INVITAE CORP, 10-K filed on 2/28/2019
Annual Report
v3.10.0.1
Document and Entity Information - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2018
Feb. 22, 2019
Jun. 29, 2018
Document And Entity Information [Abstract]      
Entity Registrant Name Invitae Corp    
Entity Central Index Key 0001501134    
Document Type 10-K    
Document Period End Date Dec. 31, 2018    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Entity Current Reporting Status Yes    
Entity Filer Category Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company true    
Entity Ex Transition Period true    
Entity Shell Company false    
Trading Symbol NVTA    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer Yes    
Entity Common Stock, Shares Outstanding   76,811,562  
Entity Public Float     $ 477.8
Document Fiscal Year Focus 43465    
Document Fiscal Period Focus FY    
v3.10.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Current assets:    
Cash and cash equivalents $ 112,158 $ 12,053
Marketable securities 13,727 52,607
Accounts receivable 26,296 10,422
Prepaid expenses and other current assets 13,258 11,599
Total current assets 165,439 86,681
Property and equipment, net 27,886 30,341
Restricted cash 6,006 5,406
Marketable securities, non-current 0 5,983
Intangible assets, net 30,469 35,516
Goodwill 50,095 46,575
Other assets 3,064 576
Total assets 282,959 211,078
Current liabilities:    
Accounts payable 7,812 8,606
Accrued liabilities 26,563 22,742
Capital lease obligation, current portion 1,937 2,039
Total current liabilities 36,312 33,387
Capital lease obligation, net of current portion 1,375 3,373
Debt 74,477 39,084
Other long-term liabilities 8,956 13,440
Total liabilities 121,120 89,284
Commitments and contingencies (Note 9)
Stockholders’ equity:    
Preferred stock, $0.0001 par value: 20,000 shares authorized; 3,459 shares issued and outstanding as of December 31, 2018 and 2017 0 0
Common stock, $0.0001 par value: 400,000 shares authorized; 75,481 and 53,597 shares issued and outstanding as of December 31, 2018 and 2017, respectively 8 5
Accumulated other comprehensive loss (5) (171)
Additional paid-in capital 678,548 520,558
Accumulated deficit (516,712) (398,598)
Total stockholders’ equity 161,839 121,794
Total liabilities and stockholders’ equity $ 282,959 $ 211,078
v3.10.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Preferred stock, authorized (in shares) 20,000,000 20,000,000
Preferred stock, issued (in shares) 3,459,000 3,459,000
Preferred stock, outstanding (in shares) 3,459,000 3,459,000
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, authorized (in shares) 400,000,000 400,000,000
Common stock, issued (in shares) 75,481,000 53,597,000
Common stock, outstanding (in shares) 75,481,000 53,597,000
v3.10.0.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Revenue:      
Total revenue $ 147,699 $ 68,221 $ 25,048
Costs and operating expenses:      
Cost of revenue 80,105 50,142 27,878
Research and development 63,496 46,469 44,630
Selling and marketing 74,428 53,417 28,638
General and administrative 52,227 39,472 24,085
Total costs and operating expenses 270,256 189,500 125,231
Loss from operations (122,557) (121,279) (100,183)
Other income (expense), net (2,568) (303) 348
Interest expense (7,030) (3,654) (421)
Net loss before taxes (132,155) (125,236) (100,256)
Income tax benefit (2,800) (1,856) 0
Net loss $ (129,355) $ (123,380) $ (100,256)
Net loss per share, basic and diluted (in dollars per share) $ (1.94) $ (2.65) $ (3.02)
Shares used in computing net loss per share, basic and diluted (in shares) 66,747 46,512 33,176
Test revenue      
Revenue:      
Total revenue $ 144,560 $ 65,169 $ 24,840
Other revenue      
Revenue:      
Total revenue $ 3,139 $ 3,052 $ 208
v3.10.0.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Statement of Comprehensive Income [Abstract]      
Net loss $ (129,355) $ (123,380) $ (100,256)
Other comprehensive income (loss):      
Unrealized income (loss) on available-for-sale marketable securities, net of tax 166 (171) 15
Comprehensive loss $ (129,189) $ (123,551) $ (100,241)
v3.10.0.1
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Preferred Stock
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Balance at the beginning of the period at Dec. 31, 2015 $ 138,376   $ 4 $ 313,349 $ (15) $ (174,962)
Balance at the beginning of the period (in shares) at Dec. 31, 2015   0 31,935      
Increase (Decrease) in Stockholders' Deficit            
Common stock issued on exercise of stock options 744     744    
Options exercised (in shares)     244      
Common stock issued pursuant to vesting of restricted stock units (1)   $ (1)      
Common stock issued pursuant to vesting of restricted stock units (in shares)     157      
Common stock issued pursuant to employee stock purchase plan 2,391     2,391    
Common stock issued pursuant to employee stock purchase plan (in shares)     370      
Common stock issued in connection with initial public offering, net of offering costs 47,102   $ 1 47,101    
Common stock issued in connection with initial public offering, net of offering costs (in shares)     8,433      
Vesting of common stock related to early exercise of options 4     4    
Vesting of common stock related to early exercise of options (in shares)     5      
Stock-based compensation expense 10,699     10,699    
Unrealized income (loss) on available-for-sale marketable securities, net of tax 15       15  
Net loss (100,256)         (100,256)
Balance at the end of the period at Dec. 31, 2016 99,074   $ 4 374,288   (275,218)
Balance at the end of the period (in shares) at Dec. 31, 2016   0 41,144      
Increase (Decrease) in Stockholders' Deficit            
Options exercised (in shares)     387      
Common stock issued pursuant to vesting of restricted stock units (in shares)     925      
Common stock issued pursuant to employee stock purchase plan 2,635     2,635    
Common stock issued pursuant to employee stock purchase plan (in shares)     379      
Stock-based compensation expense 18,832     18,832    
Unrealized income (loss) on available-for-sale marketable securities, net of tax (171)       (171)  
Net loss (123,380)         (123,380)
Common and convertible preferred stock issued in private placement, net of offering costs 68,897   $ 1 68,896    
Common and convertible preferred stock issued in private placement, net of offering costs (in shares)   3,459 5,188      
Common stock issued on exercise of stock options, net 1,706     1,706    
Common stock issued pursuant to acquisition-related transaction bonus (in shares)     4      
Common stock issued pursuant to exercises of warrants 1,381     1,381    
Common stock issued pursuant to exercises of warrants (in shares)     232      
Common stock issued pursuant to business combinations 50,808     50,808    
Common stock issued pursuant to business combinations (in shares)     5,176      
Common stock issued to settle assumed liabilities 1,272     1,272    
Common stock issued to settle assumed liabilities (in shares)     162      
Warrants issued pursuant to the 2017 Loan Agreement 740     740    
Balance at the end of the period at Dec. 31, 2017 121,794   $ 5 520,558 (171) (398,598)
Balance at the end of the period (in shares) at Dec. 31, 2017   3,459 53,597      
Increase (Decrease) in Stockholders' Deficit            
Options exercised (in shares)     351      
Common stock issued pursuant to vesting of restricted stock units (in shares)     1,369      
Common stock issued pursuant to employee stock purchase plan 3,231     3,231    
Common stock issued pursuant to employee stock purchase plan (in shares)     566      
Common stock issued in connection with initial public offering, net of offering costs 112,441   $ 3 112,438    
Common stock issued in connection with initial public offering, net of offering costs (in shares)     17,103      
Stock-based compensation expense 20,850     20,850    
Unrealized income (loss) on available-for-sale marketable securities, net of tax 166       166  
Net loss (129,355)         (129,355)
Common stock issued on exercise of stock options, net 2,741     2,741    
Common stock issued pursuant to exercises of warrants 6,539     6,539    
Common stock issued pursuant to exercises of warrants (in shares)     1,099      
Common stock issued pursuant to business combinations 6,455     6,455    
Common stock issued pursuant to business combinations (in shares)     1,022      
Warrants issued pursuant to the 2017 Loan Agreement 383     383    
Common stock issued pursuant to Securities Purchase Agreement (see Note 9) 5,353     5,353    
Common stock issued pursuant to debt financing (in shares)     374      
Balance at the end of the period at Dec. 31, 2018 $ 161,839   $ 8 $ 678,548 $ (5) $ (516,712)
Balance at the end of the period (in shares) at Dec. 31, 2018   3,459 75,481      
v3.10.0.1
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Statement of Stockholders' Equity [Abstract]      
Offering costs $ 6,183 $ 4,599 $ 3,498
v3.10.0.1
Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Cash flows from operating activities:      
Net loss $ (129,355,000) $ (123,380,000) $ (100,256,000)
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation and amortization 13,540,000 9,181,000 6,553,000
Stock-based compensation 20,850,000 19,221,000 10,699,000
Impairment losses 2,925,000 0 0
Remeasurements of liabilities associated with business combinations 362,000 1,810,000 0
Benefit from income taxes (2,862,000) (1,856,000) 0
Debt extinguishment costs (5,266,000) 0 0
Other 806,000 404,000 1,341,000
Changes in operating assets and liabilities, net of effects of business combination:      
Accounts receivable (5,291,000) (1,963,000) (843,000)
Prepaid expenses and other current assets (1,445,000) (641,000) (1,149,000)
Other assets (163,000) (185,000) 1,465,000
Accounts payable (417,000) (535,000) (111,000)
Accrued expenses and other liabilities 3,564,000 (37,000) 5,984,000
Net cash used in operating activities (92,220,000) (97,981,000) (76,317,000)
Cash flows from investing activities:      
Purchases of marketable securities (9,680,000) (101,867,000) (90,236,000)
Proceeds from sales of marketable securities 19,965,000 0 0
Proceeds from maturities of marketable securities 32,458,000 68,768,000 117,922,000
Acquisition of businesses, acquired cash 0 2,821,000 0
Purchases of property and equipment (5,970,000) (6,675,000) (11,625,000)
Other (1,000,000) 0 0
Net cash provided by (used in) investing activities 35,773,000 (36,953,000) 16,061,000
Cash flows from financing activities:      
Proceeds from public offering of common stock, net of issuance costs 112,441,000 0 47,102,000
Proceeds from issuance of common stock 17,511,000 74,619,000 3,134,000
Net proceeds from issuance of debt 93,909,000 39,661,000 7,500,000
Payments for debt extinguishment costs (4,609,000) 0 0
Loan payments (60,000,000) (30,457,000) (2,438,000)
Capital lease principal payments (2,100,000) (2,952,000) (1,589,000)
Net cash provided by financing activities 157,152,000 80,871,000 53,709,000
Net increase (decrease) in cash, cash equivalents and restricted cash 100,705,000 (54,063,000) (6,547,000)
Cash, cash equivalents and restricted cash at beginning of period 17,459,000 71,522,000 78,069,000
Cash, cash equivalents and restricted cash at end of period 118,164,000 17,459,000 71,522,000
Supplemental cash flow information:      
Interest paid 6,231,000 2,852,000 421,000
Supplemental cash flow information of non-cash investing and financing activities:      
Equipment acquired through capital leases 0 6,789,000 0
Purchases of property and equipment in accounts payable and accrued liabilities 510,000 200,000 1,644,000
Amounts related to co-development agreement in other assets and accrued liabilities 2,000,000 0 0
Warrants issued pursuant to 2017 Loan Agreement 383,000 740,000 0
Common stock issued for acquisition of businesses 6,445,000 50,808,000 0
Consideration payable for acquisition of businesses 0 13,276,000 0
Common stock issued to settle assumed liabilities $ 0 $ 1,272,000 $ 0
v3.10.0.1
Organization and description of business
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and description of business Organization and description of businessInvitae Corporation (the “Company”) was incorporated in the State of Delaware on January 13, 2010, as Locus Development, Inc. and changed its name to Invitae Corporation in 2012. The Company utilizes 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 their patients. The Company’s headquarters and main production facility is located in San Francisco, California. The Company currently has more than 20,000 genes in production and provides a variety of diagnostic tests that can be used in multiple indications. The Company’s 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, the Company’s 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. The Company operates in one segment.
v3.10.0.1
Summary of significant accounting policies
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Summary of significant accounting policies Summary of significant accounting policies
Principles of consolidation
The consolidated financial statements include the accounts of the Company and its 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. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that the Company believes 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:
revenue recognition (See Note 3, “Revenue, accounts receivable and deferred revenue” for further information);
the fair value of assets acquired and liabilities assumed for business combinations;
the fair value of goodwill and intangible assets;
the recoverability of long-lived assets;
stock-based compensation expense and the fair value of awards issued; and
income tax uncertainties.
Concentrations of credit risk and other risks and uncertainties
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. The Company’s 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 the Company’s total revenue for each year presented on the statements of operations. For the significant customer, revenue as a percentage of total revenue were as follows:
 
December 31,
Customers
2018
 
2017
 
2016
Medicare
22
%
 
13
%
 
11
%

Medicare represented 21% and 13% of accounts receivable as of December 31, 2018 and 2017.
Cash, cash equivalents, and restricted cash
The Company considers 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 and U.S. government agency securities.
Restricted cash consists of money market funds that serve as collateral for security deposits for the Company’s facility lease and sublease agreements and collateral for a credit card agreement at one of the Company’s financial institutions.
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):
 
December 31, 2018
 
December 31, 2017
Cash and cash equivalents
$
112,158

 
$
12,053

Restricted cash
6,006

 
5,406

Total cash, cash equivalents and restricted cash
$
118,164

 
$
17,459


Marketable securities
All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable debt securities at the time of purchase and reevaluates such designation at each balance sheet date. Short-term marketable securities have maturities less than 365 days at the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of other comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest and other income (expense), net. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest and other income (expense), net.
Accounts receivable
The Company receives payment for its tests from partners, patients, institutional customers and third-party payers. See Note 3, "Revenue, accounts receivable and deferred revenue" for further information.
Inventory
The Company maintains test reagents and other consumables primarily used in sample collection kits which are valued at the lower of cost or market value. Cost is determined using actual costs on a first-in, first-out basis. The Company's inventory was $8.3 million and $5.4 million as of December 31, 2018 and 2017, respectively, and was recorded in prepaid expenses and other current assets in the Company's 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. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s 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, the Company recognizes a liability equal to the fair value of the contingent payments the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records 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 the Company’s operating results from the date of acquisition.
Intangible assets
Amortizable intangible assets include trade names, non-compete agreements, developed technology and customer relationships acquired as part of business combinations. Customer relationships are amortized on an accelerated basis, utilizing free cash flows, over periods ranging from five to 11 years. All other intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from two to 15 years. All intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment.
Goodwill
In accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), the Company’s 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, the Company performs annual impairment reviews of its goodwill balance during the fourth fiscal quarter. In testing for impairment, the Company compares the fair value of its 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, the Company 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 that reporting unit. The Company did not incur any goodwill impairment losses in any of the periods presented.
Leases
The Company rents its facilities under operating lease agreements and recognizes related rent expense on a straight-line basis over the term of the applicable lease agreement. Some of the lease agreements contain rent holidays, scheduled rent increases, lease incentives, and renewal options. Rent holidays and scheduled rent increases are included in the determination of rent expense to be recorded over the lease term. Lease incentives are recognized as a reduction of rent expense on a straight-line basis over the term of the lease. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. The Company recognizes rent expense beginning on the date it obtains the legal right to use and control the leased space.
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight‑line method over the estimated useful lives of the assets, generally between three and seven years. Leasehold improvements are amortized using the straight‑line method over the shorter of the estimated useful life of the asset or the term of the lease. Amortization expense of assets acquired through capital leases is included in depreciation and amortization expense in the consolidated statements of operations. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the statements of operations in the period realized.
The estimated useful lives of property and equipment are as follows:
Furniture and fixtures
7 years
Automobiles
7 years
Laboratory equipment
5 years
Computer equipment
3 years
Software
3 years
Leasehold improvements
Shorter of lease term or estimated useful life

Long‑lived assets
The Company reviews long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the total estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is assessed using discounted cash flows or other appropriate measures of fair value. Other than impairment losses of $1.0 million in 2016 relating to leasehold improvements and to the shutdown of the Company’s Chilean operations, there were no long-lived asset impairment losses recorded for any period presented. All impairment losses were charged to general and administrative expense.
Variable interest entity
The Company had a variable interest in a variable interest entity (“VIE”) through an investment in convertible notes issued by the VIE. The convertible notes do not provide the Company with voting rights in the VIE or with power to direct the activities of the VIE which most significantly affect its economic performance. The Company is not the VIE’s primary beneficiary and it does not consolidate the VIE.
Fair value of financial instruments
The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, accrued liabilities, capital 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 the Company, the carrying value of capital leases and debt approximate their fair values.
Revenue recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects 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 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 and utilities.
Income taxes
The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
Stock-based compensation
The Company measures its stock-based payment awards made to employees and directors based on the estimated fair values of the awards and recognizes the compensation expense over the requisite service period. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its 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. The Company grants 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 the Company. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. The Company recognizes 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, the Company’s 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.
The Company accounts for compensation expense related to stock options granted to non-employees based on fair values estimated using the Black-Scholes option-pricing model. Stock options granted to non-employees are re-measured at each reporting date until the award is vested.
The Company accounts for stock issued as compensation in connection with business combinations based on the fair value of the Company’s common stock on the date of issuance.
Advertising
Advertising expenses are expensed as incurred. The Company incurred advertising expenses of $0.6 million, $0.6 million and $0.5 million during the years ended December 31, 2018, 2017 and 2016, respectively.
Comprehensive loss
Comprehensive loss is composed of two components: net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity, but are excluded from net loss. The Company’s other comprehensive income (loss) consists of unrealized gains or losses on investments in available-for-sale securities.
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 preferred stock, options to purchase common stock, common stock warrants, RSUs and PRSUs, 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
The Company evaluates 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 the Company’s consolidated financial statements.
Recently issued accounting pronouncements not yet adopted
In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, which clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under Accounting Standards Codification ("ASC") 606 when the counterparty is a customer. In addition, Topic 808 precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. This guidance will be effective for the Company beginning January 1, 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), which replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.
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 (with the exception of short-term leases) at the commencement date and also requires expanded disclosures about leasing arrangements. Topic 842 is effective for annual and interim periods beginning on or after December 15, 2018 and early adoption is permitted. Entities may initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.
The Company is evaluating the final effect that Topic 842 and related standards will have on its consolidated financial statements, related disclosures and ongoing financial reporting, but expects implementation of Topic 842 to result in the recognition of material right of use assets and corresponding lease liabilities in its consolidated balance sheets as of the implementation of Topic 842 on January 1, 2019, principally relating to facilities leases. The Company does not have any material embedded leases and the implementation of Topic 842 is primarily focused on the treatment of the Company's previously identified leases. As of December 31, 2018, the Company's total future undiscounted capital lease payments were $3.5 million and future undiscounted non-cancelable minimum operating lease payments, net of subleases were $78.4 million
Recently adopted accounting pronouncements
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), designed to enable users of financial statements to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. On January 1, 2018, the Company adopted the provisions of Topic 606 using the modified retrospective method. From adoption to date, the Company has recognized all its revenue from contracts with customers within the scope of Topic 606. In connection with the adoption, the Company recognized the cumulative effect of initially applying this standard as an adjustment to retained earnings on the date of adoption. Comparative information prior to the date of adoption has not been restated and continues to be reported under the accounting standards in effect for those periods.
In connection with the adoption of Topic 606, the Company amended its revenue recognition policy to provide for the recognition of certain variable consideration related to diagnostic tests that was previously deferred pending cash collection. Under Topic 606, the Company records variable consideration based on an estimate of the consideration to which it will be entitled.
The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers.
Diagnostic tests
The majority of the Company’s revenue is generated from genetic testing services that provide analysis and associated interpretation of the sequencing of parts of the genome. Test orders are placed under signed requisitions, and the Company often enters into contracts with institutions (e.g., hospitals and clinics) and insurance companies that include pricing provisions under which such tests are billed. Billing terms are generally net thirty days.
While the transaction price of diagnostic tests is originally established either via contract or pursuant to the Company’s standard list price, the Company often provides concessions for tests billed to insurance carriers, and therefore the transaction price for patient insurance-billed tests is considered to be variable and revenue is recognized based on an estimate of the consideration to which the Company will be entitled at an amount for which it is probable that a reversal of cumulative consideration will not occur. Making these estimates requires significant judgments based upon such factors as length of payer relationship, historical payment patterns, changes in contract provisions and insurance reimbursement policies. These judgments are reviewed quarterly and revenue recognized is updated, as necessary, until the Company’s obligations are fully settled.
In connection with some diagnostic test orders, the Company offers limited re-requisition rights (“Re-Requisition Rights”) that are considered distinct at contract inception, and therefore certain diagnostic test orders contain two performance obligations, the performance of the original test and the Re-Requisition Rights. When Re-Requisition Rights are granted, the Company allocates the transaction price to each performance obligation based on the relative estimated standalone selling prices. In order to comply with loss contract rules, the allocations are adjusted, if necessary, to ensure the amount deferred for Re-Requisition Rights is no less than the estimated cost of fulfilling the Company’s related obligations.
The Company looks to transfer of control in assessing timing of recognition of revenue in connection with each performance obligation. In general, revenue in connection with diagnostic tests is recognized upon delivery of the underlying clinical report or when the report is made available on the Company’s web portal. Outstanding performance obligations pertaining to orders received but for which the underlying report has not been issued are generally satisfied within a thirty-day period. Revenue in connection with Re-Requisition Rights is recognized as the rights are exercised or expire unexercised, which is generally within ninety days of initial deferral.
Other contracts
The Company also enters into collaboration and genome network contracts. Collaboration agreements provide customers with diagnostic testing and related data aggregation reporting services that are provided over the contract term. Collaboration revenue is recognized as the testing and reporting services are delivered to the customer. Genome network offerings consist of subscription services related to a proprietary software platform designed to connect patients, clinicians, advocacy organizations, researchers and therapeutic developers to accelerate the understanding, diagnosis and treatment of hereditary disease. Such services are recognized on a straight-line basis over the subscription periods.
Amounts due under collaboration and genome network agreements are typically billable on net thirty-day terms.
v3.10.0.1
Revenue, accounts receivable and deferred revenue
12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Revenue, accounts receivable and deferred revenue Revenue, accounts receivable and deferred revenue
As described in Note 2, "Summary of significant accounting policies," the Company adopted Topic 606 effective January 1, 2018. In connection with the adoption the Company utilized the following practical expedients and exemptions:
Certain information about remaining performance obligations is not disclosed because the underlying contracts have an original expected duration of one year or less.
Costs to obtain or fulfill a contract are expensed when incurred because the amortization period would have been one year or less.
No adjustments to promised consideration were made for financing as the Company expects, at contract inception, that the period between the transfer of a promised good or service and when the customer pays for that good or service will be one year or less.
The adoption of Topic 606 resulted in a cumulative-effect adjustment to accounts receivable and accumulated deficit of $11.2 million as of January 1, 2018 primarily related to the recognition of uncollected
diagnostic test variable consideration as of the date of adoption. Test revenue without adoption of Topic 606 for the year ended December 31, 2018 includes cash collections related to accounts receivable recorded as of January 1, 2018 in connection with the Topic 606 cumulative-effect adjustment.
The effect of the adoption of Topic 606 on financial statement line items in the Company’s consolidated statement of operations for the year ended December 31, 2018, and the Company’s consolidated balance sheet as of December 31, 2018 was as follows (in thousands, except per share amounts):

 
 
Year Ended December 31, 2018
 
 
 
 
Without
 
Effect of
 
 
 
 
Adoption of
 
Adoption
 
 
As Reported
 
Topic 606
 
Higher/(Lower)
Test revenue
 
$
144,560

 
$
144,222

 
$
338

Net loss
 
$
(129,355
)
 
$
(129,693
)
 
$
338

Net loss per share, basic and diluted
 
$
(1.94
)
 
$
(1.94
)
 
$


 
 
As of December 31, 2018
 
 
 
 
Without
 
Effect of
 
 
 
 
Adoption of
 
Adoption
 
 
As Reported
 
Topic 606
 
Higher/(Lower)
Accounts receivable
 
$
26,296

 
$
14,150

 
$
12,146

Accumulated deficit
 
$
(516,712
)
 
$
(528,291
)
 
$
11,579

Stockholders' equity
 
$
161,839

 
$
150,260

 
$
11,579


Disaggregation of 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 the Company’s revenues as disaggregated by payer category (in thousands):
 
 
Year Ended December 31,
 
 
2018
 
2017 (1)
Test revenue:
 
 
 
 
Institutions
 
$
34,618

 
$
17,238

Patient - direct
 
13,589

 
5,638

Patient - insurance
 
96,353

 
42,293

 Total test revenue
 
144,560

 
65,169

Other revenue
 
3,139

 
3,052

Total revenue
 
$
147,699

 
$
68,221

___________________________________________________________________ 
(1)
As noted above, prior period amounts are presented as originally reported based upon the accounting standards in effect for those periods.
Included in revenue in the Company’s consolidated statements of operations for the year ended December 31, 2018 was $0.3 million that was included in deferred revenue at January 1, 2018.
The Company recognizes 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, changes in contract provisions and insurance reimbursement policies. Cash collections for certain tests delivered may differ from rates originally estimated. As a result of new information, the Company updated its estimate of the amounts to be recognized for previously delivered tests which resulted in
an additional $4.5 million of test revenue for the year ended December 31, 2018. These changes in estimates decreased the Company’s loss from operations by $4.5 million and decreased basic and diluted net loss per share by approximately $0.07 for the year ended December 31, 2018.
Accounts receivable
The majority of the Company’s accounts receivable represents amounts billed to institutions (e.g., hospitals, clinics) and estimated amounts to be collected from third-party insurance payers for test revenue recognized. Also included is 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 revenues
The Company records deferred revenues when cash payments are received or due in advance of its 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. The Company defers revenue related to Re-Requisition Rights in amounts no less than the estimated cost of fulfilling its related obligations. The Company recognizes revenue related to Re-Requisition Rights as the rights are exercised or expire unexercised, which is generally within 90 days of initial deferral.
v3.10.0.1
Business combinations
12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]  
Business combinations Business combinations
AltaVoice
On January 6, 2017, the Company acquired AltaVoice (formerly PatientCrossroads, Inc.), a privately-owned patient-centered data company with a global platform for collecting, curating, coordinating and delivering safeguarded data from patients and clinicians. The acquisition, complemented by several other strategic partnerships, expanded the Company's genome network, designed to connect patients, clinicians, advocacy organizations, researchers and therapeutic developers to accelerate the understanding, diagnosis, and treatment of hereditary disease. Pursuant to the terms of the Stock Purchase Agreement, the Company acquired all of the outstanding shares of AltaVoice for total purchase consideration of $12.4 million, payable in the Company’s common stock, as follows:
(a)
payment of $5.5 million through the issuance of 641,126 shares of the Company’s common stock;
(b)
payment of $5.0 million in the Company’s common stock, payable on March 31, 2018, with the common shares deliverable equal to $5.0 million divided by the trailing average share price of the Company’s common stock for the 30 days preceding March 31, 2018. This payment was made in April 2018 through the issuance of 716,332 shares of the Company's common stock;
(c)
payment of $5.0 million in the Company’s common stock, which was contingently payable on March 31, 2018 if a milestone based on a certain threshold of revenue was achieved during 2017, with the shares deliverable equal to $5.0 million divided by the trailing average share price of the Company’s common stock for the 30 days preceding March 31, 2018. As the foregoing milestone was not achieved, there was a new contingent milestone based on achieving a revenue target during 2017 and 2018. Since this new contingent milestone was achieved, on March 31, 2019, a payment of $5.0 million in the Company’s common stock will be payable. The actual payout is dependent upon meeting the 2017 and 2018 revenue targets (capped at $14.0 million) times 75% less $5.5 million. This formula in effect caps the possible payout amount at $5.0 million in the Company’s common shares. The number of shares to be issued will be equal to the payout amount divided by the trailing average share price of the Company’s common stock for the 30 days preceding March 31, 2019.
The first payment of $5.5 million was classified as equity. The second payment was discounted to $4.7 million as of the acquisition date, recorded as a liability, and was accreted to fair value at each reporting date until the extinguishment of the liability in April 2018. The third payment, representing contingent consideration, was determined to have a fair value of $2.2 million as of the acquisition date and was recorded as a liability. In accordance with ASC Topic 805, Business Combinations, the contingent consideration of $2.2 million was remeasured to fair value at each reporting date until the contingency was resolved, with changes in fair value recognized in earnings.
For the second payment, the acquisition-date fair value was $4.7 million, and the Company recorded accretion gains (losses) of $1.6 million and $(0.2) million in other income (expense), net, for the years ended December 31, 2018 and 2017, respectively. The accretion gains in 2018 resulted from an adjustment to the value of
the second payment as of March 31, 2018, and principally reflected the difference between the value of the common shares deliverable, based upon the closing price of the Company’s stock on March 29, 2018, and the value per share used to calculate the number of common shares deliverable. The accretion losses in 2017 resulted from adjustments to the discounted value of the second payment, reflecting the passage of time.
For the third payment, the acquisition-date fair value was $2.2 million, and the Company recorded remeasurement losses of $1.2 million and $1.6 million in general and administrative expense for the years ended December 31, 2018 and 2017, respectively. The remeasurement losses in 2018 reflect updated estimations of fair value of the third payment, based upon achieving a revenue target during 2017 and 2018, as the milestone based on a certain threshold of revenue to be achieved during 2017 was not met. The principal inputs affecting those estimations have been updates to the Company’s revenue forecasts and the passage of time.
Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its 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):
Cash
$
54

Accounts receivable
274

Prepaid expense and other assets
52

Non-compete agreement
286

Developed technology
570

Customer relationships
3,389

Total identifiable assets acquired
4,625

Accounts payable
(28
)
Deferred revenue
(202
)
Accrued expenses
(21
)
Deferred tax liability
(1,422
)
Total liabilities assumed
(1,673
)
Net identifiable assets acquired
2,952

Goodwill
9,432

Net assets acquired
$
12,384


Acquisition-related intangibles included in the above table are finite-lived. Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of ten years. All other 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 expected to be realized, as follows (in thousands):
 
Gross
Purchased
Intangible
Assets
 
Estimated
Useful
Life
(in Years)
Non-compete agreement
$
286

 
5
Developed technology
570

 
6
Customer relationships
3,389

 
10
 
$
4,245

 
 

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of AltaVoice resulted in $9.4 million of goodwill which the Company believes consists principally of expected synergies to be realized by combining capabilities, technology and data to accelerate the use of genetic information for the diagnosis and treatment of hereditary diseases. In accordance with ASC 350, goodwill will not be amortized but will be tested for impairment at least annually. Goodwill created as a result of the acquisition is not deductible for tax purposes. The Company has finalized its assessment of fair value of the assets and liabilities assumed at the acquisition date.
Ommdom
On June 11, 2017, the Company acquired Ommdom, Inc. (“Ommdom”), a privately held company that develops, commercializes and sells hereditary risk assessment and management software, including CancerGene Connect, a cancer genetic counseling platform. The acquisition expanded Invitae’s suite of genome management offerings designed to help patients and clinicians use genetic information as part of mainstream medical care. CancerGene Connect is a platform for collecting and managing genetic family histories.
Pursuant to the terms of a Stock Exchange Agreement, the Company acquired all of the outstanding shares of Ommdom for consideration of $6.1 million, payable entirely in the Company’s common stock. There was no cash consideration nor any contingent payments associated with the acquisition, other than a hold-back amount of $0.6 million. Per the terms of the agreement, the Company was obligated to issue shares of its common stock as follows:
(a)
payment of $5.5 million through the issuance of 600,108 shares of the Company’s common stock on the acquisition date; and
(b)
payment of $0.6 million through the issuance of 66,582 shares of the Company’s common stock, representing a hold-back amount, and payable on the twelve-month anniversary of the acquisition date.
The first payment of $5.5 million was classified as equity. The second payment of $0.6 million was recorded as a stock payable liability on the acquisition date and was reclassified to equity upon the issuance of 66,582 shares of the Company’s common stock in June 2018.
Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its 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):
Cash
$
53

Accounts receivable
10

Prepaid expense and other assets
4

Trade name
13

Developed technology
2,335

Customer relationships
147

Total identifiable assets acquired
2,562

Accounts payable
(16
)
Accrued expenses
(17
)
Deferred tax liability
(434
)
Total liabilities assumed
(467
)
Net identifiable assets acquired
2,095

Goodwill
4,045

Net assets acquired
$
6,140


Finite-lived intangibles included in the above table 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 expected to be realized, as follows (in thousands):
 
Gross
Purchased
Intangible
Assets
 
Estimated
Useful
Life
(in Years)
Trade name
$
13

 
5
Developed technology
2,335

 
5
Customer relationships
147

 
5
 
$
2,495

 
 

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of Ommdom resulted in the recognition of $4.0 million of goodwill which the Company believes consists principally of expected synergies to be realized by expanding the Company’s suite of genome management offerings. In accordance with ASC 350, goodwill will not be amortized but rather will be tested for impairment at least annually. Goodwill created as a result of the acquisition is not deductible for tax purposes. The Company has finalized its assessment of fair value of the assets and liabilities assumed at the acquisition date.
Good Start Genetics
On August 4, 2017, the Company 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. The acquisition of Good Start was intended to further Invitae’s plan to create a comprehensive genetic information platform providing high-quality, affordable genetic information coupled with world-class clinical expertise to inform healthcare decisions throughout every stage of an individual’s life. The purchase consideration for the Good Start acquisition consisted of the assumption of the net liabilities of Good Start of $24.4 million at the acquisition date.
Immediately subsequent to the acquisition of Good Start, the Company paid $18.4 million in cash to settle outstanding notes payable, accrued interest and related costs. In addition, and immediately subsequent to the acquisition, the Company settled outstanding convertible promissory notes payable through:
(a)
payment of $11.9 million through the issuance of 1,148,283 shares of the Company’s common stock; and
(b)
payment of $3.6 million through the issuance of 343,986 shares of the Company’s common stock, representing a hold-back amount payable on the one-year anniversary of the acquisition date. In September 2018, the Company issued 212,260 shares in partial payment of the hold-back amount payable. The remainder of the hold-back amount payable, approximately $1.3 million as of December 31, 2018, will be settled upon resolution of outstanding claims from Good Start customers, of which $0.6 million was settled in January 2019.
Also in connection with the acquisition of Good Start and immediately subsequent to the acquisition, the Company paid bonuses to certain members of Good Start’s management team through:
(a)
payment of $0.9 million through the issuance of 83,025 shares of the Company’s common stock; and
(b)
payment of $0.4 million through the issuance of 37,406 shares of the Company’s common stock, representing a hold-back amount payable on the one-year anniversary of the acquisition date. In September 2018, the Company issued 27,784 shares in partial payment of the hold-back amount payable to settle bonuses to Good Start's management team. The remainder of the hold-back amount payable, approximately $0.2 million as of December 31, 2018, will be settled upon resolution of outstanding claims from Good Start customers, of which $0.1 million was settled in January 2019.
These bonus payments were recorded as general and administrative expense.
Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its 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.
At acquisition date, the Company also recorded $4.8 million as a provisional amount for a deferred tax liability because certain information and analysis related to Good Start’s historical net operating losses that could have affected the Company’s initial valuation was still being obtained or reviewed at that time. This provisional amount for the deferred tax liability was subsequently reversed during the fourth quarter of 2017 based on the results of further analysis of Good Start’s historical net operating losses.
The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):
Cash and restricted cash
$
1,381

Accounts receivable
2,246

Prepaid expense and other assets
1,579

Property and equipment
1,320

Trade name
460

Developed technology
5,896

Customer relationships
7,830

Total identifiable assets acquired
20,712

Accounts payable
(5,418
)
Accrued expenses
(6,802
)
Notes payable
(17,904
)
Convertible promissory notes payable
(15,430
)
Other liabilities
(222
)
Total liabilities assumed
(45,776
)
Net identifiable assets acquired
(25,064
)
Goodwill
25,064

Net assets acquired
$


During the year ended December 31, 2018, the Company recorded adjustments to its accounting for the amount recorded as accounts receivable at acquisition. Accordingly, the fair value of accounts receivable was decreased by $0.7 million during the year ended December 31, 2018, with corresponding increases to goodwill.

Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of eight years. All other finite-lived intangibles included in the above table 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 expected to be realized, as follows (in thousands):
 
Gross
Purchased
Intangible
Assets
 
Estimated
Useful
Life
(in Years)
Trade name
$
460

 
3
Developed technology
5,896

 
5
Customer relationships
7,830

 
8
 
$
14,186

 
 

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of Good Start resulted in the recognition of $25.1 million of goodwill which the Company believes consists principally of expected synergies to be realized by expanding the Company’s suite of genome management offerings. In accordance with ASC 350, goodwill will not be amortized but rather will be tested for impairment at least annually. Goodwill created as a result of the acquisition is not deductible for tax purposes. The Company has finalized its assessment of fair value of the assets and liabilities assumed at the acquisition date.
CombiMatrix
On November 14, 2017, the Company completed its acquisition of CombiMatrix in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of July 31, 2017 (the “Merger Agreement”), by and among the Company, Coronado Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), and CombiMatrix, pursuant to which Merger Sub merged with and into CombiMatrix, with CombiMatrix surviving as a wholly owned subsidiary of the Company (the “Merger”).
At the closing of the Merger, the Company issued shares of its common stock to (i) CombiMatrix’s common stockholders, at an exchange ratio of 0.8692 of a share of the Company’s common stock (the “Merger Exchange
Ratio”) for each share of CombiMatrix common stock outstanding immediately prior to the Merger, (ii) CombiMatrix’s Series F preferred stockholders, at the Merger Exchange Ratio for each share of CombiMatrix common stock underlying Series F preferred stock outstanding immediately prior to the Merger, (iii) holders of outstanding and unexercised in-the-money CombiMatrix stock options, which were fully accelerated to the extent of any applicable vesting period and converted into the right to receive the number of shares of the Company’s common stock equal to the Merger Exchange Ratio multiplied by the number of shares of CombiMatrix common stock issuable upon exercise of such option, minus the number of shares of the Company’s common stock determined by dividing the aggregate exercise price for such option by $9.491, and (iv) holders of outstanding and unsettled CombiMatrix restricted stock units, which were fully accelerated to the extent of any applicable vesting period and converted into the right to receive a number of shares of the Company’s common stock determined by multiplying the number of shares of CombiMatrix common stock that were subject to such restricted stock unit by the Merger Exchange Ratio.
In addition, at the closing of the Merger, (a) all outstanding and unexercised out-of-the money CombiMatrix stock options were cancelled and terminated without the right to receive any consideration, (b) all CombiMatrix Series D Warrants and Series F Warrants outstanding and unexercised immediately prior to the closing of the Merger were assumed by the Company and converted into warrants to purchase the number of shares of the Company’s common stock determined by multiplying the number of shares of CombiMatrix common stock subject to such warrants by the Merger Exchange Ratio, and with the exercise price adjusted by dividing the per share exercise price of the CombiMatrix common stock subject to such warrants by the Merger Exchange Ratio, and (c) certain entitlements under CombiMatrix’s executive compensation transaction bonus plan (the “Transaction Bonus Plan”) were paid in shares of the Company’s common stock or RSUs to be settled in shares of the Company’s common stock. All outstanding and unexercised CombiMatrix Series A, Series B, Series C, Series E, and PIPE warrants were repurchased by CombiMatrix prior to closing pursuant to that certain CombiMatrix Common Stock Purchase Warrants Repurchase Agreement dated July 11, 2016.
Pursuant to the Merger Agreement, the Company issued an aggregate of 2,703,389 shares of its common stock as follows:
(a)
payment of $20.5 million through the issuance of 2,611,703 shares of the Company’s common stock to holders of CombiMatrix common stock outstanding;
(b)
payment of $0.7 million through the issuance of 85,219 shares of the Company’s RSUs to holders of outstanding and unsettled CombiMatrix restricted stock units;
(c)
payment of $0.1 million through the issuance of 3,323 shares of the Company’s common stock to holders of outstanding and unexercised in-the-money CombiMatrix stock options; and
(d)
payment of $0.1 million through the issuance of 3,144 shares of the Company’s common stock to holders of CombiMatrix Series F preferred stock.
In addition, and pursuant to the Merger Agreement, the Company issued warrants to purchase an aggregate of 2,077,273 shares of its common stock as follows:
(a)
payment of $7.4 million through the issuance of warrants to purchase a total of 1,739,689 shares of the Company’s common stock in exchange for all outstanding CombiMatrix Series F warrants; and
(b)
payment of $1,000 through the issuance of warrants to purchase a total of 337,584 shares of the Company’s common stock in exchange for all outstanding CombiMatrix Series D warrants.
In connection with the acquisition of CombiMatrix, the Company paid bonuses to certain members of CombiMatrix’s management team through:
(a)
payment of $1.7 million through the issuance of common stock and RSUs totaling 214,976 shares of the Company’s common stock to settle payments pursuant to CombiMatrix’s executive compensation transaction bonus plan (the “Transaction Bonus Plan”), recorded as post-combination compensation expense and included in general and administrative expense; and
(b)
payment of $0.2 million through the issuance of 22,966 shares of the Company’s common stock to settle payments pursuant to the Transaction Bonus Plan, recorded as an assumed liability at the acquisition date.
Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its 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):
Cash and restricted cash
$
1,333

Accounts receivable
4,118

Prepaid expense and other assets
1,299

Property and equipment
437

Other assets - non current
30

Favorable leases
247

Trade name
103

Patent licensing agreement
496

Developed technology
3,162

Customer relationships
12,397

Total identifiable assets acquired
23,622

 
 
Accounts payable
(276
)
Accrued expenses
(3,925
)
Deferred tax liability
(2,862
)
Other liabilities
(180
)
Total liabilities assumed
(7,243
)
 
 
Net identifiable assets acquired
16,379

Goodwill
11,554

Net assets acquired
$
27,933


During the year ended December 31, 2018, upon the completion of the Company's analysis of CombiMatrix's historical net operating losses, the Company recorded a deferred tax liability of $2.9 million with corresponding increases to goodwill. The $2.9 million net deferred tax liability represents the excess of the financial reporting over tax basis in acquired intangibles over the amount of CombiMatrix’s historical net operating loss carryovers that were determined to be available to offset future income due to change in ownership operating loss carryover limitation rules under Internal Revenue Code section 382.
Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of eleven years. All other finite-lived intangibles included in the above table 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 expected to be realized, as follows (in thousands):
 
Gross
Purchased
Intangible
Assets
 
Estimated
Useful
Life
(in Years)
Favorable leases
$
247

 
2
Trade name
103

 
1
Patent licensing agreement
496

 
15
Developed technology
3,162

 
4
Customer relationships
12,397

 
11
 
$
16,405

 
 

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of CombiMatrix resulted in the recognition of $11.6 million of goodwill which the Company believes consists principally of expected synergies to be realized by expanding the Company’s suite of genome management offerings. In accordance with ASC 350, goodwill will not be amortized but rather will be tested for impairment at least annually. Goodwill created as a result of the acquisition is not deductible for tax purposes. The Company has finalized its assessment of fair value of the assets and liabilities assumed at the acquisition date.
v3.10.0.1
Goodwill and intangible assets
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and intangible assets Goodwill and intangible assets
Goodwill
Details of the Company’s goodwill for the year ended December 31, 2018 are as follows (in thousands):
 
AltaVoice
 
Ommdom
 
Good Start
 
CombiMatrix
 
Total
Balance as of December 31, 2017
$
9,432

 
$
4,045

 
$
24,406

 
$
8,692

 
$
46,575

Goodwill adjustment

 

 
658

 
2,862

 
3,520

Balance as of December 31, 2018
$
9,432

 
$
4,045

 
$
25,064

 
$
11,554

 
$
50,095


The goodwill adjustments were principally due to changes in the fair value of accounts receivable for Good Start as well as the recognition of a $2.9 million deferred tax liability for CombiMatrix resulting from the completion of the Company’s analysis of historical net operating losses.
Intangible assets
The following table presents details of the Company’s finite-lived intangible assets as of December 31, 2018 (in thousands):
 
Cost
 
Accumulated
Amortization
 
Net
 
Weighted Average
Useful Life
(in Years)
 
Weighted Average
Estimated Remaining
Useful Life
(in Years)
Customer relationships
$
23,763

 
$
(2,783
)
 
$
20,980

 
10.0
 
8.6
Developed technology
11,963

 
(3,482
)
 
8,481

 
4.8
 
3.4
Non-compete agreement
286

 
(114
)
 
172

 
5.0
 
3.0
Trade name
576

 
(329
)
 
247

 
2.7
 
1.4
Patent licensing agreement
496

 
(37
)
 
459

 
15.0
 
13.9
Favorable leases
247

 
(117
)
 
130

 
2.2
 
1.1
 
$
37,331

 
$
(6,862
)
 
$
30,469

 
8.2
 
6.8

Acquisition-related intangibles included in the above table are finite-lived. Customer relationships are being amortized on an accelerated basis, in proportion to estimated cash flows, over periods ranging from five to eleven years. All other 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 $5.0 million, $1.8 million, and nil for the years ended December 31, 2018, 2017, and 2016, respectively. Intangible assets are carried at cost less accumulated amortization. Amortization expense is recorded to research and development, sales and marketing and general and administrative expense.
The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of December 31, 2018 (in thousands):
 
Amount
2019
$
5,250

2020
5,525

2021
5,829

2022
4,124

2023
3,111

Thereafter
6,630

Total estimated future amortization expense
$
30,469

v3.10.0.1
Balance sheet components
12 Months Ended
Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]  
Balance sheet components Balance sheet components
Property and equipment, net
Property and equipment consisted of the following (in thousands):
 
December 31, 2018
 
December 31, 2017
Leasehold improvements
$
13,034

 
$
12,623

Laboratory equipment
22,149

 
17,705

Equipment under capital lease
7,129

 
11,446

Computer equipment
4,723

 
4,023

Software
2,594

 
2,520

Furniture and fixtures
784

 
569

Automobiles
20

 
20

Construction-in-progress
1,962

 
965

Total property and equipment, gross
52,395

 
49,871

Accumulated depreciation and amortization
(24,509
)
 
(19,530
)
Total property and equipment, net
$
27,886

 
$
30,341


Depreciation expense was $8.5 million, $7.2 million and $6.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Accrued liabilities
Accrued liabilities consisted of the following (in thousands):
 
December 31, 2018
 
December 31, 2017
Accrued compensation and related expenses
$
7,917

 
$
7,406

Deferred revenue
761

 
307

Liabilities associated with business combinations
6,460

 
9,497

Liability associated with co-development agreement
2,000

 

Other
9,425

 
5,532

Total accrued liabilities
$
26,563

 
$
22,742


Other long-term liabilities
Other long-term liabilities consisted of the following (in thousands):
 
December 31, 2018
 
December 31, 2017
Lease incentive obligation, non-current
$
3,280

 
$
3,831

Deferred rent, non-current
5,495

 
5,153

Liabilities associated with business combinations

 
3,779

Other non-current liabilities
181

 
677

Total other long-term liabilities
$
8,956

 
$
13,440

v3.10.0.1
Fair value measurements
12 Months Ended
Dec. 31, 2018
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 the Company’s consolidated financial instruments that were measured at fair value on a recurring basis (in thousands):
 
 
December 31, 2018
 
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
 

 
 

 
 

Money market funds
 
$
93,934

 
$

 
$

 
$
93,934

 
$
93,934

 
$

 
$

Certificates of deposit
 
300

 

 

 
300

 

 
300

 

Commercial paper
 
10,908

 

 
(1
)
 
10,907

 

 
10,907

 

U.S. treasury notes
 
9,990

 

 

 
9,990

 
9,990

 

 

U.S. government agency securities
 
6,001

 

 
(4
)
 
5,997

 

 
5,997

 

Total financial assets
 
$
121,133

 
$

 
$
(5
)
 
$
121,128

 
$
103,924

 
$
17,204

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration
 
 
 
 
 
 
 
$
4,998

 
$

 
$

 
$
4,998

Total financial liabilities
 
 
 
 
 
 
 
$
4,998

 
$

 
$

 
$
4,998

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
Reported as:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents
 
 
 
 
 
 
 
 
 
 
 
$
101,395
 
Restricted cash
 
 
 
 
 
 
 
 
 
 
 
6,006
 
Marketable securities
 
 
 
 
 
 
 
 
 
 
 
13,727
 
Total cash equivalents, restricted cash, and marketable securities
 
 
 
$
121,128
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities
 
 
 
 
 
 
 
 
 
 
 
$
4,998
 
 
 
December 31, 2017
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
5,998

 
$

 
$

 
$
5,998

 
$
5,998

 
$

 
$

Certificates of deposit
 
300

 

 

 
300

 
300

 

 

U.S. treasury notes
 
12,010

 

 
(19
)
 
11,991

 
11,991

 

 

U.S. government agency securities
 
46,451

 

 
(152
)
 
46,299

 

 
46,299

 

Total financial assets
 
$
64,759

 
$

 
$
(171
)
 
$
64,588

 
$
18,289

 
$
46,299

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration
 
 
 
 
 
 
 
$
3,779

 
$

 
$

 
$
3,779

Total financial liabilities
 
 
 
 
 
 
 
$
3,779

 
$

 
$

 
$
3,779

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
Reported as:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents
 
 
 
 
 
 
 
 
 
 
 
$
592
 
Restricted cash
 
 
 
 
 
 
 
 
 
 
 
5,406
 
Marketable securities
 
 
 
 
 
 
 
 
 
 
 
58,590
 
Total cash equivalents, restricted cash, and marketable securities
 
 
 
$
64,588
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities
 
 
 
 
 
 
 
 
 
 
 
$
3,779
 

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 December 31, 2018 was $13.4 million. None of the available-for-sale securities held as of December 31, 2018 has been in a material continuous unrealized loss position for more than one year. At December 31, 2018, unrealized losses on available-for-sale investments are not attributed to credit risk and are considered to be temporary. The Company believes it is more likely than not that investments in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not identified any other-than-temporary declines in market value and thus has not recorded any impairment charges on its financial assets other than on the convertible notes which are described in Note 8, “Investment in privately held company.”
At December 31, 2018, the remaining contractual maturities of available-for-sale securities ranged from less than one to 4 months. For the years ended December 31, 2018, 2017 and 2016, there were no realized gains or losses on available-for-sale securities.
The Company’s 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.
The following table presents the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands):
 
Level 3
 
Contingent Consideration Liability
Balance as of December 31, 2017
$
3,779

Change in estimate of fair value
1,219

Balance as of December 31, 2018
$
4,998


As of December 31, 2018, the Company had a contingent obligation of up to $5.0 million payable in the Company’s common stock to the former owners of AltaVoice in conjunction with the Company’s acquisition of AltaVoice in January 2017. The contingency was dependent upon future revenues attributable to AltaVoice. If the revenue attributable to AltaVoice for the combined period of 2017 and 2018 was at least $10 million, the Company would make a payment of up to $5.0 million in the Company’s common stock in March 2019. The Company estimated the fair value of the contingent consideration at $2.2 million at the acquisition date in January 2017, based on a Monte Carlo simulation, as well as estimates of the 30-day trailing price of its stock at certain dates, its volatility assumptions and its revenue forecasts, all of which were significant inputs in the Level 3 measurement not supported by market activity. The value of the liability was subsequently remeasured to fair value at each reporting date. Changes in estimated fair value are recorded as general and administrative expense until the contingency is paid or expires. The change in the fair value of the contingent consideration between the acquisition date and December 31, 2018 was an increase of $2.8 million.
The fair value of the Company’s 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 carrying amount of the Company’s outstanding debt at December 31, 2018 approximated its fair value and as of December 31, 2017, the Company's debt carrying amount and fair value were as follows (in thousands):
 
December 31, 2017
 
Carrying Amount
 
Fair Value
Debt
$
39,084

 
$
40,526

v3.10.0.1
Investment in privately held company Investment in privately held company
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Investment in privately held company Investment in privately held company
 
On March 15, 2018, the Company entered into a collaboration agreement with KEW, Inc. (“KEW”), a privately held comprehensive genomic profiling company. The Company determined it had a variable interest in a VIE through its investment in a convertible note issued by KEW. During the year ended December 31, 2018, the Company incurred losses relating to this collaboration agreement with KEW of $2.9 million which were recognized in general and administrative expenses in the Company’s consolidated statements of operations. As of December 31, 2018, the Company fulfilled its obligations with respect to the collaboration agreement and there are no balances recorded in the Company's consolidated balance sheets pertaining to this arrangement.
v3.10.0.1
Commitments and contingencies
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies Commitments and contingencies
Operating leases
In September 2015, the Company entered into a lease agreement for its headquarters and main production facility in San Francisco, California. This lease expires in July 2026 and the Company may renew the lease for an additional ten years. The Company has determined the lease term to be a ten-year period expiring in 2026. The lease term commenced when the Company took occupancy of the facility in February 2016. In connection with the execution of the lease, the Company provided a security deposit of approximately $4.6 million which is included in restricted cash in the Company’s consolidated balance sheets. Minimum annual rent under the lease is subject to increases based on stated rental adjustment terms. In addition, per the terms of the lease, the Company received a $5.2 million lease incentive in the form of reimbursement from the landlord for a portion of the costs of leasehold improvements the Company has made to the facility. The assets purchased with the lease incentive are included in property and equipment, net, in the Company’s consolidated balance sheets and the lease incentive is recognized as a reduction of rental expense on a straight-line basis over the term of the lease. At December 31, 2018, all of the lease incentive had been utilized by the Company and all related reimbursements had been received from the landlord. Aggregate future minimum lease payments for this facility at December 31, 2018 were approximately $57.8 million.
Future minimum payments under non-cancelable operating leases and future minimum payments to be received from non-cancelable subleases as of December 31, 2018 are as follows (in thousands):
 
Amounts
2019
$
10,948

2020
10,860

2021
11,109

2022
11,067

2023
8,898

Thereafter
25,715

Future non-cancelable minimum operating lease payments
78,597

Less: minimum payments to be received from non-cancelable subleases
(174
)
Total future non-cancelable minimum operating lease payments, net
$
78,423


The following table summarizes rent expense related to non-cancelable operating leases (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
Rent expense
$
9,720

 
$
8,950

 
$
8,901

Sublease income
227

 
398

 
257

Rent expense, net of sublease income
$
9,493

 
$
8,552

 
$
8,644


Debt financing
In March 2017, the Company entered into a Loan and Security Agreement (the “2017 Loan Agreement”) with a lender pursuant to which the Company borrowed an initial term loan of $40.0 million, and received net proceeds of approximately $39.7 million. Subject to certain conditions, the Company was eligible to borrow a second term loan pursuant to the 2017 Loan Agreement of $20.0 million in the first quarter of 2018 and did so in March 2018, receiving net proceeds of approximately $19.8 million.
In February 2018 and June 2018, the Company entered into amendments to the 2017 Loan Agreement (the “2018 Amendments”) pursuant to which the Company, subject to certain conditions, was eligible to borrow a third term loan of $20.0 million during the period from April 2, 2018 to December 31, 2018. Pursuant to the 2018 Amendments, since the third term loan became available and the Company did not draw upon the third term loan, a fee of 1% was applied to the difference between $20.0 million and the amount drawn, or $0.2 million.

Term loans under the amended 2017 Loan Agreement bore interest at a floating rate equal to an index rate plus 7.73%, where the index rate was the greater of 0.77% or the 30-day U.S. Dollar London Interbank Offered Rate (“LIBOR”) as reported in The Wall Street Journal, with the floating rate resetting monthly subject to a floor of 8.5%.
The Company could make monthly interest-only payments until May 1, 2019 (or, subject to certain conditions, May 1, 2020), and thereafter monthly payments of principal and interest were required to fully amortize the borrowed amount by a final maturity date of March 1, 2022. A fee of 5% of each funded draw was due at the earlier of prepayment or loan maturity, a facility fee of 0.5% was due upon funding for each draw, and a prepayment fee of between 1% and 3% of the outstanding balance applied in the event of a prepayment. Concurrent with each term loan, the Company granted to the lender a warrant to acquire shares of the Company’s common stock equal to the quotient of 3% of the funded amount divided by a per share exercise price equal to the lower of the average closing price for the previous ten days of trading (calculated on the day prior to funding) or the closing price on the day prior to funding. In connection with the initial term loan, in 2017, the Company issued the lender warrants to purchase 116,845 shares of common stock at an exercise price of $10.27 per share. The Company classified these warrants as equity with a fair value of $0.7 million. In connection with the second term loan, in 2018, the Company issued the lender warrants to purchase 85,482 shares of common stock at an exercise price of $7.02 per share. The Company classified these warrants as equity with a fair value of $0.4 million. All warrants issued pursuant to the amended 2017 Loan Agreement have a term of ten years from the date of issuance and include a cashless exercise provision.
In November 2018, the Company entered into a Note Purchase Agreement (the "2018 Note Purchase Agreement") pursuant to which the Company was 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. The Company received net proceeds of $10.3 million after terminating and repaying the balance of its obligations of approximately $64.7 million under the 2017 Loan Agreement and associated amendments with its previous lender. The Company incurred $5.3 million of debt extinguishment costs upon terminating its previous debt facility which the Company recorded as other income (expense), net in its consolidated statements of operations during the year ended December 31, 2018.
At December 31, 2018, 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 the Company repays prior to the three year anniversary following the initial borrowing, 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.
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, the Company will make quarterly payments of 0.5% of the Company's 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, the Company is 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 year ended December 31, 2018, 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 the Company’s 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 its capital stock, repurchase stock and make investments, in each case subject to certain exceptions. The Company’s obligations under the 2018 Note Purchase Agreement are secured by a security interest on substantially all of its and certain of its subsidiaries’ assets.
In connection with the 2018 Note Purchase Agreement, in November 2018, the Company entered into a Securities Purchase Agreement with the lender pursuant to which the Company issued 373,524 shares of its common stock at a price of $13.39 per share for an aggregate amount of $5.0 million. The share price paid by the lender was calculated based on the 15-day average closing share price prior to the issuance. The relative fair value method was used to allocate the proceeds between the common stock issued and the note proceeds; the fair value of the common stock issued to the lender was determined to be $5.4 million.
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 December 31, 2018 are as follows (in thousands):
 
Amounts
2019
$
6,654

2020
8,297

2021
8,279

2022
8,279

2023
8,279

Thereafter
89,998

Total remaining payments
129,786

Less: amount representing debt discount
(721
)
Less: amount representing interest
(54,588
)
Total non-current debt obligation
$
74,477


Interest expense related to the Company's debt financings was $6.7 million, $3.5 million and $0.3 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Capital leases
The Company has entered into various capital lease agreements to obtain laboratory equipment. The terms of the Company's capital leases are typically three years and are secured by the underlying equipment. The portion of the future payments designated as principal repayment was classified as a capital lease obligation on the consolidated balance sheets.
Future payments under capital leases at December 31, 2018 were as follows (in thousands):
 
Amounts
2019
$
2,087

2020
1,392

2021
21

Total capital lease obligations
3,500

Less: amount representing interest
(188
)
Present value of net minimum capital lease payments
3,312

Less: current portion
(1,937
)
Total non-current capital lease obligations
$
1,375


Interest expense related to capital leases was $0.3 million, $0.2 million and $0.1 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Property and equipment under capital leases was $7.1 million and $11.4 million as of December 31, 2018 and 2017, respectively. Accumulated depreciation, collectively, on these assets was $2.0 million and $3.0 million at December 31, 2018 and 2017, respectively.
Guarantees and indemnifications
As permitted under Delaware law and in accordance with the Company’s bylaws, the Company indemnifies its 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, the Company maintains director and officer liability insurance. This insurance allows the transfer of the risk associated with the Company’s exposure and may enable it to recover a portion of any future amounts paid. The Company believes the fair value of these indemnification agreements is minimal. Accordingly, the Company did not record any liabilities associated with these indemnification agreements at December 31, 2018 or December 31, 2017.
Other commitments
In the normal course of business, the Company enters into various purchase commitments primarily related to service agreements, laboratory supplies, and a co-development agreement. At December 31, 2018, the Company’s total future payments under noncancelable unconditional purchase commitments having a remaining term of over one year were as follows (in thousands):
 
Amount
2019
$
3,040

2020
3,040

2021
1,440

Total
$
7,520


In addition, in September 2018, the Company entered into a co-development agreement with a privately held genetics testing company. The co-development agreement grants the Company the right of first refusal to enter into an agreement for an acquisition of the entity in return for total fees of $3.0 million over the term of the 12-month agreement, of which $1.0 million has been paid by the Company as of December 31, 2018. The unpaid fees of $2.0 million were paid in January 2019, and as of December 31, 2018, were recorded as an accrued liability in the Company’s consolidated balance sheets.
Contingencies
The Company was not a party to any material legal proceedings at December 31, 2018, or at the date of this report. The Company may from time to time become involved in various legal proceedings arising in the ordinary course of business, and the resolution of any such claims could be material.
v3.10.0.1
Stockholders' Equity
12 Months Ended
Dec. 31, 2018
Stockholders' Equity Note [Abstract]  
Stockholders’ Equity Stockholders’ Equity
Common stock
As of December 31, 2018 and 2017, the Company had reserved shares of common stock, on an as‑if converted basis, for issuance as follows (in thousands):
 
As of December 31,
 
2018
 
2017
Options issued and outstanding
3,855

 
4,115

RSU awards issued and outstanding
4,031

 
2,387

Shares available for grant under stock option plans
118

 
2,397

Shares reserved for issuance under the 2015 Employee Stock Purchase Plan
278

 
308

Common stock underlying warrants
611

 
1,962

Common stock issuable upon conversion of preferred stock
3,459

 
3,459

Common stock underlying stock payable liabilities
132

 
689

Common stock payable as contingent consideration
452

 
551

Total
12,936

 
15,868


Private placement
In August 2017, in a private placement to certain accredited investors, the Company issued 5.2 million shares of its common stock at a price of $8.50 per share, and 3.5 million shares of its 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 a non-voting common stock equivalent and conversion of the Series A preferred stock is prohibited if the holder exceeds a specified threshold of voting security ownership. 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. The Series A Preferred Stock has the right to receive dividends first or simultaneously with payment of dividends on common stock, in an amount equal to the product of (i) the dividend payable on each share of common stock and (ii) the number of shares of common stock issuable upon conversion
of a share of Series A Preferred Stock. The Series A Preferred Stock has no voting rights except as required by law, as modified by the Company’s Amended and Restated Certificate of Incorporation. In the event of any liquidation or dissolution of the Company, the Series A Preferred Stock is entitled to receive $0.001 per share prior to the payment of any amount to any holders of capital stock of the Company ranking junior to the Series A Preferred Stock and thereafter shall participate pari passu with the holders of the Company’s common stock (on an as-if-converted-to-common-stock basis). During January and February 2019, 1.1 million shares of Series A convertible preferred stock were converted to 1.1 million shares of common stock.
Public offering
In April 2018, the Company issued, in an underwritten public offering, an aggregate of 12.8 million shares of its common stock at a price of $4.50 per share, for gross proceeds of $57.5 million and net proceeds of $53.5 million.
2018 Sales Agreement
In August 2018, the Company entered into a Common Stock Sales Agreement (the “2018 Sales Agreement”) with Cowen and Company, LLC (“Cowen”), under which the Company may offer and sell from time to time at its sole discretion shares of its common stock through Cowen as its 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, including without limitation sales made directly on The New York Stock Exchange, and also may sell the shares in privately negotiated transactions, subject to the Company’s prior approval. The Company is obligated to pay Cowen 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. During the year ended December 31, 2018, the Company issued 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.
Common stock warrants
As of December 31, 2018, the Company had outstanding warrants to purchase common stock as follows:
Warrant
 
Issuance Date
 
Expiration Date
 
Exercise
Price
Per Share
 
Number of Shares of Common Stock Underlying Warrants
Warrants issued in exchange for CombiMatrix Series F warrants
 
November 2017
 
March 2021
 
$
5.95

 
408,548

Warrants issued to lender under 2017 Loan Agreement
 
March 2017
 
March 2027
 
$
10.27

 
116,845

Warrants issued to lender under 2017 Loan Agreement - 2018 Amendments
 
March 2018
 
March 2028
 
$
7.02

 
85,482

 
 
 
 
 
 
 
 
610,875


The exercise price of warrants issued in exchange for CombiMatrix Series F warrants was determined pursuant to the terms of the Merger Agreement (See Note 4, "Business Combinations"). The CombiMatrix Series D warrants expired during the year ended December 31, 2018. The exercise price of the warrants issued to the lender under the 2017 Loan Agreement was the closing price of the Company’s common stock on the date of the agreements. During the year ended December 31, 2018, the Company received $6.5 million from exercises 1.0 million shares of common stock under these warrants.
v3.10.0.1
Stock incentive plans
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock incentive plans Stock incentive plans
Stock incentive plans
In 2010, the Company 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 the 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 the Board of Directors. The terms of options granted under the 2010 Plan may not exceed ten years.
In January 2015, the Company adopted the 2015 Stock Incentive Plan (the “2015 Plan”), which became effective upon the closing of the Company’s 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.
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 one third of the award vests upon each anniversary of the grant date.
In February 2016, the Company granted PRSUs under the 2015 Plan, which PRSUs could be earned based on the achievement of specified performance conditions measured over a period of approximately 12 months. In February 2017, upon the Audit Committee’s determination of the level of achievement, 352,045 fully vested stock units were awarded to holders of PRSUs. The Company has not granted any PRSUs since 2016.
Based on its evaluations of the probability of achieving performance conditions, the Company recorded stock-based compensation expense of nil, $0.4 million, and $1.9 million for the years ended December 31, 2018, 2017, and 2016, respectively, related to the PRSUs.
Activity under the 2010 Plan and the 2015 Plan is set forth below (in thousands, except per share amounts and years):
 
Shares
Available
For Grant
 
Stock
Options
Outstanding
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Life (years)
 
Aggregate
Intrinsic
Value
Balance at December 31, 2017
2,397

 
4,115

 
$
8.51

 
7.6
 
$
5,128

Additional shares reserved
754

 

 
 
 
 
 
 
Options granted
(260
)
 
260

 
$
8.50

 
 
 
 
Options cancelled
169

 
(169
)
 
$
9.35

 
 
 
 
Options exercised

 
(351
)
 
$
7.73

 
 
 
 
RSUs granted
(3,282
)
 

 
 
 
 
 
 
RSUs cancelled
340

 

 
 
 
 
 
 
Balance at December 31, 2018
118

 
3,855

 
$
8.54

 
6.8
 
$
9,927

Options exercisable at December 31, 2018
 
 
2,737

 
$
8.27

 
6.4
 
$
7,787

Options vested and expected to vest at December 31, 2018
 
 
3,710

 
$
8.52

 
6.8
 
$
9,626


The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock for stock options that were in-the-money.
The weighted-average fair value of options to purchase common stock granted was $4.87, $5.82 and $6.18 in the years ended December 31, 2018, 2017 and 2016, respectively. The weighted-average fair value of RSUs granted was $7.46, $10.03 and $9.80 in the years ended December 31, 2018, 2017 and 2016, respectively. No PRSUs were granted in the years ended December 31, 2018 or 2017 and the weighted average fair value of PRSUs granted in the year ended December 31, 2016 was $6.50.
The total grant-date fair value of options to purchase common stock vested was $5.9 million, $6.9 million and $5.6 million in the year ended December 31, 2018, 2017, and 2016, respectively.
The intrinsic value of options to purchase common stock exercised was $1.7 million, $2.1 million and $1.4 million in the years ended December 31, 2018, 2017 and 2016, respectively.
The following table summarizes RSU activity for the year ended December 31, 2018 (in thousands, except per share data:
 
Number of Shares
 
Weighted-Average Grant Date Fair Value
Balance at December 31, 2017
2,387

 
$
9.91

RSUs granted
3,282

 
$
7.46

RSUs vested
(1,298
)
 
$
8.84

RSUs cancelled
(340
)
 
$
8.84

Balance at December 31, 2018
4,031

 
$
8.35


2015 employee stock purchase plan
In January 2015, the Company 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 December 31, 2018, cash received from payroll deductions pursuant to the ESPP was $0.6 million.
The ESPP provides for automatic annual increases in shares available for grant, beginning on January 1, 2016 and continuing through January 1, 2025. At December 31, 2018, a total of 277,577 shares of common stock are reserved for issuance under the ESPP.
Stock-based compensation
The Company uses the grant date fair value of its common stock to value both employee and non-employee options when granted. The Company revalues non-employee options each reporting period using the fair market value of the Company’s common stock as of the last day of each reporting period.
In determining the fair value of stock options and ESPP purchases, the Company uses the Black-Scholes option-pricing model and, for stock options, the assumptions discussed below. Each of these inputs is subjective and its determination generally requires significant judgment. The fair value of RSU and PRSU awards is based on the grant date share price. Compensation cost is recognized as expense on a straight-line basis over the vesting period for options and RSUs and on an accelerated basis for PRSUs.
In 2016, the Company modified certain stock options and RSU awards. The terms of the stock option modifications included acceleration of vesting and extensions of post-termination exercise periods. The terms of the RSU award modifications included acceleration of vesting. A total of 14 employees were affected by the stock option and RSU modifications and the total incremental compensation cost relating to these modifications was $0.3 million.
Expected term—The expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the simplified method (based on the midpoint between the vesting date and the end of the contractual term).
Expected volatility—Because the Company was privately held until its initial public offering in February 2015 and did not have any trading history for its common stock, the Company estimates expected volatility using its own stock price volatility when available as well as the average volatility for comparable publicly traded life sciences companies, including molecular diagnostics companies, over a period equal to the expected term of stock option grants and RSUs. When selecting comparable publicly-traded biopharmaceutical companies, including molecular diagnostics companies, the Company selected companies with comparable characteristics, including enterprise value, risk profiles, position within the industry and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computed historical volatility data using daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. The Company estimates expected volatility for ESPP purchases using its own stock price volatility over the expected six-month term ESPP purchase periods.
Risk-free interest rate—The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the option.
Dividend yield—The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero.
The fair value of share-based payments for stock options granted to employees and directors was estimated on the date of grant using the Black-Scholes option-pricing model based on the following assumptions:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Expected term (in years)
6.00
 
6.03
 
6.03
Expected volatility
59.58%
 
72.64%
 
71.42%
Risk-free interest rate
2.80%
 
2.01%
 
1.37%

Stock-based compensation related to stock options granted to non-employees is recognized as the stock options vest. The fair value of the stock options granted is calculated at each reporting date using the Black-Scholes option-pricing model based on the following assumptions:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Expected term (in years)
 
8.41 – 8.83
 
6.25 – 10.00
Expected volatility
 
69.9 – 78.70%
 
76.92%
Risk-free interest rate
 
1.83 – 2.04%
 
1.55 – 2.37%

No stock options granted to non-employees vested during the year ended December 31, 2018.
The fair value of shares purchased pursuant to the ESPP is estimated using the Black‑Scholes option pricing model. For the years ended December 31, 2018, 2017 and 2016, the weighted average grant date fair value per share for the ESPP was $3.26, $2.51 and $2.66, respectively and stock‑based compensation expense for the ESPP was $1.4 million, $1.1 million and $0.9 million, respectively.
The fair value of the shares purchased pursuant to the ESPP was estimated using the following assumptions:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Expected term (in years)
0.5
 
0.5
 
0.5
Expected volatility
71.66%
 
52.50%
 
66.31%
Risk-free interest rate
2.09%
 
1.23%
 
0.50%

The following table summarizes stock-based compensation expense for the years ended December 31, 2018, 2017 and 2016, included in the consolidated statements of operations (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
Cost of revenue
$
2,960

 
$
2,093

 
$
1,353

Research and development
7,017

 
6,158

 
4,976

Selling and marketing
4,887

 
3,956

 
1,709

General and administrative
5,986

 
7,014

 
2,661

Total stock-based compensation expense
$
20,850

 
$
19,221

 
$
10,699


At December 31, 2018, unrecognized compensation expense related to unvested stock options, net of estimated forfeitures, was $4.5 million, which the Company expects to recognize on a straight-line basis over a weighted-average period of 1.8 years. Unrecognized compensation expense related to RSUs at December 31, 2018, net of estimated forfeitures, was $22.6 million, which the Company expects to recognize on a straight-line basis over a weighted-average period of 2.1 years. At December 31, 2018, there was no unrecognized compensation expense related to PRSUs and no capitalized stock-based employee compensation.
v3.10.0.1
Income taxes
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
The Company recorded a benefit for income taxes in the years ended December 31, 2018 and 2017. The Company did not record a provision or benefit for income taxes during the year ended December 31, 2016. The components of net loss before taxes by U.S. and foreign jurisdictions are as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
United States
$
132,194

 
$
124,108

 
$
99,793

Foreign
(39
)
 
1,128

 
463

Total
$
132,155

 
$
125,236

 
$
100,256


The components of the provision for income taxes are as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
Current:
 
 
 
 
 
Foreign
62

 

 

Total current benefit for income taxes
62

 

 

Deferred:
 
 
 
 
 
Federal
(2,862
)
 
(1,704
)
 

State

 
(152
)
 

Total deferred benefit for income taxes
(2,862
)
 
(1,856
)
 

Total income tax benefit
$
(2,800
)
 
$
(1,856
)
 
$


The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense for the periods presented:
 
Year Ended December 31,
 
2018
 
2017
 
2016
U.S. federal taxes at statutory rate
21.0
 %
 
34.0
 %
 
34.0
 %
State taxes (net of federal benefit)
5.2
 %
 
3.3
 %
 
1.4
 %
Stock-based compensation
(0.7
)%
 
(1.1
)%
 
(1.7
)%
Research and development credits
2.7
 %
 
 %
 
 %
Non-deductible expenses
(0.6
)%
 
 %
 
0.2
 %
Foreign tax differential
 %
 
(0.3
)%
 
(0.2
)%
Other
 %
 
 %
 
1.1
 %
Change in valuation allowance
(25.5
)%
 
(34.4
)%
 
(34.8
)%
Change in deferred—Tax Reform
 %
 
(39.0
)%
 
 %
Change in valuation allowance—Tax Reform
 %
 
39.0
 %
 
 %
Total
2.1
 %
 
1.5
 %
 
 %

The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows (in thousands):
 
As of December 31,
 
2018
 
2017
Deferred tax assets:
 

 
 

Net operating loss carryforwards
$
76,972

 
$
70,825

Tax credits
15

 
15

Revenue recognition differences
47,650

 
29,819

Accruals and other
7,262

 
5,544

Gross deferred tax assets
131,899

 
106,203

Valuation allowance
(121,954
)
 
(95,687
)
Total deferred tax assets
9,945

 
10,516

Deferred tax liabilities:
 
 
 
Property and equipment
(9,945
)
 
(10,516
)
Total deferred tax liabilities
(9,945
)
 
(10,516
)
Net deferred tax assets
$

 
$


On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes included among other items, a reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%. Although the Tax Act was generally effective January 1, 2018, GAAP required recognition of the tax effects of new legislation during the reporting period that includes the enactment date, which was December 22, 2017. As a result of the lower corporate tax rate enacted as part of the Tax Act, during 2017, the Company recorded a provisional estimate to reduce deferred tax assets by $48.8 million offset by a corresponding reduction in the valuation allowance resulting in no net impact to the Company's income tax benefit or expense.
On December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, during 2017, the Company recorded a provisional estimate which resulted in a $48.8 million reduction in deferred tax assets and in the fourth quarter of 2018, the Company completed its analysis of the impact of the Tax Act and determined that no material adjustments were required to the provisional amounts previously recorded.     
The Company has established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding realization of such assets. The Company's valuation allowance increased by $26.3 million, $2.0 million, and $33.4 million during the years ended December 31, 2018, 2017, and 2016, respectively.
As of December 31, 2018, the Company had net operating loss carryforwards of approximately $318.7 million and $134.3 million available to reduce future taxable income, if any, for Federal and state income tax purposes, respectively. Of the $318.7 million, $277.3 million will begin to expire in 2030 while $41.4 million have no expiration date. The state net operating loss carryforwards will begin to expire in 2030.
As of December 31, 2018, the Company had research and development credit carryforwards of approximately $9.0 million and $7.4 million available to reduce its future tax liability, if any, for Federal and state income tax purposes, respectively. The Federal credit carryforwards begin to expire in 2030. California credit carryforwards have no expiration date.
Internal Revenue Code ("IRC") section 382 places a limitation (the “Section 382 limitation” or “annual limitation”) on the amount of taxable income that can be offset by net operating loss carryforwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Similar provisions exist for states. In addition, and as a result of the acquisitions of Good Start Genetics and CombiMatrix in 2017, tax loss carryforwards from acquired entities are also subject to the Section 382 limitation due to the change in control in the acquired entities in the current year.
The Company performed a section 382 analysis for Good Start Genetics and CombiMatrix and concluded that a substantial portion of the acquired operating loss and credit carryovers would expire unused as a result of
annual limitations under IRC sections 382 and 383 in 2017. As a result, the federal and state operating loss and credit carryforwards acquired in connection with the Good Start Genetics and CombiMatrix acquisitions were reduced by the amount of tax attributes estimated to expire during their respective carryforward periods. In addition, as a result of equity issued in connection with its 2017 acquisitions, the Company also performed a section 382 analysis with respect to its legacy operating loss and credit carryforwards. The Company concluded while an ownership change occurred in 2017 as defined under IRC section 382, none of the Company’s legacy carryforwards would expire unused solely as a result of annual limitations imposed on the use of the carryforwards under IRC sections 382 and 383.
As of December 31, 2018, the Company had unrecognized tax benefits of $16.4 million, which primarily relates to research and development credits, none of which would currently affect the Company’s effective tax rate if recognized due to the Company’s deferred tax assets being fully offset by a valuation allowance. Unrecognized tax benefits are not expected to change in the next 12 months.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
 
Year ended December 31,
 
2018
 
2017
 
2016
Unrecognized tax benefits, beginning of period
$
10,561

 
$
7,791

 
$
11,429

Gross increases—current period tax positions
5,686

 
2,552

 
782

Gross increases (decreases)—prior period tax positions
128

 
218

 
(4,420
)
Unrecognized tax benefits, end of period
$
16,375

 
$
10,561

 
$
7,791


The Company’s policy is to include penalties and interest expense related to income taxes as a component of tax expense. The Company has not accrued interest and penalties related to the unrecognized tax benefits reflected in the financial statements for the years ended December 31, 2018, 2017 and 2016.
The Company’s major tax jurisdictions are the United States and California. All of the Company’s tax years will remain open for examination by the Federal and state tax authorities for three and four years, respectively, from the date of utilization of the net operating loss or research and development credit. The Company does not have any tax audits pending.
v3.10.0.1
Net loss per common share
12 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]  
Net loss per common share Net loss per share
The following table presents the calculation of basic and diluted net loss per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except per share data):
 
Year ended December 31,
 
2018
 
2017
 
2016
Net loss
$
(129,355
)
 
$
(123,380
)
 
$
(100,256
)
Shares used in computing net loss per share, basic and diluted
66,747

 
46,512

 
33,176

Net loss per share, basic and diluted
$
(1.94
)
 
$
(2.65
)
 
$
(3.02
)

The following common stock equivalents have been excluded from diluted net loss per share for the years ended December 31, 2018, 2017 and 2016 because their inclusion would be anti-dilutive (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
Shares of common stock subject to outstanding options
3,855

 
4,115

 
4,491

Shares of common stock subject to outstanding warrants
611

 
1,962

 

Shares of common stock subject to outstanding RSUs
4,031

 
2,387

 
892

Shares of common stock subject to outstanding PRSUs

 

 
530

Shares of common stock pursuant to ESPP
63

 
59

 
55

Shares of common stock underlying Series A convertible preferred stock
3,459

 
3,459

 

Total shares of common stock equivalents
12,019

 
11,982

 
5,968

v3.10.0.1
Geographic information
12 Months Ended
Dec. 31, 2018
Segments, Geographical Areas [Abstract]  
Geographic information Geographic information
Revenue by country is determined based on the billing address of the customer and is summarized as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
United States
$
138,239

 
$
62,446

 
$
20,758

Canada
4,206

 
3,226

 
2,526

Rest of world
5,254

 
2,549

 
1,764

Total revenue
$
147,699

 
$
68,221

 
$
25,048


As of December 31, 2018 and 2017, all long-lived assets were located in the United States.
v3.10.0.1
Selected quarterly data (unaudited)
12 Months Ended
Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]  
Selected quarterly data (unaudited) Selected quarterly data (unaudited)
The following table summarizes the Company's quarterly financial information for 2018 and 2017 (in thousands, except per share amounts):
 
 
Three Months Ended
 
 
March 31, 2018
 
June 30, 2018
 
September 30, 2018
 
December 31, 2018
Revenue
 
$
27,671

 
$
37,306

 
$
37,366

 
$
45,356

Cost of revenue
 
$
18,076

 
$
20,447

 
$
20,441

 
$
21,141

Loss from operations
 
$
(36,475
)
 
$
(30,068
)
 
$
(30,110
)
 
$
(25,904
)
Net loss(2)
 
$
(36,120
)
 
$
(31,671
)
 
$
(31,723
)
 
$
(29,841
)
Net loss per share, basic and diluted(1)
 
$
(0.66
)
 
$
(0.47
)
 
$
(0.45
)
 
$
(0.40
)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31, 2017
 
June 30, 2017
 
September 30, 2017
 
December 31, 2017
Revenue
 
$
10,338

 
$
14,336

 
$
18,148

 
$
25,399

Cost of revenue
 
$
9,329

 
$
10,490

 
$
13,274

 
$
17,049

Loss from operations
 
$
(27,337
)
 
$
(28,075
)
 
$
(30,976
)
 
$
(34,891
)
Net loss(2)
 
$
(26,928
)
 
$
(28,557
)
 
$
(27,402
)
 
$
(40,493
)
Net loss per share, basic and diluted(1)
 
$
(0.64
)
 
$
(0.66
)
 
$
(0.57
)
 
$
(0.78
)
___________________________________________________________________ 
(1) 
Net loss per share is computed independently for each of the quarters presented. Therefore, the sum of quarterly net loss per share information may not equal annual net loss per share.
(2)
Includes $5.3 million of debt extinguishment costs during the three months ended December 31, 2018. See Note 9, "Commitments and contingencies" for further information.
v3.10.0.1
Summary of significant accounting policies (Policies)
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Principles of consolidation Principles of consolidationThe consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that the Company believes 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:
revenue recognition (See Note 3, “Revenue, accounts receivable and deferred revenue” for further information);
the fair value of assets acquired and liabilities assumed for business combinations;
the fair value of goodwill and intangible assets;
the recoverability of long-lived assets;
stock-based compensation expense and the fair value of awards issued; and
income tax uncertainties.
Concentrations of credit risk and other risks and uncertainties Concentrations of credit risk and other risks and uncertainties
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. The Company’s 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 the Company’s total revenue for each year presented on the statements of operations.
Cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash
The Company considers 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 and U.S. government agency securities.
Restricted cash consists of money market funds that serve as collateral for security deposits for the Company’s facility lease and sublease agreements and collateral for a credit card agreement at one of the Company’s financial institutions.
Marketable securities Marketable securitiesAll marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable debt securities at the time of purchase and reevaluates such designation at each balance sheet date. Short-term marketable securities have maturities less than 365 days at the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of other comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest and other income (expense), net. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest and other income (expense), net.
Accounts receivable Accounts receivableThe Company receives payment for its tests from partners, patients, institutional customers and third-party payers.
Inventory InventoryThe Company maintains test reagents and other consumables primarily used in sample collection kits which are valued at the lower of cost or market value. Cost is determined using actual costs on a first-in, first-out basis.
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. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s 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, the Company recognizes a liability equal to the fair value of the contingent payments the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records 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 the Company’s operating results from the date of acquisition.
Intangible assets Intangible assetsAmortizable intangible assets include trade names, non-compete agreements, developed technology and customer relationships acquired as part of business combinations. Customer relationships are amortized on an accelerated basis, utilizing free cash flows, over periods ranging from five to 11 years. All other intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from two to 15 years. All intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment.
Goodwill GoodwillIn accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), the Company’s 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, the Company performs annual impairment reviews of its goodwill balance during the fourth fiscal quarter. In testing for impairment, the Company compares the fair value of its 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, the Company 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 that reporting unit. The Company did not incur any goodwill impairment losses in any of the periods presented.
Leases LeasesThe Company rents its facilities under operating lease agreements and recognizes related rent expense on a straight-line basis over the term of the applicable lease agreement. Some of the lease agreements contain rent holidays, scheduled rent increases, lease incentives, and renewal options. Rent holidays and scheduled rent increases are included in the determination of rent expense to be recorded over the lease term. Lease incentives are recognized as a reduction of rent expense on a straight-line basis over the term of the lease. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. The Company recognizes rent expense beginning on the date it obtains the legal right to use and control the leased space.
Property and equipment, net Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight‑line method over the estimated useful lives of the assets, generally between three and seven years. Leasehold improvements are amortized using the straight‑line method over the shorter of the estimated useful life of the asset or the term of the lease. Amortization expense of assets acquired through capital leases is included in depreciation and amortization expense in the consolidated statements of operations. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the statements of operations in the period realized.
The estimated useful lives of property and equipment are as follows:
Furniture and fixtures
7 years
Automobiles
7 years
Laboratory equipment
5 years
Computer equipment
3 years
Software
3 years
Leasehold improvements
Shorter of lease term or estimated useful life
Long-lived assets Long‑lived assetsThe Company reviews long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the total estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is assessed using discounted cash flows or other appropriate measures of fair value.
Variable interest entity Variable interest entityThe Company had a variable interest in a variable interest entity (“VIE”) through an investment in convertible notes issued by the VIE. The convertible notes do not provide the Company with voting rights in the VIE or with power to direct the activities of the VIE which most significantly affect its economic performance. The Company is not the VIE’s primary beneficiary and it does not consolidate the VIE.
Fair value of financial instruments Fair value of financial instrumentsThe Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, accrued liabilities, capital 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 the Company, the carrying value of capital leases and debt approximate their fair values.
Revenue recognition and cost of revenue Revenue recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects 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 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 and utilities.
Income taxes Income taxesThe Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
Stock-based compensation Stock-based compensation
The Company measures its stock-based payment awards made to employees and directors based on the estimated fair values of the awards and recognizes the compensation expense over the requisite service period. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its 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. The Company grants 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 the Company. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. The Company recognizes 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, the Company’s 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.
The Company accounts for compensation expense related to stock options granted to non-employees based on fair values estimated using the Black-Scholes option-pricing model. Stock options granted to non-employees are re-measured at each reporting date until the award is vested.
The Company accounts for stock issued as compensation in connection with business combinations based on the fair value of the Company’s common stock on the date of issuance.
Advertising AdvertisingAdvertising expenses are expensed as incurred.
Comprehensive loss Comprehensive lossComprehensive loss is composed of two components: net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity, but are excluded from net loss. The Company’s other comprehensive income (loss) consists of unrealized gains or losses on investments in available-for-sale securities.
Net loss per share Net loss per shareBasic 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 preferred stock, options to purchase common stock, common stock warrants, RSUs and PRSUs, 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 Recent accounting pronouncements
The Company evaluates 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 the Company’s consolidated financial statements.
Recently issued accounting pronouncements not yet adopted
In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, which clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under Accounting Standards Codification ("ASC") 606 when the counterparty is a customer. In addition, Topic 808 precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. This guidance will be effective for the Company beginning January 1, 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), which replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.
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 (with the exception of short-term leases) at the commencement date and also requires expanded disclosures about leasing arrangements. Topic 842 is effective for annual and interim periods beginning on or after December 15, 2018 and early adoption is permitted. Entities may initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.
The Company is evaluating the final effect that Topic 842 and related standards will have on its consolidated financial statements, related disclosures and ongoing financial reporting, but expects implementation of Topic 842 to result in the recognition of material right of use assets and corresponding lease liabilities in its consolidated balance sheets as of the implementation of Topic 842 on January 1, 2019, principally relating to facilities leases. The Company does not have any material embedded leases and the implementation of Topic 842 is primarily focused on the treatment of the Company's previously identified leases. As of December 31, 2018, the Company's total future undiscounted capital lease payments were $3.5 million and future undiscounted non-cancelable minimum operating lease payments, net of subleases were $78.4 million
Recently adopted accounting pronouncements
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), designed to enable users of financial statements to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. On January 1, 2018, the Company adopted the provisions of Topic 606 using the modified retrospective method. From adoption to date, the Company has recognized all its revenue from contracts with customers within the scope of Topic 606. In connection with the adoption, the Company recognized the cumulative effect of initially applying this standard as an adjustment to retained earnings on the date of adoption. Comparative information prior to the date of adoption has not been restated and continues to be reported under the accounting standards in effect for those periods.
In connection with the adoption of Topic 606, the Company amended its revenue recognition policy to provide for the recognition of certain variable consideration related to diagnostic tests that was previously deferred pending cash collection. Under Topic 606, the Company records variable consideration based on an estimate of the consideration to which it will be entitled.
The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers.
Diagnostic tests
The majority of the Company’s revenue is generated from genetic testing services that provide analysis and associated interpretation of the sequencing of parts of the genome. Test orders are placed under signed requisitions, and the Company often enters into contracts with institutions (e.g., hospitals and clinics) and insurance companies that include pricing provisions under which such tests are billed. Billing terms are generally net thirty days.
While the transaction price of diagnostic tests is originally established either via contract or pursuant to the Company’s standard list price, the Company often provides concessions for tests billed to insurance carriers, and therefore the transaction price for patient insurance-billed tests is considered to be variable and revenue is recognized based on an estimate of the consideration to which the Company will be entitled at an amount for which it is probable that a reversal of cumulative consideration will not occur. Making these estimates requires significant judgments based upon such factors as length of payer relationship, historical payment patterns, changes in contract provisions and insurance reimbursement policies. These judgments are reviewed quarterly and revenue recognized is updated, as necessary, until the Company’s obligations are fully settled.
In connection with some diagnostic test orders, the Company offers limited re-requisition rights (“Re-Requisition Rights”) that are considered distinct at contract inception, and therefore certain diagnostic test orders contain two performance obligations, the performance of the original test and the Re-Requisition Rights. When Re-Requisition Rights are granted, the Company allocates the transaction price to each performance obligation based on the relative estimated standalone selling prices. In order to comply with loss contract rules, the allocations are adjusted, if necessary, to ensure the amount deferred for Re-Requisition Rights is no less than the estimated cost of fulfilling the Company’s related obligations.
The Company looks to transfer of control in assessing timing of recognition of revenue in connection with each performance obligation. In general, revenue in connection with diagnostic tests is recognized upon delivery of the underlying clinical report or when the report is made available on the Company’s web portal. Outstanding performance obligations pertaining to orders received but for which the underlying report has not been issued are generally satisfied within a thirty-day period. Revenue in connection with Re-Requisition Rights is recognized as the rights are exercised or expire unexercised, which is generally within ninety days of initial deferral.
Other contracts
The Company also enters into collaboration and genome network contracts. Collaboration agreements provide customers with diagnostic testing and related data aggregation reporting services that are provided over the contract term. Collaboration revenue is recognized as the testing and reporting services are delivered to the customer. Genome network offerings consist of subscription services related to a proprietary software platform designed to connect patients, clinicians, advocacy organizations, researchers and therapeutic developers to accelerate the understanding, diagnosis and treatment of hereditary disease. Such services are recognized on a straight-line basis over the subscription periods.
Amounts due under collaboration and genome network agreements are typically billable on net thirty-day terms.
v3.10.0.1
Summary of significant accounting policies (Tables)
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Schedule significant customer, revenue as a percentage For the significant customer, revenue as a percentage of total revenue were as follows:
 
December 31,
Customers
2018
 
2017
 
2016
Medicare
22
%
 
13
%
 
11
%
Schedule 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):
 
December 31, 2018
 
December 31, 2017
Cash and cash equivalents
$
112,158

 
$
12,053

Restricted cash
6,006

 
5,406

Total cash, cash equivalents and restricted cash
$
118,164

 
$
17,459

Schedule of cash, cash equivalents and restricted cash 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):
 
December 31, 2018
 
December 31, 2017
Cash and cash equivalents
$
112,158

 
$
12,053

Restricted cash
6,006

 
5,406

Total cash, cash equivalents and restricted cash
$
118,164

 
$
17,459

Schedule of useful lives of property and equipment The estimated useful lives of property and equipment are as follows:
Furniture and fixtures
7 years
Automobiles
7 years
Laboratory equipment
5 years
Computer equipment
3 years
Software
3 years
Leasehold improvements
Shorter of lease term or estimated useful life
v3.10.0.1
Revenue, accounts receivable and deferred revenue (Tables)
12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Schedule of impact of adoption of topic 606 on condensed consolidated statement of operations and balance sheet The effect of the adoption of Topic 606 on financial statement line items in the Company’s consolidated statement of operations for the year ended December 31, 2018, and the Company’s consolidated balance sheet as of December 31, 2018 was as follows (in thousands, except per share amounts):

 
 
Year Ended December 31, 2018
 
 
 
 
Without
 
Effect of
 
 
 
 
Adoption of
 
Adoption
 
 
As Reported
 
Topic 606
 
Higher/(Lower)
Test revenue
 
$
144,560

 
$
144,222

 
$
338

Net loss
 
$
(129,355
)
 
$
(129,693
)
 
$
338

Net loss per share, basic and diluted
 
$
(1.94
)
 
$
(1.94
)
 
$


 
 
As of December 31, 2018
 
 
 
 
Without
 
Effect of
 
 
 
 
Adoption of
 
Adoption
 
 
As Reported
 
Topic 606
 
Higher/(Lower)
Accounts receivable
 
$
26,296

 
$
14,150

 
$
12,146

Accumulated deficit
 
$
(516,712
)
 
$
(528,291
)
 
$
11,579

Stockholders' equity
 
$
161,839

 
$
150,260

 
$
11,579

Schedule of disaggregated revenue by payer category The following table includes the Company’s revenues as disaggregated by payer category (in thousands):
 
 
Year Ended December 31,
 
 
2018
 
2017 (1)
Test revenue:
 
 
 
 
Institutions
 
$
34,618

 
$
17,238

Patient - direct
 
13,589

 
5,638

Patient - insurance
 
96,353

 
42,293

 Total test revenue
 
144,560

 
65,169

Other revenue
 
3,139

 
3,052

Total revenue
 
$
147,699

 
$
68,221

___________________________________________________________________ 
(1)
As noted above, prior period amounts are presented as originally reported based upon the accounting standards in effect for those periods.
v3.10.0.1
Business combinations (Tables)
12 Months Ended
Dec. 31, 2018
AltaVoice  
Business Acquisition [Line Items]  
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):
Cash
$
54

Accounts receivable
274

Prepaid expense and other assets
52

Non-compete agreement
286

Developed technology
570

Customer relationships
3,389

Total identifiable assets acquired
4,625

Accounts payable
(28
)
Deferred revenue
(202
)
Accrued expenses
(21
)
Deferred tax liability
(1,422
)
Total liabilities assumed
(1,673
)
Net identifiable assets acquired
2,952

Goodwill
9,432

Net assets acquired
$
12,384

Schedule of economic benefits of intangible assets expected to be realized Acquisition-related intangibles included in the above table are finite-lived. Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of ten years. All other 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 expected to be realized, as follows (in thousands):
 
Gross
Purchased
Intangible
Assets
 
Estimated
Useful
Life
(in Years)
Non-compete agreement
$
286

 
5
Developed technology
570

 
6
Customer relationships
3,389

 
10
 
$
4,245

 
 
Ommdom, Inc.  
Business Acquisition [Line Items]  
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):
Cash
$
53

Accounts receivable
10

Prepaid expense and other assets
4

Trade name
13

Developed technology
2,335

Customer relationships
147

Total identifiable assets acquired
2,562

Accounts payable
(16
)
Accrued expenses
(17
)
Deferred tax liability
(434
)
Total liabilities assumed
(467
)
Net identifiable assets acquired
2,095

Goodwill
4,045

Net assets acquired
$
6,140

Schedule of economic benefits of intangible assets expected to be realized Finite-lived intangibles included in the above table 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 expected to be realized, as follows (in thousands):
 
Gross
Purchased
Intangible
Assets
 
Estimated
Useful
Life
(in Years)
Trade name
$
13

 
5
Developed technology
2,335

 
5
Customer relationships
147

 
5
 
$
2,495

 
 
Good Start Genetics  
Business Acquisition [Line Items]  
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):
Cash and restricted cash
$
1,381

Accounts receivable
2,246

Prepaid expense and other assets
1,579

Property and equipment
1,320

Trade name
460

Developed technology
5,896

Customer relationships
7,830

Total identifiable assets acquired
20,712

Accounts payable
(5,418
)
Accrued expenses
(6,802
)
Notes payable
(17,904
)
Convertible promissory notes payable
(15,430
)
Other liabilities
(222
)
Total liabilities assumed
(45,776
)
Net identifiable assets acquired
(25,064
)
Goodwill
25,064

Net assets acquired
$

Schedule of economic benefits of intangible assets expected to be realized Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of eight years. All other finite-lived intangibles included in the above table 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 expected to be realized, as follows (in thousands):
 
Gross
Purchased
Intangible
Assets
 
Estimated
Useful
Life
(in Years)
Trade name
$
460

 
3
Developed technology
5,896

 
5
Customer relationships
7,830

 
8
 
$
14,186

 
 
CombiMatrix  
Business Acquisition [Line Items]  
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):
Cash and restricted cash
$
1,333

Accounts receivable
4,118

Prepaid expense and other assets
1,299

Property and equipment
437

Other assets - non current
30

Favorable leases
247

Trade name
103

Patent licensing agreement
496

Developed technology
3,162

Customer relationships
12,397

Total identifiable assets acquired
23,622

 
 
Accounts payable
(276
)
Accrued expenses
(3,925
)
Deferred tax liability
(2,862
)
Other liabilities
(180
)
Total liabilities assumed
(7,243
)
 
 
Net identifiable assets acquired
16,379

Goodwill
11,554

Net assets acquired
$
27,933

Schedule of economic benefits of intangible assets expected to be realized Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of eleven years. All other finite-lived intangibles included in the above table 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 expected to be realized, as follows (in thousands):
 
Gross
Purchased
Intangible
Assets
 
Estimated
Useful
Life
(in Years)
Favorable leases
$
247

 
2
Trade name
103

 
1
Patent licensing agreement
496

 
15
Developed technology
3,162

 
4
Customer relationships
12,397

 
11
 
$
16,405

 
 
v3.10.0.1
Goodwill and intangible assets (Tables)
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of goodwill Details of the Company’s goodwill for the year ended December 31, 2018 are as follows (in thousands):
 
AltaVoice
 
Ommdom
 
Good Start
 
CombiMatrix
 
Total
Balance as of December 31, 2017
$
9,432

 
$
4,045

 
$
24,406

 
$
8,692

 
$
46,575

Goodwill adjustment

 

 
658

 
2,862

 
3,520

Balance as of December 31, 2018
$
9,432

 
$
4,045

 
$
25,064

 
$
11,554

 
$
50,095

Schedule of finite-lived intangible assets The following table presents details of the Company’s finite-lived intangible assets as of December 31, 2018 (in thousands):
 
Cost
 
Accumulated
Amortization
 
Net
 
Weighted Average
Useful Life
(in Years)
 
Weighted Average
Estimated Remaining
Useful Life
(in Years)
Customer relationships
$
23,763

 
$
(2,783
)
 
$
20,980

 
10.0
 
8.6
Developed technology
11,963

 
(3,482
)
 
8,481

 
4.8
 
3.4
Non-compete agreement
286

 
(114
)
 
172

 
5.0
 
3.0
Trade name
576

 
(329
)
 
247

 
2.7
 
1.4
Patent licensing agreement
496

 
(37
)
 
459

 
15.0
 
13.9
Favorable leases
247

 
(117
)
 
130

 
2.2
 
1.1
 
$
37,331

 
$
(6,862
)
 
$
30,469

 
8.2
 
6.8
Summary of estimated future amortization expense of intangible assets with finite lives The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of December 31, 2018 (in thousands):
 
Amount
2019
$
5,250

2020
5,525

2021
5,829

2022
4,124

2023
3,111

Thereafter
6,630

Total estimated future amortization expense
$
30,469

v3.10.0.1
Balance sheet components (Tables)
12 Months Ended
Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]  
Schedule of property and equipment, net Property and equipment consisted of the following (in thousands):
 
December 31, 2018
 
December 31, 2017
Leasehold improvements
$
13,034

 
$
12,623

Laboratory equipment
22,149

 
17,705

Equipment under capital lease
7,129

 
11,446

Computer equipment
4,723

 
4,023

Software
2,594

 
2,520

Furniture and fixtures
784

 
569

Automobiles
20

 
20

Construction-in-progress
1,962

 
965

Total property and equipment, gross
52,395

 
49,871

Accumulated depreciation and amortization
(24,509
)
 
(19,530
)
Total property and equipment, net
$
27,886

 
$
30,341

Schedule of accrued liabilities Accrued liabilities consisted of the following (in thousands):
 
December 31, 2018
 
December 31, 2017
Accrued compensation and related expenses
$
7,917

 
$
7,406

Deferred revenue
761

 
307

Liabilities associated with business combinations
6,460

 
9,497

Liability associated with co-development agreement
2,000

 

Other
9,425

 
5,532

Total accrued liabilities
$
26,563

 
$
22,742

Schedule of other long-term liabilities Other long-term liabilities consisted of the following (in thousands):
 
December 31, 2018
 
December 31, 2017
Lease incentive obligation, non-current
$
3,280

 
$
3,831

Deferred rent, non-current
5,495

 
5,153

Liabilities associated with business combinations

 
3,779

Other non-current liabilities
181

 
677

Total other long-term liabilities
$
8,956

 
$
13,440

v3.10.0.1
Fair value measurements (Tables)
12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Schedule of Financial instruments at fair value on a recurring basis The following tables set forth the fair value of the Company’s consolidated financial instruments that were measured at fair value on a recurring basis (in thousands):
 
 
December 31, 2018
 
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
 

 
 

 
 

Money market funds
 
$
93,934

 
$

 
$

 
$
93,934

 
$
93,934

 
$

 
$

Certificates of deposit
 
300

 

 

 
300

 

 
300

 

Commercial paper
 
10,908

 

 
(1
)
 
10,907

 

 
10,907

 

U.S. treasury notes
 
9,990

 

 

 
9,990

 
9,990

 

 

U.S. government agency securities
 
6,001

 

 
(4
)
 
5,997

 

 
5,997

 

Total financial assets
 
$
121,133

 
$

 
$
(5
)
 
$
121,128

 
$
103,924

 
$
17,204

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration
 
 
 
 
 
 
 
$
4,998

 
$

 
$

 
$
4,998

Total financial liabilities
 
 
 
 
 
 
 
$
4,998

 
$

 
$

 
$
4,998

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
Reported as:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents
 
 
 
 
 
 
 
 
 
 
 
$
101,395
 
Restricted cash
 
 
 
 
 
 
 
 
 
 
 
6,006
 
Marketable securities
 
 
 
 
 
 
 
 
 
 
 
13,727
 
Total cash equivalents, restricted cash, and marketable securities
 
 
 
$
121,128
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities
 
 
 
 
 
 
 
 
 
 
 
$
4,998
 
 
 
December 31, 2017
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
5,998

 
$

 
$

 
$
5,998

 
$
5,998

 
$

 
$

Certificates of deposit
 
300

 

 

 
300

 
300

 

 

U.S. treasury notes
 
12,010

 

 
(19
)
 
11,991

 
11,991

 

 

U.S. government agency securities
 
46,451

 

 
(152
)
 
46,299

 

 
46,299

 

Total financial assets
 
$
64,759

 
$

 
$
(171
)
 
$
64,588

 
$
18,289

 
$
46,299

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration
 
 
 
 
 
 
 
$
3,779

 
$

 
$

 
$
3,779

Total financial liabilities
 
 
 
 
 
 
 
$
3,779

 
$

 
$

 
$
3,779

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
Reported as:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents
 
 
 
 
 
 
 
 
 
 
 
$
592
 
Restricted cash
 
 
 
 
 
 
 
 
 
 
 
5,406
 
Marketable securities
 
 
 
 
 
 
 
 
 
 
 
58,590
 
Total cash equivalents, restricted cash, and marketable securities
 
 
 
$
64,588
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued liabilities
 
 
 
 
 
 
 
 
 
 
 
$
3,779
 
Schedule of Level 3 financial instruments measured at fair value on a recurring basis The following table presents the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands):
 
Level 3
 
Contingent Consideration Liability
Balance as of December 31, 2017
$
3,779

Change in estimate of fair value
1,219

Balance as of December 31, 2018
$
4,998

Schedule of Carrying amount and the estimated fair value of the Company's outstanding debt The carrying amount of the Company’s outstanding debt at December 31, 2018 approximated its fair value and as of December 31, 2017, the Company's debt carrying amount and fair value were as follows (in thousands):
 
December 31, 2017
 
Carrying Amount
 
Fair Value
Debt
$
39,084

 
$
40,526

v3.10.0.1
Commitments and contingencies (Tables)
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Schedule of future minimum payments under operating leases Future minimum payments under non-cancelable operating leases and future minimum payments to be received from non-cancelable subleases as of December 31, 2018 are as follows (in thousands):
 
Amounts
2019
$
10,948

2020
10,860

2021
11,109

2022
11,067

2023
8,898

Thereafter
25,715

Future non-cancelable minimum operating lease payments
78,597

Less: minimum payments to be received from non-cancelable subleases
(174
)
Total future non-cancelable minimum operating lease payments, net
$
78,423

Schedule of rent expense related to non-cancelable operating leases The following table summarizes rent expense related to non-cancelable operating leases (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
Rent expense
$
9,720

 
$
8,950

 
$
8,901

Sublease income
227

 
398

 
257

Rent expense, net of sublease income
$
9,493

 
$
8,552

 
$
8,644

Schedule of future payments under loan and security agreement Future estimated payments under the 2018 Note Purchase Agreement as of December 31, 2018 are as follows (in thousands):
 
Amounts
2019
$
6,654

2020
8,297

2021
8,279

2022
8,279

2023
8,279

Thereafter
89,998

Total remaining payments
129,786

Less: amount representing debt discount
(721
)
Less: amount representing interest
(54,588
)
Total non-current debt obligation
$
74,477

Schedule of future minimum lease payments under capital leases Future payments under capital leases at December 31, 2018 were as follows (in thousands):
 
Amounts
2019
$
2,087

2020
1,392

2021
21

Total capital lease obligations
3,500

Less: amount representing interest
(188
)
Present value of net minimum capital lease payments
3,312

Less: current portion
(1,937
)
Total non-current capital lease obligations
$
1,375

Schedule of future payments under noncancelable unconditional purchase commitments At December 31, 2018, the Company’s total future payments under noncancelable unconditional purchase commitments having a remaining term of over one year were as follows (in thousands):
 
Amount
2019
$
3,040

2020
3,040

2021
1,440

Total
$
7,520

v3.10.0.1
Stockholders' Equity (Tables)
12 Months Ended
Dec. 31, 2018
Stockholders' Equity Note [Abstract]  
Schedule of shares of common stock reserved for future issuance As of December 31, 2018 and 2017, the Company had reserved shares of common stock, on an as‑if converted basis, for issuance as follows (in thousands):
 
As of December 31,
 
2018
 
2017
Options issued and outstanding
3,855

 
4,115

RSU awards issued and outstanding
4,031

 
2,387

Shares available for grant under stock option plans
118

 
2,397

Shares reserved for issuance under the 2015 Employee Stock Purchase Plan
278

 
308

Common stock underlying warrants
611

 
1,962

Common stock issuable upon conversion of preferred stock
3,459

 
3,459

Common stock underlying stock payable liabilities
132

 
689

Common stock payable as contingent consideration
452

 
551

Total
12,936

 
15,868

Schedule of outstanding warrants to purchase common stock As of December 31, 2018, the Company had outstanding warrants to purchase common stock as follows:
Warrant
 
Issuance Date
 
Expiration Date
 
Exercise
Price
Per Share
 
Number of Shares of Common Stock Underlying Warrants
Warrants issued in exchange for CombiMatrix Series F warrants
 
November 2017
 
March 2021
 
$
5.95

 
408,548

Warrants issued to lender under 2017 Loan Agreement
 
March 2017
 
March 2027
 
$
10.27

 
116,845

Warrants issued to lender under 2017 Loan Agreement - 2018 Amendments
 
March 2018
 
March 2028
 
$
7.02

 
85,482

 
 
 
 
 
 
 
 
610,875

v3.10.0.1
Stock incentive plans (Tables)
12 Months Ended
Dec. 31, 2018
Stock incentive plan  
Schedule of activity under stock incentive plans Activity under the 2010 Plan and the 2015 Plan is set forth below (in thousands, except per share amounts and years):
 
Shares
Available
For Grant
 
Stock
Options
Outstanding
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Life (years)
 
Aggregate
Intrinsic
Value
Balance at December 31, 2017
2,397

 
4,115

 
$
8.51

 
7.6
 
$
5,128

Additional shares reserved
754

 

 
 
 
 
 
 
Options granted
(260
)
 
260

 
$
8.50

 
 
 
 
Options cancelled
169

 
(169
)
 
$
9.35

 
 
 
 
Options exercised

 
(351
)
 
$
7.73

 
 
 
 
RSUs granted
(3,282
)
 

 
 
 
 
 
 
RSUs cancelled
340

 

 
 
 
 
 
 
Balance at December 31, 2018
118

 
3,855

 
$
8.54

 
6.8
 
$
9,927

Options exercisable at December 31, 2018
 
 
2,737

 
$
8.27

 
6.4
 
$
7,787

Options vested and expected to vest at December 31, 2018
 
 
3,710

 
$
8.52

 
6.8
 
$
9,626

Summary of RSU activity The following table summarizes RSU activity for the year ended December 31, 2018 (in thousands, except per share data:
 
Number of Shares
 
Weighted-Average Grant Date Fair Value
Balance at December 31, 2017
2,387

 
$
9.91

RSUs granted
3,282

 
$
7.46

RSUs vested
(1,298
)
 
$
8.84

RSUs cancelled
(340
)
 
$
8.84

Balance at December 31, 2018
4,031

 
$
8.35

Summary of stock based compensation expense related to stock options included in consolidated statements of operations The following table summarizes stock-based compensation expense for the years ended December 31, 2018, 2017 and 2016, included in the consolidated statements of operations (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
Cost of revenue
$
2,960

 
$
2,093

 
$
1,353

Research and development
7,017

 
6,158

 
4,976

Selling and marketing
4,887

 
3,956

 
1,709

General and administrative
5,986

 
7,014

 
2,661

Total stock-based compensation expense
$
20,850

 
$
19,221

 
$
10,699

Employee Stock Option  
Stock incentive plan  
Schedule of assumptions used in determination of fair value of options The fair value of share-based payments for stock options granted to employees and directors was estimated on the date of grant using the Black-Scholes option-pricing model based on the following assumptions:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Expected term (in years)
6.00
 
6.03
 
6.03
Expected volatility
59.58%
 
72.64%
 
71.42%
Risk-free interest rate
2.80%
 
2.01%
 
1.37%
Non-Employee Options  
Stock incentive plan  
Schedule of assumptions used in determination of fair value of options The fair value of the stock options granted is calculated at each reporting date using the Black-Scholes option-pricing model based on the following assumptions:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Expected term (in years)
 
8.41 – 8.83
 
6.25 – 10.00
Expected volatility
 
69.9 – 78.70%
 
76.92%
Risk-free interest rate
 
1.83 – 2.04%
 
1.55 – 2.37%
2015 Employee Stock Purchase Plan  
Stock incentive plan  
Schedule of assumptions used in determination of fair value of options The fair value of the shares purchased pursuant to the ESPP was estimated using the following assumptions:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Expected term (in years)
0.5
 
0.5
 
0.5
Expected volatility
71.66%
 
52.50%
 
66.31%
Risk-free interest rate
2.09%
 
1.23%
 
0.50%
v3.10.0.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Schedule of components of loss before income taxes by U.S. and foreign jurisdictions The components of net loss before taxes by U.S. and foreign jurisdictions are as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
United States
$
132,194

 
$
124,108

 
$
99,793

Foreign
(39
)
 
1,128

 
463

Total
$
132,155

 
$
125,236

 
$
100,256

Schedule of components of the provision for income taxes The components of the provision for income taxes are as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
Current:
 
 
 
 
 
Foreign
62

 

 

Total current benefit for income taxes
62

 

 

Deferred:
 
 
 
 
 
Federal
(2,862
)
 
(1,704
)
 

State

 
(152
)
 

Total deferred benefit for income taxes
(2,862
)
 
(1,856
)
 

Total income tax benefit
$
(2,800
)
 
$
(1,856
)
 
$

Schedule of reconciliation of the tax expense computed at the statutory federal rate and Company's tax expense The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense for the periods presented:
 
Year Ended December 31,
 
2018
 
2017
 
2016
U.S. federal taxes at statutory rate
21.0
 %
 
34.0
 %
 
34.0
 %
State taxes (net of federal benefit)
5.2
 %
 
3.3
 %
 
1.4
 %
Stock-based compensation
(0.7
)%
 
(1.1
)%
 
(1.7
)%
Research and development credits
2.7
 %
 
 %
 
 %
Non-deductible expenses
(0.6
)%
 
 %
 
0.2
 %
Foreign tax differential
 %
 
(0.3
)%
 
(0.2
)%
Other
 %
 
 %
 
1.1
 %
Change in valuation allowance
(25.5
)%
 
(34.4
)%
 
(34.8
)%
Change in deferred—Tax Reform
 %
 
(39.0
)%
 
 %
Change in valuation allowance—Tax Reform
 %
 
39.0
 %
 
 %
Total
2.1
 %
 
1.5
 %
 
 %
Schedule of net deferred tax assets The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows (in thousands):
 
As of December 31,
 
2018
 
2017
Deferred tax assets:
 

 
 

Net operating loss carryforwards
$
76,972

 
$
70,825

Tax credits
15

 
15

Revenue recognition differences
47,650

 
29,819

Accruals and other
7,262

 
5,544

Gross deferred tax assets
131,899

 
106,203

Valuation allowance
(121,954
)
 
(95,687
)
Total deferred tax assets
9,945

 
10,516

Deferred tax liabilities:
 
 
 
Property and equipment
(9,945
)
 
(10,516
)
Total deferred tax liabilities
(9,945
)
 
(10,516
)
Net deferred tax assets
$

 
$

Schedule of reconciliation of gross unrecognized tax benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
 
Year ended December 31,
 
2018
 
2017
 
2016
Unrecognized tax benefits, beginning of period
$
10,561

 
$
7,791

 
$
11,429

Gross increases—current period tax positions
5,686

 
2,552

 
782

Gross increases (decreases)—prior period tax positions
128

 
218

 
(4,420
)
Unrecognized tax benefits, end of period
$
16,375

 
$
10,561

 
$
7,791

v3.10.0.1
Net loss per common share (Tables)
12 Months Ended
Dec. 31, 2018
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 for the years ended December 31, 2018, 2017 and 2016 (in thousands, except per share data):
 
Year ended December 31,
 
2018
 
2017
 
2016
Net loss
$
(129,355
)
 
$
(123,380
)
 
$
(100,256
)
Shares used in computing net loss per share, basic and diluted
66,747

 
46,512

 
33,176

Net loss per share, basic and diluted
$
(1.94
)
 
$
(2.65
)
 
$
(3.02
)
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 for the years ended December 31, 2018, 2017 and 2016 because their inclusion would be anti-dilutive (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
Shares of common stock subject to outstanding options
3,855

 
4,115

 
4,491

Shares of common stock subject to outstanding warrants
611

 
1,962

 

Shares of common stock subject to outstanding RSUs
4,031

 
2,387

 
892

Shares of common stock subject to outstanding PRSUs

 

 
530

Shares of common stock pursuant to ESPP
63

 
59

 
55

Shares of common stock underlying Series A convertible preferred stock
3,459

 
3,459

 

Total shares of common stock equivalents
12,019

 
11,982

 
5,968

v3.10.0.1
Geographic information (Tables)
12 Months Ended
Dec. 31, 2018
Segments, Geographical Areas [Abstract]  
Schedule of revenue by country Revenue by country is determined based on the billing address of the customer and is summarized as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
 
2016
United States
$
138,239

 
$
62,446

 
$
20,758

Canada
4,206

 
3,226

 
2,526

Rest of world
5,254

 
2,549

 
1,764

Total revenue
$
147,699

 
$
68,221

 
$
25,048

v3.10.0.1
Selected Quarterly Data (Unaudited) (Tables)
12 Months Ended
Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]  
Schedule of selected quarterly data The following table summarizes the Company's quarterly financial information for 2018 and 2017 (in thousands, except per share amounts):
 
 
Three Months Ended
 
 
March 31, 2018
 
June 30, 2018
 
September 30, 2018
 
December 31, 2018
Revenue
 
$
27,671

 
$
37,306

 
$
37,366

 
$
45,356

Cost of revenue
 
$
18,076

 
$
20,447

 
$
20,441

 
$
21,141

Loss from operations
 
$
(36,475
)
 
$
(30,068
)
 
$
(30,110
)
 
$
(25,904
)
Net loss(2)
 
$
(36,120
)
 
$
(31,671
)
 
$
(31,723
)
 
$
(29,841
)
Net loss per share, basic and diluted(1)
 
$
(0.66
)
 
$
(0.47
)
 
$
(0.45
)
 
$
(0.40
)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31, 2017
 
June 30, 2017
 
September 30, 2017
 
December 31, 2017
Revenue
 
$
10,338

 
$
14,336

 
$
18,148

 
$
25,399

Cost of revenue
 
$
9,329

 
$
10,490

 
$
13,274

 
$
17,049

Loss from operations
 
$
(27,337
)
 
$
(28,075
)
 
$
(30,976
)
 
$
(34,891
)
Net loss(2)
 
$
(26,928
)
 
$
(28,557
)
 
$
(27,402
)
 
$
(40,493
)
Net loss per share, basic and diluted(1)
 
$
(0.64
)
 
$
(0.66
)
 
$
(0.57
)
 
$
(0.78
)
___________________________________________________________________ 
(1) 
Net loss per share is computed independently for each of the quarters presented. Therefore, the sum of quarterly net loss per share information may not equal annual net loss per share.
(2)
Includes $5.3 million of debt extinguishment costs during the three months ended December 31, 2018. See Note 9, "Commitments and contingencies" for further information.
v3.10.0.1
Organization and description of business - Narrative (Details)
gene in Thousands
12 Months Ended
Dec. 31, 2018
Segment
gene
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of genes | gene 20
Number of operating segments | Segment 1
v3.10.0.1
Summary of significant accounting policies - Narrative (Details) - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Summary Of Significant Accounting Policies [Line Items]      
Inventory $ 8,300,000 $ 5,400,000  
Intangible assets estimated useful lives 8 years 2 months 12 days    
Goodwill impairment loss $ 0 0 $ 0
Impairment losses 2,925,000 0 0
Long-lived asset impairment losses 0 0 0
Advertising expense 600,000 $ 600,000 500,000
Future undiscounted capital lease payments 3,500,000    
Future undiscounted non-cancelable minimum operating lease payments $ 78,423,000    
Leasehold improvements | General and administrative      
Summary Of Significant Accounting Policies [Line Items]      
Impairment losses     $ 1,000,000.0
Customer relationships      
Summary Of Significant Accounting Policies [Line Items]      
Intangible assets estimated useful lives 10 years    
Minimum      
Summary Of Significant Accounting Policies [Line Items]      
Intangible assets estimated useful lives 2 years    
Property and equipment, estimated useful lives 3 years    
Minimum | Customer relationships      
Summary Of Significant Accounting Policies [Line Items]      
Intangible assets estimated useful lives 5 years    
Maximum      
Summary Of Significant Accounting Policies [Line Items]      
Intangible assets estimated useful lives 15 years    
Property and equipment, estimated useful lives 7 years    
Maximum | Customer relationships      
Summary Of Significant Accounting Policies [Line Items]      
Intangible assets estimated useful lives 11 years    
Revenue | Customer concentration risk | Medicare      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk (as a percent) 22.00% 13.00% 11.00%
Revenue | Customer concentration risk | Medicare | Maximum      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk (as a percent) 10.00%    
Accounts receivable | Customer concentration risk | Medicare      
Summary Of Significant Accounting Policies [Line Items]      
Concentration risk (as a percent) 21.00% 13.00%  
v3.10.0.1
Summary of significant accounting policies - Schedule of significant customers, revenue as a percentage (Details)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Customer concentration risk | Revenue | Medicare      
Product Information [Line Items]      
Concentration risk (as a percent) 22.00% 13.00% 11.00%
v3.10.0.1
Summary of significant accounting policies - Schedule of cash, cash equivalents and restricted cash (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Accounting Policies [Abstract]        
Cash and cash equivalents $ 112,158 $ 12,053    
Restricted cash 6,006 5,406    
Total cash, cash equivalents and restricted cash $ 118,164 $ 17,459 $ 71,522 $ 78,069
v3.10.0.1
Summary of significant accounting policies - Schedule of useful lives of property and equipment (Details)
12 Months Ended
Dec. 31, 2018
Furniture and fixtures  
Property and equipment  
Useful lives 7 years
Automobiles  
Property and equipment  
Useful lives 7 years
Laboratory equipment  
Property and equipment  
Useful lives 5 years
Computer equipment  
Property and equipment  
Useful lives 3 years
Software  
Property and equipment  
Useful lives 3 years
v3.10.0.1
Revenue, accounts receivable and deferred revenue - Narrative (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Jan. 01, 2018
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Disaggregation of Revenue [Line Items]                        
Cumulative effect of accounting change $ 11,241                      
Revenue recognized                   $ 300    
Total revenue   $ 45,356 $ 37,366 $ 37,306 $ 27,671 $ 25,399 $ 18,148 $ 14,336 $ 10,338 147,699 $ 68,221 $ 25,048
Loss from operations   $ (25,904) $ (30,110) $ (30,068) $ (36,475) $ (34,891) $ (30,976) $ (28,075) $ (27,337) $ (122,557) $ (121,279) $ (100,183)
Net loss per share, basic and diluted (in dollars per share)   $ (0.40) $ (0.45) $ (0.47) $ (0.66) $ (0.78) $ (0.57) $ (0.66) $ (0.64) $ (1.94) $ (2.65) $ (3.02)
Topic 606                        
Disaggregation of Revenue [Line Items]                        
Cumulative effect of accounting change $ 11,200                      
Test revenue                        
Disaggregation of Revenue [Line Items]                        
Total revenue                   $ 144,560 $ 65,169 $ 24,840
Test revenue | Change in estimate of revenue recognition                        
Disaggregation of Revenue [Line Items]                        
Total revenue                   4,500    
Loss from operations                   $ 4,500    
Net loss per share, basic and diluted (in dollars per share)                   $ 0.07    
Maximum                        
Disaggregation of Revenue [Line Items]                        
Performance obligations underlying contracts period 1 year                      
Sales commissions amortization period 1 year                      
Period of payments to be received for goods or service 1 year                      
v3.10.0.1
Revenue, accounts receivable and deferred revenue - Schedule of impact of adoption of topic 606 on condensed statement of operations and balance sheet (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                        
Total revenue $ 45,356 $ 37,366 $ 37,306 $ 27,671 $ 25,399 $ 18,148 $ 14,336 $ 10,338 $ 147,699 $ 68,221 $ 25,048  
Net loss $ (29,841) $ (31,723) $ (31,671) $ (36,120) $ (40,493) $ (27,402) $ (28,557) $ (26,928) $ (129,355) $ (123,380) $ (100,256)  
Net loss per share, basic and diluted (in dollars per share) $ (0.40) $ (0.45) $ (0.47) $ (0.66) $ (0.78) $ (0.57) $ (0.66) $ (0.64) $ (1.94) $ (2.65) $ (3.02)  
Accounts receivable $ 26,296       $ 10,422       $ 26,296 $ 10,422    
Accumulated deficit (516,712)       (398,598)       (516,712) (398,598)    
Stockholders' equity 161,839       $ 121,794       161,839 121,794 $ 99,074 $ 138,376
Without adoption of topic 606 | Topic 606                        
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                        
Net loss                 $ (129,693)      
Net loss per share, basic and diluted (in dollars per share)                 $ (1.94)      
Accounts receivable 14,150               $ 14,150      
Accumulated deficit (528,291)               (528,291)      
Stockholders' equity 150,260               150,260      
Effect of adoption higher/lower | Topic 606                        
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                        
Net loss                 $ 338      
Net loss per share, basic and diluted (in dollars per share)                 $ 0      
Accounts receivable 12,146               $ 12,146      
Accumulated deficit 11,579               11,579      
Stockholders' equity $ 11,579               11,579      
Test revenue                        
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                        
Total revenue                 144,560 $ 65,169 $ 24,840  
Test revenue | Without adoption of topic 606 | Topic 606                        
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                        
Total revenue                 144,222      
Test revenue | Effect of adoption higher/lower | Topic 606                        
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                        
Total revenue                 $ 338      
v3.10.0.1
Revenue, accounts receivable and deferred revenue - Schedule of disaggregated revenue by payer category (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Disaggregation of Revenue [Line Items]                      
Total revenue $ 45,356 $ 37,366 $ 37,306 $ 27,671 $ 25,399 $ 18,148 $ 14,336 $ 10,338 $ 147,699 $ 68,221 $ 25,048
Test revenue                      
Disaggregation of Revenue [Line Items]                      
Total revenue                 144,560 65,169 24,840
Test revenue | Institutions                      
Disaggregation of Revenue [Line Items]                      
Total revenue                 34,618 17,238  
Test revenue | Patient - direct                      
Disaggregation of Revenue [Line Items]                      
Total revenue                 13,589 5,638  
Test revenue | Patient - insurance                      
Disaggregation of Revenue [Line Items]                      
Total revenue                 96,353 42,293  
Other revenue                      
Disaggregation of Revenue [Line Items]                      
Total revenue                 $ 3,139 $ 3,052 $ 208
v3.10.0.1
Business combinations - Narrative (Details) - USD ($)
1 Months Ended 12 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Nov. 14, 2017
Aug. 04, 2017
Jul. 31, 2017
Jun. 11, 2017
Jan. 06, 2017
Jan. 31, 2019
Sep. 30, 2018
Jun. 30, 2018
Apr. 30, 2018
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives                       8 years 2 months 12 days    
Goodwill                       $ 50,095,000 $ 46,575,000  
Decrease in accounts receivable                       (5,291,000) (1,963,000) $ (843,000)
Goodwill adjustment                       $ 3,520,000    
Non-compete agreement                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives                       5 years    
Customer relationships                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives                       10 years    
Maximum                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives                       15 years    
Maximum | Customer relationships                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives                       11 years    
AltaVoice                            
Business Acquisition [Line Items]                            
Total purchase consideration             $ 12,400,000              
Payment through issuance of shares company's common stock             5,500,000              
Contingently payable amount   $ 5,000,000.0                        
Purchase consideration, second payment discounted and recorded as liability             4,700,000              
Change in fair value of contingent consideration             2,200,000              
Goodwill acquired                       $ 9,400,000    
Goodwill             9,432,000         9,432,000 9,432,000  
Goodwill adjustment                       $ 0    
Deferred tax liability             $ 1,422,000              
AltaVoice | Non-compete agreement                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives             5 years         10 years    
AltaVoice | Customer relationships                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives             10 years              
AltaVoice | Other (income) expense                            
Business Acquisition [Line Items]                            
Accretion gains (losses)                       $ 1,600,000 (200,000)  
AltaVoice | General and administrative                            
Business Acquisition [Line Items]                            
Change in estimate of fair value                       1,200,000 1,600,000  
AltaVoice | Milestone Based on Certain Threshold of Revenue Achieved During 2017 [Member]                            
Business Acquisition [Line Items]                            
Common stock issued, value   5,000,000.0                        
AltaVoice | Scenario, forecast | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018                            
Business Acquisition [Line Items]                            
Contingent consideration, revenue target for payout $ 14,000,000.0                          
Contingent consideration, revenue target (as a percent) 75.00%                          
Contingent consideration, amount deducted on revenue target $ 5,500,000                          
Business combination possible payout amount 5,000,000.0                          
AltaVoice | Scenario, forecast | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | Maximum                            
Business Acquisition [Line Items]                            
Common stock issued, value $ 5,000,000.0                          
AltaVoice | Common stock                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock   5,000,000.0         $ 5,500,000              
Common stock issued (in shares)             641,126       716,332      
Common stock issued, value   $ 5,000,000.0                        
AltaVoice | Common stock | Maximum                            
Business Acquisition [Line Items]                            
Contingently payable amount                       5,000,000.0    
Ommdom, Inc.                            
Business Acquisition [Line Items]                            
Total purchase consideration           $ 6,100,000                
Payment through issuance of shares company's common stock           5,500,000                
Purchase consideration, second payment discounted and recorded as liability           600,000                
Hold-back consideration amount           600,000                
Goodwill           4,045,000           4,045,000 4,045,000  
Goodwill adjustment                       0    
Deferred tax liability           $ 434,000                
Ommdom, Inc. | Customer relationships                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives           5 years                
Ommdom, Inc. | Common stock                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock           $ 5,500,000                
Common stock issued (in shares)           600,108                
Hold-back consideration amount           $ 600,000                
Common stock issued, related to hold back (in shares)           66,582       66,582        
Good Start Genetics                            
Business Acquisition [Line Items]                            
Total purchase consideration       $ 24,400,000                    
Percentage of diluted interest acquired       100.00%                    
Goodwill       $ 25,064,000               25,064,000 24,406,000  
Cash consideration       18,400,000                    
Provisional deferred tax liability       $ 4,800,000                    
Decrease in accounts receivable                       700,000    
Goodwill adjustment                       $ 658,000    
Good Start Genetics | Customer relationships                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives       8 years               8 years    
Good Start Genetics | Common stock                            
Business Acquisition [Line Items]                            
Hold-back consideration amount       $ 3,600,000                    
Common stock issued, related to hold back (in shares)       343,986         212,260          
Equity interests issued for settlement of convertible debt       $ 11,900,000                    
Equity interests issued for settlement of convertible debt (in shares)       1,148,283                    
Remaining hold-back amount payable to settle outstanding claims                       $ 1,300,000    
Remaining hold back amount payable to settle bonuses                       200,000    
Good Start Genetics | Common stock | General and administrative                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock       $ 900,000                    
Common stock issued (in shares)       83,025                    
Payment by issuance of common stock to settle bonuses       $ 400,000                    
Issuance of common stock to settle bonuses (in shares)       37,406         27,784          
CombiMatrix                            
Business Acquisition [Line Items]                            
Common stock issued (in shares)         2,703,389                  
Goodwill     $ 11,554,000                 11,554,000 $ 8,692,000  
Goodwill adjustment                       2,862,000    
Trailing average share value (in dollars per share)         $ 9.491                  
Deferred tax liability     $ 2,862,000                 $ 2,900,000    
CombiMatrix | Series F Preferred Stock                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock         $ 100,000                  
Common stock issued (in shares)         3,144                  
CombiMatrix | Series F Warrants                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock         $ 7,400,000                  
Common stock issued (in shares)         1,739,689                  
CombiMatrix | Series D Warrants                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock         $ 1,000                  
Common stock issued (in shares)         337,584                  
CombiMatrix | Restricted Stock Units (RSUs)                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock         $ 700,000                  
Common stock issued (in shares)         85,219                  
CombiMatrix | Shares of common stock subject to outstanding options                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock         $ 100,000                  
Common stock issued (in shares)         3,323                  
CombiMatrix | Common stock                            
Business Acquisition [Line Items]                            
Business combination common stock conversion ratio         86.92%                  
CombiMatrix | Shares of common stock subject to outstanding warrants                            
Business Acquisition [Line Items]                            
Common stock issued (in shares)         2,077,273                  
CombiMatrix | Customer relationships                            
Business Acquisition [Line Items]                            
Intangible assets estimated useful lives     11 years                 11 years    
CombiMatrix | General and administrative | Common stock | Restricted Stock Units (RSUs)                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock         $ 1,700,000                  
Common stock issued (in shares)         214,976                  
CombiMatrix | Common stock                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock         $ 20,500,000                  
Common stock issued (in shares)         2,611,703                  
CombiMatrix | Common stock | General and administrative                            
Business Acquisition [Line Items]                            
Payment through issuance of shares company's common stock         $ 200,000                  
Common stock issued (in shares)         22,966                  
Subsequent event | Good Start Genetics | Common stock                            
Business Acquisition [Line Items]                            
Hold-back consideration amount               $ 600,000            
Subsequent event | Good Start Genetics | Common stock | General and administrative                            
Business Acquisition [Line Items]                            
Payment by issuance of common stock to settle bonuses               $ 100,000            
v3.10.0.1
Business combinations - Summary of fair values of assets acquired and liabilities assumed (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Nov. 14, 2017
Aug. 04, 2017
Jun. 11, 2017
Jan. 06, 2017
Business Acquisition [Line Items]            
Goodwill $ 50,095 $ 46,575        
AltaVoice            
Business Acquisition [Line Items]            
Cash           $ 54
Accounts receivable           274
Prepaid expense and other assets           52
Total identifiable assets acquired           4,625
Accounts payable           (28)
Deferred revenue           (202)
Accrued expenses           (21)
Deferred tax liability           (1,422)
Total liabilities assumed           (1,673)
Net identifiable assets acquired           2,952
Goodwill 9,432 9,432       9,432
Net assets acquired           12,384
AltaVoice | Non-compete agreement            
Business Acquisition [Line Items]            
Intangible Assets           286
AltaVoice | Developed technology            
Business Acquisition [Line Items]            
Intangible Assets           570
AltaVoice | Customer relationships            
Business Acquisition [Line Items]            
Intangible Assets           $ 3,389
Ommdom, Inc.            
Business Acquisition [Line Items]            
Cash         $ 53  
Accounts receivable         10  
Prepaid expense and other assets         4  
Total identifiable assets acquired         2,562  
Accounts payable         (16)  
Accrued expenses         (17)  
Deferred tax liability         (434)  
Total liabilities assumed         (467)  
Net identifiable assets acquired         2,095  
Goodwill 4,045 4,045     4,045  
Net assets acquired         6,140  
Ommdom, Inc. | Trade name            
Business Acquisition [Line Items]            
Intangible Assets         13  
Ommdom, Inc. | Developed technology            
Business Acquisition [Line Items]            
Intangible Assets         2,335  
Ommdom, Inc. | Customer relationships            
Business Acquisition [Line Items]            
Intangible Assets         $ 147  
Good Start Genetics            
Business Acquisition [Line Items]            
Cash and restricted cash       $ 1,381    
Accounts receivable       2,246    
Prepaid expense and other assets       1,579    
Property and equipment       1,320    
Total identifiable assets acquired       20,712    
Accounts payable       (5,418)    
Accrued expenses       (6,802)    
Notes payable       (17,904)    
Convertible promissory notes payable       (15,430)    
Other liabilities       (222)    
Total liabilities assumed       (45,776)    
Net identifiable assets acquired       (25,064)    
Goodwill 25,064 24,406   25,064    
Net assets acquired       0    
Good Start Genetics | Trade name            
Business Acquisition [Line Items]            
Intangible Assets       460    
Good Start Genetics | Developed technology            
Business Acquisition [Line Items]            
Intangible Assets       5,896    
Good Start Genetics | Customer relationships            
Business Acquisition [Line Items]            
Intangible Assets       $ 7,830    
CombiMatrix            
Business Acquisition [Line Items]            
Cash and restricted cash     $ 1,333      
Accounts receivable     4,118      
Prepaid expense and other assets     1,299      
Property and equipment     437      
Other assets - non current     30      
Total identifiable assets acquired     23,622      
Accounts payable     (276)      
Accrued expenses     (3,925)      
Deferred tax liability (2,900)   (2,862)      
Other liabilities     (180)      
Total liabilities assumed     (7,243)      
Net identifiable assets acquired     16,379      
Goodwill $ 11,554 $ 8,692 11,554      
Net assets acquired     27,933      
CombiMatrix | Favorable leases            
Business Acquisition [Line Items]            
Intangible Assets     247      
CombiMatrix | Trade name            
Business Acquisition [Line Items]            
Intangible Assets     103      
CombiMatrix | Patent licensing agreement            
Business Acquisition [Line Items]            
Intangible Assets     496      
CombiMatrix | Developed technology            
Business Acquisition [Line Items]            
Intangible Assets     3,162      
CombiMatrix | Customer relationships            
Business Acquisition [Line Items]            
Intangible Assets     $ 12,397      
v3.10.0.1
Business combinations - Schedule of economic benefits of intangible assets expected to be realized (Details) - USD ($)
$ in Thousands
12 Months Ended
Nov. 14, 2017
Aug. 04, 2017
Jun. 11, 2017
Jan. 06, 2017
Dec. 31, 2018
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets         $ 37,331
Intangible assets estimated useful lives         8 years 2 months 12 days
Non-compete agreement          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets         $ 286
Intangible assets estimated useful lives         5 years
Trade name          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets         $ 576
Intangible assets estimated useful lives         2 years 8 months 12 days
Patent licensing agreement          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets         $ 496
Intangible assets estimated useful lives         15 years
Developed technology          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets         $ 11,963
Intangible assets estimated useful lives         4 years 9 months 18 days
Customer relationships          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets         $ 23,763
Intangible assets estimated useful lives         10 years
AltaVoice          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets       $ 4,245  
AltaVoice | Non-compete agreement          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets       $ 286  
Intangible assets estimated useful lives       5 years 10 years
AltaVoice | Developed technology          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets       $ 570  
Intangible assets estimated useful lives       6 years  
AltaVoice | Customer relationships          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets       $ 3,389  
Intangible assets estimated useful lives       10 years  
Ommdom, Inc.          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets     $ 2,495    
Ommdom, Inc. | Trade name          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets     $ 13    
Intangible assets estimated useful lives     5 years    
Ommdom, Inc. | Developed technology          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets     $ 2,335    
Intangible assets estimated useful lives     5 years    
Ommdom, Inc. | Customer relationships          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets     $ 147    
Intangible assets estimated useful lives     5 years    
Good Start Genetics          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets   $ 14,186      
Good Start Genetics | Trade name          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets   $ 460      
Intangible assets estimated useful lives   3 years      
Good Start Genetics | Developed technology          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets   $ 5,896      
Intangible assets estimated useful lives   5 years      
Good Start Genetics | Customer relationships          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets   $ 7,830      
Intangible assets estimated useful lives   8 years     8 years
CombiMatrix          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets $ 16,405        
CombiMatrix | Favorable leases          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets $ 247        
Intangible assets estimated useful lives 2 years        
CombiMatrix | Trade name          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets $ 103        
Intangible assets estimated useful lives 1 year        
CombiMatrix | Patent licensing agreement          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets $ 496        
Intangible assets estimated useful lives 15 years        
CombiMatrix | Developed technology          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets $ 3,162        
Intangible assets estimated useful lives 4 years        
CombiMatrix | Customer relationships          
Business Acquisition [Line Items]          
Gross Purchased Intangible Assets $ 12,397        
Intangible assets estimated useful lives 11 years       11 years
v3.10.0.1
Goodwill and intangible assets - Summary of goodwill (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2018
USD ($)
Goodwill [Roll Forward]  
December 31, 2017 $ 46,575
Goodwill adjustment 3,520
December 31, 2018 50,095
AltaVoice  
Goodwill [Roll Forward]  
December 31, 2017 9,432
Goodwill adjustment 0
December 31, 2018 9,432
Ommdom  
Goodwill [Roll Forward]  
December 31, 2017 4,045
Goodwill adjustment 0
December 31, 2018 4,045
Good Start  
Goodwill [Roll Forward]  
December 31, 2017 24,406
Goodwill adjustment 658
December 31, 2018 25,064
CombiMatrix  
Goodwill [Roll Forward]  
December 31, 2017 8,692
Goodwill adjustment 2,862
December 31, 2018 $ 11,554
v3.10.0.1
Goodwill and intangible assets - Narrative (Details) - USD ($)
$ in Thousands
12 Months Ended
Nov. 14, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Goodwill [Line Items]        
Goodwill adjustment   $ 3,520    
Intangible assets estimated useful lives   8 years 2 months 12 days    
Amortization expense   $ 5,000 $ 1,800
Minimum        
Goodwill [Line Items]        
Intangible assets estimated useful lives   2 years    
Maximum        
Goodwill [Line Items]        
Intangible assets estimated useful lives   15 years    
Customer relationships        
Goodwill [Line Items]        
Intangible assets estimated useful lives   10 years    
Customer relationships | Minimum        
Goodwill [Line Items]        
Intangible assets estimated useful lives   5 years    
Customer relationships | Maximum        
Goodwill [Line Items]        
Intangible assets estimated useful lives   11 years    
CombiMatrix        
Goodwill [Line Items]        
Goodwill adjustment   $ 2,862    
CombiMatrix | Customer relationships        
Goodwill [Line Items]        
Intangible assets estimated useful lives 11 years 11 years    
v3.10.0.1
Goodwill and intangible assets - Schedule of finite-lived intangible assets (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]    
Cost $ 37,331  
Accumulated Amortization (6,862)  
Net $ 30,469 $ 35,516
Weighted Average Useful Life (in Years) 8 years 2 months 12 days  
Weighted Average Estimated Remaining Useful Life (in Years) 6 years 9 months 18 days  
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 23,763  
Accumulated Amortization (2,783)  
Net $ 20,980  
Weighted Average Useful Life (in Years) 10 years  
Weighted Average Estimated Remaining Useful Life (in Years) 8 years 7 months 6 days  
Developed technology    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 11,963  
Accumulated Amortization (3,482)  
Net $ 8,481  
Weighted Average Useful Life (in Years) 4 years 9 months 18 days  
Weighted Average Estimated Remaining Useful Life (in Years) 3 years 4 months 24 days  
Non-compete agreement    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 286  
Accumulated Amortization (114)  
Net $ 172  
Weighted Average Useful Life (in Years) 5 years  
Weighted Average Estimated Remaining Useful Life (in Years) 3 years  
Trade name    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 576  
Accumulated Amortization (329)  
Net $ 247  
Weighted Average Useful Life (in Years) 2 years 8 months 12 days  
Weighted Average Estimated Remaining Useful Life (in Years) 1 year 4 months 24 days  
Patent licensing agreement    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 496  
Accumulated Amortization (37)  
Net $ 459  
Weighted Average Useful Life (in Years) 15 years  
Weighted Average Estimated Remaining Useful Life (in Years) 13 years 10 months 24 days  
Favorable leases    
Finite-Lived Intangible Assets [Line Items]    
Cost $ 247  
Accumulated Amortization (117)  
Net $ 130  
Weighted Average Useful Life (in Years) 2 years 2 months 12 days  
Weighted Average Estimated Remaining Useful Life (in Years) 1 year 1 month 6 days  
v3.10.0.1
Goodwill and intangible assets - Summary of estimated future amortization expense of intangible assets with finite lives (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]    
2019 $ 5,250  
2020 5,525  
2021 5,829  
2022 4,124  
2023 3,111  
Thereafter 6,630  
Net $ 30,469 $ 35,516
v3.10.0.1
Balance sheet components - Property and equipment (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Property and equipment      
Total property and equipment, gross $ 52,395 $ 49,871  
Accumulated depreciation and amortization (24,509) (19,530)  
Total property and equipment, net 27,886 30,341  
Depreciation 8,500 7,200 $ 6,600
Leasehold improvements      
Property and equipment      
Total property and equipment, gross 13,034 12,623  
Laboratory equipment      
Property and equipment      
Total property and equipment, gross 22,149 17,705  
Equipment under capital lease      
Property and equipment      
Total property and equipment, gross 7,129 11,446  
Computer equipment      
Property and equipment      
Total property and equipment, gross 4,723 4,023  
Software      
Property and equipment      
Total property and equipment, gross 2,594 2,520  
Furniture and fixtures      
Property and equipment      
Total property and equipment, gross 784 569  
Automobiles      
Property and equipment      
Total property and equipment, gross 20 20  
Construction-in-progress      
Property and equipment      
Total property and equipment, gross $ 1,962 $ 965  
v3.10.0.1
Balance sheet components - Accrued liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Balance Sheet Related Disclosures [Abstract]    
Accrued compensation and related expenses $ 7,917 $ 7,406
Deferred revenue 761 307
Liabilities associated with business combinations 6,460 9,497
Liability associated with co-development agreement 2,000 0
Other 9,425 5,532
Total accrued liabilities $ 26,563 $ 22,742
v3.10.0.1
Balance sheet components - Other long-term liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Balance Sheet Related Disclosures [Abstract]    
Lease incentive obligation, non-current $ 3,280 $ 3,831
Deferred rent, non-current 5,495 5,153
Liabilities associated with business combinations 0 3,779
Other non-current liabilities 181 677
Total other long-term liabilities $ 8,956 $ 13,440
v3.10.0.1
Fair value measurements - Financial instruments at fair value on a recurring basis (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, amortized cost $ 121,133 $ 64,759
Cash equivalents, restricted cash and marketable securities, gross unrealized loss before tax (5) (171)
Cash equivalents, restricted cash and marketable securities, estimated fair value 121,128 64,588
Cash equivalents 101,395 592
Restricted cash 6,006 5,406
Marketable securities 13,727 58,590
Accrued liabilities 26,563 22,742
Recurring basis    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total financial assets 121,128 64,588
Total financial liabilities 4,998 3,779
Recurring basis | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total financial assets 103,924 18,289
Recurring basis | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total financial assets 17,204 46,299
Recurring basis | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total financial liabilities 4,998 3,779
Money market funds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, amortized cost 93,934 5,998
Money market funds | Recurring basis    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 93,934 5,998
Money market funds | Recurring basis | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 93,934 5,998
Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, amortized cost 300 300
Certificates of deposit | Recurring basis    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 300 300
Certificates of deposit | Recurring basis | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 0 300
Certificates of deposit | Recurring basis | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 300  
Commercial paper    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, amortized cost 10,908  
Cash equivalents, restricted cash and marketable securities, gross unrealized loss before tax (1)  
Commercial paper | Recurring basis    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 10,907  
Commercial paper | Recurring basis | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 0  
Commercial paper | Recurring basis | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 10,907  
U.S. treasury notes    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, amortized cost 9,990 12,010
Cash equivalents, restricted cash and marketable securities, gross unrealized loss before tax   (19)
U.S. treasury notes | Recurring basis    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 9,990 11,991
U.S. treasury notes | Recurring basis | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 9,990 11,991
U.S. government agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, amortized cost 6,001 46,451
Cash equivalents, restricted cash and marketable securities, gross unrealized loss before tax (4) (152)
U.S. government agency securities | Recurring basis    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 5,997 46,299
U.S. government agency securities | Recurring basis | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents, restricted cash and marketable securities, estimated fair value 5,997 46,299
Contingent consideration    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Accrued liabilities 4,998 3,779
Contingent consideration | Recurring basis    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total financial liabilities 4,998 3,779
Contingent consideration | Recurring basis | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total financial liabilities $ 4,998 $ 3,779
v3.10.0.1
Fair value measurements - Narrative (Details) - USD ($)
12 Months Ended
Jan. 06, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Mar. 31, 2019
Mar. 31, 2018
Jan. 31, 2017
Fair Value, Option, Quantitative Disclosures [Line Items]              
Transfers of assets and liabilities between Level 1, Level 2 and Level 3   $ 0 $ 0        
Total fair value of investments with unrealized losses   13,400,000          
Available-for-sale securities gross realized gain (loss)   0 $ 0 $ 0      
AltaVoice              
Fair Value, Option, Quantitative Disclosures [Line Items]              
Contingently payable amount           $ 5,000,000.0  
Increase in fair value of contingent consideration $ 2,200,000            
AltaVoice | Common stock              
Fair Value, Option, Quantitative Disclosures [Line Items]              
Common stock issued, value           $ 5,000,000.0  
AltaVoice | Maximum | Common stock              
Fair Value, Option, Quantitative Disclosures [Line Items]              
Contingently payable amount   5,000,000.0          
AltaVoice | Maximum | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | Scenario, forecast              
Fair Value, Option, Quantitative Disclosures [Line Items]              
Common stock issued, value         $ 5,000,000.0    
AltaVoice | Minimum | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | Scenario, forecast              
Fair Value, Option, Quantitative Disclosures [Line Items]              
Contingent revenue threshold         $ 10,000,000    
Contingent consideration | AltaVoice | Level 3 | Recurring basis              
Fair Value, Option, Quantitative Disclosures [Line Items]              
Estimated fair value for contingent consideration             $ 2,200,000
Increase in fair value of contingent consideration   $ 2,800,000          
v3.10.0.1
Fair value measurements - Level 3 financial instruments measured at fair value on a recurring basis (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
AltaVoice | General and administrative    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Change in estimate of fair value $ 1,200 $ 1,600
AltaVoice | General and administrative | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Change in estimate of fair value 1,219  
Contingent consideration | Recurring basis | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
December 31, 2017 3,779  
December 31, 2018 $ 4,998 $ 3,779
v3.10.0.1
Fair value measurements - Carrying amount and the estimated fair value of the Company's outstanding debt (Details) - Recurring basis - Level 2
$ in Thousands
Dec. 31, 2017
USD ($)
Carrying Amount  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Debt $ 39,084
Fair Value  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Debt $ 40,526
v3.10.0.1
Investment in privately held company (Details)
$ in Millions
12 Months Ended
Dec. 31, 2018
USD ($)
KEW  
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]  
Loss on license agreement $ 2.9
v3.10.0.1
Commitments and contingencies - Operating leases narrative (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Sep. 30, 2015
Operating Leased Assets [Line Items]    
Total minimum lease payments $ 78,597  
Office Facility In San Francisco | New leases    
Operating Leased Assets [Line Items]    
Additional term of lease   10 years
Lease term   10 years
Security deposit   $ 4,600
Lease incentive in form of lease improvements   $ 5,200
Total minimum lease payments $ 57,800  
v3.10.0.1
Commitments and contingencies - Schedule of future minimum payments under operating leases (Details)
$ in Thousands
Dec. 31, 2018
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2019 $ 10,948
2020 10,860
2021 11,109
2022 11,067
2023 8,898
Thereafter 25,715
Future non-cancelable minimum operating lease payments 78,597
Less: minimum payments to be received from non-cancelable subleases (174)
Total future non-cancelable minimum operating lease payments, net $ 78,423
v3.10.0.1
Commitments and contingencies - Schedule of rent expense related to non-cancelable operating leases (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]      
Rent expense $ 9,720 $ 8,950 $ 8,901
Sublease income 227 398 257
Rent expense, net of sublease income $ 9,493 $ 8,552 $ 8,644
v3.10.0.1
Commitments and contingencies - Debt financing narrative (Details) - USD ($)
1 Months Ended 3 Months Ended 12 Months Ended
Nov. 30, 2018
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Jan. 01, 2020
Mar. 31, 2018
Debt Instrument [Line Items]                
Debt extinguishment costs       $ 4,609,000 $ 0 $ 0    
Common stock, par value (in dollars per share)     $ 0.0001 $ 0.0001 $ 0.0001      
Common stock issued pursuant to Securities Purchase Agreement (see Note 9)       $ 5,353,000        
Note Purchase Agreement                
Debt Instrument [Line Items]                
Maximum borrowing capacity $ 200,000,000.0              
Debt instrument, term 7 years              
Debt instrument, interest rate, stated percentage     8.75% 8.75%        
Internal rate of return percentage       11.00%        
Debt instrument, average effective interest rate       10.60%        
Note Purchase Agreement | Payment made within 12 months after closing date                
Debt Instrument [Line Items]                
Term loans, fee percentage of funded draw       117.50%        
Note Purchase Agreement | Payment made within 24 months after closing date                
Debt Instrument [Line Items]                
Term loans, fee percentage of funded draw       132.50%        
Note Purchase Agreement | Payment made within 36 months after closing date                
Debt Instrument [Line Items]                
Term loans, fee percentage of funded draw       145.00%        
Note Purchase Agreement | Scenario, forecast                
Debt Instrument [Line Items]                
Percentage of net annual revenue receivable by purchasers in addition to interest, beginning on January 1, 2020             0.50%  
Maximum net annual revenue receivable by purchasers in addition to interest, beginning on January 1, 2020             $ 1,600,000  
Loan and Security Agreement | Initial term loan                
Debt Instrument [Line Items]                
Term loan, borrowing amount   $ 40,000,000.0            
Net proceeds from term loan   39,700,000            
Loan and Security Agreement | Second Term Loan                
Debt Instrument [Line Items]                
Term loan, borrowing amount               $ 20,000,000.0
Net proceeds from term loan   $ 19,800,000            
Loan and Security Agreement | Third Term Loan                
Debt Instrument [Line Items]                
Term loan, borrowing amount     $ 20,000,000.0 $ 20,000,000.0        
Loan and Security Agreement | Secured Debt                
Debt Instrument [Line Items]                
Term loan, line fee percentage on unused commitment amount     1.00% 1.00%        
Term loan, line fee on unused commitment amount     $ 200,000 $ 200,000        
Term loans, variable interest rate   7.73%            
Term loans, index interest rate, minimum   0.77%            
Term loans, frequency of periodic payment   monthly            
Term loans, floor interest rate   8.50%            
Term loans, fee percentage of funded draw   5.00%            
Term loans, facility fee percentage   0.50%            
Warrants issued to acquire shares, percentage of funded amount   3.00%            
Warrants issued to purchase shares of common stock (in shares)   116,845            
Warrants issued to purchase common stock exercise price (in dollars per share)   $ 10.27            
Fair value of warrant   $ 700,000            
Repayments of Long-term Debt $ 64,700,000     75,000,000.0        
Debt extinguishment costs     $ 5,300,000          
Debt issuance cost       700,000        
Interest expense       $ 6,700,000 $ 3,500,000 $ 300,000    
Loan and Security Agreement | Secured Debt | Minimum                
Debt Instrument [Line Items]                
Term loans, prepayment fee percentage of outstanding balance   1.00%            
Loan and Security Agreement | Secured Debt | Maximum                
Debt Instrument [Line Items]                
Term loans, prepayment fee percentage of outstanding balance   3.00%            
Loan and Security Agreement | Secured Debt | Second Term Loan                
Debt Instrument [Line Items]                
Warrants issued to purchase shares of common stock (in shares)   85,482            
Warrants issued to purchase common stock exercise price (in dollars per share)   $ 7.02            
Fair value of warrant   $ 400,000            
Warrants term   10 years            
Initial sale of notes | Note Purchase Agreement                
Debt Instrument [Line Items]                
Maximum borrowing capacity 75,000,000.0              
Proceeds from Notes Payable $ 10,300,000              
Common stock                
Debt Instrument [Line Items]                
Common stock issued during period (in shares)       17,103,000   8,433,000    
Common stock | Note Purchase Agreement                
Debt Instrument [Line Items]                
Common stock issued during period (in shares) 373,524              
Shares issued price per share (in dollars per share) $ 13.39              
Common stock issued pursuant to Securities Purchase Agreement (see Note 9) $ 5,000,000.0              
Fair value of common stock $ 5,400,000              
v3.10.0.1
Commitments and contingencies - Schedule of future payments under loan and security agreement (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Future payments under the Loan Agreement    
2019 $ 6,654  
2020 8,297  
2021 8,279  
2022 8,279  
2023 8,279  
Thereafter 89,998  
Total remaining payments 129,786  
Less: amount representing debt discount (721)  
Less: amount representing interest (54,588)  
Total non-current debt obligation $ 74,477 $ 39,084
v3.10.0.1
Commitments and contingencies - Capital leases narrative (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Capital Leased Assets [Line Items]      
Lease term 3 years    
Interest expense $ 300 $ 200 $ 100
Total property and equipment, gross 52,395 49,871  
Accumulated depreciation and amortization 2,000 3,000  
Equipment under capital lease      
Capital Leased Assets [Line Items]      
Total property and equipment, gross $ 7,129 $ 11,446  
v3.10.0.1
Commitments and contingencies - Schedule of future minimum lease payments under capital leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Future payments under the capital lease    
2019 $ 2,087  
2020 1,392  
2021 21  
Total capital lease obligations 3,500  
Less: amount representing interest (188)  
Present value of net minimum capital lease payments 3,312  
Less: current portion (1,937) $ (2,039)
Total non-current capital lease obligations $ 1,375 $ 3,373
v3.10.0.1
Commitments and contingencies - Schedule of future payments under noncancelable unconditional purchase commitments (Details) - Service agreements and laboratory supplies
$ in Thousands
Dec. 31, 2018
USD ($)
Long-term Purchase Commitment [Line Items]  
2019 $ 3,040
2020 3,040
2021 1,440
Total $ 7,520
v3.10.0.1
Commitments and contingencies - Other commitments narrative (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Other Commitments [Line Items]    
Registration payment arrangement term P12M  
Accrued liabilities $ 26,563 $ 22,742
Co Development Agreement    
Other Commitments [Line Items]    
Right of refusal fees related to acquisition agreement 3,000  
Payment of refusal fees related to the acquisition agreement 1,000  
Accrued liabilities $ 2,000  
v3.10.0.1
Stockholders' Equity - Schedule of shares of common stock reserved for future issuance (Details) - shares
Dec. 31, 2018
Dec. 31, 2017
Class of Stock    
Common stock reserved for future issuance (in shares) 12,936,000 15,868,000
Convertible Preferred Stock    
Class of Stock    
Common stock reserved for future issuance (in shares) 3,459,000 3,459,000
Stock Payable Liabilities    
Class of Stock    
Common stock reserved for future issuance (in shares) 132,000 689,000
Payable as Contingent Consideration    
Class of Stock    
Common stock reserved for future issuance (in shares) 452,000 551,000
Shares of common stock subject to outstanding warrants    
Class of Stock    
Number of shares of common stock underlying warrants (in shares) 611,000 1,962,000
Shares of common stock subject to outstanding RSUs    
Class of Stock    
RSU awards issued and outstanding (in shares) 4,031,000 2,387,000
Stock incentive plans | Employee Stock Option    
Class of Stock    
Options issued and outstanding (in shares) 3,855,000 4,115,000
Shares available for grant under stock options plans (in shares) 118,000 2,397,000
2015 Employee Stock Purchase Plan    
Class of Stock    
Common stock reserved for future issuance (in shares) 277,577 308,000
v3.10.0.1
Stockholders' Equity - Narrative (Details) - USD ($)
$ / shares in Units, $ in Thousands
1 Months Ended 2 Months Ended 12 Months Ended
Aug. 31, 2018
Apr. 30, 2018
Aug. 31, 2017
Feb. 28, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Class of Stock [Line Items]              
Proceeds from issuance of common stock         $ 17,511 $ 74,619 $ 3,134
Common stock              
Class of Stock [Line Items]              
Common stock issued during period (in shares)         17,103,000   8,433,000
Common stock issued pursuant to exercise of warrants (in shares)         1,022,000 5,176,000  
Private placement              
Class of Stock [Line Items]              
Gross proceeds from private placement     $ 73,500        
Net proceeds from private placement     $ 68,900        
Preferred stock to common stock conversion ratio 100.00%            
Preferred stock liquidation preference per share (in dollars per share)     $ 0.001        
Private placement | Series A Convertible Preferred Stock              
Class of Stock [Line Items]              
Number of shares sold in private placement (in shares)     3,500,000        
Shares issued price per share (in dollars per share)     $ 8.50        
Private placement | Common stock              
Class of Stock [Line Items]              
Number of shares sold in private placement (in shares)     5,200,000        
Shares issued price per share (in dollars per share)     $ 8.50        
Underwritten public offering              
Class of Stock [Line Items]              
Proceeds from issuance of common stock   $ 57,500          
Net proceeds from issuance of common stock   $ 53,500          
Underwritten public offering | Common stock              
Class of Stock [Line Items]              
Number of shares sold in private placement (in shares)   12,800,000          
Shares issued price per share (in dollars per share)   $ 4.50          
2018 Sales Agreement | Cowen and Company, LLC              
Class of Stock [Line Items]              
Percentage of commission payable on gross proceeds 3.00%            
2018 Sales Agreement | Cowen and Company, LLC | Common stock              
Class of Stock [Line Items]              
Proceeds from issuance of common stock         $ 61,100    
Net proceeds from issuance of common stock         $ 58,900    
Common stock issued during period (in shares)         4,300,000    
Maximum | 2018 Sales Agreement | Cowen and Company, LLC              
Class of Stock [Line Items]              
Proceeds from issuance of common stock $ 75,000            
CombiMatrix              
Class of Stock [Line Items]              
Proceeds from warrant exercises         $ 6,500    
Common stock issued pursuant to exercise of warrants (in shares)         1,000,000.0    
Subsequent event | Series A Convertible Preferred Stock | Series A convertible preferred stock converted to common stock              
Class of Stock [Line Items]              
Shares converted (in shares)       1,100,000      
Subsequent event | Common stock | Series A convertible preferred stock converted to common stock              
Class of Stock [Line Items]              
Shares issued upon conversion (in shares)       1,100,000      
v3.10.0.1
Stockholders' Equity - Schedule of outstanding warrants to purchase common stock (Details) - Common Stock
Dec. 31, 2018
$ / shares
shares
Class of Warrant or Right [Line Items]  
Number of shares of common stock underlying warrants (in shares) 610,875
CombiMatrix | Series F Warrants  
Class of Warrant or Right [Line Items]  
Exercise price per share (in dollars per share) | $ / shares $ 5.95
Number of shares of common stock underlying warrants (in shares) 408,548
Warrants issued to lender under Loan and Security Agreement  
Class of Warrant or Right [Line Items]  
Exercise price per share (in dollars per share) | $ / shares $ 10.27
Number of shares of common stock underlying warrants (in shares) 116,845
Warrants issued to lender under Loan and Security Agreement - 2018 Amendments  
Class of Warrant or Right [Line Items]  
Exercise price per share (in dollars per share) | $ / shares $ 7.02
Number of shares of common stock underlying warrants (in shares) 85,482
v3.10.0.1
Stock incentive plans - Narrative (Details)
1 Months Ended 12 Months Ended
Feb. 28, 2017
shares
Feb. 29, 2016
Jan. 31, 2015
Dec. 31, 2018
USD ($)
$ / shares
shares
Dec. 31, 2017
USD ($)
Employee
$ / shares
shares
Dec. 31, 2016
USD ($)
$ / shares
Stock incentive plan            
Stock-based compensation       $ 20,850,000 $ 19,221,000 $ 10,699,000
Additional shares reserved (in shares) | shares       12,936,000 15,868,000  
Number of employees affected by the stock option and RSU modifications | Employee         14  
Incremental compensation cost relating to stock option and RSU modifications           $ 300,000
Unrecognized stock-based compensation       $ 4,500,000    
Expected period to recognize on a straight-line basis       1 year 9 months 18 days    
Capitalized stock-based employee compensation       $ 0    
Shares of common stock subject to outstanding RSUs            
Stock incentive plan            
Weighted-average grant date fair value (in dollars per share) | $ / shares       $ 7.46 $ 10.03 $ 9.80
Share-based compensation arrangement by share-based payment award equity instruments other than options granted in period (in shares) | shares       3,282,000    
Unrecognized stock-based compensation       $ 22,600,000    
Expected period to recognize on a straight-line basis       2 years 1 month 6 days    
Shares of common stock subject to outstanding PRSUs            
Stock incentive plan            
Weighted-average grant date fair value (in dollars per share) | $ / shares           $ 6.50
Share-based compensation arrangement by share-based payment award equity instruments other than options granted in period (in shares) | shares       0 0  
Unrecognized stock-based compensation       $ 0    
Non-Employee Options            
Stock incentive plan            
Vested stock units awarded (in shares) | shares       0    
2015 Plan | Shares of common stock subject to outstanding PRSUs            
Stock incentive plan            
Vesting period   12 months        
Vested stock units awarded (in shares) | shares 352,045          
Stock-based compensation       $ 400,000 $ 1,900,000
Stock incentive plans            
Stock incentive plan            
Vesting period       4 years    
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage       25.00%    
Share-based compensation arrangement by share-based payment award, vesting rights, equal monthly vesting percentage       2.08%    
Stock incentive plans | Shares of common stock subject to outstanding RSUs            
Stock incentive plan            
Vesting period       3 years    
Share-based compensation arrangement by share-based payment award equity instruments other than options granted in period (in shares) | shares       3,282,000    
Stock incentive plans | Shares of common stock subject to outstanding options            
Stock incentive plan            
Weighted-average grant date fair value (in dollars per share) | $ / shares       $ 4.87 $ 5.82 $ 6.18
Total grant date fair value of options to purchase common stock vested       $ 5,900,000 $ 6,900,000 $ 5,600,000
Exercised, aggregate intrinsic value       $ 1,700,000 $ 2,100,000 $ 1,400,000
Stock incentive plans | First anniversary | Shares of common stock subject to outstanding RSUs            
Stock incentive plan            
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage       33.33%    
Stock incentive plans | Second anniversary | Shares of common stock subject to outstanding RSUs            
Stock incentive plan            
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage       33.33%    
Stock incentive plans | Third anniversary | Shares of common stock subject to outstanding RSUs            
Stock incentive plan            
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage       33.33%    
2015 Employee Stock Purchase Plan            
Stock incentive plan            
Weighted-average grant date fair value (in dollars per share) | $ / shares       $ 3.26 $ 2.51 $ 2.66
Stock-based compensation       $ 1,400,000 $ 1,100,000 $ 900,000
Purchase price of common stock of the lesser of fair market value on the purchase date or the last trading day preceding the offering date (as a percent)     85.00%      
Proceeds from stock plans       $ 600,000    
Additional shares reserved (in shares) | shares       277,577 308,000  
Minimum | 2010 Plan            
Stock incentive plan            
Employees holding voting rights of all classes of stock (as a percent)       10.00%    
Exercise price of options on common stock (as a percent)       110.00%    
Maximum | 2010 Plan            
Stock incentive plan            
Term of options granted       10 years    
v3.10.0.1
Stock incentive plans - Schedule of activity under stock incentive plans (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Shares of common stock subject to outstanding RSUs    
Activity under the plan    
Units granted (in shares) (3,282)  
Units cancelled (in shares) 340  
Stock incentive plans | Shares of common stock subject to outstanding options    
Activity under the plan    
Shares available for grant, beginning balance (in shares) 2,397  
Stock options outstanding, beginning balance (in shares) 4,115  
Additional shares reserved (in shares) 754  
Options granted (in shares) 260  
Option cancelled (in shares) (169)  
Options exercised (in shares) (351)  
Shares available for grant, ending balance (in shares) 118 2,397
Stock options outstanding, ending balance (in shares) 3,855 4,115
Weighted- Average Exercise Price    
Balance at the beginning of the period (in dollars per share) $ 8.51  
Options granted (in dollars per share) 8.50  
Options cancelled (in dollars per share) 9.35  
Options exercised (in dollars per share) 7.73  
Balance at the end of the period (in dollars per share) $ 8.54 $ 8.51
Additional information    
Exercisable (in shares) 2,737  
Exercisable, weighted-average exercise price (in dollars per share) $ 8.27  
Weighted-average remaining contractual life 6 years 9 months 18 days 7 years 7 months 6 days
Exercisable, weighted-average remaining contractual life 6 years 4 months 24 days  
Aggregate intrinsic value $ 9,927 $ 5,128
Exercisable, aggregate intrinsic value $ 7,787  
Vested and expected to vest    
Number of options (in shares) 3,710  
Weighted-average exercise price (in dollars per share) $ 8.52  
Weighted-average remaining contractual life 6 years 9 months 18 days  
Aggregate intrinsic value $ 9,626  
Stock incentive plans | Shares of common stock subject to outstanding RSUs    
Activity under the plan    
Units granted (in shares) (3,282)  
Units cancelled (in shares) 340  
v3.10.0.1
Stock incentive plans - Summary of RSU activity (Details) - Shares of common stock subject to outstanding RSUs - $ / shares
shares in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Number of Shares      
Balance at the beginning of the period (in shares) 2,387    
Granted (in shares) 3,282    
Vested (in shares) (1,298)    
Cancelled (in shares) (340)    
Balance at the end of the period (in shares) 4,031 2,387  
Weighted-Average Grant Date Fair Value      
Balance at the beginning of the period (in dollars per share) $ 9.91    
Granted (in dollars per share) 7.46 $ 10.03 $ 9.80
Vested (in dollars per share) 8.84    
Canceled (in dollars per share) 8.84    
Balance at the end of the period (in dollars per share) $ 8.35 $ 9.91  
v3.10.0.1
Stock incentive plans - Schedule of assumptions used in determination of fair value of options (Details)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Non-Employee Options      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Expected volatility     76.92%
Non-Employee Options | Minimum      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Expected term (in years) 8 years 4 months 28 days 6 years 3 months
Expected volatility 69.90%  
Risk-free interest rate 1.83% 1.55%
Non-Employee Options | Maximum      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Expected term (in years) 8 years 9 months 29 days 10 years
Expected volatility 78.70% 0.00%
Risk-free interest rate 2.04% 2.37%
Employees and directors stock options | Employee Stock Option      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Expected term (in years) 6 years 6 years 10 days 6 years 10 days
Expected volatility 59.58% 72.64% 71.42%
Risk-free interest rate 2.80% 2.01% 1.37%
2015 Employee Stock Purchase Plan      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Expected term (in years) 15 days 15 days 15 days
Expected volatility 71.66% 52.50% 66.31%
Risk-free interest rate 2.09% 1.23% 0.50%
v3.10.0.1
Stock incentive plans - Stock-based compensation expense (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Stock-based compensation      
Total stock-based compensation expense $ 20,850 $ 19,221 $ 10,699
Cost of revenue      
Stock-based compensation      
Total stock-based compensation expense 2,960 2,093 1,353
Research and development      
Stock-based compensation      
Total stock-based compensation expense 7,017 6,158 4,976
Selling and marketing      
Stock-based compensation      
Total stock-based compensation expense 4,887 3,956 1,709
General and administrative      
Stock-based compensation      
Total stock-based compensation expense $ 5,986 $ 7,014 $ 2,661
v3.10.0.1
Income Taxes - Narrative (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Tax Contingency [Line Items]          
Corporate tax rate   21.00% 34.00% 34.00%  
Provisional amount related to the remeasurement of certain deferred tax assets and liabilities $ 48,800   $ 48,800    
Increase in valuation allowance   $ 26,300 2,000 $ 33,400  
Net operating loss carryforwards change in ownership percentage minimum   50.00%      
Unrecognized tax benefits 16,375 $ 16,375 $ 10,561 $ 7,791 $ 11,429
Federal          
Income Tax Contingency [Line Items]          
Net operating loss carryforwards 318,700 $ 318,700      
Number of tax years open for examination   3 years      
California          
Income Tax Contingency [Line Items]          
Number of tax years open for examination   4 years      
Research and development | Federal          
Income Tax Contingency [Line Items]          
Tax credit carryforwards 9,000 $ 9,000      
Research and development | California          
Income Tax Contingency [Line Items]          
Tax credit carryforwards 7,400 7,400      
State          
Income Tax Contingency [Line Items]          
Net operating loss carryforwards 134,300 134,300      
Begins to expire 2030 | Federal          
Income Tax Contingency [Line Items]          
Net operating loss carryforwards 277,300 277,300      
No expiration date | Federal          
Income Tax Contingency [Line Items]          
Net operating loss carryforwards $ 41,400 $ 41,400      
v3.10.0.1
Income Taxes - Schedule of components of loss before income taxes by U.S. and foreign jurisdictions (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Tax Disclosure [Abstract]      
United States $ 132,194 $ 124,108 $ 99,793
Foreign (39) 1,128 463
Total $ 132,155 $ 125,236 $ 100,256
v3.10.0.1
Income Taxes - Schedule of components of the provision for income taxes (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Current:      
Foreign $ 62 $ 0 $ 0
Total current benefit for income taxes 62 0 0
Deferred      
Federal (2,862) (1,704) 0
State 0 (152) 0
Total deferred benefit for income taxes (2,862) (1,856) 0
Total income tax benefit $ (2,800) $ (1,856) $ 0
v3.10.0.1
Income Taxes - Schedule of reconciliation of the tax expense computed at the statutory federal rate and Company's tax expense (Details)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of the tax expense computed at the statutory federal rate and Company's tax expense      
U.S. federal taxes at statutory rate 21.00% 34.00% 34.00%
State taxes (net of federal benefit) 5.20% 3.30% 1.40%
Stock-based compensation (0.70%) (1.10%) (1.70%)
Research and development credits (2.70%) 0.00% 0.00%
Non-deductible expenses (0.60%) 0.00% 0.20%
Foreign tax differential 0.00% (0.30%) (0.20%)
Other 0.00% 0.00% 1.10%
Change in valuation allowance (25.50%) (34.40%) (34.80%)
Change in deferred—Tax Reform 0.00% (39.00%) 0.00%
Change in valuation allowance—Tax Reform 0.00% 39.00% 0.00%
Total 2.10% 1.50% 0.00%
v3.10.0.1
Income Taxes - Schedule of net deferred tax assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Deferred tax assets:    
Net operating loss carryforwards $ 76,972 $ 70,825
Tax credits 15 15
Revenue recognition differences 47,650 29,819
Accruals and other 7,262 5,544
Gross deferred tax assets 131,899 106,203
Valuation allowance (121,954) (95,687)
Total deferred tax assets 9,945 10,516
Deferred tax liabilities:    
Property and equipment (9,945) (10,516)
Total deferred tax liabilities (9,945) (10,516)
Net deferred tax assets $ 0 $ 0
v3.10.0.1
Income Taxes - Schedule of reconciliation of unrecognized tax benefits (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Tax Disclosure [Abstract]      
Unrecognized tax benefits, beginning of period $ 10,561 $ 7,791 $ 11,429
Gross increases—current period tax positions 5,686 2,552 782
Gross increases (decreases)—prior period tax positions 128 218 (4,420)
Unrecognized tax benefits, end of period $ 16,375 $ 10,561 $ 7,791
v3.10.0.1
Net loss per common share - Schedule of earnings per share, basic and diluted (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Earnings Per Share [Abstract]                      
Net loss $ (29,841) $ (31,723) $ (31,671) $ (36,120) $ (40,493) $ (27,402) $ (28,557) $ (26,928) $ (129,355) $ (123,380) $ (100,256)
Shares used in computing net loss per share, basic and diluted (in shares)                 66,747 46,512 33,176
Net loss per share, basic and diluted (in dollars per share)                 $ (1.94) $ (2.65) $ (3.02)
v3.10.0.1
Net loss per common share - Schedule of antidilutive securities excluded from computation of earnings per share (Details) - shares
shares in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (in shares) 12,019 11,982 5,968
Shares of common stock subject to outstanding options      
Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (in shares) 3,855 4,115 4,491
Shares of common stock subject to outstanding warrants      
Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (in shares) 611 1,962 0
Shares of common stock subject to outstanding RSUs      
Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (in shares) 4,031 2,387 892
Shares of common stock subject to outstanding PRSUs      
Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (in shares) 0 0 530
Shares of common stock pursuant to ESPP      
Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (in shares) 63 59 55
Shares of common stock underlying Series A convertible preferred stock      
Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of earnings per share (in shares) 3,459 3,459 0
v3.10.0.1
Geographic information - Schedule of revenue by country (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Geographic information                      
Total revenue $ 45,356 $ 37,366 $ 37,306 $ 27,671 $ 25,399 $ 18,148 $ 14,336 $ 10,338 $ 147,699 $ 68,221 $ 25,048
United States                      
Geographic information                      
Total revenue                 138,239 62,446 20,758
Canada                      
Geographic information                      
Total revenue                 4,206 3,226 2,526
Rest of world                      
Geographic information                      
Total revenue                 $ 5,254 $ 2,549 $ 1,764
v3.10.0.1
Selected Quarterly Data (Unaudited) (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Total revenue $ 45,356 $ 37,366 $ 37,306 $ 27,671 $ 25,399 $ 18,148 $ 14,336 $ 10,338 $ 147,699 $ 68,221 $ 25,048
Cost of revenue 21,141 20,441 20,447 18,076 17,049 13,274 10,490 9,329 80,105 50,142 27,878
Loss from operations (25,904) (30,110) (30,068) (36,475) (34,891) (30,976) (28,075) (27,337) (122,557) (121,279) (100,183)
Net loss $ (29,841) $ (31,723) $ (31,671) $ (36,120) $ (40,493) $ (27,402) $ (28,557) $ (26,928) $ (129,355) $ (123,380) $ (100,256)
Net loss per share, basic and diluted (in dollars per share) $ (0.40) $ (0.45) $ (0.47) $ (0.66) $ (0.78) $ (0.57) $ (0.66) $ (0.64) $ (1.94) $ (2.65) $ (3.02)
Debt extinguishment costs                 $ 4,609 $ 0 $ 0
Secured Debt | Loan and Security Agreement                      
Debt extinguishment costs $ 5,300                    
v3.10.0.1
Label Element Value
Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ 11,241,000