the Company’s statement of operations in each subsequent period. The following table describes the outstanding warrants as of December 31, 2018 : December 2017 Warrants Exercise price $4.27 Expiration date December 6, 2023 Total shares issuable on exercise 26,951 During the year ended December 31, 2018 , the Company issued 565,895 shares of common stock upon the exercise of August 2013 Warrants with an exercise price of $4.80 . As of December 31, 2018 , the unexercised August 2013 Warrants expired by their terms. In addition, SVB and MidCap's assignee exercised all 117,074 of the September 2016 Warrants with an exercise price of $2.25 and 26,951 of the December 2017 Warrants with an exercise price of $4.27 , in each case via cashless exercise in exchange for 95,335 and 19,750 shares of the Company's common stock, respectively. As of December 31, 2018 no August 2013 or September 2016 warrants are outstanding. The fair value of the warrants described in the table above is measured using the Black-Scholes valuation model. Inherent in the Black-Scholes valuation model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero . The assumptions used by the Company are summarized in the following table: December 2017 Warrants December 6, 2017 Closing stock price $ 5.10 Expected dividend rate — % Expected stock price volatility 86.4 % Risk-free interest rate 2.2 % Expected life (years) 6.00 ICT Warrants On December 21, 2017, the Company received $5.2 million (gross of withholding tax) from Innovative Cellular Therapeutics CO., LTD. (ICT), of which $4.0 million was allocated to the purchase of a warrant for 818,424 shares of the Company's common stock based on the fair value on the date of grant and the remaining $1.2 million was allocated as consideration for the license agreement described in note 4. The fair value of the warrant was based on the closing price as of December 6, 2017 of $4.90 at an exercise price of $0.01 per share. On December 27, 2017, ICT exercised the warrant via a cashless exercise in exchange for 816,850 shares of the Company’s common stock. There were no warrants issued to ICT outstanding as of December 31, 2017. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s fair value measurements are classified and disclosed in one of the following three categories: • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; • Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). There was no movement between Level 1 and Level 2 or between Level 2 and Level 3. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The commercial paper, corporate notes, government securities and asset-backed securities are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. The following table summarizes the valuation of the Company’s financial instruments that are measured at fair value on a recurring basis: December 31, 2018 December 31, 2017 Fair value measurement category Fair value measurement category (In thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 5,838 $ 5,838 $ — $ — $ — $ — $ — $ — Repurchase agreements 5,000 — 5,000 — — — — — Commercial paper 30,710 — 30,710 — — — — — Corporate notes 13,144 — 13,144 — — — — — U.S. government securities 10,166 — 10,166 — — — — — U.S. asset-backed securities 10,618 — 10,618 — — — — — $ 75,476 $ 5,838 $ 69,638 $ — $ — $ — $ — $ — Liabilities: Warrant liabilities $ — $ — $ — $ — $ 1,014 $ — $ 1,014 $ — The fair values of the cash equivalents and marketable securities are based on observable market prices. Accrued interest of $0.1 million is included in the fair value measurements above and currently classified as an other asset on the consolidated balance sheet as of December 31, 2018. The fair values of the warrants are measured using the Black-Scholes valuation model. See note 12 for further discussion of the significant observable inputs use to measure the warrant liabilities. The following table summarizes the change in the estimated fair value of the Company’s warrant liabilities: Warrant Liabilities (In thousands) Balance at December 31, 2016 $ 757 Increase in fair value 257 Balance at December 31, 2017 1,014 Increase in fair value (net of expired warrants) 2,524 Warrant exercise (3,538 ) Balance at December 31, 2018 $ — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income (loss) before income taxes for U.S and non-U.S operations was as follows: Year Ended December 31, 2018 2017 2016 U.S. loss $ (8,056 ) $ (17,066 ) $ (19,302 ) Non U.S. loss (81 ) (220 ) (264 ) $ (8,137 ) $ (17,286 ) $ (19,566 ) A reconciliation of income taxes computed using the federal statutory rate to the taxes reported in the consolidated statements of operations is as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Loss before income taxes $ (8,137 ) $ (17,286 ) $ (19,566 ) Federal statutory rate 21 % 34 % 34 % Taxes computed at federal statutory rate (1,709 ) (5,877 ) (6,652 ) State taxes (net of federal benefit) (385 ) (1,106 ) (1,016 ) Nondeductible stock compensation (605 ) 563 549 Federal and State Rate Change 839 11,749 (614 ) Other 172 116 56 Change in valuation allowance 1,688 (5,445 ) 7,677 Reported income taxes $ — $ — $ — Deferred tax assets consist of the following: Year Ended December 31, (In thousands) 2018 2017 Net operating loss carryforwards $ 10,969 $ 10,487 Employee benefits and stock compensation 2,798 2,128 Research and development costs 9,067 8,275 Fixed assets 418 508 Inventory reserve 2,339 2,568 Other, net 345 282 Total deferred tax assets 25,936 24,248 Valuation allowance (25,936 ) (24,248 ) Net deferred tax assets $ — $ — As of December 31, 2018, the Company’s U.S. federal and state tax net operating loss carryforwards available to offset future profits, after considering the annual Section 382 limit described below, are $44.6 million and $25.2 million , respectively. These net operating loss carryforwards will expire between 2019 and 2038 with the exception of the federal net operating loss generated in 2018. The federal net operating loss of $ 1.3 million generated in 2018 can be carried forward indefinitely. The projected annual limitation on the use of the net operating losses that existed prior to September 17, 2014 as a result of our change in control in 2014 per Section 382 of the Internal Revenue Code is $0.8 million . As a result, a significant portion of the net operating losses and tax credit carryforwards will expire prior to their utilization, regardless of the level of future profitability. In accordance with the accounting guidance for income taxes, the Company estimated whether recoverability of its deferred tax assets is “more likely than not,” based on forecasts of taxable income in the related tax jurisdictions. In this estimate, the Company uses historical results, projected future operating results based upon approved business plans, eligible carry forward periods, tax planning opportunities and other relevant considerations. Based on these factors, including historical losses incurred by the Company, a full valuation allowance for the deferred tax assets, including the deferred tax assets for the aforementioned net operating losses and credits, has been provided since they are not more likely than not to be realized. If the Company achieves profitability, these deferred tax assets may be available to offset future income taxes. The change in the valuation allowance was an increase of $1.7 million and a decrease of $5.4 million for the years ended December 31, 2018 and 2017, respectively. The Company assesses uncertain tax positions in accordance with the guidance for accounting for uncertain tax positions. This pronouncement prescribes a recognition threshold and measurement methodology for recording within the financial statements uncertain tax positions taken, or expected to be taken, in the Company’s income tax returns. To the extent the uncertain tax positions do not meet the “more likely than not” threshold, the Company has derecognized such positions. To the extent the uncertain tax positions meet the “more likely than not” threshold, the Company has measured and recorded the highest probable benefit, and have established appropriate reserves for benefits that exceed the amount likely to be sustained upon examination. The Company currently has not recorded any uncertain tax positions and does not anticipate that the unrecognized tax benefits will significantly increase or decrease within the next twelve months. The Company files U.S. federal and state income tax returns with varying statute of limitations. Due to the Company’s net operating loss carryforwards, federal income tax returns from incorporation are still subject to examination. Michigan tax returns for the year ended December 31, 2013 and forward are subject to examination. Massachusetts tax returns for the year ended December 31, 2015 and forward are subject to examination. On December 22, 2017 the Tax Cuts and Jobs Act (Tax Act) was enacted. The Tax Act contains significant changes to corporate taxation, including the reduction of the corporate tax rate from 35 percent to 21 percent, increased deductions for capital spending, limitations on interest expense deductions, implementation of a territorial tax system, and imposition of a tax on deemed repatriated earnings of foreign subsidiaries. The Company remeasured the deferred taxes based on the enacted rate of 21 percent which resulted in an increase to tax expense of $11.7 million , which was recorded in 2017. The increase to tax expense was offset by the reversal of the valuation allowance. Our final determination of the Tax Act impact and the remeasurement of our deferred assets and liabilities was completed prior to the deadline of one year from enactment of the Tax Act. For the year ended December 31, 2018, there were no material changes to our analysis originally performed as of December 31, 2017. |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Savings Plan | Employee Savings Plan The Company has a 401(k) savings plan that allows participating employees to contribute a portion of their salary, subject to annual limits and minimum qualifications. The Board may, at its sole discretion, approve Company matching contributions to the plan. The Company made contributions of $0.6 million , $0.6 million and $0.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Manufacturing and Supply Agreements Matricel — In October 2015, the Company signed a long-term supply agreement with Matricel GmbH for the ACI-Maix collagen membrane used in the manufacture of MACI. Matricel supplied ACI-Maix membranes used in the production of MACI when it was previously marketed outside the U.S. by Genzyme Corporation, a Sanofi company. The Company and Matricel amended the agreement on March 17, 2018. Under the agreement, the Company has committed to purchase annually approximately $0.6 million per year. For the years ended December 31, 2016, 2017 and 2018, the Company has fulfilled this commitment. The agreement is effective until December 31, 2022 and contains a 5 -year renewal option by the Company and an additional 5 -year automatic renewal, unless otherwise terminated. Manufacture, Supply and Other Agreements — The Company has entered into various agreements relating to the manufacture of its products and the supply of certain components. If the manufacturing or supply agreements expire or are otherwise terminated, the Company may not be able to identify and obtain ancillary materials that are necessary to develop its products and such expiration and termination could have a material effect on the Company’s business. Contractual Obligations The Company leases facilities in Ann Arbor, Michigan and Cambridge, Massachusetts. In March 2016, the Company amended its current lease in Cambridge to extend the terms until February 2022 and have the right to extend until February 2027, subject to certain conditions. The Cambridge facilities include clean rooms, laboratories for MACI and Epicel manufacturing and office space. It is probable the Company will exercise its right to extend the lease. Under the amendment, the landlord will contribute approximately $2.0 million toward the cost of tenant improvements. The contribution toward the cost of tenant improvements is recorded as deferred rent on the Company's consolidated balance sheet and is amortized to our consolidated statement of operations as reductions to rent expense over the lease term. Through December 31, 2018 , the Company has recorded tenant improvements of $1.9 million . In addition to the property leases, the Company also pays for use of an offsite warehouse space, and leases various vehicles and computer equipment. Future minimum payments related to our operating and capital leases, and contractual obligations including interest on outstanding term loans are as follows: Payments Due by Period Contractual Obligations Total 2019 2020 2021 2022 2023 More than 5 Years Operating leases $ 15,386 $ 4,879 $ 4,719 $ 4,754 $ 966 $ 68 $ — Purchase commitments 2,761 741 711 674 635 — — Capital leases 205 41 41 41 41 41 — Total $ 18,352 $ 5,661 $ 5,471 $ 5,469 $ 1,642 $ 109 $ — Rent expense for the years ended December 31, 2018 , 2017 and 2016 , was $5.5 million , $5.6 million and $4.8 million , respectively. |
Supplementary Quarterly Financi
Supplementary Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Supplementary Quarterly Financial Information (unaudited) | Supplementary Quarterly Financial Information (unaudited) Quarterly earnings per share amounts may not sum to the totals for each of the years, since quarterly computations are based on weighted average common shares outstanding during each quarter. In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Year 2018 Revenues $ 18,027 $ 19,011 $ 22,484 $ 31,335 $ 90,857 Gross profit 10,361 11,284 14,346 22,706 58,697 Profit (loss) from operations (4,322 ) (4,246 ) (1,336 ) 5,995 (3,909 ) Net (loss) profit (7,659 ) (4,651 ) (1,069 ) 5,242 (8,137 ) Net (loss) profit per share (Basic) (0.21 ) (0.12 ) (0.02 ) 0.12 (0.20 ) Net (loss) profit per share (Diluted) (0.21 ) (0.12 ) (0.02 ) 0.11 (0.20 ) 2017 Revenues $ 9,361 $ 16,953 $ 14,260 $ 23,350 $ 63,924 Gross profit 2,252 9,283 7,074 14,961 33,570 Loss from operations (9,623 ) (2,521 ) (4,031 ) 1,191 (14,984 ) Net loss (9,778 ) (2,388 ) (5,407 ) 287 (17,286 ) Net (loss) profit per share (Basic and Diluted) (0.31 ) (0.07 ) (0.16 ) 0.01 (0.52 ) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Vericel and its wholly-owned subsidiaries, Marrow Donation, LLC, located in San Diego, California, Vericel Denmark ApS, in Kastrup, Demark and Vericel Security Corporation (collectively, the Company). All inter-company transactions and accounts have been eliminated in consolidation. Marrow Donation, LLC and Vericel Denmark ApS ceased operations in 2015. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported period. Actual results could differ from those estimates. |
Inventory | Inventory Inventories are measured at the lower of cost and net realizable value. Cost is calculated based upon standard-cost which approximates costs determined on the first-in, first-out method. The Company periodically reviews its inventories for excess or obsolescence and write-down obsolete or other unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than that estimated by us, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written down are charged to cost of sales. |
Accounts Receivable | Accounts Receivable Accounts receivable are initially recorded at the contractual amount owed by the customer or based on expected payments from the insurance provider, hospital or patient. Allowances for doubtful accounts are established when the facts and circumstances indicate that a receivable may not be collectible. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are initially measured and recognized at acquisition cost, including any directly attributable cost of preparing the asset for its intended use or, in the case of assets acquired in a business combination, at fair value as at the date of the combination. After initial measurement, property, plant and equipment are carried at cost less accumulated depreciation and impairment. Repair and maintenance costs of property, plant and equipment are expensed as incurred. The depreciable value of property, plant and equipment, net of any residual value, is depreciated on a straight line basis over the useful life of the asset. The useful life of an asset is usually equivalent to its economic life. The useful lives of property, plant and equipment are as follows: • Equipment and computers: 3 to 5 years • Furniture and fixtures: 5 years • Building improvements and leasehold improvements: Shorter of the remaining life of the lease or 10 years The costs of assets retired or otherwise disposed of and the accumulated depreciation thereon are removed from the accounts, with any gain or loss realized upon sale or disposal credited or charged to operations. |
Intangible Assets and Other Long Lived Assets | Intangible Assets and Other Long Lived Assets Intangible assets are initially measured at acquisition cost, including any directly attributable costs of preparing the asset for its intended use or, in the case of assets acquired in a business combination at fair value as at the date of the combination. Identifiable intangible assets related to commercial rights are amortized on a straight line basis over their expected useful lives. Amortization of intangible assets is recognized in these financial statements under Cost of product sales. Intangible assets and long-lived assets are assessed for potential impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss would be recognized when an asset’s fair value, determined based on undiscounted cash flows expected to be generated by the asset, is less than its carrying amount. The impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value and recognized in these financial statements. Intangible assets are carried at cost less accumulated amortization and impairment. |
Research and Development Expense | Research and Development Expense Research and development activities represent a significant part of the Company’s business. These expenditures relate to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of consumers and patients. Research and development expenses are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company’s accounting for stock-based compensation requires it to determine the fair value of common stock issued in the form of stock option awards. The Company uses the value of its common stock at the date of the grant in the calculation of the fair value of its share-based awards. The fair value of stock options held by the employees is determined using a Black-Scholes option valuation method, which is a valuation technique that is acceptable for share-based payment accounting. Key assumptions in determining fair value include volatility, risk-free interest rate, dividend yield and expected term. The assumptions used in calculating the fair value of stock options represent the Company’s best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the stock-based compensation expense could be materially different in the future. In addition, the Company estimates the expected forfeiture rate and only recognize expense for those stock options expected to vest over the service period. The estimated forfeiture rate considers the historical experience of the Company’s stock-based awards. If the actual forfeiture rate is different from the estimate, expense is adjusted accordingly. For certain non-employee consultants, stock option awards continue to vest post-termination. The guidance for non-employee stock compensation accounting for equity-classified awards was updated, and these awards are now subject to fixed grant date fair value principles which eliminates the variable mark-to-market accounting. The options were valued as of the adoption date July 1, 2018. The Company also has an Employee Stock Purchase Plan (ESPP) which is a compensatory plan. Compensation expense is recorded based on the fair value of the purchase options at the grant date, which corresponds to the first day of each purchase period, and is amortized over the purchase period. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is the change in stockholders’ equity during a period arising from any gain or loss unrealized related to |
Income Taxes | Income Taxes Deferred tax assets are recognized for deductible temporary differences and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company records uncertain tax positions in the financial statements only if it is more likely than not that the uncertain tax position will be sustained upon examination by the taxing authorities. The Company records interest and penalties related to uncertain tax positions in income tax expense. |
Net Loss Per Share Attributable to Common Shareholders | Net Loss Per Share Attributable to Common Shareholders Basic and diluted earnings (loss) per share is calculated using the two-class method. Basic earnings (loss) per share which is based on an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares and holders of the Series B preferred stock. The Series B preferred stock shares contain participation rights in undistributed earnings, but do not share in the losses of the Company. The accumulated but undeclared dividends on the Series B preferred stock of $7.6 million for the year ended December 31, 2016 is treated as a reduction of earnings attributable to common shareholders. There were no undeclared dividends for the year ended December 31, 2018 or 2017. Diluted earnings (loss) per share includes convertible securities or common equivalent share (stock options and warrants) in addition to the Company's common shares. Common equivalent shares and treasury stock are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. |
Financial Instruments | Financial Instruments The Company’s financial instruments include receivables for which the current carrying amounts approximate market value based upon their short-term nature. |
Warrants | Warrants Warrants that could be cash settled or have anti-dilution price protection provisions are recorded as liabilities at their estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in other income (expense) in our statement of operations in each subsequent period. Warrants that meet the requirements for equity classification are recorded at fair value with no subsequent remeasurement. In general, warrants are measured using the Black-Scholes valuation model. The methodology is based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent our best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the change in estimated fair value of the warrant liability for those warrants that could be cash settled or have anti-dilution price protection provisions, could be materially different. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance requiring entities to apply a new model for recognizing revenue from contracts with customers and the reporting of principal versus agent considerations. The guidance superseded the then-applicable revenue recognition guidance and requires entities to evaluate their revenue recognition arrangements using a five step model to determine when a customer obtains control of a transferred good or service. The new revenue standard A ccounting Standards Codification 606, Revenue Recognition, (ASC 606), became effective for the Company on January 1, 2018, and was adopted using the modified retrospective method. See note 4 for further discussion. Accounting for Leases The FASB issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In accordance with the updated guidance, lessees are required to recognize the right of use assets and lease liabilities arising from operating leases on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within 2019. The Company has evaluated its leasing arrangements under the issued guidance and determined all leases are classified as operating leases and will be recognized as assets and future payments as liabilities on the balance sheet. Based on the Company's evaluation to date, the Company expects that the adoption of the new leasing standards will result in the recognition of material right-to-use assets and liabilities in the Company's consolidated balance sheet. The adoption of the new leasing standards is not expected to have a material impact to the Company's consolidated statements of income. The Company elected to utilize the practical expedients when adopting the standard. Accounting for Non-Employee Share Based Payment Arrangements The FASB issued guidance to expand the scope of stock compensation guidance to include stock compensation granted to nonemployees. Previously, stock compensation granted to nonemployees was subject to vesting date, as opposed to grant date, fair value principles that required companies to re-measure fair value at each reporting period until settlement for equity classified awards. The guidance for non-employee stock compensation accounting for equity-classified awards was updated, and these awards are now subject to fixed grant date fair value principles which eliminates the variable mark-to-market accounting. The non-employee stock awards granted by the Company have a service condition but no performance condition, each of which is measured using the Black-Scholes valuation model. The guidance was adopted early and applied as of July 1, 2018 and reflected in the Company's financial statements. The impact upon adoption was not material and no cumulative adjustment was recorded. Measuring Credit Losses on Financial Instruments The FASB issued updated guidance on measuring credit losses on financial instruments. The guidance removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Prior to the updated guidance, credit losses are recognized when it is probable that the loss has been incurred. The revised guidance removes all recognition thresholds and requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that a company expected to collect over the instrument’s contractual life. The guidance is effective for annual reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact to its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of cash flow, supplemental disclosures | The following table presents certain supplementary cash flows information for the years ended December 31, 2018, 2017, and 2016: Year Ended December 31, (In thousands) 2018 2017 2016 Supplementary Cash Flows information: Non-cash information: Warrant liabilities settled in common stock $ 3,538 $ — $ — Additions to equipment in process included in accounts payable $ 606 $ 341 $ 18 Shares exchanged between common and preferred stock $ — $ (38,389 ) $ (3,150 ) Cash information: Interest paid (net of interest capitalized) $ 2,230 $ 931 $ 226 Income tax withholding paid $ — $ 100 $ — |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Disaggregation of Revenue | The following table and description below shows the products from which the Company generated its revenue: Year Ended December 31, Revenue by product (in thousands) 2018 2017 2016 MACI and Carticel implants and kits Implants - based on contracted rate $ 40,830 $ 30,366 $ 17,027 Implants - based on third party reimbursement 25,096 12,122 20,299 Biopsy kits - direct bill 1,997 1,764 1,545 Change in estimates related to prior periods (182 ) (350 ) — Epicel Direct bill (hospital) 23,116 18,858 15,512 License Revenue — 1,164 — Total revenue $ 90,857 $ 63,924 $ 54,383 |
Schedules of concentration of risk | The Company's total revenue and accounts receivable balances were comprised of the following concentrations from its largest customers of Carticel, MACI and Epicel, as follows: Revenue Concentration Accounts Receivable Concentration Year Ended December 31, December 31, 2018 2017 2016 2018 2017 Carticel and MACI 16 % 35 % 31 % 2 % 46 % Epicel 7 % 10 % 11 % 4 % 3 % |
Selected Balance Sheet Compon_2
Selected Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventory | Inventory as of December 31, 2018 and 2017 : (In thousands) 2018 2017 Raw materials $ 2,872 $ 3,532 Work-in-process 638 226 Finished goods 48 35 Inventory $ 3,558 $ 3,793 |
Schedule of property and equipment, net | Property and Equipment, net as of December 31, 2018 and 2017 : (In thousands) 2018 2017 Machinery and equipment $ 1,536 $ 1,249 Furniture, fixtures and office equipment 775 872 Computer equipment and software 3,712 3,536 Leasehold improvements 4,587 4,213 Construction in process 2,801 822 13,411 10,692 Less accumulated depreciation (7,505 ) (6,621 ) Property and Equipment $ 5,906 $ 4,071 |
Schedule of accrued expenses | Accrued Expenses as of December 31, 2018 and 2017 : (In thousands) 2018 2017 Bonus $ 5,161 $ 2,693 Employee related accruals 1,559 2,389 Other accrued expenses 210 491 Accrued expenses $ 6,930 $ 5,573 |
Cash Equivalents and Investme_2
Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of fair value of securities, not including cash | The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of December 31, 2018: Gross Unrealized (In thousands) Amortized Cost Gains Losses Fair Value Money market funds $ 5,838 $ — $ — $ 5,838 Repurchase agreements 5,000 — — 5,000 Commercial paper 30,710 — — 30,710 Corporate notes 13,168 — (24 ) 13,144 U.S. government securities 10,167 — (1 ) 10,166 U.S. asset-backed securities 10,632 — (14 ) 10,618 $ 75,515 $ — $ (39 ) $ 75,476 Classified as: Cash equivalents $ 10,838 Short-term investments 64,638 $ 75,476 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of non-cash stock-based compensation expense | Non-cash stock-based compensation expense (employee stock purchase plan and service-based stock options) is summarized in the following table: Years Ended December 31, (in thousands) 2018 2017 2016 Cost of goods sold $ 1,015 $ 428 $ 427 Research and development 1,672 506 497 General, selling and administrative 4,536 1,746 1,575 Total non-cash stock-based compensation expense $ 7,223 $ 2,680 $ 2,499 |
Schedule of weighted average assumptions used to estimate fair value of each service-based stock option grant | The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table. Year Ended December 31, Service-Based Stock Options 2018 2017 2016 Expected dividend rate —% —% —% Expected stock price volatility 82.3-88.3% 79.7 – 88.2% 78.7 – 92.2% Risk-free interest rate 2.4-3.1% 1.39 – 2.3% 1.1 – 2.1% Expected life (years) 5.3 - 6.3 5.5 - 6.3 5.5 – 6.3 |
Summary of activity for service-based stock options | The following table summarizes the activity for service-based stock options for the indicated periods: Service-Based Stock Options Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2017 4,528,426 $ 3.77 8.0 $ 10,776,000 Granted 1,644,160 $ 9.64 Exercised (1,180,815 ) $ 3.14 Expired (12,862 ) $ 6.84 Forfeited (188,226 ) $ 5.89 Outstanding at December 31, 2018 4,790,683 $ 5.85 7.7 $ 11,407 Exercisable at December 31, 2018 2,292,065 $ 5.40 $ 4,840 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method | The following reflects the net loss attributable to common shareholders and share data used in the basic and diluted earnings per share computations using the two class method: Year Ended December 31, (Amounts in thousands, except per share amounts) 2018 2017 2016 Numerator: Net loss $ (8,137 ) $ (17,286 ) $ (19,566 ) Less: earnings attributable to convertible preferred stock — — 7,579 Numerator of basic and diluted EPS $ (8,137 ) $ (17,286 ) $ (27,145 ) Denominator: Denominator for basic and diluted EPS: weighted-average common shares outstanding 40,242 33,355 23,093 Net loss per share attributable to common shareholders (basic and diluted) $ (0.20 ) $ (0.52 ) $ (1.18 ) |
Stock Purchase Warrants (Tables
Stock Purchase Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of warrants outstanding | The following table describes the outstanding warrants as of December 31, 2018 : December 2017 Warrants Exercise price $4.27 Expiration date December 6, 2023 Total shares issuable on exercise 26,951 |
Schedule of assumptions used in calculating estimated fair value of warrants | The assumptions used by the Company are summarized in the following table: December 2017 Warrants December 6, 2017 Closing stock price $ 5.10 Expected dividend rate — % Expected stock price volatility 86.4 % Risk-free interest rate 2.2 % Expected life (years) 6.00 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of valuation of the Company's investments and financial instruments that are measured at fair value on a recurring basis | December 31, 2018 December 31, 2017 Fair value measurement category Fair value measurement category (In thousands) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 5,838 $ 5,838 $ — $ — $ — $ — $ — $ — Repurchase agreements 5,000 — 5,000 — — — — — Commercial paper 30,710 — 30,710 — — — — — Corporate notes 13,144 — 13,144 — — — — — U.S. government securities 10,166 — 10,166 — — — — — U.S. asset-backed securities 10,618 — 10,618 — — — — — $ 75,476 $ 5,838 $ 69,638 $ — $ — $ — $ — $ — Liabilities: Warrant liabilities $ — $ — $ — $ — $ 1,014 $ — $ 1,014 $ — |
Summary of change in estimated fair values of warrant liabilities | The following table summarizes the change in the estimated fair value of the Company’s warrant liabilities: Warrant Liabilities (In thousands) Balance at December 31, 2016 $ 757 Increase in fair value 257 Balance at December 31, 2017 1,014 Increase in fair value (net of expired warrants) 2,524 Warrant exercise (3,538 ) Balance at December 31, 2018 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of income (loss) before income taxes for U.S. and non-U.S. operations | Income (loss) before income taxes for U.S and non-U.S operations was as follows: Year Ended December 31, 2018 2017 2016 U.S. loss $ (8,056 ) $ (17,066 ) $ (19,302 ) Non U.S. loss (81 ) (220 ) (264 ) $ (8,137 ) $ (17,286 ) $ (19,566 ) |
Schedule of reconciliation of income taxes computed using the federal statutory rate to the taxes reported in consolidated statements of operations | A reconciliation of income taxes computed using the federal statutory rate to the taxes reported in the consolidated statements of operations is as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Loss before income taxes $ (8,137 ) $ (17,286 ) $ (19,566 ) Federal statutory rate 21 % 34 % 34 % Taxes computed at federal statutory rate (1,709 ) (5,877 ) (6,652 ) State taxes (net of federal benefit) (385 ) (1,106 ) (1,016 ) Nondeductible stock compensation (605 ) 563 549 Federal and State Rate Change 839 11,749 (614 ) Other 172 116 56 Change in valuation allowance 1,688 (5,445 ) 7,677 Reported income taxes $ — $ — $ — |
Schedule of deferred tax assets | Deferred tax assets consist of the following: Year Ended December 31, (In thousands) 2018 2017 Net operating loss carryforwards $ 10,969 $ 10,487 Employee benefits and stock compensation 2,798 2,128 Research and development costs 9,067 8,275 Fixed assets 418 508 Inventory reserve 2,339 2,568 Other, net 345 282 Total deferred tax assets 25,936 24,248 Valuation allowance (25,936 ) (24,248 ) Net deferred tax assets $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments related to operating and capital leases | Future minimum payments related to our operating and capital leases, and contractual obligations including interest on outstanding term loans are as follows: Payments Due by Period Contractual Obligations Total 2019 2020 2021 2022 2023 More than 5 Years Operating leases $ 15,386 $ 4,879 $ 4,719 $ 4,754 $ 966 $ 68 $ — Purchase commitments 2,761 741 711 674 635 — — Capital leases 205 41 41 41 41 41 — Total $ 18,352 $ 5,661 $ 5,471 $ 5,469 $ 1,642 $ 109 $ — |
Supplementary Quarterly Finan_2
Supplementary Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Year 2018 Revenues $ 18,027 $ 19,011 $ 22,484 $ 31,335 $ 90,857 Gross profit 10,361 11,284 14,346 22,706 58,697 Profit (loss) from operations (4,322 ) (4,246 ) (1,336 ) 5,995 (3,909 ) Net (loss) profit (7,659 ) (4,651 ) (1,069 ) 5,242 (8,137 ) Net (loss) profit per share (Basic) (0.21 ) (0.12 ) (0.02 ) 0.12 (0.20 ) Net (loss) profit per share (Diluted) (0.21 ) (0.12 ) (0.02 ) 0.11 (0.20 ) 2017 Revenues $ 9,361 $ 16,953 $ 14,260 $ 23,350 $ 63,924 Gross profit 2,252 9,283 7,074 14,961 33,570 Loss from operations (9,623 ) (2,521 ) (4,031 ) 1,191 (14,984 ) Net loss (9,778 ) (2,388 ) (5,407 ) 287 (17,286 ) Net (loss) profit per share (Basic and Diluted) (0.31 ) (0.07 ) (0.16 ) 0.01 (0.52 ) |
Organization (Details)
Organization (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Business Acquisition [Line Items] | ||||||||||||
Number of reportable segments | segment | 1 | |||||||||||
Accumulated deficit | $ 369,014 | $ 369,014 | $ 360,877 | |||||||||
Net loss | (5,242) | $ 1,069 | $ 4,651 | $ 7,659 | $ 5,407 | $ 2,388 | $ 9,778 | $ (287) | 8,137 | 17,286 | $ 19,566 | |
Cash and cash equivalents | 18,286 | $ 22,978 | 18,286 | 26,862 | $ 22,978 | $ 14,581 | ||||||
Short term investments | $ 64,638 | $ 64,638 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Warrants exercised for common stock | $ 3,538 | $ 0 | $ 0 |
Non-cash information: | 2,230 | 931 | 226 |
Shares exchanged between common and preferred stock | 0 | (38,389) | (3,150) |
Additions to equipment in process included in accounts payable | 0 | 100 | 0 |
Additions to equipment in process included in accounts payable | $ 606 | $ 341 | $ 18 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment | |||
Loss on impairment of intangible asset | $ 0 | $ 0 | $ 2,638 |
Equipment and computers | Minimum | |||
Property, Plant and Equipment | |||
Useful lives | 3 years | ||
Equipment and computers | Maximum | |||
Property, Plant and Equipment | |||
Useful lives | 5 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment | |||
Useful lives | 5 years | ||
Building improvements and leasehold improvements | Maximum | |||
Property, Plant and Equipment | |||
Useful lives | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Undeclared Dividends (Details) $ in Millions | Dec. 31, 2016USD ($) |
Series B voting convertible preferred stock | |
Net Loss Per Share Attributable to Common Shareholders | |
Accumulated undeclared dividends | $ 7.6 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||
Fee on long-term debt | $ 710 | $ 583 | $ 0 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | Dec. 21, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
CONCENTRATION | ||||
Warrants issued in connection with debt arrangement | $ 0 | $ 207 | $ 190 | |
Carticel and MACI | Customer concentration | Revenue Concentration | ||||
CONCENTRATION | ||||
Concentration risk | 16.00% | 35.00% | 31.00% | |
Carticel and MACI | Customer concentration | Accounts Receivable Concentration | ||||
CONCENTRATION | ||||
Concentration risk | 2.00% | 46.00% | ||
Epicel | Customer concentration | Revenue Concentration | ||||
CONCENTRATION | ||||
Concentration risk | 7.00% | 10.00% | 11.00% | |
Epicel | Customer concentration | Accounts Receivable Concentration | ||||
CONCENTRATION | ||||
Concentration risk | 4.00% | 3.00% | ||
Potential Payment | ||||
CONCENTRATION | ||||
Other Commitment | $ 1,300 | $ 1,200 | ||
ICT | ||||
CONCENTRATION | ||||
License Agreement, Initial Payment | $ 5,200 | |||
ICT | Potential Payment | ||||
CONCENTRATION | ||||
Other Commitment | 1,200 | |||
December 21, 2017 Warrants | ICT | ||||
CONCENTRATION | ||||
Warrants issued in connection with debt arrangement | $ 4,000 |
Revenue Disaggregation of Reven
Revenue Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | $ 90,857 | $ 62,760 | $ 54,383 | ||||||||
Revenues | $ 31,335 | $ 22,484 | $ 19,011 | $ 18,027 | $ 14,260 | $ 16,953 | $ 9,361 | $ 23,350 | 90,857 | 63,924 | 54,383 |
Sales Channel, Directly to Consumer [Member] | Biopsy Kits [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 1,997 | 1,764 | 1,545 | ||||||||
Sales Channel, Directly to Consumer [Member] | Epicel | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 23,116 | 18,858 | 15,512 | ||||||||
Revenue, Rights Granted [Member] | Epicel | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 0 | 1,164 | 0 | ||||||||
Fixed-price Contract [Member] | Sales Channel, Through Intermediary [Member] | Implants [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 40,830 | 30,366 | 17,027 | ||||||||
Time-and-materials Contract [Member] | Sales Channel, Through Intermediary [Member] | Implants [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | 25,096 | 12,122 | 20,299 | ||||||||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Product sales, net | $ (182) | $ (350) | $ 0 |
Selected Balance Sheet Compon_3
Selected Balance Sheet Components (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory: | ||
Raw materials | $ 2,872 | $ 3,532 |
Work-in-process | 638 | 226 |
Finished goods | 48 | 35 |
Inventory | $ 3,558 | $ 3,793 |
Selected Balance Sheet Compon_4
Selected Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment, net: | |||
Total property and equipment, gross | $ 13,411 | $ 10,692 | |
Accumulated depreciation | (7,505) | (6,621) | |
Property and Equipment | 5,906 | 4,071 | |
Depreciation expense | 1,400 | 1,600 | $ 1,600 |
Machinery and equipment | |||
Property and equipment, net: | |||
Total property and equipment, gross | 1,536 | 1,249 | |
Furniture, fixtures and office equipment | |||
Property and equipment, net: | |||
Total property and equipment, gross | 775 | 872 | |
Computer equipment and software | |||
Property and equipment, net: | |||
Total property and equipment, gross | 3,712 | 3,536 | |
Leasehold improvements | |||
Property and equipment, net: | |||
Total property and equipment, gross | 4,587 | 4,213 | |
Construction in process | |||
Property and equipment, net: | |||
Total property and equipment, gross | $ 2,801 | $ 822 |
Selected Balance Sheet Compon_5
Selected Balance Sheet Components - Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued expenses | ||
Bonus | $ 5,161 | $ 2,693 |
Employee related accruals | 1,559 | 2,389 |
Other accrued expenses | 210 | 491 |
Accrued expenses | $ 6,930 | $ 5,573 |
Debt (Details)
Debt (Details) | Dec. 19, 2018USD ($) | Dec. 06, 2017USD ($)installment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||||
Repayments of Debt | $ 17,532,000 | $ 7,151,000 | $ 38,000 | ||
Loss on extinguishment of debt | $ 838,000 | 860,000 | $ 0 | ||
SVB and MidCap | Debt financing agreement | Revolving credit facility | Line of credit | |||||
Debt Instrument [Line Items] | |||||
Revolving line of credit, borrowing capacity (up to) | $ 10,000,000 | ||||
SVB and MidCap | Term loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 15,000,000 | ||||
Repayments of Debt | $ 17,100,000 | ||||
Pre-Payment Premium (as a percent) | 1.50% | ||||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 200,000 | ||||
Stated percentage for final payment | 3.60% | ||||
Debt instrument final payment | $ 500,000 | ||||
Loss on extinguishment of debt | $ 800,000 | $ (900,000) | |||
SVB and MidCap | Term loan | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 4.25% | ||||
Number of installments | installment | 36 | ||||
SVB and MidCap | Term loan | Prime Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.25% |
Cash Equivalents and Investme_3
Cash Equivalents and Investments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Marketable Securities [Line Items] | |
Amortized Cost | $ 75,515 |
Gains | 0 |
Losses | (39) |
Fair Value | 75,476 |
Cash equivalents | |
Marketable Securities [Line Items] | |
Fair Value | 10,838 |
Short-term investments | |
Marketable Securities [Line Items] | |
Fair Value | 64,638 |
Money market funds | |
Marketable Securities [Line Items] | |
Amortized Cost | 5,838 |
Gains | 0 |
Losses | 0 |
Fair Value | 5,838 |
Repurchase agreements | |
Marketable Securities [Line Items] | |
Payments to Acquire Debt Securities, Available-for-sale | 5,000 |
Amortized Cost | 5,000 |
Gains | 0 |
Losses | 0 |
Fair Value | 5,000 |
Commercial paper | |
Marketable Securities [Line Items] | |
Amortized Cost | 30,710 |
Gains | 0 |
Losses | 0 |
Fair Value | 30,710 |
Corporate notes | |
Marketable Securities [Line Items] | |
Amortized Cost | 13,168 |
Gains | 0 |
Losses | (24) |
Fair Value | 13,144 |
U.S. government securities | |
Marketable Securities [Line Items] | |
Amortized Cost | 10,167 |
Gains | 0 |
Losses | (1) |
Fair Value | 10,166 |
U.S. asset-backed securities | |
Marketable Securities [Line Items] | |
Amortized Cost | 10,632 |
Gains | 0 |
Losses | (14) |
Fair Value | $ 10,618 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 36 Months Ended | ||
Jan. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Stock-Based Compensation | ||||||
Shares issued under the Employee Stock Purchase Plan (in shares) | $ 656,000 | $ 425,000 | $ 467,000 | |||
Service-based stock options | ||||||
Stock-Based Compensation | ||||||
Vesting period | 4 years | |||||
Stock-based compensation expense | $ 6,900,000 | $ 2,500,000 | $ 2,300,000 | |||
Weighted average grant-date fair value (in dollars per share) | $ 6.96 | $ 1.99 | $ 2.15 | |||
Weighted average assumptions used to estimate fair value of each service-based stock option grant | ||||||
Expected dividend rate | 0.00% | 0.00% | 0.00% | |||
Options | ||||||
Outstanding at the beginning of the period (in shares) | 4,528,426 | |||||
Granted (in shares) | 1,644,160 | |||||
Exercised (in shares) | (1,180,815) | |||||
Expired (in shares) | (12,862) | |||||
Forfeited (in shares) | (188,226) | |||||
Outstanding at the end of the period (in shares) | 4,528,426 | 4,790,683 | 4,528,426 | 4,528,426 | ||
Exercisable at the end of the period (in shares) | 2,292,065 | |||||
Weighted Average Exercise Price | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ 3.77 | |||||
Granted (in dollars per share) | 9.64 | |||||
Exercised (in dollars per share) | 3.14 | |||||
Expired (in dollars per share) | 6.84 | |||||
Forfeited or expired (in dollars per share) | 5.89 | |||||
Outstanding at the end of the period (in dollars per share) | $ 3.77 | 5.85 | $ 3.77 | $ 3.77 | ||
Exercisable at the end of the period (in dollars per share) | $ 5.40 | |||||
Weighted Average Remaining Contractual Term | ||||||
Outstanding | 7 years 8 months 12 days | 8 years | ||||
Aggregate Intrinsic Value | ||||||
Outstanding | $ 10,776,000 | $ 11,407,000 | $ 10,776,000 | $ 10,776,000 | ||
Exercised | ||||||
Exercisable at end of period | 4,840,000 | |||||
Additional disclosures | ||||||
Total unrecognized compensation cost | $ 7,200,000 | |||||
Expected to vest (in shares) | 4,481,963 | |||||
Weighted average period over which unrecognized compensation is expected to be recognized | 3 years 12 days | |||||
Total intrinsic value of options vested | $ 10,300,000 | $ 700,000 | $ 100,000 | |||
Service-based stock options | Minimum | ||||||
Weighted average assumptions used to estimate fair value of each service-based stock option grant | ||||||
Expected stock price volatility | 82.30% | 79.70% | 78.70% | |||
Risk-free interest rate | 2.40% | 1.39% | 1.10% | |||
Expected life (years) | 5 years 3 months 18 days | 5 years 6 months | 5 years 6 months | |||
Service-based stock options | Maximum | ||||||
Stock-Based Compensation | ||||||
Expiration period | 10 years | |||||
Weighted average assumptions used to estimate fair value of each service-based stock option grant | ||||||
Expected stock price volatility | 88.30% | 88.20% | 92.20% | |||
Risk-free interest rate | 3.10% | 2.30% | 2.10% | |||
Expected life (years) | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 3 months 18 days | |||
Service-based stock options | Non-employee | ||||||
Stock-Based Compensation | ||||||
Expiration period | 10 years | |||||
Vesting period | 1 year | |||||
Options | ||||||
Granted (in shares) | 105,000 | |||||
Employee stock | ||||||
Stock-Based Compensation | ||||||
Common stock available for issuance (in shares) | 1,000,000 | |||||
Common stock granted since inception (in shares) | 526,020 | |||||
Shares purchased during period (in shares) | 18,407 | |||||
Shares issued under the Employee Stock Purchase Plan (in shares) | $ 200,000 | |||||
Stock-based compensation expense | $ 300,000 | $ 200,000 | $ 200,000 | |||
Prior Plans | ||||||
Stock-Based Compensation | ||||||
Awards available for future grant under the Plan (in shares) | 0 | |||||
Omnibus Incentive Plan 2017 | ||||||
Stock-Based Compensation | ||||||
Awards available for future grant under the Plan (in shares) | 2,983,774 |
Stock-Based Compensation - Non-
Stock-Based Compensation - Non-cash Stock Compensation Expense (Details) - Employee stock purchase plan and service-based stock options - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total non-cash stock-based compensation expense | $ 7,223 | $ 2,680 | $ 2,499 |
Cost of goods sold | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total non-cash stock-based compensation expense | 1,015 | 428 | 427 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total non-cash stock-based compensation expense | 1,672 | 506 | 497 |
General, selling and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total non-cash stock-based compensation expense | $ 4,536 | $ 1,746 | $ 1,575 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 10, 2016 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2017 |
Cowen and Company, LLC | ||||
Shareholders' Equity | ||||
ATM Agreement, proceeds from issuance of common stock | $ 8 | |||
Commission and issuance cost | $ 0.3 | |||
Cowen and Company, LLC | Common Stock | ||||
Shareholders' Equity | ||||
ATM Agreement, shares issued (in shares) | 2,340,879 | |||
Cowen and Company, LLC | Maximum | ||||
Shareholders' Equity | ||||
Percentage of gross proceeds payable as commission (up to) | 3.00% | |||
Public Stock Offering | ||||
Shareholders' Equity | ||||
Commission and issuance cost | $ 4.7 | |||
Sale of Stock, Consideration Received on Transaction | $ 70.1 | |||
Public Stock Offering | Common Stock | ||||
Shareholders' Equity | ||||
Sale of Stock, Number of Shares Issued in Transaction | 5,750,000 | |||
Sale of Stock, Price Per Share | $ 13 |
Preferred Stock - Series B Conv
Preferred Stock - Series B Convertible Preferred Stock (Details) - $ / shares | Mar. 09, 2017 | Feb. 10, 2017 | Mar. 09, 2012 | Dec. 31, 2018 |
Series B Convertible Preferred Stock | ||||
Shares issued upon conversion (in shares) | 0 | |||
Series B voting convertible preferred stock | ||||
Series B Convertible Preferred Stock | ||||
Period of closing of offering after which shares are convertible | 5 years | |||
Conversion price per share (in dollars per share) | $ 3.25 | |||
Conversion ratio, the number of shares of common stock received per share of convertible preferred stock (in shares) | 50 | |||
Series B-1 non-voting convertible preferred stock | ||||
Series B Convertible Preferred Stock | ||||
Number of common shares sold (in shares) | 12,308 | |||
Offering price per share (in dollars per share) | $ 3,250 | |||
Preferred Class A and Class B | ||||
Series B Convertible Preferred Stock | ||||
Shares converted (in shares) | 12,308 | |||
Accumulated shares but undeclared dividends (in shares) | 9,570 | |||
Common Stock | ||||
Series B Convertible Preferred Stock | ||||
Shares issued upon conversion (in shares) | 1,093,892 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||||||||||
Net loss | $ 5,242 | $ (1,069) | $ (4,651) | $ (7,659) | $ (5,407) | $ (2,388) | $ (9,778) | $ 287 | $ (8,137) | $ (17,286) | $ (19,566) |
Less: earnings attributable to convertible preferred stock | 0 | 0 | 7,579 | ||||||||
Numerator of basic and diluted EPS | $ (8,137) | $ (17,286) | $ (27,145) | ||||||||
Denominator for basic and diluted EPS: | |||||||||||
Weighted-average common shares outstanding (in shares) | 40,242 | 33,355 | 23,093 | ||||||||
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share) | $ (0.16) | $ (0.07) | $ (0.31) | $ 0.01 | $ (0.52) | $ (1.18) | |||||
Aggregate number of common equivalent shares (related to options, warrants and preferred stock) that have been excluded from computations of diluted net loss per common share (in shares) | 4,800 | 5,400 | 5,300 |
Stock Purchase Warrants (Detail
Stock Purchase Warrants (Details) $ in Thousands | Dec. 27, 2017shares | Dec. 21, 2017USD ($)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 06, 2017$ / shares |
Stock Purchase Warrants | ||||||
Proceeds from issuance of warrants | $ | $ 0 | $ 207 | $ 190 | |||
ICT | ||||||
Stock Purchase Warrants | ||||||
License Agreement, Initial Payment | $ | $ 5,200 | |||||
Common Stock | ||||||
Stock Purchase Warrants | ||||||
Exercise of warrants resulting in the issuance of common stock (in shares) | 681,000 | 817,000 | ||||
Conversion of preferred stock for common stock (Note 9) (in shares) | 1,094,000 | |||||
December 2017 Warrants | ||||||
Stock Purchase Warrants | ||||||
Exercise price (in dollars per share) | $ / shares | $ 4.27 | |||||
Total shares issuable on exercise | 26,951 | |||||
Expected life (years) | 6 years | |||||
December 2017 Warrants | Common Stock | ||||||
Stock Purchase Warrants | ||||||
Conversion of preferred stock for common stock (Note 9) (in shares) | 19,750 | |||||
December 2017 Warrants | Closing stock price | ||||||
Stock Purchase Warrants | ||||||
Warrants and Rights Outstanding | $ / shares | 5.10 | |||||
December 2017 Warrants | Expected dividend yield | ||||||
Stock Purchase Warrants | ||||||
Warrants and Rights Outstanding | 0 | |||||
December 2017 Warrants | Expected stock price volatility | ||||||
Stock Purchase Warrants | ||||||
Warrants and Rights Outstanding | 0.864 | |||||
December 2017 Warrants | Risk-free interest rate | ||||||
Stock Purchase Warrants | ||||||
Warrants and Rights Outstanding | 0.022 | |||||
August 2013 Warrants | ||||||
Stock Purchase Warrants | ||||||
Exercise price (in dollars per share) | $ / shares | $ 4.8 | |||||
August 2013 Warrants | Common Stock | ||||||
Stock Purchase Warrants | ||||||
Conversion of preferred stock for common stock (Note 9) (in shares) | 565,895 | |||||
September 2016 Warrants | ||||||
Stock Purchase Warrants | ||||||
Exercise price (in dollars per share) | $ / shares | $ 2.25 | |||||
Total shares issuable on exercise | 117,074 | |||||
September 2016 Warrants | Common Stock | ||||||
Stock Purchase Warrants | ||||||
Conversion of preferred stock for common stock (Note 9) (in shares) | 95,335 | |||||
December 21, 2017 Warrants | ICT | ||||||
Stock Purchase Warrants | ||||||
Exercise price (in dollars per share) | $ / shares | $ 0.01 | |||||
Total shares issuable on exercise | 818,424 | |||||
Proceeds from issuance of warrants | $ | $ 4,000 | |||||
Share Price | $ / shares | $ 4.90 | |||||
Exercise of warrants resulting in the issuance of common stock (in shares) | 816,850 | |||||
Warrants outstanding (in shares) | 0 | |||||
Potential Payment | ||||||
Stock Purchase Warrants | ||||||
Other Commitment | $ | $ 1,300 | $ 1,200 | ||||
Potential Payment | ICT | ||||||
Stock Purchase Warrants | ||||||
Other Commitment | $ | $ 1,200 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | $ 75,476 | ||||
Warrant liabilities | $ 397 | $ 397 | 104 | $ 397 | |
Change in the estimated fair value of warrant liabilities | |||||
Balance at the beginning of the period | 397 | ||||
Increase in fair value (net of expired warrants) | (2,524) | (257) | $ 0 | ||
Warrant exercise | (3,538) | 0 | 0 | ||
Balance at the end of the period | 104 | 397 | |||
Other assets | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Interest Receivable and Other Assets | 100 | ||||
Recurring | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Repurchase agreements | 5,000 | 0 | |||
Assets, fair value | 75,476 | 0 | |||
Warrant liabilities | 1,014 | 757 | 757 | 0 | 1,014 |
Change in the estimated fair value of warrant liabilities | |||||
Balance at the beginning of the period | 1,014 | 757 | |||
Increase in fair value (net of expired warrants) | 2,524 | 257 | |||
Warrant exercise | (3,538) | ||||
Balance at the end of the period | 0 | 1,014 | $ 757 | ||
Recurring | Level 1 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Repurchase agreements | 0 | 0 | |||
Assets, fair value | 5,838 | 0 | |||
Warrant liabilities | 0 | 0 | 0 | 0 | |
Change in the estimated fair value of warrant liabilities | |||||
Balance at the beginning of the period | 0 | ||||
Balance at the end of the period | 0 | 0 | |||
Recurring | Level 2 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Repurchase agreements | 5,000 | 0 | |||
Assets, fair value | 69,638 | 0 | |||
Warrant liabilities | 1,014 | 1,014 | 0 | 1,014 | |
Change in the estimated fair value of warrant liabilities | |||||
Balance at the beginning of the period | 1,014 | ||||
Balance at the end of the period | 0 | 1,014 | |||
Recurring | Level 3 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Repurchase agreements | 0 | 0 | |||
Assets, fair value | 0 | 0 | |||
Warrant liabilities | 0 | 0 | 0 | 0 | |
Change in the estimated fair value of warrant liabilities | |||||
Balance at the beginning of the period | 0 | ||||
Balance at the end of the period | $ 0 | $ 0 | |||
Money market funds | Recurring | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Money market funds | 5,838 | 0 | |||
Money market funds | Recurring | Level 1 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Money market funds | 5,838 | 0 | |||
Money market funds | Recurring | Level 2 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Money market funds | 0 | 0 | |||
Money market funds | Recurring | Level 3 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Money market funds | 0 | 0 | |||
Commercial paper | Recurring | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 30,710 | 0 | |||
Commercial paper | Recurring | Level 1 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 0 | 0 | |||
Commercial paper | Recurring | Level 2 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 30,710 | 0 | |||
Commercial paper | Recurring | Level 3 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 0 | 0 | |||
US Government Debt Securities | Recurring | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 10,166 | 0 | |||
US Government Debt Securities | Recurring | Level 1 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 0 | 0 | |||
US Government Debt Securities | Recurring | Level 2 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 10,166 | 0 | |||
US Government Debt Securities | Recurring | Level 3 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 0 | 0 | |||
Asset-backed Securities | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 10,618 | ||||
Asset-backed Securities | Recurring | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 10,618 | 0 | |||
Asset-backed Securities | Recurring | Level 1 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 0 | 0 | |||
Asset-backed Securities | Recurring | Level 2 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 10,618 | 0 | |||
Asset-backed Securities | Recurring | Level 3 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 0 | 0 | |||
Corporate Note Securities | Recurring | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 13,144 | 0 | |||
Corporate Note Securities | Recurring | Level 1 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 0 | 0 | |||
Corporate Note Securities | Recurring | Level 2 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | 13,144 | 0 | |||
Corporate Note Securities | Recurring | Level 3 | |||||
Liabilities that are measured at fair value on a recurring basis | |||||
Debt securities, fair value | $ 0 | $ 0 |
Income Taxes - Components of In
Income Taxes - Components of Income (Loss) Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Loss before income taxes | $ (8,137) | $ (17,286) | $ (19,566) |
U.S. loss | |||
Operating Loss Carryforwards [Line Items] | |||
Loss before income taxes | (8,056) | (17,066) | (19,302) |
Non U.S. loss | |||
Operating Loss Carryforwards [Line Items] | |||
Loss before income taxes | $ (81) | $ (220) | $ (264) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of income taxes computed using the federal statutory rate to the taxes reported in consolidated statements of operations | |||
Loss before income taxes | $ 8,137 | $ 17,286 | $ 19,566 |
Federal statutory rate | 21.00% | 34.00% | 34.00% |
Taxes computed at federal statutory rate | $ (1,709) | $ (5,877) | $ (6,652) |
State taxes (net of federal benefit) | (385) | (1,106) | (1,016) |
Nondeductible stock compensation | (605) | 563 | 549 |
Federal and State Rate Change | 839 | 11,749 | (614) |
Other | 172 | 116 | 56 |
Change in valuation allowance | 1,688 | (5,445) | 7,677 |
Reported income taxes | 0 | 0 | $ 0 |
Deferred tax assets | |||
Net operating loss carryforwards | 10,969 | 10,487 | |
Employee benefits and stock compensation | 2,798 | 2,128 | |
Research and development costs | 9,067 | 8,275 | |
Fixed assets | 418 | 508 | |
Inventory reserve | 2,339 | 2,568 | |
Other, net | 345 | 282 | |
Total deferred tax assets | 25,936 | 24,248 | |
Valuation allowance | (25,936) | (24,248) | |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 16, 2014 |
Operating Loss Carryforwards [Line Items] | |||||||||||||
Projected annual limitation on the use of the net operating losses that existed prior to September 17, 2014 | $ 800 | ||||||||||||
Profit (loss) from operations | $ 5,995 | $ (1,336) | $ (4,246) | $ (4,322) | $ (4,031) | $ (2,521) | $ (9,623) | $ 1,191 | $ (3,909) | $ (14,984) | $ (19,245) | ||
Increase (decrease) in valuation allowance | 1,700 | ||||||||||||
Change in valuation allowance | 1,688 | $ (5,445) | $ 7,677 | ||||||||||
Tax Cuts and Jobs Act of 2017, incomplete accounting, change in tax rate, deferred tax asset, provisional income tax expense | $ 11,700 | ||||||||||||
Federal | Internal Revenue Service | |||||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||||
Net operating loss carryforwards | 44,600 | 44,600 | |||||||||||
Profit (loss) from operations | 1,300 | ||||||||||||
State | |||||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||||
Net operating loss carryforwards | $ 25,200 | $ 25,200 |
Employee Savings Plan (Details)
Employee Savings Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Contributions made under 401(k) savings plan | $ 0.6 | $ 0.6 | $ 0.6 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | Dec. 21, 2017 | Oct. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Licenses, Royalties and Collaborative Agreements and Commitments | ||||||
Purchase obligation, due in second year | $ 600 | $ 711 | ||||
Purchase obligation, renewal option, term | 5 years | |||||
Purchase obligation, automatic renewal, term | 5 years | |||||
Proceeds from issuance of warrants | 0 | $ 207 | $ 190 | |||
Landlord contributions toward tenant improvements | $ 2,000 | |||||
Tenant improvements | 1,900 | |||||
Rent expense | $ 5,500 | $ 5,600 | $ 4,800 | |||
ICT | ||||||
Licenses, Royalties and Collaborative Agreements and Commitments | ||||||
License Agreement, Initial Payment | $ 5,200 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2015 |
Operating leases | ||
Total | $ 15,386 | |
2,018 | 4,879 | |
2,019 | 4,719 | |
2,020 | 4,754 | |
2,021 | 966 | |
2,022 | 68 | |
More than 5 Years | 0 | |
Purchase commitments | ||
Total | 2,761 | |
2,018 | 741 | |
2,019 | 711 | $ 600 |
2,020 | 674 | |
2,021 | 635 | |
2,022 | 0 | |
More than 5 Years | 0 | |
Capital leases | ||
Total | 205 | |
2,018 | 41 | |
2,019 | 41 | |
2,020 | 41 | |
2,021 | 41 | |
2,022 | 41 | |
More than 5 years | 0 | |
Operating and capital leases and purchase commitments | ||
Total operating and capital leases and purchase commitments | 18,352 | |
2,018 | 5,661 | |
2,019 | 5,471 | |
2,020 | 5,469 | |
2,021 | 1,642 | |
2,022 | 109 | |
More than 5 Years | $ 0 |
Supplementary Quarterly Finan_3
Supplementary Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 31,335 | $ 22,484 | $ 19,011 | $ 18,027 | $ 14,260 | $ 16,953 | $ 9,361 | $ 23,350 | $ 90,857 | $ 63,924 | $ 54,383 |
Gross profit | 22,706 | 14,346 | 11,284 | 10,361 | 7,074 | 9,283 | 2,252 | 14,961 | 58,697 | 33,570 | 26,076 |
Profit (loss) from operations | 5,995 | (1,336) | (4,246) | (4,322) | (4,031) | (2,521) | (9,623) | 1,191 | (3,909) | (14,984) | (19,245) |
Net loss | $ 5,242 | $ (1,069) | $ (4,651) | $ (7,659) | $ (5,407) | $ (2,388) | $ (9,778) | $ 287 | $ (8,137) | $ (17,286) | $ (19,566) |
Net (loss) profit per share (Basic) (in USD per share) | $ 0.12 | $ (0.20) | |||||||||
Net (loss) profit per share (Diluted) (in USD per share) | $ 0.11 | $ (0.02) | $ (0.12) | $ (0.21) | $ (0.20) | ||||||
Net (loss) profit per share (Basic and Diluted) (in dollars per share) | $ (0.16) | $ (0.07) | $ (0.31) | $ 0.01 | $ (0.52) | $ (1.18) |