Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2020 |
Dec. 31, 2019 |
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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) | 125,000 | 125,000 |
Preferred stock, outstanding (in shares) | 125,000 | 125,000 |
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) | 185,886,000 | 98,796,000 |
Common stock, outstanding (in shares) | 185,886,000 | 98,796,000 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Total revenue | $ 279,598 | $ 216,824 | $ 147,699 |
Cost of revenue | 198,275 | 118,103 | 80,105 |
Research and development | 240,605 | 141,526 | 63,496 |
Selling and marketing | 168,317 | 122,237 | 74,428 |
General and administrative | 324,573 | 79,070 | 52,227 |
Loss from operations | (652,172) | (244,112) | (122,557) |
Other expense, net | (32,332) | (3,891) | (2,568) |
Interest expense | (29,766) | (12,412) | (7,030) |
Net loss before taxes | (714,270) | (260,415) | (132,155) |
Income tax benefit | (112,100) | (18,450) | (2,800) |
Net loss | $ (602,170) | $ (241,965) | $ (129,355) |
Net loss per share, basic and diluted (in dollars per share) | $ (4.47) | $ (2.66) | $ (1.94) |
Shares used in computing net loss per share, basic and diluted | 134,587 | 90,859 | 66,747 |
Test revenue | |||
Total revenue | $ 272,310 | $ 212,473 | $ 144,560 |
Other revenue | |||
Total revenue | $ 7,288 | $ 4,351 | $ 3,139 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (602,170) | $ (241,965) | $ (129,355) |
Other comprehensive income (loss): | |||
Unrealized income (loss) on available-for-sale marketable securities, net of tax | 10 | (4) | 166 |
Comprehensive loss | $ (602,160) | $ (241,969) | $ (129,189) |
Organization and description of business |
12 Months Ended |
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Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and description of business | Organization and description of businessInvitae Corporation ("Invitae," “the Company," "we," "us," and "our") was incorporated in the State of Delaware on January 13, 2010, as Locus Development, Inc. and we changed our name to Invitae Corporation in 2012. We offer high-quality, comprehensive, affordable genetic testing across multiple clinical areas, including hereditary cancer, cardiology, neurology, pediatrics, personalized oncology, metabolic conditions and rare diseases. To augment our offering and realize our mission, we have acquired multiple assets including four businesses in 2020, which expanded our suite of genome management offerings and established a broader entry into oncology therapy selection and personalized cancer monitoring.In October 2020, we completed the acquisition of ArcherDX, Inc. (“ArcherDX”). ArcherDX is a genomics company democratizing precision oncology by offering a suite of products and services that are accurate, personal, actionable and easy to use in local settings, thereby empowering clinicians to control the sample, data, patient care and economics. ArcherDX’s development platform, including its proprietary Anchored Multiplex PCR, ("AMP"), chemistry at the core, is enabling clinical tests and services that allow for therapy selection and cancer monitoring in community locations for the first time at scale. Invitae operates in one segment. |
Summary of significant accounting policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of significant accounting policies | Summary of significant accounting policies Principles of consolidation Our consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base these estimates on current facts, historical and anticipated results, trends and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. Actual results could differ materially from those judgments, estimates and assumptions. We evaluate our estimates on an ongoing basis. Significant estimates and assumptions made by management include the determination of: •revenue recognition; •the fair value of assets and liabilities associated with business combinations; •the impairment assessment of goodwill and intangible assets; •the valuation of our 2.00% convertible senior notes due 2024 issued in September 2019 ("Convertible Senior Notes"); •the recoverability of long-lived assets; •our incremental borrowing rates used to calculate our lease balances; •stock-based compensation expense and the fair value of awards and warrants issued; and •income tax uncertainties. Concentrations of credit risk and other risks and uncertainties Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. Our cash and cash equivalents are held by financial institutions in the United States. Such deposits may exceed federally insured limits. Significant customers are those that represent 10% or more of our total revenue for each year presented on the consolidated statements of operations. Our revenue from significant customers as a percentage of our total revenue was as follows:
No customers represented more than 10% of accounts receivable as of December 31, 2020 or 2019. Cash, cash equivalents, and restricted cash We consider all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds, U.S. treasury notes and government agency securities. Restricted cash consists primarily of money market funds that secure irrevocable standby letters of credit that serve as collateral for security deposits for our facility leases. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows (in thousands):
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 one year or less 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 impairments, if any, on available-for-sale securities are included in other expense, net. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in other income (expense), net. For marketable securities in an unrealized loss position, we assess our intent to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the security’s amortized cost basis is written down to fair value through other income (expense), net. Accounts receivable We receive payment from patients, biopharmaceutical partners, third-party payers and other business-to-business customers. See Note 3, "Revenue, accounts receivable and deferred revenue" for further information. Deferred revenue We record a contract liability when cash payments are received or due in advance of our performance related to one or more performance obligations. See Note 3, "Revenue, accounts receivable and deferred revenue" for further information. Inventory Our inventory consists of raw materials, work in progress, and finished goods, which are stated at the lower of cost or net realizable value on a first-in, first-out basis. We periodically analyze our inventory levels and expiration dates, and write down inventory that has become obsolete, inventory that has a cost basis in excess of its net realizable value, and inventory in excess of expected sales requirements as cost of revenue. We record an allowance for obsolete inventory using an estimate based on historical trends and evaluation of near-term expirations. Business combinations We apply Financial Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC") 805, Business Combinations, which requires recognition of assets acquired, liabilities assumed, and contingent consideration at their fair value on the acquisition date with subsequent changes recognized in earnings; requires acquisition-related expenses and restructuring costs to be recognized separately from the business combination and expensed as incurred; requires in-process research and development to be capitalized at fair value as an indefinite-lived intangible asset until completion or abandonment; and requires that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period be recognized as a component of provision for taxes. We account for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations. The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. We base the estimated fair value of identifiable intangible assets acquired in a business combination on independent third-party valuations that use information and assumptions provided by our management, which consider our estimates of inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, estimated cost savings, 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 ASC Topic 480, Distinguishing Liabilities from Equity, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We remeasure this liability each reporting period and record changes in the fair value as general and administrative expense. Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in our operating results from the date of acquisition. Intangible assets Amortizable intangible assets include trade names, non-compete agreements, patent licensing agreements, favorable leases, developed technology, customer relationships, and rights to develop new technology acquired as part of business combinations. Customer relationships acquired through our business combinations in 2017 are amortized on an accelerated basis, utilizing free cash flows, over periods ranging from to 12 years. All other intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from 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”), our goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Under ASC 350, we perform annual impairment reviews of our goodwill balance during the fourth fiscal quarter or more frequently if business factors indicate. In testing for impairment, we compare the fair value of our reporting unit to its carrying value including the goodwill of that unit. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, we will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. We did not incur any goodwill impairment losses in any of the periods presented. In-process research and development Intangible assets related to in-process research and development costs (“IPR&D”) are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. During this period, the assets will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. During the fourth quarter and if business factors indicate more frequently, we perform an assessment of the qualitative factors affecting the fair value of our IPR&D projects. If the fair value exceeds the carrying value, there is no impairment. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of an asset to its carrying value, without consideration of any recoverability test. We have not identified any such impairment losses to date. Leases Under ASC 842, Leases, we determine if an arrangement is a lease at inception. Operating leases are included in operating lease assets and operating lease obligations in our consolidated balance sheets. Finance leases are included in other assets and finance lease obligations in our consolidated balance sheets. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments. The operating lease asset also includes any lease payments made and is adjusted for lease incentives. Our lease terms may include options to extend or terminate the lease which are recognized when it is reasonably certain that we will exercise that option. Leases with terms of 12 months or less are not recorded on our balance sheet. Lease expense is recognized on a straight-line basis over the lease terms, or in some cases, the useful life of the underlying asset. We account for the lease and non-lease components as a single lease component. 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 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. 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 consolidated statements of operations in the period realized. The estimated useful lives of property and equipment are as follows:
Long-lived assets We review 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. There were no long-lived asset impairment losses recorded for any period presented. Fair value of financial instruments Our financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, accrued liabilities, finance leases, and liabilities associated with business combinations. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued and other current liabilities approximate their current fair value due to the relatively short-term nature of these accounts. Based on borrowing rates available to us, the carrying value of finance leases approximate their fair values. Liabilities associated with business combinations are recorded at their estimated fair value. Revenue recognition We recognize revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers. We utilize the following practical expedients and exemptions: •Costs to obtain or fulfill a contract are expensed when incurred because the amortization period would have been one year or less, and •No adjustments to promised consideration were made for financing as we expect, 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. Test revenue Test revenue is comprised of testing services and sales of distributed precision oncology products. The majority of our test revenue is generated from genetic testing, in addition to somatic testing for therapy selection and personalized cancer monitoring. These testing services provide analysis and associated interpretation of the sequencing of parts of the genome. Test orders are placed under signed requisitions or contractual agreements, and we often enter into contracts with biopharmaceutical partners, other business-to-business customers (e.g., hospitals, clinics, medical centers) and insurance companies that include pricing provisions under which such tests are billed. Billing terms are generally net 30 to 60 days. While the transaction price of diagnostic tests is originally established either via contract or pursuant to our standard list price, we often provide 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 we 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 each reporting period and updated as necessary. We look to transfer of control in assessing timing of recognition of revenue in connection with each performance obligation. In general, revenue in connection with the service portion of our diagnostic tests is recognized upon delivery of the underlying clinical report or when the report is made available on our web portal. Outstanding performance obligations pertaining to orders received but for which the underlying report has not been issued are generally satisfied within a 30-day period. We also generate test revenue through the sale of our precision oncology products, which is comprised primarily of sales of our distributed research use only ("RUO ") and in vitro diagnostics ("IVD") products for therapy selection. We recognize revenue on these sales once shipment has occurred. Product sales are recorded net of discounts and other deductions. Billing terms are generally net 30 days. Shipping and handling fees billed to customers are recorded as revenue on the consolidated statements of operations. The associated shipping and handling costs are recorded as cost of revenue. Other revenue Other revenue is primarily generated from pharma development services provided to biopharmaceutical companies related to companion diagnostic development as well as through collaboration agreements and genome network contracts. Contracts for companion diagnostic development consist primarily of milestone-based payments along with annual fees and marked-up pass-through costs. The arrangements are treated as short-term contracts for revenue recognition purposes because they allow termination of the agreements by the customers with 30 to 120 days’ written notice without a termination penalty. Upon termination, customers are required to pay for the proportion of services provided under milestones that were in progress. We recognize revenue in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenue over time based on the progress made toward achieving the performance obligation, utilizing both input or output methods, depending on the performance obligation, including labor hours expended, tests processed, or time elapsed, that measure our progress toward the achievement of the milestone. We also enter 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 data 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 30-day terms. Cost of revenue Cost of revenue reflects the aggregate costs incurred in delivering our genetic offerings and includes expenses for personnel-related costs including stock-based compensation, materials and supplies, royalties, regulatory fees, commercialization fees, equipment and infrastructure expenses associated with testing and allocated overhead including rent, equipment depreciation, information technology costs, amortization of acquired intangibles and utilities. License Agreements We have entered and may continue to enter into license agreements to access and utilize certain technology. We evaluate if the license agreement results in the acquisition of an asset or a business and then determine if the acquired asset has the ability to generate revenues or is subject to regulatory approval. When regulatory approval is not required, we record the license as an asset and amortize it over the estimated economic life. When regulatory approval is required, we record the amount paid as a research and development expense. Income taxes We use 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. Significant judgment is required in determining the net valuation allowance which includes our evaluation of all available evidence including past operating results, estimates on future taxable income and acquisition-related tax assets and liabilities. We historically established a full valuation allowance against our deferred tax assets due to the uncertainty surrounding realization of such assets. In 2020, we released approximately $112.1 million of our valuation allowance to account for acquired intangibles that support the future realization of some of our deferred tax assets. Due to the overall increase of deferred tax assets, our valuation allowance has also increased from the prior year. Stock-based compensation We measure stock-based payment awards made to employees and directors based on the estimated fair values of the awards and recognize the compensation expense over the requisite service period. We use the Black-Scholes option-pricing model to estimate the fair value of stock option awards and employee stock purchase plan (“ESPP”) purchases. The fair value of restricted stock unit (“RSU”) awards with time-based vesting terms is based on the grant date share price. We grant performance-based restricted stock unit (“PRSU”) awards to certain employees which vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with us. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. We recognize such compensation expense on an accelerated vesting method. Stock-based compensation expense for awards without a performance condition is recognized using the straight-line method. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, our stock-based compensation is reduced for estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We account for stock issued in connection with business combinations based on the fair value on the date of issuance. Advertising Advertising expenses are expensed as incurred. We incurred advertising expenses of $11.4 million, $9.9 million and $0.6 million during the years ended December 31, 2020, 2019 and 2018, 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. Our 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, shares of common stock pursuant to ESPP, common stock issuable in connection with our Convertible Senior Notes, 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. Prior period reclassifications We have reclassified certain amounts in prior periods to conform with current presentation. Immaterial correction of an error We determined the historical classification of certain acquisition-related obligations as equity and the subsequent measurement of such obligations was inappropriate and instead should have been classified as liabilities and subsequently measured at fair value with changes recognized in other expense, net during the year ended December 31, 2020. We determined that the impact of the error to previously issued consolidated financial statements was not material and have corrected the immaterial error in the current period financial statements. The impact of this correction was an increase to other long-term liabilities of $10.1 million, a corresponding decrease to additional paid-in capital of $10.4 million and an increase to other income, net of $0.3 million. Recent accounting pronouncements We evaluate all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board ("FASB") for consideration of their applicability. ASUs not included in the disclosures in this report were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements. Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. This new standard is effective for our interim and annual periods beginning January 1, 2022, and earlier adoption is permitted. We may elect to apply the amendments on a retrospective or modified retrospective basis. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. Recently adopted accounting pronouncements In June 2016, FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires measurement and recognition of expected credit losses for financial assets. This guidance became effective for us beginning in the first quarter of 2020 and was adopted using a modified retrospective approach, with certain exceptions. The adoption of Topic 326 did not have a material impact on our consolidated financial statements as credit losses are not expected to be significant. As part of our adoption of Topic 326, we assess our accounts receivables for expected credit losses at each reporting period by disaggregating by payer type and further by portfolios of customers with similar characteristics, such as customer type and geographic location. We then review each portfolio for expected credit losses based on historical payment trends as well as forward looking data and current economic trends. If a credit loss is determined, we record a reduction to our accounts receivable balance with a corresponding general and administrative expense. In accordance with Topic 326, we no longer evaluate whether our available-for-sale debt securities in an unrealized loss position are other than temporarily impaired. Instead, we assess whether such unrealized loss positions are credit-related. Our expected loss allowance methodology for these securities is developed by reviewing the extent of the unrealized loss, the issuers’ credit ratings and any changes in those ratings, as well as reviewing current and future economic market conditions and the issuers’ current status and financial condition. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in other income (expense), net. Unrealized gains and losses that are not credit-related are included in accumulated other comprehensive income (loss). On January 1, 2019, we adopted the provisions of ASC Topic 842, Leases, using the modified retrospective approach in accordance with Topic 842. Adoption of Topic 842 had a material impact on our consolidated balance sheets, but did not have an impact on our consolidated statements of operations. We elected the package of practical expedients permitted under the transition guidance which, among other things, allowed us to carry forward the historical classification of leases in place as of January 1, 2019. We did not identify any material embedded leases with the adoption of Topic 842 and therefore the implementation of Topic 842 primarily focused on the treatment of our previously identified leases. Prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under previous lease guidance, ASC 840, Leases. Under ASC 840, we rented facilities under operating lease agreements and recognized related rent expense on a straight-line basis over the term of the applicable lease agreement. Some of the lease agreements contained rent holidays, scheduled rent increases, lease incentives, and renewal options. Rent holidays and scheduled rent increases were included in the determination of rent expense recorded over the lease term. Lease incentives were recognized as a reduction of rent expense on a straight-line basis over the term of the lease. Renewals were not assumed in the determination of the lease term unless they were deemed to be reasonably assured at the inception of the lease. We recognized rent expense beginning on the date we obtained the legal right to use and control the leased space.
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Revenue, accounts receivable and deferred revenue |
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Revenue, accounts receivable and deferred revenue | Revenue, accounts receivable and deferred revenue Test revenue is generated from sales of diagnostic tests and precision oncology products to four groups of customers: biopharmaceutical partners; patients who pay directly; patients' insurance carriers; and other business-to-business customers (e.g., hospitals, clinics, medical centers). Test revenue is generated in two ways: through a centralized lab and decentralized through the shipment of reactions to biopharma partners and other business-to-business customers. We refer to the set of reagents needed to perform a next-generation sequencing test as a "reaction." Amounts billed and collected, and the timing of collections, vary based on the type of payer. Other revenue consists principally of revenue recognized under contracts for pharma development services and other collaboration and genome network agreements and is accounted for under the provisions provided in ASC 606, Revenue from Contracts with Customers. Our revenue as disaggregated by payer category and revenue subtype is as follows (in thousands):
We recognize revenue related to billings based on estimates of the amount that will ultimately be realized. Cash collections for certain tests delivered may differ from rates originally estimated. As a result of new information, we update our estimate quarterly of the amounts to be recognized for previously delivered tests which resulted in the following increases to revenue and decreases to our loss from operations and basic and diluted net loss per share (in millions, except per share amounts):
Impact of COVID-19 Our billable volumes decreased significantly in the second half of March 2020 as compared to the first few months of 2020 as a result of COVID-19 and related limitations and priorities across the healthcare system. Our daily test volumes have consistently increased from the low in March 2020, although we are currently still experiencing changes in product mix due to the impact of COVID-19. COVID-19 could have a material impact on our financial results for the foreseeable future, particularly on product mix and as a result, the revenue we recognize. We have reviewed and adjusted for the impact of COVID-19 on our estimates related to revenue recognition and expected credit losses. Approximately 8% of our workforce as of March 31, 2020 was impacted by a reduction in force in April 2020 in an initiative to manage costs and cash burn that resulted in one-time costs in the second quarter of 2020 of $3.8 million. In addition, effective May 2020, we have reduced the salaries of our named executive officers by approximately 20%, which reductions ceased as of January 2021. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law which was a stimulus bill intended to bolster the economy, among other things, and provide assistance to qualifying businesses and individuals. The CARES Act included an infusion of funds into the healthcare system, and in April 2020, we received $3.8 million as a part of this initiative. This payment was recognized as other income (expense), net in our consolidated statement of operations during the year ended December 31, 2020. We also received $2.3 million in January 2021 which we recognized as other income (expense), net during the three months ended March 31, 2021. At this time, we are not certain of the availability, extent or impact of any future relief provided under the CARES Act. Accounts receivable The majority of our accounts receivable represents amounts billed to pharmaceutical partners and other business-to-business customers for test and other revenue recognized, and estimated amounts to be collected from third-party insurance payers for genetic testing revenue recognized. Also included are amounts due under the terms of collaboration and genome network agreements for diagnostic testing and data aggregation reporting services provided and proprietary platform access rights transferred. We also record unbilled revenue for revenue recognized but yet to be billed for services provided to biopharmaceutical companies related to companion diagnostic development. The amount is a contract receivable and is included in accounts receivable on the consolidated balance sheets; unbilled revenue was $4.3 million and nil as of December 31, 2020 and 2019, respectively. Deferred revenue We record a contract liability when cash payments are received or due in advance of our performance related to one or more performance obligations. The deferred revenue balance primarily consists of advanced billings for pharma development services, including billings at the initiation of a performance-based milestones, and recognized as revenue in the applicable future period when the revenue is earned. Also included are prepayments related to our consumer direct channel. We recognized revenue of $1.4 million from deferred revenue for the year ended as of December 31, 2020. In addition, we recognized deferred revenue of $4.8 million upon the acquisition of ArcherDX in October 2020, $2.0 million of which was recognized as revenue during the year ended December 31, 2020.
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Business combinations |
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Business combinations | Business combinations Singular Bio In June 2019, we acquired 100% of the fully diluted equity of Singular Bio, a privately held company developing single molecule detection technology, for approximately $57.3 million, comprised of $53.9 million in the form of 2.5 million shares of our common stock and the remainder in cash. We granted approximately $90.0 million of restricted stock units ("RSU") under our 2015 Stock Incentive Plan as inducement awards to new employees who joined Invitae in connection with our acquisition of Singular Bio. $45.0 million of the RSUs are time-based and vested in three equal installments in December 2019, June 2020, and December 2020, subject to the employee's continued service with us ("Time-based RSUs") and $45.0 million of the RSUs are performance-based RSUs ("PRSU") that vest upon the achievement of certain performance conditions. Since the number of awards granted is based on a 30-day volume weighted-average share price with a fixed dollar value, these Time-based RSUs and PRSUs are liability-classified and the fair value is estimated at each reporting period based on the number of shares that are expected to be issued at each reporting date and our closing stock price, which combined are categorized as Level 3 inputs. Therefore, fair value of the RSUs and PRSUs and the number of shares to be issued will not be fixed until the awards vest. During the years ended December 31, 2020 and 2019, we recorded research and development stock-based compensation expense of $29.1 million and $14.7 million, respectively, related to the Time-based RSUs, and $19.4 million and $24.4 million, respectively, related to the PRSUs based on our evaluations of the probability of achieving performance conditions. As of December 31, 2020, the Time-based RSUs and PRSUs had a total fair value of $43.9 million and $43.8 million, respectively, based on a total estimated issuance of 3.5 million shares and expectation of the achievement of the performance conditions. As of December 31, 2020, 2.0 million of the Time-based RSUs and 1.2 million of the PRSUs had vested with a total fair value of $75.0 million which was recorded in common stock issued or issuable pursuant to acquisitions in the consolidated statements of stockholders' equity. Jungla In July 2019, we acquired 100% of the equity interest of Jungla, a privately held company developing a platform for molecular evidence testing in genes, for approximately $59.0 million, comprised of $44.9 million in the form of shares of our common stock and the remainder in cash. We may be required to pay contingent consideration based on achievement of post-closing development milestones. As of the acquisition date, the fair value of this contingent consideration was $10.7 million including cash and common stock. These milestones are expected to be completed within two years of the date of acquisition, two of which were completed during the year ended December 31, 2020. The material factors that may impact the fair value of the contingent consideration, and therefore, this liability, are the probabilities and timing of achieving the related milestones and the discount rate we used to estimate the fair value, which are Level 3 inputs not supported by market activity. Significant changes in any of the probabilities of success would result in a significant change in the fair value, which will be estimated at each reporting date with changes reflected as a general and administrative expense. As of December 31, 2020, the fair value of this contingent consideration was $7.1 million. Upon acquisition, we had a stock payable liability related to our acquisition of Jungla which represents the hold-back obligation to issue 0.2 million shares subject to indemnification claims that may arise. This liability was adjusted at each reporting period based on the fair value of our common stock, which is a Level 3 input, with the change recorded in other income (expense), net. During July 2020, the hold-back shares were remitted in full to the former owners of Jungla. Clear Genetics In November 2019, we acquired 100% of the equity interest of Clear Genetics, a developer of software for providing genetic services at scale, for approximately $50.1 million. Of the cash and stock purchase price consideration issued, $0.2 million of cash and approximately 0.4 million shares of our common stock were subject to a 12-month hold back to satisfy indemnification obligations that were released during the year ended December 31, 2020. Diploid In March 2020, we acquired 100% of the equity interest of Diploid, a developer of artificial intelligence software capable of diagnosing genetic disorders using sequencing data and patient information, for approximately $82.3 million in cash and shares of our common stock. Of the stock purchase price consideration issued, approximately 0.4 million shares are subject to a hold-back to satisfy indemnification obligations that may arise. We included the financial results of Diploid in our consolidated financial statements from the acquisition date, which were not material for the year ended December 31, 2020. The following table summarizes the purchase price recorded as a part of the acquisition of Diploid (in thousands):
Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by us. While we believe that our estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed through our acquisition of Diploid at the date of acquisition (in thousands):
Based on the guidance provided in ASC 805, Business Combinations, we accounted for the acquisition of Diploid as a business combination and determined that 1) Diploid was a business which combines inputs and processes to create outputs, and 2) substantially all of the fair value of gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets. Our purchase price allocation for the acquisition is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available, primarily related to our deferred tax liability assumed in connection with the acquisition. Additional information that existed as of the acquisition date but at the time was unknown to us may become known to us during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. We measured the identifiable assets and liabilities assumed at their acquisition date fair values separately from goodwill. The intangible asset acquired is developed technology related to Diploid's artificial intelligence technology platform. The fair value of the developed technology was estimated using an income approach with an estimated useful life of nine years. As of the acquisition date, we recorded a stock payable liability of $7.5 million to represent the hold-back obligation to issue 0.4 million shares subject to indemnification claims that may arise. This liability is adjusted at each reporting period based on the fair value of our common stock, which is a Level 3 input. As of December 31, 2020, the value of this liability was $17.7 million with the change recorded in other income (expense), net. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of Diploid resulted in the recognition of $50.7 million of goodwill which we believe relates primarily to expansion of the acquired technology to apply to new areas of genetic testing. The goodwill created as a result of the acquisition of Diploid is not deductible for the foreign local tax purposes. In June 2020, we granted 0.2 million RSUs with a fair value of $3.6 million under our 2015 Stock Incentive Plan as inducement awards in connection with our acquisition of Diploid. These RSUs vest in two equal installments, in April 2021 and April 2022. The value of the awards was recognized as research and development stock-based compensation upon grant in June 2020 as there were no ongoing obligations required by the award recipients. Genelex and YouScript In April 2020, we acquired 100% of the equity interest of Genelex and YouScript to bring pharmacogenetic testing and integrated clinical decision support to Invitae. We acquired Genelex for approximately $13.2 million, primarily in shares of our common stock. Of the stock purchase price consideration issued, approximately 0.1 million shares are subject to a hold-back to satisfy indemnification obligations that may arise. We acquired YouScript for approximately $52.7 million, including cash consideration of $24.5 million and the remaining in shares of our common stock. Of the purchase price consideration for YouScript, approximately $1.4 million and 0.5 million shares of our common stock are subject to a hold-back to satisfy indemnification obligations that may arise. We included the financial results of Genelex and YouScript in our consolidated financial statements from the acquisition date, which were not material for the year ended December 31, 2020. We recorded $1.7 million of transaction costs related to the acquisition of Genelex and YouScript as general and administrative expense during the year ended December 31, 2020. We may be required to pay contingent consideration in the form of additional shares of our common stock in connection with the acquisition of Genelex if, within a specified period following the closing, we achieve a certain product milestone, in which case we would issue shares of our common stock with a value equal to a portion of the gross revenues actually received by us for a pharmacogenetic product reimbursed through certain payers during an earn-out period of up to four years. As of the acquisition date, the fair value of this contingent consideration was $2.0 million in the form of shares of our common stock. The material factors that may impact the fair value of the contingent consideration, and therefore, this liability, are the probabilities and timing of achieving the related milestone, the estimated revenues achieved for a pharmacogenetic product and the discount rate we used to estimate the fair value, which are Level 3 inputs not supported by market activity. Significant changes in any of the probabilities of success would result in a significant change in the fair value, which is estimated at each reporting date with changes reflected as general and administrative expense. As of December 31, 2020, the fair value of this contingent consideration was $1.2 million. The following table summarizes the purchase prices recorded as a part of the acquisition of Genelex and YouScript (in thousands):
Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by us. While we believe that our estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed through our acquisitions of Genelex and YouScript at the date of acquisition (in thousands):
Based on the guidance provided in ASC 805, Business Combinations, we accounted for the acquisitions of Genelex and YouScript as business combinations and determined that 1) Genelex and YouScript were businesses which combine inputs and processes to create outputs, and 2) substantially all of the fair value of gross assets acquired were not concentrated in a single identifiable asset or group of similar identifiable assets. Our purchase price allocation for the acquisitions is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available, primarily related to our deferred tax liability assumed. Additional information that existed as of the acquisition date but at the time was unknown to us may become known to us during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. We measured the identifiable assets and liabilities assumed at their acquisition date fair values separately from goodwill. The intangible assets acquired are the developed technologies related to Genelex's and YouScript's technology platforms. The fair value of the developed technologies were estimated using an income approach with an estimated useful life of eight years. As of the acquisition date, we recorded stock payable liabilities of $6.2 million to represent the hold-back obligation to issue shares subject to indemnification claims that may arise. These liabilities are adjusted at each reporting period based on the fair value of our common stock, which is a Level 3 input. As of December 31, 2020, the value of this liability was $21.6 million with the change recorded in other income (expense), net. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisitions of Genelex and YouScript resulted in the recognition of $33.8 million of goodwill which we believe relates primarily to future functionality and expansion of the acquired technologies. Of the goodwill recognized, $29.7 million related to the YouScript acquisition is not deductible for tax purposes. ArcherDX In June 2020, we entered into a definitive agreement with ArcherDX, a genomics analysis company democratizing precision oncology, and in October 2020, the closing conditions were met and the transaction was consummated. Under the terms of the agreement, we acquired 100% of the equity interest of ArcherDX for $2.3 billion, comprised of $2.0 billion in the form of our common stock, $2.0 million in liabilities, and the remainder in cash. We incurred $20.9 million of transaction costs related to the acquisition of ArcherDX which we recorded as general and administrative expense during the year ended December 31, 2020. We may be required to pay contingent consideration based on achievement of post-closing development and revenue milestones. As of the acquisition date, the total fair value of the contingent consideration was $945.2 million, $933.6 million of which was included in the purchase price and $11.6 million recognized as non-recurring post-combination compensation expense. Of this $933.6 million, $925.1 million would be in the form of shares of our common stock which will be priced at the time of the milestone achievement, and the remainder in cash. The milestones are expected to be completed within approximately two years from the date of the acquisition, with one of them being achieved during November 2020 which resulted in the issuance of 5.0 million shares of our common stock and a cash payment of $1.9 million. This milestone achievement subsequent to the acquisition date resulted in the recognition of $40.6 million general and administrative expense. The material factors that may impact the fair value of the contingent consideration, and therefore the liability, are (i) the estimated number of shares issued, (ii) the volatility assumptions of our common stock used in the Monte Carlo simulation, (iii) the probabilities and timing of achievement of milestones and (iv) discount rates, all of which are Level 3 inputs not supported by market activity. Significant changes in any of these inputs may result in a significant change in fair value, which is estimated at each reporting date with changes reflected as general and administrative expense. As of December 31, 2020, the fair value of the contingent consideration representing the remaining milestones was $788.3 million. In connection with the acquisition, all of ArcherDX's equity awards outstanding and unvested prior to the acquisition became fully vested per the terms of the agreement. The acceleration of vesting required us to allocate the fair value of the equity attributable to the pre-combination service to the purchase price and the remaining amount of $125.8 million, inclusive of $11.6 million in contingent consideration, to non-recurring post-combination expense which we recognized as general and administrative expense during the year ended December 31, 2020. We included the financial results of ArcherDX in our consolidated financial statements from the acquisition date, which contributed $16.2 million and $24.8 million of revenue and net loss, respectively, during the year ended December 31, 2020. The following table summarizes the purchase price and post-combination expense recorded as a part of the acquisition of ArcherDX (in millions):
Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by us. While we believe that our estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed through our acquisition of ArcherDX at the date of acquisition (in millions):
Based on the guidance provided in ASC 805, Business Combinations, we accounted for the acquisition of ArcherDX as a business combination and determined that 1) ArcherDX was a business which combines inputs and processes to create outputs, and 2) substantially all of the fair value of gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets. Our purchase price allocation for the acquisition is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available, primarily related to our deferred tax liability assumed in connection with the acquisition. Additional information that existed as of the acquisition date but at the time was unknown to us may become known to us during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. We measured the identifiable assets and liabilities assumed at their acquisition date fair values separately from goodwill. The intangible assets acquired are the developed technology related to ArcherDX's artificial intelligence technology platform, IPR&D for its STRATAFIDE and PCM products, ArcherDX's customer relationships in place at the time of acquisition, and the ArcherDX tradename. We also acquired the right to develop new technology through an existing agreement for the development and commercialization of sequencing-based companion diagnostics between ArcherDX and a vendor. The fair value of our intangible assets acquired as of the acquisition date and the method used to value these assets as well as the estimated economic lives for amortizable intangible assets were as follows (in millions, except estimated useful life which is in years):
Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of ArcherDX resulted in the recognition of $1.7 billion of goodwill which we believe relates primarily to the anticipated benefits of synergies created through the acquisition and assembled workforce. The acquisition of ArcherDX advances our objectives to create a comprehensive offering that provides testing services for disease risk, therapy selection and personalized cancer monitoring to enable precision approaches to cancer treatment. Goodwill created as a result of the acquisition of ArcherDX is not deductible for tax purposes. We recorded an income tax benefit of $109.5 million in the three months ended December 31, 2020 due to net deferred tax liabilities assumed in connection with our acquisition of ArcherDX which provided a future source of income to support the realization of our deferred tax assets and resulted in a partial release of our valuation allowance. In connection with the acquisition, we granted inducement awards of Invitae common stock to new employees who joined Invitae in connection with our acquisition of ArcherDX with an estimated fair value of $112.2 million, net of estimated forfeitures. These awards vest upon the achievement of the contingent consideration milestones discussed above and are subject to the employee’s continued service with us, unless terminated without cause in which case vesting is only dependent on milestone achievement. As the number of shares that are expected to be issued are fixed, the awards are equity-classified. During the year ended December 31, 2020, we recorded $41.2 million in stock-based compensation expense based on our probability of milestone achievement. Included in the stock-based compensation expense is $2.1 million related to the acceleration of stock-based compensation expense due to the termination of an employee without cause whereby the employee's continued service is not required. Pro forma financial information (unaudited) The audited pro forma financial information in the table below summarizes the combined results of operations for Invitae and ArcherDX as though the companies had been combined as of January 1, 2019. The pro forma amounts have been adjusted for: •transaction expenses incurred by ArcherDX and us, •depreciation expense resulting from the fair value of the acquired property and equipment, •amortization expense resulting from the acquired intangible assets, •the elimination of historical interest expense incurred by ArcherDX on its debt and debt-like items and the incurrence of interest expense related to the issuance of debt in connection with the acquisition, •lease expense resulting from the step-up in the operating lease obligation and operating lease asset, •nonrecurring post-combination expense, •income tax benefits resulting from the deferred tax liabilities acquired, and •the 26.3 million shares of our common stock issued upon the closing of the ArcherDX transaction. The following unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisition had taken place as of January 1, 2019 (in thousands):
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Goodwill and intangible assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and intangible assets | Goodwill and intangible assets Goodwill The changes in the carrying amounts of goodwill were as follows (in thousands):
Intangible assets The following table presents details of our acquired intangible assets as of December 31, 2020 (in thousands):
Acquisition-related intangibles included in the above table are finite-lived, other than in-process research and development which has an indefinite life, and are carried at cost less accumulated amortization. Customer relationships related to our 2017 business combinations are being amortized on an accelerated basis, in proportion to estimated cash flows. All other finite-lived acquisition-related intangibles are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized. Amortization expense was $26.6 million, $7.7 million, and $5.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. Intangible assets are carried at cost less accumulated amortization. Amortization expense is recorded to cost of revenue, research and development, sales and marketing and general and administrative expense. The following table summarizes our estimated future amortization expense of intangible assets with finite lives as of December 31, 2020 (in thousands):
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Balance sheet components |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet components | Balance sheet components Inventory Inventory consisted of the following (in thousands):
Property and equipment, net Property and equipment consisted of the following (in thousands):
Depreciation expense was $10.5 million, $7.1 million and $8.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. Accrued liabilities Accrued liabilities consisted of the following (in thousands):
Other long-term liabilities Other long-term liabilities consisted of the following (in thousands):
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Fair value measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | Fair value measurements Financial assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is summarized as follows: Level 1—Observable inputs such as quoted prices (unadjusted) for identical instruments in active markets. Level 2—Observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations whose significant inputs are observable. Level 3—Unobservable inputs that reflect the reporting entity’s own assumptions. The following tables set forth the fair value of our consolidated financial instruments that were measured at fair value on a recurring basis (in thousands):
There were no transfers between Level 1, Level 2 and Level 3 during the periods presented. The total fair value of investments with unrealized losses at December 31, 2020 was $109.3 million. None of the available-for-sale securities held as of December 31, 2020 have been in an unrealized loss position for more than one year. At December 31, 2020, the remaining contractual maturities of available-for-sale securities ranged from to nine months. Interest income generated from our investments was $4.0 million and $5.2 million during the years ended December 31, 2020 and 2019, respectively. Our certificates of deposit 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. Stock payable liabilities relate to certain indemnification hold-backs resulting from business combinations that are settled in shares of our common stock. We elected to account for these liabilities using the fair value option due to the inherent nature of the liabilities and the changes in value of the underlying shares that will ultimately be issued to settle the liabilities. The estimated fair value of these liabilities is classified as Level 3 and determined based upon the number of shares that are issuable to the sellers and the quoted closing price of our common stock as of the reporting date. The number of shares that will ultimately be issued is subject to adjustment for indemnified claims that existed as of the closing date for each acquisition. Changes in the number of shares issued and share price can significantly affect the estimated fair value of the liabilities. During the year ended December 31, 2020, the change in fair value related to stock payable liabilities recorded to other income (expense), net was expense of $37.5 million.
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Commitments and contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies | Commitments and contingencies Leases In 2015, we entered into an operating lease agreement for our headquarters and main production facility in San Francisco, California which commenced in 2016. This lease expires in 2026 and we may renew the lease for an additional ten years. This optional period was not considered reasonably certain to be exercised and therefore we determined the lease term to be a ten-year period expiring in 2026. In connection with the execution of the lease, we provided a security deposit of approximately $4.6 million which is included in restricted cash in our consolidated balance sheets. We also have other operating leases for office and laboratory space in California, Colorado, Massachusetts, New York and Washington and internationally in Australia and Israel. We expect to enter into new leases and modify existing leases as we support continued growth of our operations. We have entered into various finance lease agreements to obtain laboratory equipment. The terms of our finance leases are generally three years and are typically secured by the underlying equipment. The portion of the future payments designated as principal repayment and related interest was classified as a finance lease obligation on our consolidated balance sheets. Supplemental information regarding our operating and finance leases were as follows:
The components of lease costs, which were included in cost of revenue, research and development, selling and marketing and general and administrative expenses on our consolidated statements of operations, were as follows (in thousands):
Future payments under operating and finance leases as of December 31, 2020 are as follows (in thousands):
Debt financing In November 2018, we entered into a Note Purchase Agreement (the "2018 Note Purchase Agreement") pursuant to which we were eligible to borrow an aggregate principal amount up to $200.0 million over a seven year maturity term which included an initial borrowing of $75.0 million in November 2018. We received net proceeds of $10.3 million after terminating and repaying the balance of our obligations of approximately $64.7 million with our previous lender. In September 2019, we settled our obligations under the 2018 Note Purchase Agreement in full for $85.7 million, which included repayment of principal of $75.0 million, accrued interest of $2.4 million, and prepayment fees of $8.9 million which were recorded as debt extinguishment costs in other expense, net in our consolidated statement of operations during the year ended December 31, 2019. In October 2020, we entered into a credit agreement with a financial institution under which we borrowed $135.0 million (the "2020 Term Loan") concurrent with the closing of the ArcherDX transaction (the "closing date"). The 2020 Term Loan is secured by a first priority lien on all of our and our subsidiaries' assets (including our intellectual property), and is guaranteed by our subsidiaries, in each case, excluding certain excluded assets and immaterial foreign subsidiaries. The 2020 Term Loan bears interest at an annual rate equal to LIBOR, subject to a 2.00% LIBOR floor, plus a margin of 8.75%. The 2020 Term Loan will mature on (i) June 1, 2024 if at such time our Convertible Senior Notes are outstanding and are due to mature on September 1, 2024 (provided that if, prior to such date, the maturity date of at least 80% of the Convertible Senior Notes is extended to a date that is prior to September 1, 2025 the maturity date for the 2020 Term Loan will be automatically extended to a date that is 90 days prior to such Convertible Senior Notes maturity date as extended), or (ii) otherwise, on June 1, 2025. The full amount of the 2020 Term Loan is due upon maturity. If the 2020 Term Loan is prepaid (whether such prepayment is optional or mandatory), we must pay a prepayment fee of 6% if the prepayment occurs prior to the third anniversary of the closing date or 4% if the prepayment occurs after the third anniversary of the closing date and we must also pay a make-whole fee if the prepayment occurs prior to the second anniversary of the closing date. In connection with the 2020 Term Loan, we issued warrants to purchase 1.0 million shares of our common stock with an exercise price of $16.85 per share, exercisable through October 2027. The warrants, which were classified as equity, were recorded at an amount based on the allocated proceeds and do not require subsequent remeasurement. In October 2020, these warrants were exercised in full through net settlement resulting in the issuance of 0.7 million shares. The credit agreement contains customary events of default and covenants, including among others, covenants limiting our ability to incur debt, incur liens, undergo a change in control, merge with or acquire other entities, make investments, pay dividends or other distributions to holders of our equity securities, repurchase stock, and dispose of assets, in each case subject to certain customary exceptions. In addition, the credit agreement contains financial covenants that require us to maintain a minimum cash balance and minimum quarterly revenue levels. Debt discounts, including debt issuance costs, related to the 2020 Term Loan of $32.8 million were recorded as a direct deduction from the debt liability and are being amortized to interest expense over the term of the 2020 Term Loan. Interest expense related to our debt financings, excluding the impact of our Convertible Senior Notes, was $7.4 million, $5.7 million and $6.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. Convertible Senior Notes In September 2019, we issued, at par value, $350.0 million aggregate principal amount of 2.00% Convertible Senior Notes due 2024 in a private offering. The Convertible Senior Notes are our senior unsecured obligations and will mature on September 1, 2024, unless earlier converted, redeemed or repurchased. The Convertible Senior Notes bear cash interest at a rate of 2.0% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2020. Upon conversion, the Convertible Senior Notes will be convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. Our current intent is to settle the principal amount of the Convertible Senior Notes in cash upon conversion, with any remaining conversion value being delivered in shares of our common stock. The initial conversion rate for the Convertible Senior Notes is 33.6293 shares of our common stock per $1,000 principal amount of the Convertible Senior Notes (equivalent to an initial conversion price of approximately $29.74 per share of common stock). If we undergo a fundamental change (as defined in the indenture governing the Convertible Senior Notes), the holders of the Convertible Senior Notes may require us to repurchase all or any portion of their Convertible Senior Notes for cash at a repurchase price equal to 100% of the principal amount of the Convertible Senior Notes to be repurchased plus accrued and unpaid interest to, but excluding, the redemption date. The Convertible Senior Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding March 1, 2024, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Convertible Senior Notes on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Convertible Senior Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call any or all of the Convertible Senior Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after March 1, 2024 until the close of business on the business day immediately preceding the maturity date, holders may convert their Convertible Senior Notes at any time, regardless of the foregoing circumstances. As of December 31, 2020, none of the above circumstances had occurred and therefore the Convertible Senior Notes could not have been converted. However, these notes were convertible at the option of the holders during the quarter beginning on January 1, 2021 due to the sale price of our common stock during the quarter ended December 31, 2020. We may not redeem the Convertible Senior Notes prior to September 6, 2022. We may redeem for cash all or any portion of the Convertible Senior Notes, at our option, on or after September 6, 2022 and on or before the 30th scheduled trading day immediately before the maturity date if the last reported sale price of the Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Convertible Senior Notes consisted of the following (in thousands):
As of December 31, 2020, the fair value of the Convertible Senior Notes was $586.0 million. The estimated fair value of the Convertible Senior Notes, which are classified as Level 2 financial instruments, was determined based on the estimated or actual bid prices of the Convertible Senior Notes in an over-the-counter market. We recognized $22.0 million and $6.5 million of interest expense related to the Convertible Senior Notes during the years ended December 31, 2020 and 2019, respectively. Guarantees and indemnifications As permitted under Delaware law and in accordance with our bylaws, we indemnify our directors and officers for certain events or occurrences while the officer or director is or was serving in such capacity. The maximum amount of potential future indemnification is unlimited; however, we maintain director and officer liability insurance. This insurance allows the transfer of the risk associated with our exposure and may enable us to recover a portion of any future amounts paid. We believe the fair value of these indemnification agreements is minimal. Accordingly, we did not record any liabilities associated with these indemnification agreements at December 31, 2020 or 2019. Other commitments In the normal course of business, we enter into various purchase commitments primarily related to service agreements and laboratory supplies. At December 31, 2020, our total future payments under noncancelable unconditional purchase commitments having a remaining term of over one year were as follows (in thousands):
In December 2020, we entered into a lease agreement in San Francisco, California for additional office and lab space. We determined the lease commencement date to be in January 2021 when we took possession of the leased premises. Total lease payments over the course of this lease will be $45.0 million and are included in the purchase commitments above. Contingencies We were not a party to any material legal proceedings at December 31, 2020, or at the date of this report except for matters listed below which are related to ArcherDX which we acquired in October 2020. We cannot currently predict the outcome of these actions. The outcome of any such proceedings, regardless of the merits, is inherently uncertain. If we were unable to prevail in any such proceedings, our consolidated financial position, results of operations, and future cash flows may be materially impacted. In addition, we are and may from time to time become involved in various legal proceedings and claims arising in the ordinary course of business. While we believe any such claims are unsubstantiated, and we believe we are in compliance with applicable laws and regulations applicable to our business, the resolution of any such claims could be material. Natera, Inc. On January 27, 2020, Natera filed a lawsuit against ArcherDX (a subsidiary of Invitae effective October 2, 2020) in the United States District Court for the District of Delaware, alleging that ArcherDX’s products using AMP chemistry, and the manufacture, use, sale, and offer for sale of such products, infringe U.S. Patent No. 10,538,814. On March 25, 2020, ArcherDX filed an answer denying Natera’s allegations and asserting certain affirmative defenses and counterclaims, including that U.S. Patent No. 10,538,814 is invalid and not infringed. On April 15, 2020, Natera filed an answer denying ArcherDX’s counterclaims and filed an amended complaint alleging that ArcherDX’s products using AMP chemistry, including STRATAFIDE, PCM, LiquidPlex, ArcherMET, FusionPlex, and VariantPlex, and the manufacture, use, sale, and offer for sale of such products, infringe U.S. Patent No. 10,538,814, U.S. Patent No. 10,557,172, U.S. Patent No. 10,590,482, and U.S. Patent No. 10,597,708, each of which are held by Natera. Natera seeks, among other things, damages and other monetary relief, costs and attorneys’ fees, and an order enjoining ArcherDX from further infringement of such patents. On May 13, 2020, ArcherDX filed an answer to Natera’s amended complaint denying Natera’s allegations and asserting certain affirmative defenses and counterclaims, including that the asserted patents are invalid and not infringed. On June 3, 2020, Natera filed an answer denying ArcherDX’s counterclaims. On June 4, 2020, ArcherDX filed a motion seeking dismissal of Natera’s infringement claims against STRATAFIDE, PCM, and ArcherMET, and for a judgment that U.S. Patent No. 10,538,814, U.S. Patent No. 10,557,172, and U.S. Patent No. 10,590,482 are invalid. On August 6, 2020, Natera filed another complaint against ArcherDX in the United States District Court for the District of Delaware alleging that ArcherDX’s products using AMP chemistry, including STRATAFIDE, PCM, LiquidPlex, ArcherMET, and VariantPlex, and the manufacture, use, sale, and offer for sale of such products, infringe U.S. Patent No. 10,731,220. Natera seeks, among other things, damages and other monetary relief, costs and attorneys’ fees, and an order enjoining ArcherDX from further infringement of the patent. On October 13, 2020, the court issued an order denying ArcherDX's motion for dismissal of Natera’s infringement claims against STRATAFIDE, PCM, and ArcherMET, and declined to enter judgment that U.S. Patent No. 10,538,814, U.S. Patent No. 10,557,172, and U.S. Patent No. 10,590,482 are invalid. On January 12, 2021, the court issued an order granting Natera leave to amend its complaint to add Invitae as a co-defendant and plead allegations that ArcherDX and Invitae induce end-users to infringe the patents-in-suit. Natera filed its Second Amended Complaint on the same day, with service completed on January 15, 2021. ArcherDX and Invitae filed answers to the Second Amended Complaint on January 26, 2021 and February 5, 2021, respectively, denying Natera's allegations and restating certain affirmative defenses and counterclaims of non-infringement and invalidity. The litigations have now been consolidated for all purposes, are ongoing, and trial has been scheduled for May 2022. QIAGEN Sciences On July 10, 2018, ArcherDX and the General Hospital Corporation d/b/a Massachusetts General Hospital, which we refer to as MGH, filed a lawsuit in the United States District Court for the District of Delaware against QIAGEN Sciences, LLC, QIAGEN LLC, QIAGEN Beverly, Inc., QIAGEN Gaithersburg, Inc., QIAGEN GmbH and QIAGEN N.V., which is collectively referred to herein as QIAGEN, and a named QIAGEN executive who was a former member of ArcherDX’s board of directors, alleging several causes of action, including infringement of the ’810 Patent, trade secret misappropriation, breach of fiduciary duty, false advertising, tortious interference and deceptive trade practices. The ’810 Patent relates to methods for preparing a nucleic acid for sequencing and aspects of ArcherDX’s AMP technology. On October 30, 2019, with the permission of the Court, ArcherDX amended ArcherDX’s complaint to add a claim for infringement of the ’597 Patent. The ’597 Patent relates to methods of preparing and analyzing nucleic acids, such as by enriching target sequences prior to sequencing, and aspects of ArcherDX’s AMP technology. The QIAGEN products that ArcherDX alleges infringe the ’810 Patent and the ’597 Patent include, but are not limited to, QIAseq Targeted DNA Panels, QIAseq Targeted RNAscan Panels, QIAseq Index Kits and QIAseq Immune Repertoire RNA Library Kits. ArcherDX is seeking, among other things, damages for ArcherDX’s lost profits due to QIAGEN’s infringement and a permanent injunction enjoining QIAGEN from marketing and selling the infringing products and from using ArcherDX’s trade secrets. On December 5, 2019, QIAGEN and the named QIAGEN executive submitted their answer denying the allegations in ArcherDX’s complaint and asserting affirmative defenses that, among other things, the ’810 Patent and ’597 Patent are not infringed by QIAGEN’s products, that both patents are invalid, and that the complaint fails to state any claim for which relief may be granted. This litigation is ongoing, and trial is currently scheduled for August 2021.
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Stockholders' equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | Stockholders’ equity Shares outstanding Shares of convertible preferred and common stock were as follows (in thousands):
2018 Sales Agreement In August 2018, we entered into a Common Stock Sales Agreement (the “2018 Sales Agreement”) with Cowen and Company, LLC (“Cowen”), under which we could offer and sell from time to time at our sole discretion shares of our common stock through Cowen as our sales agent, in an aggregate amount not to exceed $75.0 million. Cowen may sell the shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, including without limitation sales made directly on The New York Stock Exchange, and also may sell the shares in privately negotiated transactions, subject to our prior approval. Per the terms of the agreement, Cowen receives a commission equal to 3% of the gross proceeds of the sales price of all shares sold through it as sales agent under the 2018 Sales Agreement. In March 2019, we amended the 2018 Sales Agreement to increase the aggregate amount of our common stock to be sold under this agreement to an amount not to exceed $175.0 million. During the year ended December 31, 2020, we sold a total of 3.6 million shares of common stock under the 2018 Sales Agreement at an average price of $26.33 per share, for gross proceeds of $93.7 million and net proceeds of $90.7 million. During the year ended December 31, 2019, we sold a total of 0.8 million shares of common stock under the 2018 Sales Agreement at an average price of $25.71 per share, for gross proceeds of $20.2 million and net proceeds of $19.5 million. During the year ended December 31, 2018, we sold a total of 4.3 million shares of common stock under the 2018 Sales Agreement at an average price of $14.13 per share, for aggregate gross proceeds of $61.1 million and net proceeds of $58.9 million. Public offerings In January 2021, we issued, in an underwritten public offering, an aggregate of 8.9 million shares of our common stock at a price of $51.50 per share, for gross proceeds of $460.0 million and net proceeds of approximately $434.3 million. In April 2020, we issued, in an underwritten public offering, an aggregate of 20.4 million shares of our common stock at a price of $9.00 per share, for gross proceeds of $184.0 million and net proceeds of $173.0 million. In March 2019, we sold, in an underwritten public offering, an aggregate of 10.4 million shares of our common stock at a price of $19.00 per share, for gross proceeds of $196.7 million and net proceeds of $184.5 million. Private placement In August 2017, in a private placement to certain accredited investors, we issued 5.2 million shares of common stock at a price of $8.50 per share, and 3.5 million shares of our Series A convertible preferred stock at a price of $8.50 per share, for gross proceeds of approximately $73.5 million and net proceeds of $68.9 million. The Series A preferred stock is convertible into common stock on a one-for-one basis, subject to adjustment for events such as stock splits, combinations and the like. During the year ended December 31, 2019, 3.3 million shares of Series A convertible preferred stock were converted to 3.3 million shares of common stock. In connection with our acquisition of ArcherDX, in June 2020 we entered into a definitive agreement to sell $275.0 million in common stock in a private placement at a price of $16.85 per share. The private placement closed in October 2020, concurrently with our acquisition of ArcherDX. We received proceeds of $5.0 million from the private placement during September 2020 and the remainder of the proceeds were received in October 2020. Common stock warrants As of December 31, 2020, we had outstanding warrants to purchase common stock as follows:
The exercise price of warrants issued in exchange for CombiMatrix Series F warrants was determined pursuant to the terms of the acquisition.
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Stock incentive plans |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock incentive plans | Stock incentive plans Stock incentive plans In 2010, we adopted the 2010 Incentive Plan (the “2010 Plan”). The 2010 Plan provides for the granting of stock-based awards to employees, directors and consultants under terms and provisions established by our Board of Directors. Under the terms of the 2010 Plan, options may be granted at an exercise price not less than the fair market value of our common stock. 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 our common stock on the grant date, as determined by our Board of Directors. The terms of options granted under the 2010 Plan may not exceed ten years. In January 2015, we adopted the 2015 Stock Incentive Plan (the “2015 Plan”), which became effective upon the closing of our initial public offering (“IPO”). Shares outstanding under the 2010 Plan were transferred to the 2015 Plan upon effectiveness of the 2015 Plan. The 2015 Plan provides for automatic annual increases in shares available for grant, beginning on January 1, 2016 through January 1, 2025. In addition, shares subject to awards under the 2010 Plan that are forfeited or terminated will be added to the 2015 Plan. The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, stock units, stock appreciation rights and other forms of equity compensation, all of which may be granted to employees, including officers, non-employee directors and consultants. Additionally, the 2015 Plan provides for the grant of cash-based awards. 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. Upon the acquisition of ArcherDX, any option that was outstanding was converted into a fully vested option to purchase a share of our common stock which resulted in the issuance of 3.7 million options. RSUs generally vest over a period of three years. Typically, the vesting schedule for RSUs provides that 1/3 of the award vests upon each anniversary of the grant date, with certain awards that include a portion that vests immediately upon grant. In June 2019, we granted Time-based RSUs in connection with the acquisition of Singular Bio which vest in three equal installments over a period of 18 months and PRSUs that vest based on the achievement of performance conditions. In December 2020, we granted RSUs in connection with an asset acquisition which vest in equal installments in December 2021 and December 2022, subject to the employee's continued service with us. Under our management incentive compensation plan, in July 2019 we granted PRSUs to our executive officers as well as other specified senior level employees based on the level of achievement of a specified 2019 revenue goal. One-third of the 0.8 million shares that were ultimately awarded under this plan vested during the year ended December 31, 2020 and the remaining shares will vest through March 2022. In June 2020, we granted 0.3 million PRSUs under this plan which are based on the level of achievement of a specified 2020 cash burn goal. Upon achievement of the specified 2020 cash burn goal, 0.3 million shares were ultimately awarded and began vesting in 2021 over a one year period. These PRSUs had a grant date fair value of $4.2 million based on an estimated issuance of 0.3 million shares and expectation of the performance conditions. During the year ended December 31, 2020, $2.1 million was recorded as stock-based compensation expense related to the awards. No PRSUs were granted during the year ended December 31, 2018. Activity under the 2010 Plan and the 2015 Plan is set forth below (in thousands, except per share amounts and years):
(1) Includes the changes in time-based RSUs and PRSUs granted as a part of the Singular Bio acquisition in June 2019 and shares granted in an asset acquisition in December 2020 which are based on a fixed dollar value. The number of shares issued will be variable until the awards vest. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of our common stock for stock options that were in-the-money. The weighted-average fair value of options to purchase common stock granted was $10.10, $14.52 and $4.87 in the years ended December 31, 2020, 2019 and 2018, respectively. The total grant-date fair value of options to purchase common stock vested was $2.8 million, $4.3 million and $5.9 million in the year ended December 31, 2020, 2019, and 2018, respectively. The intrinsic value of options to purchase common stock exercised was $104.4 million, $6.3 million and $1.7 million in the years ended December 31, 2020, 2019 and 2018, respectively. The following table summarizes RSU, including PRSU, activity (in thousands, except per share data):
(1) Includes the changes in the Time-based RSUs and PRSUs granted as a part of the Singular Bio acquisition in June 2019 and the shares granted in an asset acquisition in December 2020 which are based on a fixed dollar value. The number of shares issued will be variable until the awards vest. The weighted-average grant date fair value per share reflects the fair value pricing of the full award. 2015 Employee Stock Purchase Plan In January 2015, we adopted the 2015 Employee Stock Purchase Plan (the “ESPP”), which became effective upon the closing of the IPO. Employees participating in the ESPP may purchase common stock at 85% of the lesser of the fair market value of common stock on the purchase date or last trading day preceding the offering date. At December 31, 2020, cash received from payroll deductions pursuant to the ESPP was $1.8 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, 2020, a total of 0.9 million shares of common stock are reserved for issuance under the ESPP. Stock-based compensation We use the grant date fair value of our common stock to value options when granted. In determining the fair value of stock options and ESPP purchases, we use 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. Expected term—The expected term represents the period that our 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—We estimate expected volatility based on the historical volatility of our common stock over a period equal to the expected term of stock option grants and RSUs and 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—We have never paid dividends on our common stock and have no plans to pay dividends on our common stock. Therefore, we 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:
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, 2020, 2019 and 2018, the weighted-average grant date fair value per share for the ESPP was $10.98, $6.05 and $3.26, respectively. The fair value of the shares purchased pursuant to the ESPP was estimated using the following assumptions:
The following table summarizes stock-based compensation expense for the years ended December 31, 2020, 2019 and 2018, included in the consolidated statements of operations (in thousands):
At December 31, 2020, unrecognized compensation expense related to unvested stock options, net of estimated forfeitures, was $3.1 million, which we expect to recognize on a straight-line basis over a weighted-average period of 2.4 years. Unrecognized compensation expense related to RSUs, including PRSUs, and awards that are contingently issuable upon the completion of certain milestones related to our acquisition of ArcherDX at December 31, 2020, net of estimated forfeitures, was $144.2 million, which we expect to recognize on a straight-line basis over a weighted-average period of 1.6 years.
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Income taxes |
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Income taxes | Income taxes We recorded a benefit for income taxes in the years ended December 31, 2020, 2019 and 2018. The components of net loss before taxes by U.S. and foreign jurisdictions are as follows (in thousands):
The components of the provision for income taxes are as follows (in thousands):
The following table presents a reconciliation of the tax expense computed at the statutory federal rate and our tax expense for the periods presented:
The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows (in thousands):
In December 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 our income tax benefit or expense. In December 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, we recorded a provisional estimate which resulted in a $48.8 million reduction in deferred tax assets and in the fourth quarter of 2018, we completed our analysis of the impact of the Tax Act and determined that no material adjustments were required to the provisional amounts previously recorded. We historically established a full valuation allowance against our deferred tax assets due to the uncertainty surrounding realization of such assets. In 2020, we released approximately $112.1 million of our valuation allowance to account for acquired intangibles that support the future realization of some of our deferred tax assets. Due to the overall increase of deferred tax assets, our valuation allowance also increased from the prior year. Our valuation allowance increased by $64.0 million, $23.4 million, and $26.3 million during the years ended December 31, 2020, 2019, and 2018, respectively. As of December 31, 2020, we had net operating loss carryforwards of approximately $1.4 billion and $890.6 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. Of the $1.4 billion, $284.9 million will begin to expire in 2030 while $1.1 billion have no expiration date. The state net operating loss carryforwards will begin to expire in 2030. As of December 31, 2020, we had research and development credit carryforwards of approximately $26.2 million and $17.6 million available to reduce our 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, acquisitions of Singular Bio, Jungla, and Clear Genetics in 2019, and acquisitions of YouScript and ArcherDX in 2020, 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. In addition, as a result of equity issued in connection with various acquisitions, we also performed a section 382 analysis in 2020 with respect to our operating loss and credit carryforwards. We concluded while an ownership change occurred in 2019 as defined under IRC section 382, none of our net operating loss 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, 2020, we had unrecognized tax benefits of $22.0 million, which primarily relates to research and development credits, none of which would currently affect our effective tax rate if recognized due to our valuation allowance against our deferred tax assets. During the year, we benchmarked the reserves of similar tax positions within the industry based on IRS and state audits of comparable companies. Based on our analysis, we decreased our unrecognized tax benefits to more closely align with other comparable companies within the industry. As these reserves relate primarily to research and development credits which have a full valuation allowance, such adjustments did not impact our income tax provision. Unrecognized tax benefits are not expected to materially change in the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Our policy is to include penalties and interest expense related to income taxes as a component of tax expense. We have not accrued interest and penalties related to the unrecognized tax benefits reflected in the financial statements for the years ended December 31, 2020, 2019 and 2018. Our major tax jurisdictions are the United States and California. All of our tax years will remain open for examination by the Federal and state tax authorities for and four years, respectively, from the date of utilization of the net operating loss or research and development credit. We do not have any tax audits pending.
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share | Net loss per share The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
The following common stock equivalents have been excluded from diluted net loss per share because their inclusion would be anti-dilutive (in thousands):
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Geographic information |
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Geographic information | Geographic information Revenue by country is determined based on the billing address of the customer and is summarized as follows (in thousands):
As of December 31, 2020, 2019 and 2018, our long-lived assets were primarily located in the United States other than operating lease assets representing our right-of-use for leased facilities in Israel and Australia.
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Selected quarterly data (unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected quarterly data (unaudited) | Selected quarterly data (unaudited) The following table summarizes our quarterly financial information for 2020 and 2019 (in thousands, except per share amounts):
___________________________________________________________________ (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.
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Subsequent event |
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Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent event | Subsequent eventIn February 2021, we acquired 100% of the equity interest of Reference Genomics, Inc. d/b/a One Codex "One Codex", a company developing and commercializing products and services relating to microbiome sequencing, analysis and reporting, for upfront consideration consisting of 1.2 million shares of our common stock and $17.0 million in cash. Up to approximately $0.1 million in cash and 0.2 million additional shares of our common stock are subject to a hold back to satisfy indemnification obligations that may arise following the closing. Given the timing of the closing of the transaction with One Codex, we are currently in the process of valuing the assets acquired and liabilities assumed. As a result, we are not yet able to provide the amounts to be recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed and other related disclosures. We will disclose this and other related information in our Quarterly Report on Form 10-Q for the three months ending March 31, 2021. |
Summary of significant accounting policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Principles of consolidation | Principles of consolidation Our consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base these estimates on current facts, historical and anticipated results, trends and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. Actual results could differ materially from those judgments, estimates and assumptions. We evaluate our estimates on an ongoing basis. Significant estimates and assumptions made by management include the determination of: •revenue recognition; •the fair value of assets and liabilities associated with business combinations; •the impairment assessment of goodwill and intangible assets; •the valuation of our 2.00% convertible senior notes due 2024 issued in September 2019 ("Convertible Senior Notes"); •the recoverability of long-lived assets; •our incremental borrowing rates used to calculate our lease balances; •stock-based compensation expense and the fair value of awards and warrants issued; and •income tax uncertainties.
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Concentrations of credit risk and other risks and uncertainties | Concentrations of credit risk and other risks and uncertainties Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. Our cash and cash equivalents are held by financial institutions in the United States. Such deposits may exceed federally insured limits. Significant customers are those that represent 10% or more of our total revenue for each year presented on the consolidated statements of operations.
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Cash, cash equivalents, and restricted cash | Cash, cash equivalents, and restricted cash We consider all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds, U.S. treasury notes and government agency securities. Restricted cash consists primarily of money market funds that secure irrevocable standby letters of credit that serve as collateral for security deposits for our facility leases.
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Marketable securities | 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 one year or less 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 impairments, if any, on available-for-sale securities are included in other expense, net. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in other income (expense), net. For marketable securities in an unrealized loss position, we assess our intent to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the security’s amortized cost basis is written down to fair value through other income (expense), net.
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Accounts receivable | Accounts receivableWe receive payment from patients, biopharmaceutical partners, third-party payers and other business-to-business customers. | ||||||||||||||||||||||||||||||||||||||||||
Deferred revenue, revenue recognition and cost of revenue | Deferred revenueWe record a contract liability when cash payments are received or due in advance of our performance related to one or more performance obligations. Revenue recognition We recognize revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers. We utilize the following practical expedients and exemptions: •Costs to obtain or fulfill a contract are expensed when incurred because the amortization period would have been one year or less, and •No adjustments to promised consideration were made for financing as we expect, 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. Test revenue Test revenue is comprised of testing services and sales of distributed precision oncology products. The majority of our test revenue is generated from genetic testing, in addition to somatic testing for therapy selection and personalized cancer monitoring. These testing services provide analysis and associated interpretation of the sequencing of parts of the genome. Test orders are placed under signed requisitions or contractual agreements, and we often enter into contracts with biopharmaceutical partners, other business-to-business customers (e.g., hospitals, clinics, medical centers) and insurance companies that include pricing provisions under which such tests are billed. Billing terms are generally net 30 to 60 days. While the transaction price of diagnostic tests is originally established either via contract or pursuant to our standard list price, we often provide 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 we 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 each reporting period and updated as necessary. We look to transfer of control in assessing timing of recognition of revenue in connection with each performance obligation. In general, revenue in connection with the service portion of our diagnostic tests is recognized upon delivery of the underlying clinical report or when the report is made available on our web portal. Outstanding performance obligations pertaining to orders received but for which the underlying report has not been issued are generally satisfied within a 30-day period. We also generate test revenue through the sale of our precision oncology products, which is comprised primarily of sales of our distributed research use only ("RUO ") and in vitro diagnostics ("IVD") products for therapy selection. We recognize revenue on these sales once shipment has occurred. Product sales are recorded net of discounts and other deductions. Billing terms are generally net 30 days. Shipping and handling fees billed to customers are recorded as revenue on the consolidated statements of operations. The associated shipping and handling costs are recorded as cost of revenue. Other revenue Other revenue is primarily generated from pharma development services provided to biopharmaceutical companies related to companion diagnostic development as well as through collaboration agreements and genome network contracts. Contracts for companion diagnostic development consist primarily of milestone-based payments along with annual fees and marked-up pass-through costs. The arrangements are treated as short-term contracts for revenue recognition purposes because they allow termination of the agreements by the customers with 30 to 120 days’ written notice without a termination penalty. Upon termination, customers are required to pay for the proportion of services provided under milestones that were in progress. We recognize revenue in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenue over time based on the progress made toward achieving the performance obligation, utilizing both input or output methods, depending on the performance obligation, including labor hours expended, tests processed, or time elapsed, that measure our progress toward the achievement of the milestone. We also enter 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 data 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 30-day terms. Cost of revenue Cost of revenue reflects the aggregate costs incurred in delivering our genetic offerings and includes expenses for personnel-related costs including stock-based compensation, materials and supplies, royalties, regulatory fees, commercialization fees, equipment and infrastructure expenses associated with testing and allocated overhead including rent, equipment depreciation, information technology costs, amortization of acquired intangibles and utilities.
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Inventory | Inventory Our inventory consists of raw materials, work in progress, and finished goods, which are stated at the lower of cost or net realizable value on a first-in, first-out basis. We periodically analyze our inventory levels and expiration dates, and write down inventory that has become obsolete, inventory that has a cost basis in excess of its net realizable value, and inventory in excess of expected sales requirements as cost of revenue. We record an allowance for obsolete inventory using an estimate based on historical trends and evaluation of near-term expirations.
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Business combinations and License agreements | Business combinations We apply Financial Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC") 805, Business Combinations, which requires recognition of assets acquired, liabilities assumed, and contingent consideration at their fair value on the acquisition date with subsequent changes recognized in earnings; requires acquisition-related expenses and restructuring costs to be recognized separately from the business combination and expensed as incurred; requires in-process research and development to be capitalized at fair value as an indefinite-lived intangible asset until completion or abandonment; and requires that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period be recognized as a component of provision for taxes. We account for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations. The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. We base the estimated fair value of identifiable intangible assets acquired in a business combination on independent third-party valuations that use information and assumptions provided by our management, which consider our estimates of inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, estimated cost savings, 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 ASC Topic 480, Distinguishing Liabilities from Equity, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We remeasure this liability each reporting period and record changes in the fair value as general and administrative expense. Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in our operating results from the date of acquisition. License Agreements We have entered and may continue to enter into license agreements to access and utilize certain technology. We evaluate if the license agreement results in the acquisition of an asset or a business and then determine if the acquired asset has the ability to generate revenues or is subject to regulatory approval. When regulatory approval is not required, we record the license as an asset and amortize it over the estimated economic life. When regulatory approval is required, we record the amount paid as a research and development expense.
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Intangible assets and in-process research and development | Intangible assets Amortizable intangible assets include trade names, non-compete agreements, patent licensing agreements, favorable leases, developed technology, customer relationships, and rights to develop new technology acquired as part of business combinations. Customer relationships acquired through our business combinations in 2017 are amortized on an accelerated basis, utilizing free cash flows, over periods ranging from to 12 years. All other intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from to 15 years. All intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment. In-process research and development Intangible assets related to in-process research and development costs (“IPR&D”) are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. During this period, the assets will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. During the fourth quarter and if business factors indicate more frequently, we perform an assessment of the qualitative factors affecting the fair value of our IPR&D projects. If the fair value exceeds the carrying value, there is no impairment. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of an asset to its carrying value, without consideration of any recoverability test. We have not identified any such impairment losses to date.
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Goodwill | GoodwillIn accordance with ASC 350, Intangibles-Goodwill and Other (“ASC 350”), our goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Under ASC 350, we perform annual impairment reviews of our goodwill balance during the fourth fiscal quarter or more frequently if business factors indicate. In testing for impairment, we compare the fair value of our reporting unit to its carrying value including the goodwill of that unit. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, we will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. | ||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Under ASC 842, Leases, we determine if an arrangement is a lease at inception. Operating leases are included in operating lease assets and operating lease obligations in our consolidated balance sheets. Finance leases are included in other assets and finance lease obligations in our consolidated balance sheets. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments. The operating lease asset also includes any lease payments made and is adjusted for lease incentives. Our lease terms may include options to extend or terminate the lease which are recognized when it is reasonably certain that we will exercise that option. Leases with terms of 12 months or less are not recorded on our balance sheet. Lease expense is recognized on a straight-line basis over the lease terms, or in some cases, the useful life of the underlying asset. We account for the lease and non-lease components as a single lease component.
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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 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. 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 consolidated statements of operations in the period realized. The estimated useful lives of property and equipment are as follows:
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Long-lived assets | Long-lived assetsWe review 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. | ||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments | Fair value of financial instrumentsOur financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, accrued liabilities, finance leases, and liabilities associated with business combinations. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued and other current liabilities approximate their current fair value due to the relatively short-term nature of these accounts. Based on borrowing rates available to us, the carrying value of finance leases approximate their fair values. Liabilities associated with business combinations are recorded at their estimated fair value. | ||||||||||||||||||||||||||||||||||||||||||
Income taxes | Income taxes We use 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. Significant judgment is required in determining the net valuation allowance which includes our evaluation of all available evidence including past operating results, estimates on future taxable income and acquisition-related tax assets and liabilities. We historically established a full valuation allowance against our deferred tax assets due to the uncertainty surrounding realization of such assets. In 2020, we released approximately $112.1 million of our valuation allowance to account for acquired intangibles that support the future realization of some of our deferred tax assets. Due to the overall increase of deferred tax assets, our valuation allowance has also increased from the prior year.
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Stock-based compensation | Stock-based compensation We measure stock-based payment awards made to employees and directors based on the estimated fair values of the awards and recognize the compensation expense over the requisite service period. We use the Black-Scholes option-pricing model to estimate the fair value of stock option awards and employee stock purchase plan (“ESPP”) purchases. The fair value of restricted stock unit (“RSU”) awards with time-based vesting terms is based on the grant date share price. We grant performance-based restricted stock unit (“PRSU”) awards to certain employees which vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with us. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. We recognize such compensation expense on an accelerated vesting method. Stock-based compensation expense for awards without a performance condition is recognized using the straight-line method. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, our stock-based compensation is reduced for estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We account for stock issued in connection with business combinations based on the fair value on the date of issuance.
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Advertising | AdvertisingAdvertising expenses are expensed as incurred. | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | 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. Our other comprehensive income (loss) consists of unrealized gains or losses on investments in available-for-sale securities.
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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, shares of common stock pursuant to ESPP, common stock issuable in connection with our Convertible Senior Notes, 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. | ||||||||||||||||||||||||||||||||||||||||||
Prior period reclassifications | Prior period reclassifications We have reclassified certain amounts in prior periods to conform with current presentation.
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Recent accounting pronouncements | Recent accounting pronouncements We evaluate all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board ("FASB") for consideration of their applicability. ASUs not included in the disclosures in this report were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements. Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. This new standard is effective for our interim and annual periods beginning January 1, 2022, and earlier adoption is permitted. We may elect to apply the amendments on a retrospective or modified retrospective basis. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. Recently adopted accounting pronouncements In June 2016, FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires measurement and recognition of expected credit losses for financial assets. This guidance became effective for us beginning in the first quarter of 2020 and was adopted using a modified retrospective approach, with certain exceptions. The adoption of Topic 326 did not have a material impact on our consolidated financial statements as credit losses are not expected to be significant. As part of our adoption of Topic 326, we assess our accounts receivables for expected credit losses at each reporting period by disaggregating by payer type and further by portfolios of customers with similar characteristics, such as customer type and geographic location. We then review each portfolio for expected credit losses based on historical payment trends as well as forward looking data and current economic trends. If a credit loss is determined, we record a reduction to our accounts receivable balance with a corresponding general and administrative expense. In accordance with Topic 326, we no longer evaluate whether our available-for-sale debt securities in an unrealized loss position are other than temporarily impaired. Instead, we assess whether such unrealized loss positions are credit-related. Our expected loss allowance methodology for these securities is developed by reviewing the extent of the unrealized loss, the issuers’ credit ratings and any changes in those ratings, as well as reviewing current and future economic market conditions and the issuers’ current status and financial condition. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in other income (expense), net. Unrealized gains and losses that are not credit-related are included in accumulated other comprehensive income (loss). On January 1, 2019, we adopted the provisions of ASC Topic 842, Leases, using the modified retrospective approach in accordance with Topic 842. Adoption of Topic 842 had a material impact on our consolidated balance sheets, but did not have an impact on our consolidated statements of operations. We elected the package of practical expedients permitted under the transition guidance which, among other things, allowed us to carry forward the historical classification of leases in place as of January 1, 2019. We did not identify any material embedded leases with the adoption of Topic 842 and therefore the implementation of Topic 842 primarily focused on the treatment of our previously identified leases. Prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under previous lease guidance, ASC 840, Leases. Under ASC 840, we rented facilities under operating lease agreements and recognized related rent expense on a straight-line basis over the term of the applicable lease agreement. Some of the lease agreements contained rent holidays, scheduled rent increases, lease incentives, and renewal options. Rent holidays and scheduled rent increases were included in the determination of rent expense recorded over the lease term. Lease incentives were recognized as a reduction of rent expense on a straight-line basis over the term of the lease. Renewals were not assumed in the determination of the lease term unless they were deemed to be reasonably assured at the inception of the lease. We recognized rent expense beginning on the date we obtained the legal right to use and control the leased space.
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Summary of significant accounting policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule significant customer, revenue as a percentage | Our revenue from significant customers as a percentage of our total revenue was as follows:
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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 consolidated statements of cash flows (in thousands):
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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 consolidated statements of cash flows (in thousands):
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Schedule of property and equipment, net | The estimated useful lives of property and equipment are as follows:
Property and equipment consisted of the following (in thousands):
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Revenue, accounts receivable and deferred revenue (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregated revenue by payer category | Our revenue as disaggregated by payer category and revenue subtype is as follows (in thousands):
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Schedule of change in estimate | As a result of new information, we update our estimate quarterly of the amounts to be recognized for previously delivered tests which resulted in the following increases to revenue and decreases to our loss from operations and basic and diluted net loss per share (in millions, except per share amounts):
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Business combinations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of purchase price and post-combination expense | The following table summarizes the purchase price recorded as a part of the acquisition of Diploid (in thousands):
The following table summarizes the purchase prices recorded as a part of the acquisition of Genelex and YouScript (in thousands):
The following table summarizes the purchase price and post-combination expense recorded as a part of the acquisition of ArcherDX (in millions):
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Summary of fair values of assets acquired and liabilities assumed | The following table summarizes the fair values of assets acquired and liabilities assumed through our acquisition of Diploid at the date of acquisition (in thousands):
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Summary of intangible assets acquired | The fair value of our intangible assets acquired as of the acquisition date and the method used to value these assets as well as the estimated economic lives for amortizable intangible assets were as follows (in millions, except estimated useful life which is in years):
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Schedule of pro forma financial information | The following unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisition had taken place as of January 1, 2019 (in thousands):
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Goodwill and intangible assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of goodwill | The changes in the carrying amounts of goodwill were as follows (in thousands):
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Schedule of intangible assets | The following table presents details of our acquired intangible assets as of December 31, 2020 (in thousands):
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Schedule of intangible assets | The following table presents details of our acquired intangible assets as of December 31, 2020 (in thousands):
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Summary of estimated future amortization expense of intangible assets with finite lives | The following table summarizes our estimated future amortization expense of intangible assets with finite lives as of December 31, 2020 (in thousands):
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Balance sheet components (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory | Inventory consisted of the following (in thousands):
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Schedule of property and equipment, net | The estimated useful lives of property and equipment are as follows:
Property and equipment consisted of the following (in thousands):
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Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands):
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Schedule of other long-term liabilities | Other long-term liabilities consisted of the following (in thousands):
|
Fair value measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial instruments at fair value on a recurring basis | The following tables set forth the fair value of our consolidated financial instruments that were measured at fair value on a recurring basis (in thousands):
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Commitments and contingencies (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of lease cost | Supplemental information regarding our operating and finance leases were as follows:
The components of lease costs, which were included in cost of revenue, research and development, selling and marketing and general and administrative expenses on our consolidated statements of operations, were as follows (in thousands):
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Schedule of future payments under operating leases | Future payments under operating and finance leases as of December 31, 2020 are as follows (in thousands):
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Schedule of future lease payments under finance leases | Future payments under operating and finance leases as of December 31, 2020 are as follows (in thousands):
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Components of debt | The Convertible Senior Notes consisted of the following (in thousands):
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Schedule of future payments under noncancelable unconditional purchase commitments | At December 31, 2020, our total future payments under noncancelable unconditional purchase commitments having a remaining term of over one year were as follows (in thousands):
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Stockholders' equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of convertible preferred and common stock | Shares of convertible preferred and common stock were as follows (in thousands):
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Schedule of outstanding warrants to purchase common stock | As of December 31, 2020, we had outstanding warrants to purchase common stock as follows:
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Stock incentive plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Summary of RSU activity | The following table summarizes RSU, including PRSU, activity (in thousands, except per share data):
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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:
The fair value of the shares purchased pursuant to the ESPP was estimated using the following assumptions:
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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, 2020, 2019 and 2018, included in the consolidated statements of operations (in thousands):
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Income taxes (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Schedule of components of the provision for income taxes | The components of the provision for income taxes are as follows (in thousands):
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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 our tax expense for the periods presented:
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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):
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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):
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Net loss per share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share, basic and diluted | The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
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Schedule of antidilutive securities excluded from computation of earnings per share | The following common stock equivalents have been excluded from diluted net loss per share because their inclusion would be anti-dilutive (in thousands):
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Geographic information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue by geographic region | Revenue by country is determined based on the billing address of the customer and is summarized as follows (in thousands):
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Selected quarterly data (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of selected quarterly data | The following table summarizes our quarterly financial information for 2020 and 2019 (in thousands, except per share amounts):
___________________________________________________________________ (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.
|
Organization and description of business (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020
business
Segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of businesses acquired | business | 4 |
Number of operating segments | Segment | 1 |
Summary of significant accounting policies - Schedule of significant customers, revenue as a percentage (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Customer concentration risk | Revenue | Medicare | |||
Product Information [Line Items] | |||
Concentration risk | 19.00% | 25.00% | 22.00% |
Summary of significant accounting policies - Schedule of cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 124,794 | $ 151,389 | ||
Restricted cash | 6,686 | 6,183 | ||
Total cash, cash equivalents and restricted cash | $ 131,480 | $ 157,572 | $ 118,164 | $ 17,459 |
Summary of significant accounting policies - Schedule of useful lives of property and equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Furniture and fixtures | |
Property and equipment | |
Useful lives | 7 years |
Automobiles | |
Property and equipment | |
Useful lives | 7 years |
Manufacturing and 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 |
Revenue, accounts receivable and deferred revenue - Schedule of change in estimate (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Change in Accounting Estimate [Line Items] | |||||||||||
Total revenue | $ 100,431 | $ 68,728 | $ 46,191 | $ 64,248 | $ 66,285 | $ 56,511 | $ 53,475 | $ 40,553 | $ 279,598 | $ 216,824 | $ 147,699 |
Loss from operations | $ (331,483) | $ (80,823) | $ (142,082) | $ (97,784) | $ (79,036) | $ (76,983) | $ (51,886) | $ (36,207) | $ (652,172) | $ (244,112) | $ (122,557) |
Net loss per share, basic and diluted (in dollars per share) | $ (1.30) | $ (0.78) | $ (1.29) | $ (0.99) | $ (0.79) | $ (0.82) | $ (0.54) | $ (0.47) | $ (4.47) | $ (2.66) | $ (1.94) |
Change in estimate of revenue recognition | |||||||||||
Change in Accounting Estimate [Line Items] | |||||||||||
Total revenue | $ 4,400 | $ 4,100 | $ 4,500 | ||||||||
Loss from operations | $ (4,400) | $ (4,100) | $ (4,500) | ||||||||
Net loss per share, basic and diluted (in dollars per share) | $ (0.03) | $ (0.05) | $ (0.07) |
Revenue, accounts receivable and deferred revenue - Narrative (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jan. 31, 2021 |
Oct. 31, 2020 |
May 31, 2020 |
Apr. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Restructuring Cost and Reserve [Line Items] | |||||||
Unbilled revenue | $ 4,300,000 | $ 0 | |||||
Deferred revenue, revenue recognized | 1,400,000 | ||||||
Increase in deferred revenue upon acquisition | $ 4,800,000 | ||||||
ArcherDX | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Deferred revenue, revenue recognized | $ 2,000,000.0 | ||||||
One-time termination costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Positions eliminated, percent of total workforce | 8.00% | ||||||
Restructuring charges | $ 3,800,000 | ||||||
Reduction in officer salary | 20.00% | ||||||
CARES Act | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Income received under the CARES Act | $ 3,800,000 | ||||||
CARES Act | Subsequent event | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Income received under the CARES Act | $ 2,300,000 |
Business combinations - Jungla (Details) - USD ($) $ in Thousands, shares in Millions |
1 Months Ended | ||
---|---|---|---|
Apr. 30, 2020 |
Jul. 31, 2019 |
Dec. 31, 2020 |
|
Business Acquisition [Line Items] | |||
Business combination, total purchase consideration | $ 65,913 | ||
Jungla | |||
Business Acquisition [Line Items] | |||
Percentage of interest acquired | 100.00% | ||
Business combination, total purchase consideration | $ 59,000 | ||
Common stock transferred | 44,900 | ||
Ongoing development post-close milestones | Jungla | |||
Business Acquisition [Line Items] | |||
Contingent consideration | $ 10,700 | $ 7,100 | |
Business acquisition, expected milestone duration | 2 years | ||
Indemnification obligations | Jungla | |||
Business Acquisition [Line Items] | |||
Business acquisition common stock issued (in shares) | 0.2 |
Business combinations - Clear Genetics (Details) - USD ($) $ in Thousands, shares in Millions |
1 Months Ended | |
---|---|---|
Apr. 30, 2020 |
Nov. 30, 2019 |
|
Business Acquisition [Line Items] | ||
Business combination, total purchase consideration | $ 65,913 | |
Hold-back consideration - cash | $ 1,385 | |
Clear Genetics | ||
Business Acquisition [Line Items] | ||
Percentage of interest acquired | 100.00% | |
Business combination, total purchase consideration | $ 50,100 | |
Indemnification obligations | Clear Genetics | ||
Business Acquisition [Line Items] | ||
Hold-back consideration - cash | $ 200 | |
Business acquisition common stock issued (in shares) | 0.4 |
Business combinations - Summary of intangible assets acquired (Details) - USD ($) $ in Millions |
1 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Oct. 31, 2020 |
|
Developed technology | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 8 years | |
ArcherDX | ||
Business Acquisition [Line Items] | ||
Total | $ 803.8 | |
ArcherDX | Customer relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets, finite-lived | $ 17.3 | |
Estimated useful life | 12 years | |
ArcherDX | Tradename | ||
Business Acquisition [Line Items] | ||
Intangible assets, finite-lived | $ 21.1 | |
Estimated useful life | 12 years | |
ArcherDX | Developed technology | ||
Business Acquisition [Line Items] | ||
Intangible assets, finite-lived | $ 233.6 | |
Estimated useful life | 12 years | |
ArcherDX | Right to develop new technology | ||
Business Acquisition [Line Items] | ||
Intangible assets, finite-lived | $ 19.4 | |
Estimated useful life | 15 years | |
ArcherDX | In-process research and development | ||
Business Acquisition [Line Items] | ||
Intangible assets, indefinite-lived | $ 512.4 |
Business combinations - Schedule of pro forma financial information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Business Combinations [Abstract] | ||
Revenue | $ 327,233 | $ 267,389 |
Net loss | $ 685,589 | $ 355,818 |
Goodwill and intangible assets - Summary of goodwill (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 126,777 |
Goodwill, ending balance | 1,863,623 |
Diploid | |
Goodwill [Roll Forward] | |
Goodwill acquired | 50,655 |
Genelex | |
Goodwill [Roll Forward] | |
Goodwill acquired | 4,067 |
YouScript | |
Goodwill [Roll Forward] | |
Goodwill acquired | 29,726 |
ArcherDX | |
Goodwill [Roll Forward] | |
Goodwill acquired | $ 1,652,398 |
Goodwill and intangible assets - Summary of estimated future amortization expense of intangible assets with finite lives (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 46,910 |
2022 | 45,401 |
2023 | 44,388 |
2024 | 44,110 |
2025 | 42,356 |
Thereafter | 216,292 |
Net, finite-lived intangible assets | $ 439,457 |
Balance sheet components - Schedule of inventory (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Offsetting [Abstract] | ||
Raw materials | $ 21,324 | $ 6,569 |
Work in progress | 8,847 | 79 |
Finished goods | 1,859 | 0 |
Total inventory | $ 32,030 | $ 6,648 |
Balance sheet components - Property and equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Property and equipment | |||
Property and equipment, gross | $ 97,449 | $ 63,882 | |
Accumulated depreciation and amortization | (31,347) | (26,135) | |
Total property and equipment, net | 66,102 | 37,747 | |
Depreciation | 10,500 | 7,100 | $ 8,500 |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | 26,516 | 18,352 | |
Laboratory equipment | |||
Property and equipment | |||
Property and equipment, gross | 45,342 | 24,873 | |
Computer equipment | |||
Property and equipment | |||
Property and equipment, gross | 10,939 | 5,995 | |
Software | |||
Property and equipment | |||
Property and equipment, gross | 566 | 2,611 | |
Furniture and fixtures | |||
Property and equipment | |||
Property and equipment, gross | 1,967 | 1,198 | |
Automobiles | |||
Property and equipment | |||
Property and equipment, gross | 58 | 58 | |
Construction-in-progress | |||
Property and equipment | |||
Property and equipment, gross | $ 12,061 | $ 10,795 |
Balance sheet components - Accrued liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
Accrued compensation and related expenses | $ 25,221 | $ 16,440 |
Deferred revenue | 6,378 | 1,429 |
Compensation and other liabilities associated with business combinations | 25,600 | 30,560 |
Other | 28,859 | 16,385 |
Total accrued liabilities | $ 86,058 | $ 64,814 |
Balance sheet components - Other long-term liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
Deferred revenue, non-current | $ 1,380 | $ 0 |
Compensation and other liabilities associated with business combinations, non-current | 825,976 | 8,000 |
Other | 13,900 | 0 |
Total other long-term liabilities | $ 841,256 | $ 8,000 |
Fair value measurements - Narrative (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
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 | 109,300,000 | |
Investments, interest income | 4,000,000.0 | $ 5,200,000 |
Change in fair value, expense | $ 37,500,000 | |
Minimum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Maturities period of available-for-sale securities | 1 month | |
Maximum | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Maturities period of available-for-sale securities | 9 months |
Commitments and contingencies - Lease additional information (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2016 |
---|---|---|
Operating Leased Assets [Line Items] | ||
Finance lease, term of contract | 3 years | |
New Leases | Office Facility In San Francisco | ||
Operating Leased Assets [Line Items] | ||
Operating lease, renewal term | 10 years | |
Operating lease, term of contract | 10 years | |
Security deposit | $ 4.6 |
Commitments and contingencies - Supplemental information regarding our operating and finance leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Weighted-average remaining lease term: | |||
Operating leases | 5 years 4 months 24 days | 6 years 6 months | |
Finance leases | 2 years 7 months 6 days | 2 years | |
Weighted-average discount rate: | |||
Operating leases | 10.60% | 11.80% | |
Finance leases | 4.80% | 5.50% | |
Cash payments included in the measurement of lease liabilities (in millions): | |||
Operating leases | $ 11,600 | $ 10,200 | |
Finance leases | 2,000 | 2,100 | |
Lease Cost | |||
Operating lease costs | 11,329 | 10,329 | |
Operating lease costs | $ 9,648 | ||
Sublease income | 0 | (173) | |
Sublease income | (156) | ||
Finance lease costs | 2,084 | 1,546 | |
Finance lease costs | 1,820 | ||
Total lease costs | $ 13,413 | $ 11,702 | |
Total lease costs | $ 11,312 |
Commitments and contingencies - Schedule of future payments under operating and finance leases (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating leases | ||
2021 | $ 14,338 | |
2022 | 13,788 | |
2023 | 13,229 | |
2024 | 13,407 | |
2025 | 11,672 | |
Thereafter | 9,499 | |
Future non-cancelable minimum lease payments | 75,933 | |
Less: interest | (18,787) | |
Total lease liabilities | 57,146 | |
Less: current portion | (8,789) | $ (4,870) |
Lease obligations, net of current portion | 48,357 | 42,191 |
Finance leases | ||
2021 | 2,006 | |
2022 | 1,908 | |
2023 | 1,199 | |
2024 | 26 | |
2025 | 0 | |
Thereafter | 0 | |
Future non-cancelable minimum lease payments | 5,139 | |
Less: interest | (321) | |
Total lease liabilities | 4,818 | |
Less: current portion | (1,695) | (1,855) |
Lease obligations, net of current portion | $ 3,123 | $ 1,155 |
Commitments and contingencies - Convertible senior notes (Details) |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2019
USD ($)
tradingDay
$ / shares
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Convertible Senior Notes | Convertible debt | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ | $ 350,000,000.0 | ||
Stated interest rate | 2.00% | ||
Conversion ratio | 0.0336293 | ||
Conversion price (in dollars per share) | $ / shares | $ 29.74 | ||
Redemption price percentage | 100.00% | ||
Number of threshold trading days | 20 | ||
Number of consecutive trading days | 30 | ||
Threshold percentage of stock price trigger | 130.00% | ||
Threshold trading days immediately after five consecutive trading days | 5 | ||
Maximum threshold percentage of stock price trigger | 98.00% | ||
Threshold trading days | 30 | ||
Interest expense | $ | $ 22,000,000.0 | $ 6,500,000 | |
Level 2 | |||
Debt Instrument [Line Items] | |||
Fair value | $ | $ 586,000,000.0 |
Commitments and contingencies - Components of debt (Details) - Convertible debt - Convertible Senior Notes - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Outstanding principal | $ 350,000 | $ 350,000 |
Unamortized debt discount and issuance costs | (66,276) | (81,245) |
Net carrying amount, liability component | $ 283,724 | $ 268,755 |
Commitments and contingencies - Other commitments (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Other Commitments [Line Items] | |
Future non-cancelable minimum operating lease payments | $ 75,933 |
Additional office facility in San Francisco | |
Other Commitments [Line Items] | |
Future non-cancelable minimum operating lease payments | 45,000 |
Service agreements and laboratory supplies | |
Other Commitments [Line Items] | |
2021 | 23,064 |
2022 | 20,372 |
2023 | 19,451 |
2024 | 9,220 |
2025 | 4,530 |
Thereafter | 25,501 |
Total | $ 102,138 |
Stockholders' equity - Schedule of outstanding warrants to purchase common stock (Details) - Common stock - CombiMatrix - Series F Warrants |
Dec. 31, 2020
$ / shares
shares
|
---|---|
Class of Warrant or Right [Line Items] | |
Exercise price per share (in dollars per share) | $ / shares | $ 5.95 |
Common stock underlying warrants (in shares) | shares | 214,154 |
Stock incentive plans - Schedule of assumptions used in determination of fair value of options (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Employee Stock Option | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Expected term (in years) | 6 years | 6 years | 6 years |
Expected volatility | 71.00% | 64.20% | 59.60% |
Risk-free interest rate | 0.50% | 2.60% | 2.80% |
2015 Employee Stock Purchase Plan | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Expected volatility | 105.70% | 66.30% | 71.70% |
Risk-free interest rate | 0.10% | 2.00% | 2.10% |
Stock incentive plans - Stock-based compensation expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Stock-based compensation | |||
Total stock-based compensation expense | $ 158,747 | $ 75,948 | $ 20,850 |
Cost of revenue | |||
Stock-based compensation | |||
Total stock-based compensation expense | 8,713 | 4,563 | 2,960 |
Research and development | |||
Stock-based compensation | |||
Total stock-based compensation expense | 91,762 | 52,450 | 7,017 |
Selling and marketing | |||
Stock-based compensation | |||
Total stock-based compensation expense | 14,418 | 7,641 | 4,887 |
General and administrative | |||
Stock-based compensation | |||
Total stock-based compensation expense | $ 43,854 | $ 11,294 | $ 5,986 |
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, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||
United States | $ 712,409 | $ 260,531 | $ 132,194 |
Foreign | 1,861 | (116) | (39) |
Total | $ 714,270 | $ 260,415 | $ 132,155 |
Income taxes - Schedule of components of the provision for income taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Current: | |||
Foreign | $ 171 | $ 85 | $ 62 |
Total current benefit for income taxes | 171 | 85 | 62 |
Deferred: | |||
Federal | (94,279) | (16,011) | (2,862) |
State | (17,730) | (2,524) | 0 |
Foreign | (262) | 0 | 0 |
Total deferred benefit for income taxes | (112,271) | (18,535) | (2,862) |
Total income tax benefit | $ (112,100) | $ (18,450) | $ (2,800) |
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, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
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% | 21.00% | 21.00% |
State taxes (net of federal benefit) | 3.40% | 3.70% | 5.20% |
Stock-based compensation | (1.60%) | 1.30% | (0.70%) |
Research and development credits | 1.10% | 0.00% | 2.70% |
Non-deductible expenses | (1.50%) | (1.60%) | (0.60%) |
Change in valuation allowance | (6.70%) | (17.30%) | (25.50%) |
Total | 15.70% | 7.10% | 2.10% |
Income taxes - Schedule of net deferred tax assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carryforwards | $ 337,866 | $ 173,182 |
Tax credits | 19,969 | 0 |
Revenue recognition differences | 9,099 | 5,138 |
Leasing Liabilities | 14,274 | 11,626 |
Accruals and other | 37,677 | 14,391 |
Gross deferred tax assets | 418,885 | 204,337 |
Valuation allowance | (209,308) | (145,318) |
Total deferred tax assets | 209,577 | 59,019 |
Deferred tax liabilities: | ||
Amortization and depreciation | (233,150) | (30,875) |
Convertible Senior Notes | (14,658) | (17,720) |
Leasing Assets | (13,307) | (10,424) |
Total deferred tax liabilities | (261,115) | (59,019) |
Net deferred tax liabilities | $ (51,538) | $ 0 |
Income taxes - Schedule of reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits, beginning of period | $ 26,985 | $ 16,375 | $ 10,561 |
Gross increases—current period tax positions | 8,368 | 10,311 | 5,686 |
Gross increases—prior period tax positions | 53 | 299 | 128 |
Gross decreases—prior period tax positions | (13,441) | 0 | 0 |
Unrecognized tax benefits, end of period | $ 21,965 | $ 26,985 | $ 16,375 |
Net loss per share - Schedule of earnings per share, basic and diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Earnings Per Share [Abstract] | |||||||||||
Net loss | $ (234,338) | $ (102,902) | $ (166,403) | $ (98,527) | $ (76,905) | $ (78,707) | $ (48,676) | $ (37,677) | $ (602,170) | $ (241,965) | $ (129,355) |
Shares used in computing net loss per share, basic and diluted | 134,587 | 90,859 | 66,747 | ||||||||
Net loss per share, basic and diluted (in dollars per share) | $ (4.47) | $ (2.66) | $ (1.94) |
Geographic information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Geographic information | |||||||||||
Total revenue | $ 100,431 | $ 68,728 | $ 46,191 | $ 64,248 | $ 66,285 | $ 56,511 | $ 53,475 | $ 40,553 | $ 279,598 | $ 216,824 | $ 147,699 |
United States | |||||||||||
Geographic information | |||||||||||
Total revenue | 255,680 | 202,550 | 138,239 | ||||||||
Canada | |||||||||||
Geographic information | |||||||||||
Total revenue | 4,529 | 4,356 | 4,206 | ||||||||
Rest of world | |||||||||||
Geographic information | |||||||||||
Total revenue | $ 19,389 | $ 9,918 | $ 5,254 |
Selected quarterly data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 100,431 | $ 68,728 | $ 46,191 | $ 64,248 | $ 66,285 | $ 56,511 | $ 53,475 | $ 40,553 | $ 279,598 | $ 216,824 | $ 147,699 |
Cost of revenue | 68,258 | 46,643 | 42,952 | 40,422 | 36,723 | 32,120 | 28,006 | 21,254 | 198,275 | 118,103 | 80,105 |
Loss from operations | (331,483) | (80,823) | (142,082) | (97,784) | (79,036) | (76,983) | (51,886) | (36,207) | (652,172) | (244,112) | (122,557) |
Net loss | $ (234,338) | $ (102,902) | $ (166,403) | $ (98,527) | $ (76,905) | $ (78,707) | $ (48,676) | $ (37,677) | $ (602,170) | $ (241,965) | $ (129,355) |
Net loss per share, basic and diluted (in dollars per share) | $ (1.30) | $ (0.78) | $ (1.29) | $ (0.99) | $ (0.79) | $ (0.82) | $ (0.54) | $ (0.47) | $ (4.47) | $ (2.66) | $ (1.94) |
Subsequent events (Details) - USD ($) $ in Thousands, shares in Millions |
1 Months Ended | |
---|---|---|
Feb. 26, 2021 |
Apr. 30, 2020 |
|
Subsequent Event [Line Items] | ||
Cash transferred | $ 25,434 | |
Hold-back consideration - cash | 1,385 | |
Hold-back consideration - common stock | $ 6,173 | |
OneCodex | Subsequent event | ||
Subsequent Event [Line Items] | ||
Percentage of interest acquired | 100.00% | |
Business acquisition common stock issued (in shares) | 1.2 | |
Cash transferred | $ 17,000 | |
Hold-back consideration - cash | 100 | |
Hold-back consideration - common stock | $ 200 |