Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
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Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Revenue: | ||||
Total revenue | $ 53,475 | $ 37,306 | $ 94,028 | $ 64,977 |
Cost of revenue | 28,006 | 20,447 | 49,260 | 38,523 |
Research and development | 25,302 | 15,784 | 43,296 | 31,150 |
Selling and marketing | 30,779 | 18,707 | 54,972 | 37,631 |
General and administrative | 21,274 | 12,436 | 34,593 | 24,216 |
Loss from operations | (51,886) | (30,068) | (88,093) | (66,543) |
Other income, net | 1,381 | 188 | 2,019 | 1,835 |
Interest expense | (2,121) | (1,791) | (4,229) | (3,083) |
Net loss before taxes | (52,626) | (31,671) | (90,303) | (67,791) |
Income tax benefit | (3,950) | 0 | (3,950) | 0 |
Net loss | $ (48,676) | $ (31,671) | $ (86,353) | $ (67,791) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.54) | $ (0.47) | $ (1.01) | $ (1.12) |
Shares used in computing net loss per share, basic and diluted (in shares) | 90,863 | 67,807 | 85,148 | 60,775 |
Test revenue | ||||
Revenue: | ||||
Total revenue | $ 52,302 | $ 36,350 | $ 91,921 | $ 63,403 |
Other revenue | ||||
Revenue: | ||||
Total revenue | 1,173 | 956 | 2,107 | 1,574 |
Accumulated deficit: | ||||
Revenue: | ||||
Net loss | $ (48,676) | $ (31,671) | $ (86,353) | $ (67,791) |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (48,676) | $ (31,671) | $ (86,353) | $ (67,791) |
Other comprehensive income (loss): | ||||
Unrealized income (loss) on available-for-sale marketable securities, net of tax | (8) | 51 | 5 | 62 |
Comprehensive loss | $ (48,684) | $ (31,620) | $ (86,348) | $ (67,729) |
Organization and description of business |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and description of business | Organization and description of business Invitae Corporation ("Invitae," “the Company," "we," "us," and "our") was incorporated in the State of Delaware on January 13, 2010, as Locus Development, Inc. and changed its name to Invitae Corporation in 2012. We utilize an integrated portfolio of laboratory processes, software tools and informatics capabilities to process DNA-containing samples, analyze information about patient-specific genetic variation and generate test reports for clinicians and patients. Our headquarters and main production facility is located in San Francisco, California. We currently have more than 20,000 genes in production and provide a variety of diagnostic tests that can be used in multiple indications. Our tests include genes associated with hereditary cancer, neurological disorders, cardiovascular disorders, pediatric disorders, metabolic disorders and other hereditary conditions. In addition, and as a result of the acquisitions of Good Start Genetics (“Good Start”) in August 2017 and CombiMatrix Corporation (“CombiMatrix”) in November 2017, our services also include screening and testing in reproductive health, including preimplantation and carrier screening for inherited disorders, prenatal diagnosis, miscarriage analysis and pediatric developmental disorders. To complement these, in the first quarter of 2019, we introduced our Non-invasive Prenatal Screen ("NIPS") and to advance this offering, in June 2019 we acquired Singular Bio, Inc. ("Singular Bio") to lower costs associated with NIPS. In July 2019, we acquired Jungla Inc. ("Jungla") to further enhance our genetic variant interpretation. Invitae operates in one segment. Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018. The results for the three and six months ended June 30, 2019 are not necessarily indicative of the results expected for the full fiscal year or any other periods.
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Summary of significant accounting policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant accounting policies | Summary of significant accounting policies Principles of consolidation Our unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base these estimates on historical and anticipated results, trends and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. Actual results could differ materially from those estimates and assumptions. Significant estimates and assumptions made by management include the determination of:
Concentrations of credit risk and other risks and uncertainties Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. Our cash and cash equivalents are held by financial institutions in the United States. Such deposits may exceed federally insured limits. Significant customers are those that represent 10% or more of our total revenue presented on the statements of operations. We had one significant customer during the periods presented and revenue for this customer as a percentage of our total revenue were as follows:
Our significant customer's accounts receivable balance as a percentage of total accounts receivable was as follows:
____________________________ * Balance represents less than 10% of total accounts receivable Cash, cash equivalents and restricted cash We consider all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds. Restricted cash consists primarily of money market funds held in irrevocable standby letters of credit that serve as collateral for security deposits for our facility leases. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows (in thousands):
Accounts receivable We receive payment for our tests from partners, patients, institutional customers and third-party payers. See Note 3, “Revenue, accounts receivable and deferred revenue” for further information. Inventory We maintain test reagents and other consumables primarily used in sample collection kits which are valued at the lower of cost or net realizable value. Cost is determined using actual costs on a first-in, first-out basis. Our inventory was $8.6 million and $8.3 million as of June 30, 2019 and December 31, 2018, respectively, and was recorded in prepaid expenses and other current assets on our consolidated balance sheets. Business combinations The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. We base the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by our management, which consider our estimates of inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We remeasure this liability each reporting period and record changes in the fair value as a component of operating expenses. Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in our operating results from the date of acquisition. Goodwill In accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), our goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Under ASC 350, we perform annual impairment reviews of our goodwill balance during the fourth fiscal quarter. In testing for impairment, we compare the fair value of our consolidated single reporting unit to its carrying value including the goodwill of that unit. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, we will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized cannot exceed the total amount of goodwill allocated to the reporting unit. We have not incurred any goodwill impairment losses in any of the periods presented. Indefinite-lived Intangible Assets ASC 350 requires companies to test indefinite-lived intangible assets for impairment annually, and more frequently if indicators of impairment exist. ASC 350 includes an optional qualitative assessment for testing indefinite-lived intangible assets for impairment that permits companies to assess whether it is more likely than not (i.e., a likelihood of greater than 50%) that an indefinite-lived intangible asset is impaired. If a company concludes based on the qualitative assessment that it is not more likely than not that the fair value of an indefinite-lived intangible asset or, in the case of goodwill, that the fair value of the related reporting unit, is less than carrying value, it would not have to determine the asset’s or reporting unit’s fair value, as applicable. In-Process Research and Development Intangible assets related to in-process research and development costs (“IPR&D”), are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. Prior to completion of the research and development efforts, the assets are considered indefinite-lived. During this period, the assets will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. During the fourth quarter and if business factors indicate more frequently, we perform an assessment of the qualitative factors affecting the fair value of our IPR&D. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of an asset to its carrying value, without consideration of any recoverability test. We have not identified any such impairment losses to date. Fair value of financial instruments Our financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, accrued liabilities, finance leases and debt. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued and other current liabilities approximate their current fair value due to the relatively short-term nature of these accounts. Based on borrowing rates available to us, the carrying value of our finance leases and debt approximates their fair values. Revenue recognition We recognize revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers. Test revenue is generated primarily from the sale of tests that provide analysis and associated interpretation of the sequencing of parts of the genome. Other revenue consists primarily of revenue from genome network subscription services which is recognized on a straight-line basis over the subscription term, and revenue from collaboration agreements. Cost of revenue Cost of revenue reflects the aggregate costs incurred in delivering the genetic testing results to clinicians and patients and includes expenses for personnel-related costs including stock-based compensation, materials and supplies, equipment and infrastructure expenses associated with testing and allocated overhead including rent, equipment depreciation, amortization of acquired intangibles and utilities. Stock-based compensation We measure stock-based payment awards made to employees and directors based on the estimated fair values of the awards and recognize the compensation expense over the requisite service period. We use the Black-Scholes option-pricing model to estimate the fair value of stock option awards and employee stock purchase plan (“ESPP”) purchases. The fair value of restricted stock unit (“RSU”) awards with time-based vesting terms is based on the grant date share price. We grant performance-based restricted stock unit (“PRSU”) awards to certain employees which vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with us. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. We recognize such compensation expense on an accelerated vesting method. Stock-based compensation expense for awards without a performance condition is recognized using the straight-line method. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, our stock-based compensation is reduced for estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We account for stock issued in connection with business combinations based on the fair value of our common stock on the date of issuance. Net loss per share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. Potentially dilutive securities, consisting of convertible preferred stock, options to purchase common stock, common stock warrants, and RSUs, are considered to be common stock equivalents and were excluded from the calculation of diluted net loss per share because their effect would be antidilutive for all periods presented. Recent accounting pronouncements We evaluate all Accounting Standards Updates (“ASUs”) issued by the FASB for consideration of their applicability. ASUs not included in the disclosures in this report were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements. Recently issued accounting pronouncements not yet adopted In June 2016, FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) which requires measurement and recognition of expected credit losses for financial assets. This guidance will become effective for us beginning in the first quarter of 2020 and must be adopted using a modified retrospective approach, with certain exceptions. We are currently evaluating the effect that adoption of this ASU will have on our consolidated financial statements. Recently adopted accounting pronouncements – Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and in July 2018 issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842): Targeted Improvements (the foregoing ASUs collectively referred to as “Topic 842”). Under the new guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases at the commencement date and also make expanded disclosures about leasing arrangements. On January 1, 2019, we adopted Topic 842 using the modified retrospective approach in accordance with Topic 842. Adoption of Topic 842 had a material impact on our consolidated balance sheets, but did not have an impact on our consolidated statements of operations. Prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under previous lease guidance, ASC 840: Leases. We elected the package of practical expedients permitted under the transition guidance which, among other things, allowed us to carry forward the historical classification of leases in place as of January 1, 2019. The effect of the adoption of Topic 842 on our consolidated balance sheet as of January 1, 2019 was as follows (in thousands):
The adjustments due to the adoption of Topic 842 primarily relate to the recognition of operating and finance lease right-of-use assets and operating lease liabilities. Finance lease assets are recorded within other assets on our consolidated balance sheet and were $5.2 million as of implementation of Topic 842 on January 1, 2019 and $4.4 million as of June 30, 2019. Under Topic 842, we determine if an arrangement is a lease at inception primarily based on the determination of the party responsible for directing the use of an underlying asset within a contract. Operating leases are included in operating lease assets and operating lease obligations in our consolidated balance sheets. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date which includes significant assumptions made by us including our estimated credit rating. Operating lease right-of-use assets also include any lease payments made prior to the lease commencement date and exclude any lease incentives paid or payable at the lease commencement date. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise any such options. Lease expense is recognized on a straight-line basis over the expected lease term. As allowed under Topic 842, we elected to not apply the recognition requirements of Topic 842 to short-term leases, that is, leases with terms of 12 months or less which do not include an option to purchase the underlying asset that we are reasonably certain to exercise. For short-term leases, we recognize lease payments as operating expenses on a straight-line basis over the lease term. As a result of our election of the package of practical expedients permitted under the Topic 842 transition guidance, for assets related to facilities leases we elected to account for lease and non-lease components, such as common area maintenance charges, as a single lease component. We did not identify any material embedded leases with the adoption of Topic 842 and therefore the implementation of Topic 842 primarily focused on the treatment of our previously identified leases.
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Revenue, accounts receivable and deferred revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue, accounts receivable and deferred revenue | Revenue, accounts receivable and deferred revenue Test revenue is generated from sales of diagnostic tests to three groups of customers: institutions, such as hospitals, clinics and partners; patients who pay directly; and patients’ insurance carriers. Amounts billed and collected, and the timing of collections, vary based on whether the payer is an institution, an insurance carrier or a patient. Other revenue consists principally of revenue recognized under collaboration and genome network agreements. The following table includes our revenues as disaggregated by payer category (in thousands):
We recognize revenue related to billings based on estimates of the amount that will ultimately be realized. The estimate of the transaction price of test revenue is based on many factors such as length of payer relationship, historical payment patterns, and changes in contract provisions and insurance reimbursement policies. Cash collections for certain diagnostic tests delivered may differ from rates originally estimated. As a result of new information, we updated our estimate of the amounts to be recognized for previously delivered tests which resulted in the following increases to revenue and decreases to our loss from operations and basic and diluted net loss per share (in millions, except per share amounts):
The changes in estimates in revenue recognized during the three and six months ended June 30, 2019 were primarily related to adjustments to revenue recognized in 2018 from businesses acquired in 2017. We recorded revenue of $2.3 million in the six months ended June 30, 2018 due to a change in estimate related to deletion/duplication analysis for hereditary breast and ovarian cancer using Current Procedure Terminology (CPT) code 81433 in conjunction with CPT code 81432, for tests completed during the second half of 2017. Accounts receivable The majority of our accounts receivable represents amounts billed to institutions (e.g., hospitals, clinics, partners) and estimated amounts to be collected from third-party insurance payers for diagnostic test revenue recognized. Also included are amounts due under the terms of collaboration and genome network agreements for diagnostic testing and data aggregation reporting services provided and proprietary platform access rights transferred. Deferred revenue We record deferred revenue when cash payments are received or due in advance of our performance related to one or more performance obligations. The amounts deferred to date primarily consist of consideration received pertaining to the estimated exercise of certain re-requisition rights. In order to comply with loss contract rules, our re-requisition rights revenue deferral is no less than the estimated cost of fulfilling related obligations. We recognize revenue related to re-requisition rights as the rights are exercised or expire unexercised, which is generally within 90 days of initial deferral.
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Business combinations |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business combinations | Business combinations Good Start Genetics In August 2017, we acquired 100% of the fully diluted equity of Good Start, a privately held molecular diagnostics company focused on preimplantation and carrier screening for inherited disorders. As of December 31, 2018, we had a hold-back amount payable for remaining common stock to be issued upon the resolution of outstanding claims from Good Start customers of approximately $1.5 million, of which $0.7 million was settled during the six months ended June 30, 2019, with the remainder settled in July 2019. Singular Bio In June 2019, we acquired 100% of the fully diluted equity of Singular Bio, a privately held company developing single molecule detection technology, for approximately $57.3 million, comprised of $53.9 million in the form of 2.5 million shares of our common stock and the remainder in cash. As of June 30, 2019, we have hold-back amounts payable within 12 months of the acquisition date of $1.8 million. Prior to the acquisition, we entered into a co-development agreement with Singular Bio whereby we paid Singular Bio $3.0 million for a 12-month right of first refusal and an opportunity to conduct due diligence on its business. As of January 2019, we made all required payments under the terms of this agreement. In connection with the acquisition, all of Singular Bio's equity awards that were outstanding and unvested prior to the acquisition became fully vested per the terms of the merger agreement. The acceleration of vesting required us to allocate the fair value of the equity attributable to pre-combination service to the purchase price and the remaining was considered our post-combination expense. We recognized post-combination expense related to the acceleration of unvested equity of $3.2 million and we also incurred transaction costs of $1.0 million related to the acquisition of Singular Bio; both of these charges were recorded as general and administrative expense during the three months ended June 30, 2019. We included the financial results of Singular Bio in our consolidated financial statements from the acquisition date, which were not material for the three or six months ended June 30, 2019. Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by us. While we believe that our estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):
Based on the guidance provided in ASC 805, we accounted for the acquisition of Singular Bio as a business combination in which we determined that 1) Singular Bio was a business which combines inputs and processes to create outputs, and 2) substantially all of the fair value of gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets. Our purchase price allocation for our acquisition of Singular Bio is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available. Additional information that existed as of the acquisition date but at the time was unknown to us may become known to us during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of Singular Bio resulted in the recognition of $26.5 million of goodwill which we believe consists primarily of technological expertise and capabilities within nucleic acid analysis and the ability to utilize the technology outside NIPS. Goodwill created as a result of the acquisition of Singular Bio is not deductible for tax purposes. We granted approximately $90.0 million of restricted stock units ("RSUs") under our 2015 Stock Incentive Plan as inducement awards to new employees who joined Invitae in connection with our acquisition of Singular Bio. $45.0 million of the RSUs are time-based and vest in three equal installments in December 2019, June 2020, and December 2020, subject to the employee's continued service with us ("Time-based RSUs") and $45.0 million of the RSUs are performance-based RSUs ("PRSUs") that vest upon the achievement of certain performance conditions over a period of approximately 12 months, subject to the employee's continued service with us. Since the number of awards granted is based on a 30-day volume weighted-average share price with a fixed dollar value, these Time-based RSUs and PRSUs are liability-classified and the fair value will be estimated at each reporting period based on the number of shares that are expected to be issued at each reporting date and our closing stock price, which combined are categorized as Level 3 inputs. Therefore, fair value of the RSUs and the number of shares to be issued will not be fixed until the RSUs vest. During the three and six months ended June 30, 2019, we recorded research and development stock-based compensation expense of $0.9 million related to the Time-based RSUs and $1.7 million related to the PRSUs based on our evaluations of the probability of achieving performance conditions. As of June 30, 2019, the Time-based RSUs and PRSUs had a total fair value of $50.3 million and $44.7 million, respectively, based on a total estimated issuance of 4.0 million shares and expectation of the achievement of the performance conditions. As of June 30, 2019, none of the Time-based RSUs or PRSUs granted to these new employees had vested. The unaudited pro forma financial information in the table below summarizes the combined results of operations for Invitae and Singular Bio as though the companies had been combined as of January 1, 2018. The pro forma amounts have been adjusted for transaction expenses incurred by Singular Bio and us, the impacts of the co-development agreement, the historical interest expense incurred by Singular Bio on its debt and debt-like items, compensation expense recognized in relation to the equity awards granted in connection with the acquisition of Singular Bio, post-combination expenses, income tax benefits resulting from the deferred tax liabilities acquired, and the 2.5 million shares of our common stock issued upon the closing of the Singular Bio transaction. The following unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisition had taken place as of January 1, 2018 (in thousands, except per share data):
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Goodwill and intangible assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and intangible assets | Goodwill and intangible assets Goodwill The changes in the carrying amounts of goodwill were as follows (in thousands):
Intangible Assets The following table presents details of our intangible assets as of June 30, 2019 and December 31, 2018 (in thousands):
Acquisition-related intangibles included in the above table are finite-lived, other than in-process research and development which has an indefinite life, and are carried at cost less accumulated amortization. Customer relationships are being amortized on an accelerated basis, in proportion to estimated cash flows. All other finite-lived acquisition-related intangibles are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are realized. Amortization expense was $1.3 million for both three-month periods ended June 30, 2019 and 2018, and $2.6 million and $2.5 million for the six months ended June 30, 2019 and 2018, respectively. Amortization expense is recorded to cost of revenue, research and development, sales and marketing and general and administrative expense. The following table summarizes our estimated future amortization expense of intangible assets with finite lives as of June 30, 2019 (in thousands):
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Balance sheet components |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet components | Balance sheet components Property and equipment, net Property and equipment consisted of the following (in thousands):
Depreciation expense was $1.8 million and $2.3 million for the three months ended June 30, 2019 and 2018, respectively, and $3.4 million and $4.4 million for the six months ended June 30, 2019 and 2018, respectively. Accrued liabilities Accrued liabilities consisted of the following (in thousands):
Other long-term liabilities Other long-term liabilities consisted of the following (in thousands):
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Fair value measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | Fair value measurements Financial assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is summarized as follows: Level 1—Observable inputs such as quoted prices (unadjusted) for identical instruments in active markets. Level 2—Observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations whose significant inputs are observable. Level 3—Unobservable inputs that reflect the reporting entity’s own assumptions. The following tables set forth the fair value of our consolidated financial instruments that were measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 (in thousands):
There were no transfers between Level 1, Level 2 and Level 3 during the periods presented. The total fair value of investments with unrealized losses at June 30, 2019 was nil. None of the available-for-sale securities held as of June 30, 2019 has been in a continuous unrealized loss position for more than one year. We have not identified any other-than-temporary declines in market value and thus have not recorded any impairment charges on our financial assets during the six months ended June 30, 2019. At June 30, 2019, the remaining contractual maturities of available-for-sale securities ranged from zero to one month. Our certificates of deposit, commercial paper, and debt securities of U.S. government agency entities are classified as Level 2 as they are 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. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third-party data providers, including but not limited to benchmark yields, interest rate curves, reported trades, broker/dealer quotes and reference data. As of December 31, 2018, we had a contingent obligation of $5.0 million of our common stock calculated using a 30-day trailing average share price to the former owners of AltaVoice in conjunction with our acquisition of AltaVoice in January 2017. The amount of the contingent obligation was dependent upon 2017 and 2018 revenue attributable to AltaVoice. Since revenue attributable to AltaVoice for the combined period of 2017 and 2018 was greater than the $10 million contingent milestone, in April 2019 we issued 0.2 million shares of our common stock to the former owners of AltaVoice which had a fair value on the date of issuance of $5.2 million to settle this contingent obligation. The fair value of our outstanding debt is estimated using the net present value of future debt payments, discounted at an interest rate that is consistent with market interest rates, which is a Level 2 input. The estimated fair value of our outstanding debt at June 30, 2019 and December 31, 2018 approximated the carrying values.
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Commitments and contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies | Commitments and contingencies Leases Operating leases In 2015, we entered into a lease agreement for our headquarters and main production facility in San Francisco, California which commenced in 2016. This lease expires in July 2026 and we may renew the lease for an additional ten years. This optional period was not considered reasonably certain to be exercised and therefore we determined the lease term to be a ten-year period expiring in 2026. In connection with the execution of the lease, we provided a security deposit of approximately $4.6 million which is included in restricted cash in our consolidated balance sheets. We also have other operating leases for office and laboratory space in California and Massachusetts. We expect to enter into new leases and modifying existing leases as we support continued growth of our operations. As of June 30, 2019, the weighted-average remaining lease term for our operating leases was 6.1 years and the weighted-average discount rate used to determine our operating lease liability was 11.5%. Cash payments included in the measurement of our operating lease liabilities were $2.5 million for the three months ended June 30, 2019 and $4.9 million for the six months ended June 30, 2019. The components of lease costs, which were included in cost of revenue, research and development, selling and marketing and general and administrative expenses on our consolidated statements of operations were as follows (in thousands):
Future minimum payments under non-cancelable operating leases as of June 30, 2019 are as follows (in thousands):
Finance leases We have entered into various finance lease agreements to obtain laboratory equipment. The terms of our finance leases are generally three years with a weighted-average remaining lease term of 1.2 years as of June 30, 2019 and are typically secured by the underlying equipment. The weighted-average discount rate used to determine our finance lease liability was 6.2%. The portion of the future payments designated as principal repayment was classified as a finance lease obligation on our consolidated balance sheets. Cash payments included in the measurement of our finance lease liabilities were $0.6 million for the three months ended June 30, 2019 and $1.1 million for the six months ended June 30, 2019. Future payments under finance leases at June 30, 2019 are as follows (in thousands):
Debt financing In November 2018, we entered into a Note Purchase Agreement (the "2018 Note Purchase Agreement") pursuant to which we were eligible to borrow an aggregate principal amount up to $200.0 million over a seven year maturity term which included an initial borrowing of $75.0 million in November 2018. We received net proceeds of $10.3 million after terminating and repaying the balance of our obligations of approximately $64.7 million with our previous lender. At June 30, 2019, obligations under the 2018 Note Purchase Agreement were $75.0 million which are required to be repaid to the lender in a balloon payment no later than 2025. If we repay prior to the three year anniversary following the initial borrowing, in addition to other prepayment fees, the amount due will be: 117.5% of the principal amount if payment is made within 12 months after the borrowing; 132.5% of the principal amount if payment is made between 12 and 24 months after the borrowing; and 145.0% of the principal amount if payment is made between 24 and 36 months after the borrowing, all less the interest payments we've made since our initial borrowing. The outstanding principal amount under the 2018 Note Purchase Agreement bears interest at a rate of 8.75% annually. In addition, beginning on January 1, 2020 and continuing until repayment or maturity of any outstanding principal, we will make quarterly payments of 0.5% of our annual net revenues subject to a maximum annual amount of such payments of $1.6 million which will be recognized as interest expense. Through the fixed interest charges and the quarterly revenue payments, we are required to pay total amounts to generate an 11% internal rate of return to the lender on any outstanding principal balances due in a lump-sum upon the repayment or maturity of any outstanding principal. During the six months ended June 30, 2019, the 2018 Note Purchase Agreement bore interest at an average interest rate of 10.6%. The 2018 Note Purchase Agreement contains quarterly covenants to achieve certain revenue levels as well as additional covenants, including limits on our ability to dispose of assets, undergo a change of control, merge with or acquire other entities, incur debt, incur liens, pay dividends or other distributions to holders of our capital stock, repurchase stock and make investments, in each case subject to certain exceptions. Our obligations under the 2018 Note Purchase Agreement are secured by a security interest in substantially all of our and certain of our subsidiaries’ assets. Debt discounts, including debt issuance costs, related to the 2018 Note Purchase Agreement of $0.7 million were recorded as a direct deduction from the debt liability and are being amortized to interest expense over the term of the 2018 Note Purchase Agreement. Future estimated payments under the 2018 Note Purchase Agreement as of June 30, 2019 are as follows (in thousands):
Interest expense related to our debt financings was $2.0 million and $1.7 million for the three months ended June 30, 2019 and 2018, respectively, and $3.9 million and $2.9 million for the six months ended June 30, 2019 and 2018, respectively. Other commitments In the normal course of business, we enter into various purchase commitments primarily related to service agreements and laboratory supplies. At June 30, 2019, our total future payments under noncancelable unconditional purchase commitments having a remaining term of over one year were $3.1 million. Guarantees and indemnifications As permitted under Delaware law and in accordance with our bylaws, we indemnify our directors and officers for certain events or occurrences while the officer or director is or was serving in such capacity. The maximum amount of potential future indemnification is unlimited; however, we maintain director and officer liability insurance. This insurance allows the transfer of the risk associated with our exposure and may enable us to recover a portion of any future amounts paid. We believe the fair value of these indemnification agreements is minimal. Accordingly, we did not record any liabilities associated with these indemnification agreements at June 30, 2019 or December 31, 2018. Contingencies We were not a party to any material legal proceedings at June 30, 2019, or at the date of this report. We may from time to time become involved in various legal proceedings and claims arising in the ordinary course of business, and the resolution of any such claims could be material.
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Stockholders' equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' equity | Stockholders’ equity Shares Outstanding Shares of convertible preferred and common stock were as follows (in thousands):
2018 Sales Agreement In August 2018, we entered into a Common Stock Sales Agreement (the “2018 Sales Agreement”) with Cowen and Company, LLC (“Cowen”), under which we may offer and sell from time to time at our sole discretion shares of our common stock through Cowen as our sales agent, in an aggregate amount not to exceed $75.0 million. Cowen may sell the shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, including without limitation sales made directly on The New York Stock Exchange, and also may sell the shares in privately negotiated transactions, subject to our prior approval. Per the terms of the agreement, Cowen receives a commission equal to 3% of the gross proceeds of the sales price of all shares sold through it as sales agent under the 2018 Sales Agreement. In March 2019, we amended the 2018 Sales Agreement to increase the aggregate amount of our common stock to be sold under this agreement not to exceed $175.0 million. During 2018, we sold a total of 4.3 million shares of common stock under the 2018 Sales Agreement for aggregate gross proceeds of $61.1 million and net proceeds of $58.9 million. No shares of our common stock were sold under this agreement during 2019. Public offerings In March 2019, we sold, in an underwritten public offering, an aggregate of 10.4 million shares of our common stock at a price of $19.00 per share, for gross proceeds of $196.7 million and net proceeds of $184.5 million. In April 2018, we sold, in an underwritten public offering, an aggregate of 12.8 million shares of our common stock at a price of $4.50 per share, for gross proceeds of $57.5 million and net proceeds of $53.5 million. Private placement In August 2017, in a private placement to certain accredited investors, we issued 5.2 million shares of common stock at a price of $8.50 per share, and 3.5 million shares of our Series A convertible preferred stock at a price of $8.50 per share, for gross proceeds of approximately $73.5 million and net proceeds of $68.9 million. The Series A preferred stock is convertible into common stock on a one-for-one basis, subject to adjustment for events such as stock splits, combinations and the like. During the six months ended June 30, 2019, 3.3 million shares of Series A convertible preferred stock were converted to 3.3 million shares of common stock.
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Stock incentive plans |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock incentive plans | Stock incentive plans Stock incentive plans In 2010, we adopted the 2010 Incentive Plan (the “2010 Plan”). The 2010 Plan provides for the granting of stock-based awards to employees, directors and consultants under terms and provisions established by our Board of Directors. Under the terms of the 2010 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive and nonstatutory stock options must be at least 110% of fair market of the common stock on the grant date, as determined by our Board of Directors. The terms of options granted under the 2010 Plan may not exceed ten years. In January 2015, we adopted the 2015 Stock Incentive Plan (the “2015 Plan”), which became effective upon the closing of our initial public offering (“IPO”). Shares outstanding under the 2010 Plan were transferred to the 2015 Plan upon effectiveness of the 2015 Plan. The 2015 Plan provides for automatic annual increases in shares available for grant, beginning on January 1, 2016 through January 1, 2025. In addition, shares subject to awards under the 2010 Plan that are forfeited or terminated will be added to the 2015 Plan. The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, stock units, stock appreciation rights and other forms of equity compensation, all of which may be granted to employees, including officers, non-employee directors and consultants. Additionally, the 2015 Plan provides for the grant of cash-based awards. In June 2019, we amended and restated the 2015 Plan to create a pool of shares to be awarded solely as a material inducement to employees. Options granted generally vest over a period of four years. Typically, the vesting schedule for options granted to newly hired employees provides that 1/4 of the award vests upon the first anniversary of the employee’s date of hire, with the remainder of the award vesting monthly thereafter at a rate of 1/48 of the total shares subject to the option. All other options typically vest in equal monthly installments over the four-year vesting schedule. RSUs generally vest over a period of three years. Typically, the vesting schedule for RSUs provides that 1/3 of the award vests upon each anniversary of the grant date. We granted Time-based RSUs in connection with the acquisition of Singular Bio which vest in three equal installments over a period of 18 months and PRSUs that vest based on the achievement of performance conditions; see further details in Note 4, "Business Combinations." Activity under the 2010 Plan and the 2015 Plan is set forth below (in thousands, except per share amounts and years):
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of our common stock for stock options that were in-the-money. The weighted-average fair value of options to purchase common stock granted was $14.52 and $8.08 in the six months ended June 30, 2019 and 2018, respectively. The total grant-date fair value of options to purchase common stock vested was $2.5 million and $1.8 million in the six months ended June 30, 2019 and 2018, respectively. The intrinsic value of options to purchase common stock exercised was $4.5 million and $0.1 million in the six months ended June 30, 2019 and 2018, respectively. The following table summarizes RSU activity, which includes the Time-based RSUs and PRSUs granted in connection with our acquisition of Singular Bio (in thousands, except per share data):
2015 employee stock purchase plan In January 2015, we adopted the 2015 Employee Stock Purchase Plan (the “ESPP”), which became effective upon the closing of the IPO. Employees participating in the ESPP may purchase common stock at 85% of the lesser of the fair market value of common stock on the purchase date or last trading day preceding the offering date. At June 30, 2019, cash received from payroll deductions pursuant to the ESPP was $0.9 million. At June 30, 2019, a total of 0.8 million shares of common stock were reserved for issuance under the ESPP. Stock-based compensation We use the grant date fair value of our common stock to value options when granted. The fair value of share-based payments for options granted to employees and directors was estimated on the date of grant using the Black-Scholes option-pricing model which requires input of various assumptions. Changes in assumptions can materially affect the fair value and ultimately how much stock-based compensation is recognized. The assumptions used to estimate the fair value of stock options granted are as follows:
The following table summarizes stock-based compensation expense included in the consolidated statements of operations (in thousands):
At June 30, 2019, unrecognized compensation expense related to unvested stock options, net of estimated forfeitures, was $5.2 million, which we expect to recognize on a straight-line basis over a weighted-average period of 1.9 years. Unrecognized compensation expense related to RSUs, including PRSUs, at June 30, 2019, net of estimated forfeitures, was $124.1 million, which we expect to recognize on a straight-line basis over a weighted-average period of 1.3 years. Of this unrecognized compensation expense, $92.3 million is our estimate of what we expect to recognize related to awards granted in connection with the Singular Bio acquisition which we expect to recognize over a weighted-average period of 1.2 years.
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Net loss per share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share | Net loss per share The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share amounts):
The following common stock equivalents have been excluded from diluted net loss per share because their inclusion would be anti-dilutive (in thousands):
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Geographic information |
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Geographic information | Geographic information Revenue by country is determined based on the billing address of the customer. The following presents revenue by country for the three and six months ended June 30, 2019 and 2018 (in thousands):
All long-lived assets at June 30, 2019 and December 31, 2018, were located in the United States.
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Subsequent events |
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Subsequent Events [Abstract] | |
Subsequent events | Subsequent events In July 2019, we entered into a Stock Purchase and Merger Agreement for 100% of the capital stock of Jungla, a privately held company that focuses on the development and commercialization of a cloud-based platform that combines clinical knowledge with advanced modeling technologies to help clinicians and patients understand the results of genetic and genomic tests. At the closing of the transaction, we issued an aggregate of 1.4 million shares of our common stock and approximately $14.9 million in cash to the former securityholders of Jungla. Up to approximately $0.5 million in cash and 0.2 million additional shares of our common stock are subject to a hold back to satisfy indemnification obligations that may arise following the closing. In addition, approximately $15.0 million, mostly in our common stock, may become payable in connection with the achievement of certain performance milestones within 24 months after the closing of the transaction. Given the timing of the closing of this transaction, we are currently in the process of valuing the assets acquired and liabilities assumed. As a result, we are not yet able to provide the amounts to be recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed and other related disclosures. We will disclose this and other related information in our Form 10-Q for the quarter ending September 30, 2019. In July 2019, our Board of Directors approved an executive management incentive compensation plan for the 2019 fiscal year under which members of our management team may be eligible to receive incentive compensation in the form of cash and PRSUs based on the level of achievement of a specified revenue goal. Potential payouts range from 0% to 115% of aggregate target cash and PRSU amounts of $1.4 million and 1.0 million shares, respectively.
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Summary of significant accounting policies (Policies) |
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Principles of consolidation | Principles of consolidation Our unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base these estimates on historical and anticipated results, trends and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. Actual results could differ materially from those estimates and assumptions. Significant estimates and assumptions made by management include the determination of:
• income tax uncertainties.
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Concentrations of credit risk and other risks and uncertainties | Concentrations of credit risk and other risks and uncertainties Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. Our cash and cash equivalents are held by financial institutions in the United States. Such deposits may exceed federally insured limits. Significant customers are those that represent 10% or more of our total revenue presented on the statements of operations.
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Cash cash equivalents and restricted cash | Cash, cash equivalents and restricted cash We consider all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds. Restricted cash consists primarily of money market funds held in irrevocable standby letters of credit that serve as collateral for security deposits for our facility leases
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Accounts receivable | Accounts receivable We receive payment for our tests from partners, patients, institutional customers and third-party payers.
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Inventory | Inventory We maintain test reagents and other consumables primarily used in sample collection kits which are valued at the lower of cost or net realizable value. Cost is determined using actual costs on a first-in, first-out basis.
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Business combinations | Business combinations The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. We base the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by our management, which consider our estimates of inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We remeasure this liability each reporting period and record changes in the fair value as a component of operating expenses. Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in our operating results from the date of acquisition.
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Goodwill | Goodwill In accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), our goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Under ASC 350, we perform annual impairment reviews of our goodwill balance during the fourth fiscal quarter. In testing for impairment, we compare the fair value of our consolidated single reporting unit to its carrying value including the goodwill of that unit. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, we will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized cannot exceed the total amount of goodwill allocated to the reporting unit.
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Indefinite-lived Intangible Assets and In-Process Research and Development | Indefinite-lived Intangible Assets ASC 350 requires companies to test indefinite-lived intangible assets for impairment annually, and more frequently if indicators of impairment exist. ASC 350 includes an optional qualitative assessment for testing indefinite-lived intangible assets for impairment that permits companies to assess whether it is more likely than not (i.e., a likelihood of greater than 50%) that an indefinite-lived intangible asset is impaired. If a company concludes based on the qualitative assessment that it is not more likely than not that the fair value of an indefinite-lived intangible asset or, in the case of goodwill, that the fair value of the related reporting unit, is less than carrying value, it would not have to determine the asset’s or reporting unit’s fair value, as applicable. In-Process Research and Development Intangible assets related to in-process research and development costs (“IPR&D”), are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. Prior to completion of the research and development efforts, the assets are considered indefinite-lived. During this period, the assets will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. During the fourth quarter and if business factors indicate more frequently, we perform an assessment of the qualitative factors affecting the fair value of our IPR&D. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of an asset to its carrying value, without consideration of any recoverability test.
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Fair value of financial instruments | Fair value of financial instruments Our financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, accrued liabilities, finance leases and debt. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued and other current liabilities approximate their current fair value due to the relatively short-term nature of these accounts. Based on borrowing rates available to us, the carrying value of our finance leases and debt approximates their fair values.
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Revenue recognition and cost of revenue | Revenue recognition We recognize revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers. Test revenue is generated primarily from the sale of tests that provide analysis and associated interpretation of the sequencing of parts of the genome. Other revenue consists primarily of revenue from genome network subscription services which is recognized on a straight-line basis over the subscription term, and revenue from collaboration agreements. Cost of revenue Cost of revenue reflects the aggregate costs incurred in delivering the genetic testing results to clinicians and patients and includes expenses for personnel-related costs including stock-based compensation, materials and supplies, equipment and infrastructure expenses associated with testing and allocated overhead including rent, equipment depreciation, amortization of acquired intangibles and utilities.
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Stock-based compensation | Stock-based compensation We measure stock-based payment awards made to employees and directors based on the estimated fair values of the awards and recognize the compensation expense over the requisite service period. We use the Black-Scholes option-pricing model to estimate the fair value of stock option awards and employee stock purchase plan (“ESPP”) purchases. The fair value of restricted stock unit (“RSU”) awards with time-based vesting terms is based on the grant date share price. We grant performance-based restricted stock unit (“PRSU”) awards to certain employees which vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with us. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. We recognize such compensation expense on an accelerated vesting method. Stock-based compensation expense for awards without a performance condition is recognized using the straight-line method. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, our stock-based compensation is reduced for estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We account for stock issued in connection with business combinations based on the fair value of our common stock on the date of issuance.
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Net loss per share | Net loss per share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. Potentially dilutive securities, consisting of convertible preferred stock, options to purchase common stock, common stock warrants, and RSUs, are considered to be common stock equivalents and were excluded from the calculation of diluted net loss per share because their effect would be antidilutive for all periods presented.
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Recent accounting pronouncements | Recent accounting pronouncements We evaluate all Accounting Standards Updates (“ASUs”) issued by the FASB for consideration of their applicability. ASUs not included in the disclosures in this report were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements. Recently issued accounting pronouncements not yet adopted In June 2016, FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) which requires measurement and recognition of expected credit losses for financial assets. This guidance will become effective for us beginning in the first quarter of 2020 and must be adopted using a modified retrospective approach, with certain exceptions. We are currently evaluating the effect that adoption of this ASU will have on our consolidated financial statements. Recently adopted accounting pronouncements – Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and in July 2018 issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842): Targeted Improvements (the foregoing ASUs collectively referred to as “Topic 842”). Under the new guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases at the commencement date and also make expanded disclosures about leasing arrangements. On January 1, 2019, we adopted Topic 842 using the modified retrospective approach in accordance with Topic 842. Adoption of Topic 842 had a material impact on our consolidated balance sheets, but did not have an impact on our consolidated statements of operations. Prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under previous lease guidance, ASC 840: Leases. We elected the package of practical expedients permitted under the transition guidance which, among other things, allowed us to carry forward the historical classification of leases in place as of January 1, 2019. The effect of the adoption of Topic 842 on our consolidated balance sheet as of January 1, 2019 was as follows (in thousands):
The adjustments due to the adoption of Topic 842 primarily relate to the recognition of operating and finance lease right-of-use assets and operating lease liabilities. Finance lease assets are recorded within other assets on our consolidated balance sheet and were $5.2 million as of implementation of Topic 842 on January 1, 2019 and $4.4 million as of June 30, 2019. Under Topic 842, we determine if an arrangement is a lease at inception primarily based on the determination of the party responsible for directing the use of an underlying asset within a contract. Operating leases are included in operating lease assets and operating lease obligations in our consolidated balance sheets. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date which includes significant assumptions made by us including our estimated credit rating. Operating lease right-of-use assets also include any lease payments made prior to the lease commencement date and exclude any lease incentives paid or payable at the lease commencement date. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise any such options. Lease expense is recognized on a straight-line basis over the expected lease term. As allowed under Topic 842, we elected to not apply the recognition requirements of Topic 842 to short-term leases, that is, leases with terms of 12 months or less which do not include an option to purchase the underlying asset that we are reasonably certain to exercise. For short-term leases, we recognize lease payments as operating expenses on a straight-line basis over the lease term. As a result of our election of the package of practical expedients permitted under the Topic 842 transition guidance, for assets related to facilities leases we elected to account for lease and non-lease components, such as common area maintenance charges, as a single lease component. We did not identify any material embedded leases with the adoption of Topic 842 and therefore the implementation of Topic 842 primarily focused on the treatment of our previously identified leases.
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Summary of significant accounting policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant customers as percentage of total revenue and total accounts receivable | significant customer during the periods presented and revenue for this customer as a percentage of our total revenue were as follows:
Our significant customer's accounts receivable balance as a percentage of total accounts receivable was as follows:
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Summary of restrictions on cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows (in thousands):
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Schedule of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows (in thousands):
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Summary of effect of the adoption of Topic 842 | The effect of the adoption of Topic 842 on our consolidated balance sheet as of January 1, 2019 was as follows (in thousands):
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Revenue, accounts receivable and deferred revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregated revenue by payer category | The following table includes our revenues as disaggregated by payer category (in thousands):
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Schedule of change in estimate | As a result of new information, we updated our estimate of the amounts to be recognized for previously delivered tests which resulted in the following increases to revenue and decreases to our loss from operations and basic and diluted net loss per share (in millions, except per share amounts):
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Business combinations (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of fair values of assets acquired and liabilities assumed | The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):
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Summary of pro forma information | The following unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisition had taken place as of January 1, 2018 (in thousands, except per share data):
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Goodwill and intangible assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of goodwill | The changes in the carrying amounts of goodwill were as follows (in thousands):
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Schedule of finite-lived intangible assets | The following table presents details of our intangible assets as of June 30, 2019 and December 31, 2018 (in thousands):
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Summary of estimated future amortization expense of intangible assets with finite lives | The following table summarizes our estimated future amortization expense of intangible assets with finite lives as of June 30, 2019 (in thousands):
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Balance sheet components (Tables) |
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Schedule of Property and equipment | Property and equipment consisted of the following (in thousands):
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Schedule of Accrued liabilities | Accrued liabilities consisted of the following (in thousands):
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Schedule of Other long-term liabilities | Other long-term liabilities consisted of the following (in thousands):
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Fair value measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments at fair value on a recurring basis | The following tables set forth the fair value of our consolidated financial instruments that were measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 (in thousands):
|
Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of lease cost | The components of lease costs, which were included in cost of revenue, research and development, selling and marketing and general and administrative expenses on our consolidated statements of operations were as follows (in thousands):
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Schedule of future minimum payments under operating leases | Future minimum payments under non-cancelable operating leases as of June 30, 2019 are as follows (in thousands):
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Schedule of future minimum lease payments under finance leases | Future payments under finance leases at June 30, 2019 are as follows (in thousands):
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Schedule of future payments under amended 2018 loan agreement | Future estimated payments under the 2018 Note Purchase Agreement as of June 30, 2019 are as follows (in thousands):
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Stockholders' equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of convertible preferred and common stock | Shares of convertible preferred and common stock were as follows (in thousands):
|
Stock incentive plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of activity under the plans | Activity under the 2010 Plan and the 2015 Plan is set forth below (in thousands, except per share amounts and years):
(1) Includes the Time-based RSUs and PRSUs granted as a part of the Singular Bio acquisition which are based on a fixed dollar value. The number of shares issued will be variable until the awards vest. See further details in Note 4, "Business Combinations."
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Summary of RSU activity | The following table summarizes RSU activity, which includes the Time-based RSUs and PRSUs granted in connection with our acquisition of Singular Bio (in thousands, except per share data):
(1) The Time-based RSUs and PRSUs granted as a part of the Singular Bio acquisition in June 2019 are based on a fixed dollar value. The number of shares issued and weighted-average grant date fair value per share will be variable until the awards vest. See further details in Note 4, "Business Combinations."
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Schedule of assumptions used in determination of fair value of options | The assumptions used to estimate the fair value of stock options granted are as follows:
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Summary of stock based compensation expense | The following table summarizes stock-based compensation expense included in the consolidated statements of operations (in thousands):
|
Net loss per share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share, basic and diluted | The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share amounts):
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Schedule of antidilutive securities excluded from computation of earnings per share | The following common stock equivalents have been excluded from diluted net loss per share because their inclusion would be anti-dilutive (in thousands):
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Geographic information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue by country | The following presents revenue by country for the three and six months ended June 30, 2019 and 2018 (in thousands):
|
Organization and description of business - Additional Information (Details) gene in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
Segment
gene
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of genes | gene | 20 |
Number of operating segments | Segment | 1 |
Summary of significant accounting policies - Schedule of customers revenue as percentage of total revenue (Details) - Customer Concentration Risk - Total Revenue |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Medicare | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk (as a percent) | 23.00% | 18.00% | 22.00% | 17.00% |
United Healthcare | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk (as a percent) | 10.00% | 10.00% |
Summary of significant accounting policies - Schedule of significant customers as percentage of total accounts receivable (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Customer Concentration Risk | Total Accounts Receivable | Medicare | |
Summary Of Significant Accounting Policies [Line Items] | |
Concentration risk (as a percent) | 21.00% |
Summary of significant accounting policies - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Accounting Policies [Abstract] | |||||
Inventory | $ 8,600,000 | $ 8,600,000 | $ 8,300,000 | ||
Goodwill impairment losses | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of significant accounting policies - Reconciliation of cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 247,000 | $ 112,158 | ||
Restricted cash | 6,243 | 6,006 | ||
Total cash, cash equivalents and restricted cash | $ 253,243 | $ 118,164 | $ 53,875 | $ 17,459 |
Summary of significant accounting policies - Summary of effect of the adoption of Topic 842 (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property and equipment, net | $ 29,021 | $ 22,727 | $ 27,886 |
Operating lease assets | 40,228 | 36,711 | |
Other assets | 5,103 | 8,223 | 3,064 |
Accrued liabilities | 27,801 | 26,073 | 26,563 |
Operating lease obligations | 5,102 | 4,697 | |
Operating lease obligations, net of current portion | 45,694 | 41,279 | |
Other long-term liabilities | 0 | 181 | $ 8,956 |
Finance lease asset | $ 4,400 | 5,200 | |
Adjustments Due to the Adoption of Topic 842 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property and equipment, net | (5,159) | ||
Operating lease assets | 36,711 | ||
Other assets | 5,159 | ||
Accrued liabilities | (490) | ||
Operating lease obligations | 4,697 | ||
Operating lease obligations, net of current portion | 41,279 | ||
Other long-term liabilities | $ (8,775) |
Revenue, accounts receivable and deferred revenue - Schedule of disaggregated revenue by payer category (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 53,475 | $ 37,306 | $ 94,028 | $ 64,977 |
Test revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 52,302 | 36,350 | 91,921 | 63,403 |
Test revenue | Institutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 9,814 | 8,572 | 17,968 | 15,803 |
Test revenue | Patient - direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,056 | 3,575 | 7,797 | 6,425 |
Test revenue | Patient - insurance | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 38,432 | 24,203 | 66,156 | 41,175 |
Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,173 | $ 956 | $ 2,107 | $ 1,574 |
Revenue, accounts receivable and deferred revenue - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 53,475 | $ 37,306 | $ 94,028 | $ 64,977 |
Revenue re-requisition rights period | 90 days | |||
Change in estimate of revenue recognition | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,400 | 2,300 | $ 2,800 | 2,300 |
Test revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 52,302 | $ 36,350 | $ 91,921 | 63,403 |
Test revenue | Change in estimate of revenue recognition | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 2,300 |
Revenue, accounts receivable and deferred revenue - Schedule of change in estimate (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 53,475 | $ 37,306 | $ 94,028 | $ 64,977 |
Change in loss from operations | $ 51,886 | $ 30,068 | $ 88,093 | $ 66,543 |
Net loss per share, basic and diluted | $ 0.54 | $ 0.47 | $ 1.01 | $ 1.12 |
Change in estimate of revenue recognition | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 2,400 | $ 2,300 | $ 2,800 | $ 2,300 |
Change in loss from operations | $ (2,400) | $ (2,300) | $ (2,800) | $ (2,300) |
Net loss per share, basic and diluted | $ (0.03) | $ (0.03) | $ (0.03) | $ (0.04) |
Business combinations - Good Start Genetics (Details) - Good Start Genetics - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Aug. 31, 2017 |
|
Business Acquisition [Line Items] | ||
Percentage of diluted interest acquired | 100.00% | |
Business combination remaining hold back amount payable upon settlement of outstanding claims | $ 1.5 | |
Business combination remaining hold back amount settled | $ 0.7 |
Business combinations - Summary of fair values of assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Business Acquisition [Line Items] | ||
Goodwill | $ 76,556 | $ 50,095 |
Singular Bio | ||
Business Acquisition [Line Items] | ||
Cash | 4,988 | |
Property and equipment | 303 | |
In-process research and development | 29,988 | |
Total identifiable assets acquired | 35,279 | |
Current liabilities assumed | (479) | |
Deferred tax liability | (3,950) | |
Net identifiable assets acquired | 30,850 | |
Goodwill | 26,461 | |
Total purchase price | $ 57,311 |
Business combinations - Summary of Pro Forma Information (Details) - Singular Bio - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisition [Line Items] | ||||
Revenue | $ 53,475 | $ 37,306 | $ 94,028 | $ 64,977 |
Net loss | $ (45,454) | $ (32,122) | $ (83,121) | $ (68,723) |
Basic net loss per share (in dollars per share) | $ (0.50) | $ (0.46) | $ (0.98) | $ (1.09) |
Diluted net loss per share (in dollars per share) | $ (540.00) | $ (460.00) | $ (1,010.00) | $ (1,090.00) |
Goodwill and intangible assets - Summary of goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning Balance | $ 50,095 |
Goodwill acquired | 26,461 |
Ending Balance | $ 76,556 |
Goodwill and intangible assets - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 1.3 | $ 1.3 | $ 2.6 | $ 2.5 |
Goodwill and intangible assets - Summary of estimated future amortization expense of intangible assets with finite lives (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 (remainder of year) | $ 2,625 |
2020 | 5,525 |
2021 | 5,829 |
2022 | 4,124 |
2023 | 3,111 |
Thereafter | 6,630 |
Net, finite intangible assets | $ 27,844 |
Balance sheet components - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Balance Sheet Related Disclosures [Abstract] | ||||
Depreciation | $ 1.8 | $ 2.3 | $ 3.4 | $ 4.4 |
Balance sheet components - Accrued liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | |||
Accrued compensation and related expenses | $ 11,187 | $ 7,917 | |
Liabilities associated with business combinations | 5,090 | 6,460 | |
Liability associated with co-development agreement | 0 | 2,000 | |
Deferred revenue | 1,072 | 761 | |
Other | 10,452 | 9,425 | |
Total accrued liabilities | $ 27,801 | $ 26,073 | $ 26,563 |
Balance sheet components - Other long-term liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | |||
Lease incentive obligation, non-current | $ 0 | $ 3,280 | |
Deferred rent, non-current | 5,495 | ||
Other non-current liabilities | 0 | 181 | |
Total other long-term liabilities | $ 0 | $ 181 | $ 8,956 |
Commitments and contingencies - (Operating Leases) - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Dec. 31, 2015 |
|
Lessor, Lease, Description [Line Items] | |||
Weighted-average remaining lease term | 6 years 1 month 6 days | 6 years 1 month 6 days | |
Weighted-average discount rate | 11.50% | 11.50% | |
Operating lease, cash payments | $ 2.5 | $ 4.9 | |
New Leases | Office Facility In San Francisco | |||
Lessor, Lease, Description [Line Items] | |||
Additional term of lease | 10 years | ||
Lease term | 10 years | ||
Security Deposit | $ 4.6 |
Commitments and contingencies - Components of lease cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease costs | $ 2,564 | $ 5,081 | ||
Operating lease costs | $ 2,392 | $ 4,832 | ||
Sublease income | (43) | (86) | ||
Sublease income | (39) | (78) | ||
Total operating lease costs | 2,521 | 4,995 | ||
Total operating lease costs | 2,353 | 4,754 | ||
Finance lease costs | 391 | 811 | ||
Finance lease costs | 446 | 955 | ||
Total lease costs | $ 2,912 | $ 5,806 | ||
Total lease costs | $ 2,799 | $ 5,709 |
Commitments and contingencies - Schedule of future minimum payments under operating leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jan. 01, 2019 |
---|---|---|
Future minimum lease payments under operating leases | ||
2019 (remainder of year) | $ 5,491 | |
2020 | 10,636 | |
2021 | 10,698 | |
2022 | 10,636 | |
2023 | 9,912 | |
Thereafter | 28,249 | |
Future non-cancelable minimum operating lease payments | 75,622 | |
Less: minimum payments to be received from non-cancelable subleases | (88) | |
Total future non-cancelable minimum operating lease payments, net | 75,534 | |
Less: imputed interest | (24,738) | |
Total operating lease liabilities | 50,796 | |
Less: current portion | (5,102) | $ (4,697) |
Operating lease obligations, net of current portion | $ 45,694 | $ 41,279 |
Commitments and contingencies - (Finance Leases) - Additional Information (Details) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
Commitments and Contingencies Disclosure [Abstract] | ||
Lease term | 3 years | 3 years |
Weighted-average remaining lease term | 1 year 2 months 12 days | 1 year 2 months 12 days |
Weighted-average discount rate | 6.20% | 6.20% |
Finance lease, cash payments | $ 0.6 | $ 1.1 |
Commitments and contingencies - Schedule of future minimum lease payments under finance leases (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Future payments under the finance lease | |
2019 (remainder of year) | $ 1,103 |
2020 | 1,354 |
Total finance lease obligations | 2,457 |
Less: interest | (94) |
Present value of net minimum finance lease payments | 2,363 |
Less: current portion | (1,934) |
Finance lease obligations, net of current portion | $ 429 |
Commitments and contingencies - Schedule of future payments under amended 2018 loan agreement (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
2019 (remainder of year) | $ 3,354 | |
2020 | 8,297 | |
2021 | 8,279 | |
2022 | 8,279 | |
2023 | 8,279 | |
Thereafter | 89,952 | |
Total remaining payments | 126,440 | |
Less: debt discount | (668) | |
Less: interest | (50,588) | |
Total debt | $ 75,184 | $ 74,477 |
Commitments and contingencies - (Other Commitments) - Additional Information (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Service Agreements and Laboratory Supplies | |
Other Commitments [Line Items] | |
Noncancelable unconditional purchase commitments | $ 3.1 |
Stock incentive plans - Schedule of assumptions used in determination of fair value of options (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Payment Arrangement [Abstract] | ||||
Expected term (in years) | 6 years | 6 years | 6 years | 6 years |
Expected volatility | 64.20% | 59.58% | 64.20% | 59.58% |
Risk-free interest rate | 2.58% | 2.80% | 2.58% | 2.80% |
Stock incentive plans - Summary of stock based compensation expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Stock-based compensation | ||||
Total stock-based compensation expense | $ 14,317 | $ 6,112 | $ 19,540 | $ 10,505 |
Cost of revenue | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | 2,205 | 1,082 | 2,856 | 1,573 |
Research and development | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | 6,767 | 2,032 | 8,572 | 3,515 |
Selling and marketing | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | 2,914 | 1,470 | 4,157 | 2,518 |
General and administrative | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | $ 2,431 | $ 1,528 | $ 3,955 | $ 2,899 |
Net loss per share - Schedule of Earnings per share, basic and diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Earnings Per Share [Abstract] | ||||
Net loss | $ (48,676) | $ (31,671) | $ (86,353) | $ (67,791) |
Shares used in computing net loss per share, basic and diluted (in shares) | 90,863 | 67,807 | 85,148 | 60,775 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.54) | $ (0.47) | $ (1.01) | $ (1.12) |
Geographic information - Schedule of Revenue by country (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Geographic information | ||||
Total revenue | $ 53,475 | $ 37,306 | $ 94,028 | $ 64,977 |
United States | ||||
Geographic information | ||||
Total revenue | 50,368 | 34,899 | 88,013 | 60,806 |
Canada | ||||
Geographic information | ||||
Total revenue | 882 | 1,096 | 1,847 | 2,104 |
Rest of world | ||||
Geographic information | ||||
Total revenue | $ 2,225 | $ 1,311 | $ 4,168 | $ 2,067 |