QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
S | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller Reporting Company | ||||||||||||
Emerging Growth Company |
March 31, 2022 (unaudited) | December 31, 2021 | |||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Marketable securities, at fair value | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories | ||||||||||||||
Prepaid assets | ||||||||||||||
Assets held for sale | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property and equipment (net of accumulated depreciation of $ | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Intangible assets, net | ||||||||||||||
Goodwill | ||||||||||||||
Other assets | ||||||||||||||
Total non-current assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued compensation | ||||||||||||||
Accrued expenses and other liabilities | ||||||||||||||
Current portion of equipment financing obligations | ||||||||||||||
Current portion of operating lease liabilities | ||||||||||||||
Pharma contract liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term liabilities | ||||||||||||||
Convertible senior notes, net | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Deferred income tax liabilities, net | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Total long-term liabilities | ||||||||||||||
Total liabilities | $ | $ | ||||||||||||
Commitments and contingencies (Note 11) | ||||||||||||||
Stockholders’ equity | ||||||||||||||
Common stock, $ | $ | $ | ||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Total stockholders’ equity | $ | $ | ||||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
NET REVENUE | |||||||||||
Clinical Services | $ | $ | |||||||||
Pharma Services | |||||||||||
Total net revenue | |||||||||||
COST OF REVENUE | |||||||||||
GROSS PROFIT | |||||||||||
Operating expenses: | |||||||||||
General and administrative | |||||||||||
Research and development | |||||||||||
Sales and marketing | |||||||||||
Total operating expenses | |||||||||||
LOSS FROM OPERATIONS | ( | ( | |||||||||
Interest (income) expense, net | |||||||||||
Other (income) expenses, net | ( | ||||||||||
Loss before taxes | ( | ( | |||||||||
Income tax (benefit) expense | ( | ||||||||||
NET LOSS | $ | ( | $ | ( | |||||||
NET LOSS PER SHARE | |||||||||||
Basic | $ | ( | $ | ( | |||||||
Diluted | $ | ( | $ | ( | |||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
NET LOSS | $ | ( | $ | ( | ||||||||||
OTHER COMPREHENSIVE LOSS: | ||||||||||||||
Net unrealized loss on marketable securities, net of tax | ( | ( | ||||||||||||
Total other comprehensive loss, net of tax | ( | ( | ||||||||||||
COMPREHENSIVE LOSS | $ | ( | $ | ( |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | (Accumulated Deficit) Retained Earnings | Total | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Common stock issuance ESPP Plan | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Issuance of common stock for stock options | — | — | |||||||||||||||||||||||||||||||||
ESPP expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation expense - options and restricted stock | — | — | — | — | |||||||||||||||||||||||||||||||
Net unrealized loss on marketable securities, net of tax | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Cumulative-effect adjustment from change in accounting principle | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
Premiums paid for capped call confirmations | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Common stock issuance ESPP Plan | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of restricted stock, net of forfeitures | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Issuance of common stock for stock options | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of common stock - public offering, net of underwriting discounts | — | — | |||||||||||||||||||||||||||||||||
Stock issuance fees and expenses | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
ESPP expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation expense - options and restricted stock | — | — | — | — | |||||||||||||||||||||||||||||||
Net unrealized loss on marketable securities, net of tax | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
Depreciation | ||||||||||||||
Amortization of intangibles | ||||||||||||||
Non-cash stock-based compensation | ||||||||||||||
Non-cash operating lease expense | ||||||||||||||
Amortization of convertible debt discount | ||||||||||||||
Amortization of debt issue costs | ||||||||||||||
Unrealized loss on investment in non-consolidated affiliate | ||||||||||||||
Interest receivable on loan receivable from non-consolidated affiliate | ( | |||||||||||||
Gain on sale of assets held for sale | ( | |||||||||||||
Write-off of COVID-19 PCR testing inventory and equipment | ||||||||||||||
Other adjustments | ||||||||||||||
Changes in assets and liabilities, net | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories | ( | |||||||||||||
Prepaid lease asset | ( | |||||||||||||
Prepaid and other assets | ( | ( | ||||||||||||
Accounts payable, operating lease liabilities, deferred taxes, accrued and other liabilities | ( | ( | ||||||||||||
Net cash (used in) provided by operating activities | ( | |||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||
Purchases of marketable securities | ( | ( | ||||||||||||
Proceeds from sales and maturities of marketable securities | ||||||||||||||
Purchases of property and equipment | ( | ( | ||||||||||||
Loan receivable from non-consolidated affiliate | ( | |||||||||||||
Net cash provided by (used in) investing activities | ( | |||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||
Repayment of equipment financing obligations | ( | ( | ||||||||||||
Issuance of common stock, net | ||||||||||||||
Proceeds from issuance of convertible debt, net of issuance costs | ||||||||||||||
Premiums paid for capped call confirmations | ( | |||||||||||||
Proceeds from equity offering, net of issuance costs | ||||||||||||||
Net cash provided by financing activities | ||||||||||||||
Net change in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Reconciliation of cash, cash equivalents and restricted cash to the Consolidated Balance Sheets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash, non-current | ||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | ||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Interest paid | $ | $ | ||||||||||||
Income taxes (refunded) paid, net | $ | $ | ( | |||||||||||
Supplemental disclosure of non-cash investing and financing information: | ||||||||||||||
Increase in other current assets for the sale of assets held for sale | $ | $ | ||||||||||||
Purchases of property and equipment included in accounts payable | $ | $ |
Amount | ||||||||
Purchase consideration: | ||||||||
Shares of common stock issued as consideration | ||||||||
Per share value of common stock issued as consideration | $ | |||||||
Fair value of common stock at Trapelo Acquisition Date | $ | |||||||
Plus: Cash paid at closing | ||||||||
Total purchase consideration | $ | |||||||
Allocation of the purchase consideration: | ||||||||
Cash | $ | |||||||
Other current assets | ||||||||
Identifiable intangible asset - marketing assets | ||||||||
Identifiable intangible asset - developed technology | ||||||||
Other long-term assets | ||||||||
Total identifiable assets acquired | ||||||||
Current liabilities | ( | |||||||
Net identifiable assets acquired | ||||||||
Goodwill | ||||||||
Total purchase consideration | $ |
June 18, 2021 (as initially reported) | Measurement Period Adjustments | June 18, 2021 (as adjusted) | ||||||||||||||||||
Fair value of business combination: | ||||||||||||||||||||
Cash paid at closing | $ | $ | — | $ | ||||||||||||||||
Fair value of Line of Credit | — | |||||||||||||||||||
Fair value of consideration transferred | $ | $ | — | $ | ||||||||||||||||
Fair value of previously-held equity interest(1) | ||||||||||||||||||||
Fair value of Purchase Option(1) | ||||||||||||||||||||
Total fair value of business combination | $ | $ | $ | |||||||||||||||||
Allocation of the fair value business combination: | ||||||||||||||||||||
Cash | $ | $ | — | $ | ||||||||||||||||
Other current assets(2) | ||||||||||||||||||||
Property and equipment | — | |||||||||||||||||||
Identifiable intangible assets - developed technology(1) | ( | |||||||||||||||||||
Identifiable intangible assets - trademarks(1) | ( | |||||||||||||||||||
Identifiable intangible asset - trade name(1) | ||||||||||||||||||||
Other long-term assets | — | |||||||||||||||||||
Total identifiable assets acquired | ( | |||||||||||||||||||
Current liabilities | ( | ( | ( | |||||||||||||||||
Deferred income tax liabilities(3) | ( | ( | ||||||||||||||||||
Other long-term liabilities | ( | — | ( | |||||||||||||||||
Net identifiable assets acquired | ( | |||||||||||||||||||
Goodwill | ||||||||||||||||||||
Total fair value of business combination | $ | $ | $ |
Three Months Ended March 31, 2021 | ||||||||
(unaudited) | ||||||||
Net revenue | $ | |||||||
Net loss | $ | ( |
March 31, 2022 | ||||||||||||||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||||
Short-term marketable securities: | ||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Yankee bonds | ( | |||||||||||||||||||||||||
Agency bonds | ( | |||||||||||||||||||||||||
Municipal bonds | ( | |||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Asset-backed securities | ( | |||||||||||||||||||||||||
Corporate bonds | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
December 31, 2021 | ||||||||||||||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||||
Short-term marketable securities: | ||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Yankee bonds | ( | |||||||||||||||||||||||||
Agency bonds | ( | |||||||||||||||||||||||||
Municipal bonds | ( | |||||||||||||||||||||||||
Commercial paper | ( | |||||||||||||||||||||||||
Asset-backed securities | ( | |||||||||||||||||||||||||
Corporate bonds | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
March 31, 2022 | ||||||||||||||||||||||||||
(in thousands) | One Year or Less | Over One Year Through Five Years | Over Five Years | Total | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||||
Marketable Securities: | ||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | ||||||||||||||||||||||
Yankee bonds | ||||||||||||||||||||||||||
Agency bonds | ||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Asset-backed securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||
(in thousands) | One Year or Less | Over One Year Through Five Years | Over Five Years | Total | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||||
Marketable Securities: | ||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | ||||||||||||||||||||||
Yankee bonds | ||||||||||||||||||||||||||
Agency bonds | ||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Asset-backed securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
March 31, 2022 | ||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Marketable securities: | ||||||||||||||||||||||||||
U.S. Treasury securities | ||||||||||||||||||||||||||
Yankee bonds | ||||||||||||||||||||||||||
Agency bonds | ||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Asset-backed securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Marketable securities: | ||||||||||||||||||||||||||
U.S. Treasury securities | ||||||||||||||||||||||||||
Yankee bonds | ||||||||||||||||||||||||||
Agency bonds | ||||||||||||||||||||||||||
Municipal bonds | ||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Asset-backed securities | ||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
Clinical Services | $ | $ | |||||||||
Pharma Services | |||||||||||
Total | $ | $ |
March 31, 2022 | ||||||||||||||||||||||||||
Amortization Period (years) | Cost | Accumulated Amortization | Net | |||||||||||||||||||||||
Customer Relationships | $ | $ | $ | |||||||||||||||||||||||
Developed Technology | ||||||||||||||||||||||||||
Marketing Assets | ||||||||||||||||||||||||||
Trademarks | ||||||||||||||||||||||||||
Trade Name | ||||||||||||||||||||||||||
Trademark - Indefinite lived | — | — | ||||||||||||||||||||||||
Total | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||
Amortization Period (years) | Cost | Accumulated Amortization | Net | |||||||||||||||||||||||
Customer Relationships | $ | $ | $ | |||||||||||||||||||||||
Developed Technology | ||||||||||||||||||||||||||
Marketing Assets | ||||||||||||||||||||||||||
Trademarks | ||||||||||||||||||||||||||
Trade Name | ||||||||||||||||||||||||||
Trademark - Indefinite lived | — | — | ||||||||||||||||||||||||
Total | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Amortization of intangibles included in cost of revenue | $ | $ | ||||||||||||
Amortization of intangibles included in general and administrative expenses | ||||||||||||||
Total amortization of intangibles | $ | $ |
Remainder of 2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total | $ |
Number of Shares | Weighted Average Exercise Price | |||||||||||||
Options outstanding at December 31, 2021 | $ | |||||||||||||
Options granted | $ | |||||||||||||
Less: | ||||||||||||||
Options exercised | $ | |||||||||||||
Options forfeited | $ | |||||||||||||
Options outstanding at March 31, 2022 | $ | |||||||||||||
Exercisable at March 31, 2022 | $ |
Three Months Ended March 31, 2022 | |||||
Expected term (in years) | |||||
Risk-free interest rate (%) | |||||
Expected volatility (%) | |||||
Dividend yield (%) | |||||
Weighted average grant date fair value per share | $ |
Number of Restricted Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Nonvested at December 31, 2021 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Nonvested at March 31, 2022 | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
Current pharma contract assets (1) | $ | $ | |||||||||
Long-term pharma contract assets (2) | |||||||||||
Total pharma contract assets | $ | $ | |||||||||
Current pharma capitalized commissions (1) | $ | $ | |||||||||
Long-term pharma capitalized commissions (2) | |||||||||||
Total pharma capitalized commissions | $ | $ | |||||||||
Current pharma contract liabilities | $ | $ | |||||||||
Long-term pharma contract liabilities (3) | |||||||||||
Total pharma contract liabilities | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Clinical Services: | ||||||||||||||
Client direct billing | $ | $ | ||||||||||||
Commercial Insurance | ||||||||||||||
Medicare and Medicaid | ||||||||||||||
Self-Pay | ||||||||||||||
Total Clinical Services | $ | $ | ||||||||||||
Pharma Services: | ||||||||||||||
Total Revenue | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
NET LOSS | $ | ( | $ | ( | ||||||||||
Basic weighted average shares outstanding | ||||||||||||||
Diluted weighted average shares outstanding | ||||||||||||||
Basic net loss per share | $ | ( | $ | ( | ||||||||||
Diluted net loss per share | $ | ( | $ | ( |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Stock options | ||||||||||||||
Restricted stock awards | ||||||||||||||
2025 Convertible Notes | ||||||||||||||
2028 Convertible Notes |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Net revenues: | ||||||||||||||
Clinical Services | $ | $ | ||||||||||||
Pharma Services | ||||||||||||||
Total revenue | ||||||||||||||
Cost of revenue: | ||||||||||||||
Clinical Services(1) | ||||||||||||||
Pharma Services(2) | ||||||||||||||
Total cost of revenue | ||||||||||||||
Gross Profit: | ||||||||||||||
Clinical Services | ||||||||||||||
Pharma Services | ||||||||||||||
Total gross profit | ||||||||||||||
Operating expenses: | ||||||||||||||
General and administrative | ||||||||||||||
Research and development | ||||||||||||||
Sales and marketing | ||||||||||||||
Total operating expenses | ||||||||||||||
Loss from operations | ( | ( | ||||||||||||
Interest (income) expense, net | ||||||||||||||
Other (income) expenses, net | ( | |||||||||||||
Loss before taxes | ( | ( | ||||||||||||
Income tax (benefit) expense | ( | |||||||||||||
Net loss | $ | ( | $ | ( |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Net revenue | 100.0 | % | 100.0 | % | ||||||||||
Cost of revenue(1) | 67.4 | % | 64.0 | % | ||||||||||
Gross Profit | 32.6 | % | 36.0 | % | ||||||||||
Operating expenses: | ||||||||||||||
General and administrative | 56.5 | % | 35.1 | % | ||||||||||
Research and development | 6.6 | % | 2.1 | % | ||||||||||
Sales and marketing | 13.9 | % | 11.9 | % | ||||||||||
Total operating expenses | 77.0 | % | 49.1 | % | ||||||||||
Loss from operations | (44.4) | % | (13.1) | % | ||||||||||
Interest (income) expense, net | 1.1 | % | 1.0 | % | ||||||||||
Other (income) expenses, net | (0.1) | % | 4.2 | % | ||||||||||
Loss before taxes | (45.4) | % | (18.3) | % | ||||||||||
Income tax (benefit) expense | (3.2) | % | 0.8 | % | ||||||||||
Net loss | (42.2) | % | (19.1) | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||||||||||||
Net revenue: | ||||||||||||||||||||||||||
Clinical Services | $ | 98,791 | $ | 96,487 | $ | 2,304 | 2.4 | % | ||||||||||||||||||
Pharma Services | 18,378 | 19,046 | (668) | (3.5) | % | |||||||||||||||||||||
Total revenue | $ | 117,169 | $ | 115,533 | $ | 1,636 | 1.4 | % |
Three Months Ended March 31, | ||||||||||||||||||||
($ in thousands) | 2022 | 2021 | % Change | |||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Clinical Services(3) | $ | 65,267 | $ | 61,565 | 6.0 | % | ||||||||||||||
Pharma Services | 13,670 | 12,394 | 10.3 | % | ||||||||||||||||
Total cost of revenue | $ | 78,937 | $ | 73,959 | 6.7 | % | ||||||||||||||
Cost of revenue as a % of revenue | 67.4 | % | 64.0 | % | ||||||||||||||||
Gross profit: | ||||||||||||||||||||
Clinical Services | $ | 33,524 | $ | 34,922 | (4.0) | % | ||||||||||||||
Pharma Services | 4,708 | 6,652 | (29.2) | % | ||||||||||||||||
Total gross profit | $ | 38,232 | $ | 41,574 | (8.0) | % | ||||||||||||||
Gross profit margin | 32.6 | % | 36.0 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||
($ in thousands) | 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||||
General and administrative | $ | 66,248 | $ | 40,476 | $ | 25,772 | 63.7 | % | ||||||||||||||||||
As a % of revenue | 56.5 | % | 35.1 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||
($ in thousands) | 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||||
Research and development | $ | 7,713 | $ | 2,456 | $ | 5,257 | 214.0 | % | ||||||||||||||||||
As a % of revenue | 6.6 | % | 2.1 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||
($ in thousands) | 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||||
Sales and marketing | $ | 16,299 | $ | 13,749 | $ | 2,550 | 18.5 | % | ||||||||||||||||||
As a % of revenue | 13.9 | % | 11.9 | % |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
NET LOSS | $ | (49,408) | $ | (22,114) | ||||||||||
Basic weighted average shares outstanding | 123,630 | 116,199 | ||||||||||||
Diluted weighted average shares outstanding | 123,630 | 116,199 | ||||||||||||
Basic net loss per share | $ | (0.40) | $ | (0.19) | ||||||||||
Diluted net loss per share | $ | (0.40) | $ | (0.19) |
Three Months Ended March 31, | ||||||||||||||
(in thousands) | 2022 | 2021 | ||||||||||||
Net loss (GAAP) | $ | (49,408) | $ | (22,114) | ||||||||||
Adjustments to net loss: | ||||||||||||||
Interest expense, net | 1,301 | 1,177 | ||||||||||||
Income tax (benefit) expense | (3,753) | 976 | ||||||||||||
Depreciation | 8,395 | 6,680 | ||||||||||||
Amortization of intangibles | 8,490 | 2,458 | ||||||||||||
EBITDA (non-GAAP) | $ | (34,975) | $ | (10,823) | ||||||||||
Further adjustments to EBITDA: | ||||||||||||||
Acquisition and integration related expenses | 1,030 | 814 | ||||||||||||
Write-off of COVID-19 PCR testing inventory and equipment | — | 6,061 | ||||||||||||
Non-cash stock-based compensation expense | 12,103 | 2,653 | ||||||||||||
Other significant (income) expenses, net (1) | 2,831 | 5,481 | ||||||||||||
Adjusted EBITDA (non-GAAP) | $ | (19,011) | $ | 4,186 |
Three Months Ended March 31, | ||||||||||||||
(in thousands) | 2022 | 2021 | ||||||||||||
Net cash (used in) provided by: | ||||||||||||||
Operating activities | $ | (29,040) | $ | 2,210 | ||||||||||
Investing activities | 12,052 | (154,688) | ||||||||||||
Financing activities | 6,057 | 524,935 | ||||||||||||
Net change in cash, cash equivalents and restricted cash | (10,931) | 372,457 | ||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 316,827 | $ | 250,632 | ||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 305,896 | $ | 623,089 | ||||||||||
Working Capital (1), end of period | $ | 569,030 | $ | 874,982 |
Period of Repurchase | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||||||||||||
January 1, 2022 - January 31, 2022 | 51 | $ | 28.40 | — | — | ||||||||||||||||||
February 1, 2022 - February 28, 2022 | 13 | $ | 21.87 | — | — | ||||||||||||||||||
March 1, 2022 - March 31, 2022 | 58,492 | $ | 17.90 | — | — | ||||||||||||||||||
Total | 58,556 | — | — |
EXHIBIT NO. | DESCRIPTION | |||||||
10.1* | ||||||||
10.2* | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
101.INS | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive File (formatted as inline XBRL and contained within Exhibit 101) | |||||||
* | Denotes a management contract or compensatory plan or arrangement. |
Date: May 9, 2022 | NEOGENOMICS, INC. | |||||||||||||
By: | /s/ Lynn A. Tetrault | |||||||||||||
Name: | Lynn A. Tetrault | |||||||||||||
Title: | Executive Chair of the Board of Directors and | |||||||||||||
Principal Executive Officer | ||||||||||||||
By: | /s/ William B. Bonello | |||||||||||||
Name: | William B. Bonello | |||||||||||||
Title: | Chief Financial Officer | |||||||||||||
May 9, 2022 | /s/ Lynn A. Tetrault | |||||||
Lynn A. Tetrault | ||||||||
Executive Chair of the Board of Directors and Principal Executive Officer |
May 9, 2022 | /s/ William B. Bonello | |||||||
William B. Bonello | ||||||||
Chief Financial Officer |
Date: | May 9, 2022 | /s/ Lynn A. Tetrault | |||||||||
Lynn A. Tetrault | |||||||||||
Executive Chair of the Board of Directors and | |||||||||||
Principal Executive Officer |
Date: | May 9, 2022 | /s/ William B. Bonello | |||||||||
William B. Bonello | |||||||||||
Chief Financial Officer |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 116,254 | $ 109,952 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 124,722,215 | 124,107,500 |
Common stock, shares outstanding | 124,722,215 | 124,107,500 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
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Statement of Comprehensive Income [Abstract] | ||
NET LOSS | $ (49,408) | $ (22,114) |
OTHER COMPREHENSIVE LOSS: | ||
Net unrealized loss on marketable securities, net of tax | (2,371) | (160) |
Total other comprehensive loss, net of tax | (2,371) | (160) |
COMPREHENSIVE LOSS | $ (51,779) | $ (22,274) |
Nature of the Business |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | Nature of the Business Nature of the Business NeoGenomics, Inc., a Nevada corporation (the “Company,” or “NeoGenomics”), and its subsidiaries, operate as a certified, high complexity clinical laboratory in accordance with the federal government’s CLIA, as amended, and is dedicated to the delivery of clinical diagnostic services to pathologists, oncologists, urologists, hospitals, and other laboratories as well as providing clinical trial services to pharmaceutical firms. COVID-19 Pandemic Update In December 2019, a novel strain of coronavirus (“COVID-19”) was identified and the disease has since spread across the world, including the United States (“U.S.”). In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The outbreak of the pandemic is materially adversely affecting the Company’s employees, patients, communities, and business operations, as well as the U.S. economy and financial markets. The impact from the COVID-19 pandemic, including recent COVID-19 variants, and the related disruptions had a significant adverse impact on the Company’s results of operations, volume growth rates and test volumes in 2020, 2021, and the first quarter of 2022. The full extent to which the COVID-19 outbreak will impact the Company’s business, results of operations, financial condition, and cash flows will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 and the actions to contain it or treat its impact and the economic impact on local, regional, national, and international markets. As the COVID-19 pandemic continues, the Company’s results of operations, financial condition, and cash flows may continue to be materially adversely affected, particularly if the pandemic continues to persist for a significant amount of time. The Company anticipates that the cash on hand, marketable securities, and expected cash collections are sufficient to fund near-term capital and operating needs for at least the next 12 months. At the end of the first quarter 2021, due to the broad roll-out of the COVID-19 vaccine and a sharp decline in COVID-19 polymerase chain reaction (“PCR”) testing demand, the Company made the decision to exit COVID-19 PCR testing and the Company recorded a $6.1 million expense related to the exit from COVID-19 PCR testing. This amount consisted of write-offs of $5.3 million for all remaining COVID-19 PCR testing inventory recorded to cost of revenue and $0.8 million for all remaining COVID-19 PCR testing laboratory equipment recorded to general and administrative expenses on the Consolidated Statements of Operations for the three months ended March 31, 2021. There were no such amounts recorded for the three months ended March 31, 2022. Coronavirus Aid, Relief and Economic Security Act The Federal government passed legislation that the President of the United States signed into law on March 27, 2020, known as the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act permits the deferral of payment of the employer portion of social security taxes between March 27, 2020 and December 31, 2020. Fifty percent of the deferred amount was due on December 31, 2021 and the remaining 50% is due on December 31, 2022. As of March 31, 2022 and December 31, 2021 the total accrued deferred social security taxes related to the CARES Act was $3.0 million. This amount was recorded in accrued expenses and other liabilities on the Consolidated Balance Sheets.
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Summary of Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying interim Consolidated Financial Statements are unaudited and have been prepared in accordance with GAAP for interim financial information. All intercompany transactions and balances have been eliminated in the accompanying Consolidated Financial Statements. The accounting policies of the Company are the same as those set forth in Note 2. Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, except for new accounting standards discussed under Recent Accounting Pronouncements. Unaudited Interim Financial Information Certain information and footnote disclosures normally included in the Company’s annual audited Consolidated Financial Statements and accompanying notes have been condensed or omitted in these accompanying interim Consolidated Financial Statements and footnotes. Accordingly, the accompanying interim unaudited Consolidated Financial Statements included herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited Consolidated Financial Statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. Use of Estimates The Company prepares its Consolidated Financial Statements in conformity with GAAP. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the Consolidated Financial Statements. Actual results and outcomes may differ from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these Consolidated Financial Statements include, but are not limited, to those related to revenues, accounts receivable and related allowances, contingencies, useful lives and recovery of long-term assets and intangible assets, income taxes and valuation allowances, stock-based compensation, business combinations, and impairment analysis of goodwill. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected on the Consolidated Financial Statements prospectively from the date of the change in estimate. Assets Held for Sale Assets to be disposed of by sale are reclassified as held for sale if their carrying amounts are expected to be recovered through a sale transaction rather than through continuing use and when the Company commits to a plan to sell the assets. Assets classified as held for sale are measured at the lower of their carrying value or fair value less selling costs. Such assets are classified within current assets if there is reasonable certainty that the sale and collection of consideration will take place within one year. Upon reclassification as held for sale, long-lived assets are no longer depreciated or amortized and a measurement for impairment is performed to determine if there is an excess of carrying value over fair value less costs to sell. Any remeasurement is reported as an adjustment to the carrying value of the assets. Subsequent changes to estimated fair value less the selling costs will impact the measurement of assets held for sale if the fair value is determined to be less than the carrying value of the assets. The Company owned 43,560 square feet of its Carlsbad, California facility. During the third quarter of 2021, the Company committed to selling this property and the associated land and concluded that these assets met the held for sale criteria. As of December 31, 2021, $10.1 million was recorded as assets held for sale within current assets on the Consolidated Balance Sheets for this property and associated land and reflected its carrying value which was lower than its fair value less costs to sell. The Company sold this property and associated land for proceeds of $12.1 million, net of closing costs, on March 31, 2022 and recorded a receivable for this amount in other current assets on the Consolidated Balance Sheets at March 31, 2022. The Company recognized a net gain on the sale of this property and associated land of $2.0 million in general and administrative expenses on the Consolidated Statements of Operations. Sales and Marketing Expenses Sales and marketing expenses are primarily attributable to employee-related costs including sales management, sales representatives, sales and marketing consultants, and marketing and customer service personnel in the Clinical Services segment. Advertising costs are expensed at the time they are incurred and are deemed immaterial for the three months ended March 31, 2022 and 2021. Recent Accounting Pronouncements In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance (“ASU 2021-10”). This update requires business entities to disclose information annually about certain government assistance they receive. Such annual disclosure requirements include the nature of the transactions and the related accounting policy used, the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item and significant terms and conditions of the transactions. ASU 2021-10 is effective for annual periods beginning after December 15, 2021, with early adoption permitted. ASU 2021-10 should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company will adopt this new accounting standard in its Annual Report on Form 10-K for the year ended December 31, 2022 and does not expect the adoption of this standard to have a material impact on its Consolidated Financial Statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). This update amends guidance to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted including adoption in an interim period. If the Company early adopts in an interim period, the Company is required to apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The amendments in ASU 2021-08 should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company is currently evaluating its adoption date of this standard and the impact of the standard on its Consolidated Financial Statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) which provides for temporary optional expedients and exceptions to the current guidance on certain contract modifications and hedging relationships to ease the burdens related to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) or other reference rates to alternative reference rates. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”) to clarify that certain optional expedients and exceptions apply to modifications of derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and for calculating price alignment interest. ASU 2020-04 was effective beginning on March 12, 2020 and may be applied prospectively to such transactions through December 31, 2022 and ASU 2021-01 was effective beginning on January 7, 2021 and may be applied retrospectively or prospectively to such transactions through December 31, 2022. The Company will evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis. As of March 31, 2022, there was no impact to the Company’s Consolidated Financial Statements related to ASU 2020-04 or ASU 2021-01.
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Acquisitions |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Trapelo Health On April 7, 2021 (the “Trapelo Acquisition Date”), the Company completed the acquisition of a 100% ownership interest in Intervention Insights, Inc. d/b/a Trapelo Health (“Trapelo”), an information technology company focused on precision oncology. The purchase price consisted of (i) cash consideration of $35.6 million, which included a net adjustment of $0.6 million for estimated cash on hand of Trapelo and estimated working capital adjustments on the Trapelo Acquisition Date, and (ii) equity consideration of $29.2 million, consisting of 597,712 shares of the Company’s common stock, par value $0.001 per share, valued at $48.81 per share. The Company acquired control of Trapelo on the Trapelo Acquisition Date; therefore, the fair value of the common stock issued as part of consideration was determined on the basis of the closing market price of the Company’s common stock immediately prior to the Trapelo Acquisition Date. The Trapelo acquisition enhances the Company’s ability to provide customers clinical decision support to help answer complex questions related to precision oncology biomarker testing and treatment options as part of the Company’s comprehensive oncology offerings. The acquisition of Trapelo was determined to be a business combination and has been accounted for using the acquisition method. The purchase price and purchase price allocation were based upon management’s best estimates and assumptions and are considered final as of March 31, 2022. The following table summarizes the purchase consideration recorded for the acquisition of Trapelo, the fair value of the net assets acquired and liabilities assumed, and the calculation of goodwill based on the excess of the consideration transferred over the fair value of the net assets acquired and liabilities assumed at the Trapelo Acquisition Date (in thousands, except per share data):
The identified developed technology and marketing intangible assets are being amortized over ten years and four years, respectively, based on their estimated useful lives. The weighted-average amortization period in total for all classes of intangible assets from the Trapelo acquisition is 9.8 years. The developed technology was valued using the income approach, specifically, the multi-period excess earnings method, which measures the after-tax cash flows attributable to the developed technology. The marketing intangible assets were valued using the income approach, specifically, the relief from royalty method, which measures the cash flow streams attributable to the marketing intangible assets in the form of the avoided royalty payment that would be paid to the owner in return for the rights to use the marketing intangible assets had the intangible assets not been acquired. The values of the identifiable intangible assets represent Level 3 measurements as they were based on unobservable inputs reflecting the Company’s assumptions used in pricing the assets at fair value. These inputs required significant judgments and estimates at the time of the valuation. The goodwill recognized, all of which was assigned to the Clinical Services segment, was primarily attributable to expected synergies of the combined businesses and the acquisition of an assembled workforce knowledgeable of the healthcare and information technology industries. None of the goodwill resulting from the acquisition of Trapelo is expected to be deductible for income tax purposes. The results of operations of Trapelo are included in the Company’s unaudited Consolidated Financial Statements beginning on the Trapelo Acquisition Date. No pro forma information has been included relating to the Trapelo acquisition, as this acquisition was not deemed to be material to the Company’s revenue or net loss on a pro forma basis. Inivata Limited On June 18, 2021 (the “Inivata Acquisition Date”), the Company completed the acquisition of the remaining equity interests in Inivata Limited, a private limited company incorporated in England and Wales (“Inivata”). Inivata is a global, commercial stage, liquid biopsy platform company. The acquisition follows a $25.0 million minority equity investment by the Company in Series C1 Preference Shares (the “Preference Shares” or “previously-held equity interest”) in Inivata in May 2020, at which time the Company also acquired a fixed price option to purchase the remainder of equity interests in Inivata for $390.0 million (the “Purchase Option”). The Company and Inivata also entered into a line of credit agreement in the amount of $15.0 million (the “Line of Credit”) in May 2020. In the first quarter of 2021, prior to the Inivata Acquisition Date, an observable transaction of an identical investment in Inivata Preference Shares occurred which resulted in a remeasurement of the Preference Shares to the value of this observable transaction. The Company recorded a net unrealized loss of $5.0 million on investment in non-consolidated affiliate for this remeasurement for the three months ended March 31, 2021 in other expense (income), net on the Consolidated Statements of Operations. The Inivata acquisition adds liquid biopsy platform technology, including minimal residual disease testing capabilities, to the Company’s comprehensive portfolio of oncology testing solutions. The purchase price consisted of cash consideration of $398.6 million, which included a net adjustment of $8.6 million for estimated cash on hand of Inivata and other adjustments on the Inivata Acquisition Date, and was funded through cash on hand and a private placement of equity. Prior to the acquisition of the remaining equity interests in Inivata, the Company accounted for its previously-held equity interest and the Purchase Option in Inivata as equity securities without a readily determinable fair value. The equity interests were recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Therefore, the Company’s acquisition of control of Inivata on the Inivata Acquisition Date was accounted for as a business combination achieved in stages under the acquisition method. Accordingly, the Company used a discounted cash flow to derive a business enterprise value of Inivata in order to determine the acquisition-date fair value of the Company’s previously-held equity interest and Purchase Option in Inivata. To determine the fair value of the previously-held equity interest, the fair value of Inivata’s total equity was allocated to its various classes of equity based on the respective rights and privileges of each class of stock in liquidation. The business enterprise value and a Black-Scholes model were then used to determine the fair value of the remaining equity acquired through the exercise of the Purchase Option. The Purchase Option was recorded at the fair value at the Inivata Acquisition Date based on its settlement value. This resulted in fair values of $64.9 million in Preference Shares and a $74.3 million Purchase Option, immediately prior to the acquisition. On the Inivata Acquisition Date, the $10.3 million outstanding under the Line of Credit extended by the Company to Inivata was effectively settled as part of the acquisition of Inivata at the $15.0 million principal amount and was recorded as part of the consideration transferred in the acquisition. The Company recorded a gain on investment in and loan receivable from non-consolidated affiliate, net, within the Company’s Consolidated Statements of Operations of $109.3 million for the year ended December 31, 2021 for the excess of the acquisition-date fair value of the Company’s previously-held equity interest, Purchase Option, and Line of Credit over their carrying values. The fair value and allocation of the business combination are preliminary, are based upon management’s best estimates and assumptions, and are subject to future revision. The following table summarizes the preliminary calculation of goodwill based on the excess of the estimated fair value of the consideration transferred including the fair value of the Line of Credit, and the estimated fair value of the previously-held equity interest and Purchase Option, over the estimated fair value of the net assets acquired and liabilities assumed at the Inivata Acquisition Date and includes measurement period adjustments recorded during 2021 (in thousands):
(1) Measurement period adjustment primarily relates to a change in estimated taxes based on jurisdictions in which forecasted profits are expected to be generated. (2) Measurement period adjustment relates to the recognition of a credit which Inivata is entitled to claim for certain research and development expenditures (3) Measurement period adjustment relates to a change in estimated deferred income tax liabilities as a result of the reduction in the amounts for intangibles assets and related future amortization. Due to the timing of the acquisition, the following are considered preliminary and are subject to change: •amounts for intangible assets, property and equipment, other current assets, current liabilities, and other long-term liabilities pending finalization of the valuation; •amounts for income tax liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction; •amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed and the reporting unit allocation of the goodwill; and •the acquisition-date fair value of the Company’s previously-held equity interest, Purchase Option, and the Line of Credit, and the gain on investment in and loan receivable from non-consolidated affiliate. The Company will finalize these amounts no later than one year from the acquisition date, once it obtains the information necessary to complete the measurement process. Any changes resulting from facts and circumstances that existed as of the acquisition date may result in adjustments to the preliminary amounts disclosed above which may impact the reported results in the period those adjustments are identified. The identified developed technology intangible assets and the trademark intangible assets are both being amortized over fifteen years, and the trade name intangible asset is being amortized over five years, based on their estimated useful lives. The weighted-average amortization period in total for all classes of intangible assets from the Inivata acquisition is 14.9 years. The developed technology was valued using the income approach, specifically, the multi-period excess earnings method, which measures the after-tax cash flows attributable to the developed technology. The trademarks and trade name assets were valued using the income approach, specifically, the relief from royalty method, which measures the cash flow streams attributable to the trademarks and trade name assets in the form of the avoided royalty payment that would be paid to the owner in return for the rights to use the trademarks and trade name assets had the assets not been acquired. The values of the identifiable intangible assets represent Level 3 measurements as they were based on unobservable inputs reflecting the Company’s assumptions used in pricing the assets at fair value. These inputs required significant judgments and estimates at the time of the valuation. The goodwill recognized, of which $238.4 million and $33.0 million was assigned to the Clinical Services and Pharma Services segments, respectively, was primarily attributable to expected synergies of the combined businesses and the acquisition of an assembled workforce knowledgeable of liquid biopsy technology for oncology testing. The recording of amortizable intangibles has given rise to a deferred tax liability upon the acquisition of Inivata which increased goodwill by $61.0 million. None of the goodwill resulting from the acquisition of Inivata is expected to be deductible for income tax purposes. The following unaudited pro forma information and has been provided for illustrative purposes only and is not necessarily indicative of results that would have occurred had the acquisition of Inivata occurred on January 1, 2020, nor are they necessarily indicative of future results (in thousands):
These unaudited pro forma results represent the combined results of operations of the Company and Inivata, on an unaudited pro forma basis, for the period in which the acquisition of Inivata occurred and the prior reporting period as though the companies had been combined as of the beginning of the earliest period presented. Therefore, the unaudited pro forma consolidated results have been prepared by adjusting the Company’s historical results to include the acquisition of Inivata as if it occurred on January 1, 2020. These unaudited pro forma consolidated historical results exclude $5.0 million of unrealized loss on investment in non-consolidated affiliate recorded in other expense (income), net on the Consolidated Statements of Operations for the three months ended March 31, 2021.
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable. Level 1: Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2: Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments. Level 3: Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The Company measures certain financial assets at fair value on a recurring basis, including its marketable securities and certain cash equivalents. The Company considers all securities available-for-sale, including those with maturity dates beyond 12 months, and therefore these securities are classified within current assets on the Consolidated Balance Sheets as they are available to support current operational liquidity needs. The money market accounts are valued based on quoted market prices in active markets. The marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third-party pricing entities, except for U.S. Treasury securities which are valued based on quoted market prices in active markets. The following tables set forth the amortized cost, gross unrealized gains, gross unrealized losses and fair values of the Company’s marketable securities accounted for as available-for-sale securities as of March 31, 2022 and December 31, 2021.
The Company had $0.4 million and $0.6 million of accrued interest receivable at March 31, 2022 and December 31, 2021, respectively, included in other current assets on its Consolidated Balance Sheets related to its marketable securities. There were no realized gains or losses on marketable securities for the three months ended March 31, 2022. Realized gains or losses on marketable securities for the three months ended March 31, 2021 were immaterial. The following tables set forth the fair value of available-for-sale marketable securities by contractual maturity at March 31, 2022 and December 31, 2021.
The following tables set forth the Company’s cash equivalents and marketable securities accounted for as available-for-sale securities that were measured at fair value on a recurring basis based on the fair value hierarchy as of March 31, 2022 and December 31, 2021.
There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 for the three months ended March 31, 2022 and March 31, 2021. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis The carrying value of cash and cash equivalents, accounts receivable, net, accounts payable, accrued expenses and other liabilities, and other current assets and liabilities, are considered reasonable estimates of their respective fair values at March 31, 2022 and December 31, 2021 due to their short-term nature. The Company also measures certain non-financial assets at fair value on a nonrecurring basis, primarily intangible assets, goodwill, and long-lived assets in connection with periodic evaluations for potential impairment. The Company estimates the fair value of these assets using primarily unobservable inputs and, as such, these are considered Level 3 fair value measurements.
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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 AssetsThe following table summarizes the changes in the carrying amount of goodwill by segment for the three months ended March 31, 2022 (in thousands):
Intangible assets consisted of the following (in thousands):
The Company records amortization expense within cost of revenue and general and administrative expense on the Consolidated Statement of Operations. The following table summarizes the amortization expense for the three months ended March 31, 2022 and 2021 (in thousands):
The estimated amortization expense related to amortizable intangible assets for each of the following periods as of March 31, 2022 is as follows (in thousands):
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Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt2028 Convertible Senior Notes On January 11, 2021, the Company completed the sale of $345.0 million of Convertible Senior Notes with a stated interest rate of 0.25% and a maturity date of January 15, 2028 (the “2028 Convertible Notes”), unless earlier converted, redeemed, or repurchased. The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2028 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended December 31, 2021. Based on the terms of the 2028 Convertible Notes, the holders could not have converted all or a portion of their 2028 Convertible Notes in the first quarter of 2022. The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2028 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended March 31, 2022. Based on the terms of the 2028 Convertible Notes, the holders cannot convert all or a portion of their 2028 Convertible Notes in the second quarter of 2022. The value of the 2028 Convertible Notes, if-converted, does not exceed the principal amount based on a closing stock price of $12.15 on March 31, 2022. The interest expense recognized on the 2028 Convertible Notes includes $0.2 million, $0.4 million and $8,400 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended March 31, 2022. The interest expense recognized on the 2028 Convertible Notes includes $0.2 million, $0.4 million and $6,700 for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended March 31, 2021. The effective interest rate on the 2028 Convertible Notes is 0.70%, which includes the interest on the 2028 Convertible Notes and amortization of the debt discount and debt issuance costs. The 2028 Convertible Notes bear interest at a rate of 0.25% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2021. At March 31, 2022, the estimated fair values (Level 2) of the 0.25% Convertible Senior Notes due 2028 was $231.4 million. At December 31, 2021, the estimated fair value (Level 2) of the 0.25% Convertible Senior Notes due 2028 was $297.6 million. 2025 Convertible Senior Notes On May 4, 2020, the Company completed the sale of $201.3 million of Convertible Senior Notes with a stated interest rate of 1.25% and a maturity date of May 1, 2025 (the “2025 Convertible Notes”), unless earlier converted, redeemed, or repurchased. The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2025 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended December 31, 2021. Based on the terms of the 2025 Convertible Notes, the holders could not have converted all or a portion of their 2025 Convertible Notes in the first quarter of 2022. The last reported sales price of the Company’s common stock was not greater than or equal to 130.0% of the conversion price of the 2025 Convertible Notes on at least 20 of the last 30 consecutive trading days of the quarter ended March 31, 2022. Based on the terms of the 2025 Convertible Notes, the holders cannot convert all or a portion of their 2025 Convertible Notes in the second quarter of 2022. The value of the 2025 Convertible Notes, if-converted, does not exceed the principal amount based on a closing stock price of $12.15 on March 31, 2022. The interest expense recognized on the 2025 Convertible Notes includes $0.6 million, $0.3 million and $0.04 million for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended March 31, 2022. The interest expense recognized on the 2025 Convertible Notes includes $0.6 million, $0.3 million and $0.04 million for the contractual coupon interest, the amortization of the debt discount and the amortization of the debt issuance costs, respectively, for the three months ended March 31, 2021. The effective interest rate on the 2025 Convertible Notes is 1.96%, which includes the interest on the 2025 Convertible Notes and amortization of the debt discount and debt issuance costs. The 2025 Convertible Notes bear interest at a rate of 1.25% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, which began on November 1, 2020. At March 31, 2022, the estimated fair values (Level 2) of the 1.25% Convertible Senior Notes due 2025 was $176.1 million. At December 31, 2021, the estimated fair value (Level 2) of the 1.25% Convertible Senior Notes due 2025 was $238.9 million.
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Stock-Based Compensation |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company recorded approximately $12.1 million and $2.7 million for stock-based compensation in general and administrative expenses on the Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021, respectively. Stock Options A summary of the stock option activity under the Company’s plans for the three months ended March 31, 2022 is as follows:
The fair value of each stock option award granted during the three months ended March 31, 2022 was estimated as of the grant date using a Black-Scholes model with the following weighted average assumptions:
As of March 31, 2022, there was approximately $12.5 million of unrecognized stock-based compensation expense related to stock options that will be recognized over a weighted-average period of approximately 2.2 years. Restricted Stock Awards A summary of the restricted stock activity under the Company’s plans for the three months ended March 31, 2022 is as follows:
As of March 31, 2022, there was approximately $19.1 million of unrecognized stock-based compensation expense related to restricted stock that will be recognized over a weighted-average period of approximately 2.0 years. Modification of Stock Option and Restricted Stock Awards In the three months ended March 31, 2022, upon the Chief Executive Officer’s departure from the Company and in accordance with the terms of the Chief Executive Officer’s separation agreement, 237,960 previously granted time-based vesting stock option awards and 142,302 previously granted time-vesting restricted stock awards accelerated vesting. The Company accounted for the effects of the accelerated vesting of these stock awards as a modification, and recognized $5.9 million of incremental stock-based compensation which consisted of $2.3 million and $3.6 million for the acceleration of stock option awards and restricted stock awards, respectively, within general and administrative expenses on the Consolidated Statements of Operations for the three months ended March 31, 2022.
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Revenue Recognition |
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Revenue Recognition | Revenue Recognition The Company’s two reportable segments for which it recognizes revenue are (1) Clinical Services and (2) Pharma Services. The Clinical Services segment provides various clinical testing services to community-based pathology practices, oncology practices, hospital pathology labs, reference labs, and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government payers, and patients. The Pharma Services segment supports pharmaceutical firms in their drug development programs by providing testing services and data analytics for clinical trials and research. Clinical Services Revenue The Company’s specialized diagnostic services are performed based on a written test requisition form or electronic equivalent. The performance obligation is satisfied and revenues are recognized once the diagnostic services have been performed and the results have been delivered to the ordering physician. These diagnostic services are billed to various payers, including client direct billing, commercial insurance, Medicare and other government payers, and patients. Revenue is recorded for all payers based on the amount expected to be collected, which considers implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive based on negotiated discounts, historical collection experience and other anticipated adjustments, including anticipated payer denials. Collection of consideration the Company expects to receive typically occurs within 30 to 60 days of billing for commercial insurance, Medicare and other governmental and self-pay payers and within 60 to 90 days of billing for client payers. Pharma Services Revenue The Company’s Pharma Services segment generally enters into contracts with pharmaceutical customers as well as other CROs to provide research and clinical trial services ranging in duration from one month to several years. The Company records revenue on a unit-of-service basis based on number of units completed and the total expected contract value. The total expected contract value is estimated based on historical experience of total contracted units compared to realized units as well as known factors on a specific contract-by-contract basis. Certain contracts include upfront fees, final settlement amounts, and/or billing milestones that may not align with the completion of performance obligations. The value of these upfront fees or final settlement amounts is usually recognized over time based on the number of units completed, which aligns with the progress of the Company towards fulfilling its obligations under the contract. The Company also enters into other contracts, such as validation studies and informatics. Revenue for validation studies for which the sole deliverable may be a final report that is sent to the sponsor(s) at the completion of contracted activities, is recognized at a point in time upon delivery of the final report to the sponsor. Informatics is the sale of de-identified data for which deliverables typically consist of retrospective records or prospective deliveries of data. Informatics revenue is recognized upon delivery of retrospective data or over time for prospective data feeds. Any contracts that contain multiple performance obligations and include both units-of-service and point in time deliverables are accounted for as separate performance obligations and revenue is recognized as previously disclosed. The Company negotiates billing schedules and payment terms on a contract-by-contract basis. While the contract terms generally provide for payments based on a unit-of-service arrangement, the billing schedules, payment terms, and related cash payments may not align with the performance of services and, as such, may not correspond to revenue recognized in any given period. Amounts collected in advance of services being provided are deferred as contract liabilities on the Consolidated Balance Sheets. The associated revenue is recognized and the contract liability is reduced as the contracted services are subsequently performed. Contract assets are established for revenue recognized but not yet billed. These contract assets are reduced once the customer is invoiced and a corresponding receivable is recorded. Additionally, certain costs to obtain contracts, primarily for sales commissions, are capitalized when incurred and amortized over the term of the contract. Amounts capitalized for contracts with an initial contract term of twelve months or less are classified as current assets. All others are classified as non-current assets. Most contracts are terminable by the customers, either immediately or according to advance notice terms specified within the contracts. All contracts require payment of fees to the Company for services rendered through the date of termination and may require payment for subsequent services necessary to conclude the study or close out the contract. The following table summarizes the values of contract assets, capitalized commissions and contract liabilities (in thousands):
(1) Current pharma contract assets and Current pharma capitalized commissions are classified as other current assets on the Consolidated Balance Sheets. (2) Long-term pharma contract assets and Long-term pharma capitalized commissions are classified as other assets on the Consolidated Balance Sheets. (3) Long-term pharma contract liabilities are classified as other long-term liabilities on the Consolidated Balance Sheets. Revenue recognized for the three months ended March 31, 2022 and 2021 related to Pharma contract liability balances outstanding at the beginning of the period was $3.1 million was $2.7 million, respectively. Amortization of capitalized commissions for the three months ended March 31, 2022 and 2021 was $0.1 million and $0.2 million, respectively. Disaggregation of Revenue The Company considered various factors for both its Clinical Services and Pharma Services segments in determining appropriate levels of homogeneous data for its disaggregation of revenue; including the nature, amount, timing, and uncertainty of revenue and cash flows. Clinical Services categories align with the types of customers due to similarities of billing method, level of reimbursement, and timing of cash receipts. Unbilled amounts are accrued and allocated to payer categories based on historical experience. In future periods actual billings by payer category may differ from accrued amounts. Pharma Services relate to contracts with large pharmaceutical and biotech customers as well as other CROs. Because the nature, timing, and uncertainty of revenue and cash flows are similar and primarily driven by individual contract terms Pharma Services revenue is not further disaggregated. The following table details the disaggregation of revenue for both the Clinical and Pharma Services Segments (in thousands):
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Income Taxes |
3 Months Ended |
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Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesAt the end of each interim period, management estimates the annual effective tax rate based on forecasted pre-tax results of the Company’s global operations and applies such rate to its ordinary quarterly earnings to calculate income tax expense related to ordinary income. The tax effects of items significant, unusual and infrequent in nature are discretely calculated and recognized in the period during which they occur. These discrete items often relate to changes in tax laws, excess tax benefits/deficiencies related to share-based compensation or adjustments to previously reported tax expense/benefits. Management assesses the recoverability of its deferred tax assets as of the end of each quarter, weighing available positive and negative evidence, and is required to establish and maintain a valuation allowance for these assets if it is more likely than not that some or all of the deferred income tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which the evidence can be objectively verified. If negative evidence exists, positive evidence is necessary to support a conclusion that a valuation allowance is not needed. A cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome. Cumulative loss in recent years is commonly defined as a three-year cumulative loss position. As of March 31, 2022, the Company’s U.S. ongoing operations were in a three-year cumulative loss position. Management determined that sufficient objectively verifiable positive evidence did not exist to overcome the negative evidence of the Company’s U.S. cumulative loss position. Accordingly, the Company’s estimated annual effective tax rate applied to the Company’s pre-tax loss for the three months ended March 31, 2022, includes the unfavorable impact of a valuation allowance against the Company’s deferred income tax assets expected to be created in 2022 for additional U.S. net operating loss and tax credit carryforwards.
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Net Loss Per Share |
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Net Loss Per Share | Net Loss Per Share The Company presents both basic earnings per share (“EPS”) and diluted EPS. Basic EPS excludes potential dilution and is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock awards were exercised and if the 2028 Convertible Notes and 2025 Convertible Notes were converted. The potential dilution from stock awards is accounted for using the treasury stock method based on the average market value of the Company’s common stock. The potential dilution from conversion of the 2028 Convertible Notes and 2025 Convertible Notes is accounted for using the if-converted method, which requires that all of the shares of the Company’s common stock issuable upon conversion of the 2028 Convertible Notes and the 2025 Convertible Notes will be included in the calculation of diluted EPS assuming conversion of the 2028 Convertible Notes and the 2025 Convertible Notes at the beginning of the reporting period (or at time of issuance, if later). The following table shows the calculations (in thousands, except net loss per share amounts):
The following potential dilutive shares were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive (in thousands):
In connection with the 2028 Convertible Notes offering, on January 11, 2021, the Company entered into separate, privately negotiated convertible note hedge transactions (collectively, the “Capped Call Transactions”) with option counterparties pursuant to capped call confirmations at a cost of approximately $29.3 million. The potential effect of the Capped Call Transactions were excluded from the calculation of diluted net loss per share in the three months ended March 31, 2022 as the Company’s closing price on March 31, 2022 did not exceed the conversion price of $85.75 per share. The Capped Call Transactions are not reflected in diluted net loss per share as they are anti-dilutive.
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments an Contingencies | Commitments and Contingencies Legal Proceeding On January 20, 2021, Natera, Inc. filed a patent infringement complaint against the Company’s newly-acquired subsidiary Inivata Limited and its subsidiary Inivata, Inc. in United States District Court for the district of Delaware, alleging Inivata’s InVisionFirst-Lung™ cancer diagnostic test of infringing two patents. The litigation is presently in the pleadings stage. The Company believes that it has good and substantial defenses to the claims alleged in the suit, but there is no guarantee that the Company will prevail. At the time of filing, the outcome of this matter is not estimable or probable. Regulatory Matter With the assistance of outside counsel, the Company is voluntarily conducting an internal investigation that focuses on the compliance of certain consulting and service agreements with federal healthcare laws and regulations, including those relating to fraud, waste and abuse. Based on this internal investigation, the Company voluntarily notified the Office of Inspector General of the U.S. Department of Health and Human Services (“OIG”) of the Company’s internal investigation in November 2021. The Company’s review of this matter is ongoing. The Company has a reserve of $11.2 million in other long-term liabilities as of March 31, 2022 and December 31, 2021 on the Consolidated Balance Sheets for potential damages and liabilities primarily associated with the federal healthcare program revenue received by the Company in connection with the agreements at issue that were identified during the course of this internal investigation. This reserve reflects management’s best estimate of the minimum probable loss associated with this matter. As a result of the ongoing investigation and interactions with regulatory authorities, the Company may accrue additional reserves for any related potential damages and liabilities arising out of this matter. At this time, the Company is unable to predict the duration, scope, result or related costs associated with any further investigation, including by the OIG, or any other governmental authority, or what penalties or remedial actions they may seek. Accordingly, at this time, the Company is unable to estimate a range of possible loss in excess of the amount reserved. Any determination that the Company’s operations or activities are not in compliance with existing laws or regulations, however, could result in the imposition of civil or criminal fines, penalties, disgorgement, restitution, equitable relief, or other losses or conduct restrictions, which could be material to the Company’s financial results or business operations.
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Related Party Transactions |
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Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On May 22, 2020, the Company formed a strategic alliance with Inivata and entered into a Strategic Alliance Agreement and Laboratory Services Agreement whereas Inivata, prior to the Inivata Acquisition Date, would render and perform certain laboratory testing which the Company made available to customers. In connection with this agreement, Inivata provided $0.4 million of testing services to the Company recorded in cost of revenue in the Consolidated Statements of Operations for the three months ended March 31, 2021. On June 18, 2021, the Company completed its acquisition of all remaining equity interest in Inivata by exercising its Purchase Option. Beginning June 18, 2021, Inivata is a wholly-owned consolidated subsidiary of the Company. As of the Inivata Acquisition Date, Inivata’s financial statement activity is being consolidated within the Company’s unaudited Consolidated Financial Statements. For further details on the acquisition of Inivata, please refer to Note 3. Acquisitions.
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Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company recognizes revenue under two reportable segments, (1) Clinical Services and (2) Pharma Services. The Clinical Services segment provides various clinical testing services to community-based pathology and oncology practices, hospital pathology labs, and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government payers, and self-pay patients. The Pharma Services segment supports pharmaceutical firms’ drug development programs by assisting with various clinical trials and research as well as providing informatics related services often supporting pharmaceutical commercialization efforts. The financial information reviewed by the Chief Operating Decision Maker (“CODM”) includes revenues, cost of revenue, and gross profit for both reportable segments. Assets are not presented at the segment level as that information is not used by the CODM. The following table summarizes the segment information (in thousands):
(1) Clinical Services cost of revenue includes $4.3 million of amortization of acquired Inivata developed technology for the three months ended March 31, 2022. Clinical Services cost of revenue includes write-offs of $5.3 million for COVID-19 PCR testing inventory for the three months ended March 31, 2021. (2) Pharma Services cost of revenue for the three months ended March 31, 2022 includes $0.6 million of amortization of acquired Inivata developed technology intangible assets. There were no such amounts for the three months ended March 31, 2021.
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Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim Consolidated Financial Statements are unaudited and have been prepared in accordance with GAAP for interim financial information. All intercompany transactions and balances have been eliminated in the accompanying Consolidated Financial Statements. The accounting policies of the Company are the same as those set forth in Note 2. Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, except for new accounting standards discussed under Recent Accounting Pronouncements.
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Use of Estimates | Use of Estimates The Company prepares its Consolidated Financial Statements in conformity with GAAP. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the Consolidated Financial Statements. Actual results and outcomes may differ from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these Consolidated Financial Statements include, but are not limited, to those related to revenues, accounts receivable and related allowances, contingencies, useful lives and recovery of long-term assets and intangible assets, income taxes and valuation allowances, stock-based compensation, business combinations, and impairment analysis of goodwill. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected on the Consolidated Financial Statements prospectively from the date of the change in estimate.
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Assets Held for Sale | Assets Held for Sale Assets to be disposed of by sale are reclassified as held for sale if their carrying amounts are expected to be recovered through a sale transaction rather than through continuing use and when the Company commits to a plan to sell the assets. Assets classified as held for sale are measured at the lower of their carrying value or fair value less selling costs. Such assets are classified within current assets if there is reasonable certainty that the sale and collection of consideration will take place within one year. Upon reclassification as held for sale, long-lived assets are no longer depreciated or amortized and a measurement for impairment is performed to determine if there is an excess of carrying value over fair value less costs to sell. Any remeasurement is reported as an adjustment to the carrying value of the assets. Subsequent changes to estimated fair value less the selling costs will impact the measurement of assets held for sale if the fair value is determined to be less than the carrying value of the assets.
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Sales and Marketing Expense | Sales and Marketing Expenses Sales and marketing expenses are primarily attributable to employee-related costs including sales management, sales representatives, sales and marketing consultants, and marketing and customer service personnel in the Clinical Services segment. Advertising costs are expensed at the time they are incurred and are deemed immaterial for the three months ended March 31, 2022 and 2021.
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Recently Accounting Pronouncements | Recent Accounting Pronouncements In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance (“ASU 2021-10”). This update requires business entities to disclose information annually about certain government assistance they receive. Such annual disclosure requirements include the nature of the transactions and the related accounting policy used, the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item and significant terms and conditions of the transactions. ASU 2021-10 is effective for annual periods beginning after December 15, 2021, with early adoption permitted. ASU 2021-10 should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company will adopt this new accounting standard in its Annual Report on Form 10-K for the year ended December 31, 2022 and does not expect the adoption of this standard to have a material impact on its Consolidated Financial Statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). This update amends guidance to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted including adoption in an interim period. If the Company early adopts in an interim period, the Company is required to apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The amendments in ASU 2021-08 should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company is currently evaluating its adoption date of this standard and the impact of the standard on its Consolidated Financial Statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) which provides for temporary optional expedients and exceptions to the current guidance on certain contract modifications and hedging relationships to ease the burdens related to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) or other reference rates to alternative reference rates. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”) to clarify that certain optional expedients and exceptions apply to modifications of derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and for calculating price alignment interest. ASU 2020-04 was effective beginning on March 12, 2020 and may be applied prospectively to such transactions through December 31, 2022 and ASU 2021-01 was effective beginning on January 7, 2021 and may be applied retrospectively or prospectively to such transactions through December 31, 2022. The Company will evaluate transactions or contract modifications occurring as a result of reference rate reform and determine whether to apply the optional guidance on an ongoing basis. As of March 31, 2022, there was no impact to the Company’s Consolidated Financial Statements related to ASU 2020-04 or ASU 2021-01.
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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase consideration recorded for the acquisition of Trapelo, the fair value of the net assets acquired and liabilities assumed, and the calculation of goodwill based on the excess of the consideration transferred over the fair value of the net assets acquired and liabilities assumed at the Trapelo Acquisition Date (in thousands, except per share data):
(1) Measurement period adjustment primarily relates to a change in estimated taxes based on jurisdictions in which forecasted profits are expected to be generated. (2) Measurement period adjustment relates to the recognition of a credit which Inivata is entitled to claim for certain research and development expenditures (3) Measurement period adjustment relates to a change in estimated deferred income tax liabilities as a result of the reduction in the amounts for intangibles assets and related future amortization.
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Business Acquisition, Pro Forma Information | The following unaudited pro forma information and has been provided for illustrative purposes only and is not necessarily indicative of results that would have occurred had the acquisition of Inivata occurred on January 1, 2020, nor are they necessarily indicative of future results (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The following tables set forth the amortized cost, gross unrealized gains, gross unrealized losses and fair values of the Company’s marketable securities accounted for as available-for-sale securities as of March 31, 2022 and December 31, 2021.
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Investments Classified by Contractual Maturity Date | The following tables set forth the fair value of available-for-sale marketable securities by contractual maturity at March 31, 2022 and December 31, 2021.
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Fair Value, Assets Measured on Recurring Basis | The following tables set forth the Company’s cash equivalents and marketable securities accounted for as available-for-sale securities that were measured at fair value on a recurring basis based on the fair value hierarchy as of March 31, 2022 and December 31, 2021.
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Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill by segment for the three months ended March 31, 2022 (in thousands):
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Classes of Intangible Assets | Intangible assets consisted of the following (in thousands):
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Schedule of Intangible Asset Amortization Expense | The following table summarizes the amortization expense for the three months ended March 31, 2022 and 2021 (in thousands):
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Estimated Amortization Expense | The estimated amortization expense related to amortizable intangible assets for each of the following periods as of March 31, 2022 is as follows (in thousands):
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Stock-Based Compensation (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of the stock option activity under the Company’s plans for the three months ended March 31, 2022 is as follows:
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Summary of Fair Value of Each Stock Option Award Granted | The fair value of each stock option award granted during the three months ended March 31, 2022 was estimated as of the grant date using a Black-Scholes model with the following weighted average assumptions:
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Summary of Restricted Stock Activity | A summary of the restricted stock activity under the Company’s plans for the three months ended March 31, 2022 is as follows:
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Revenue Recognition (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Contract Assets and Liabilities | The following table summarizes the values of contract assets, capitalized commissions and contract liabilities (in thousands):
(1) Current pharma contract assets and Current pharma capitalized commissions are classified as other current assets on the Consolidated Balance Sheets. (2) Long-term pharma contract assets and Long-term pharma capitalized commissions are classified as other assets on the Consolidated Balance Sheets. (3) Long-term pharma contract liabilities are classified as other long-term liabilities on the Consolidated Balance Sheets.
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Summary of Disaggregation of Revenue | The following table details the disaggregation of revenue for both the Clinical and Pharma Services Segments (in thousands):
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Net Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the calculations (in thousands, except net loss per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential dilutive shares were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive (in thousands):
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Segment Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Information | The following table summarizes the segment information (in thousands):
(1) Clinical Services cost of revenue includes $4.3 million of amortization of acquired Inivata developed technology for the three months ended March 31, 2022. Clinical Services cost of revenue includes write-offs of $5.3 million for COVID-19 PCR testing inventory for the three months ended March 31, 2021. (2) Pharma Services cost of revenue for the three months ended March 31, 2022 includes $0.6 million of amortization of acquired Inivata developed technology intangible assets. There were no such amounts for the three months ended March 31, 2021.
|
Nature of the Business - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
PCR testing, amount recorded, COVID-19 | $ 0 | $ 6,061 | |
PCR testing, write-offs, COVID-19 | 5,300 | ||
PCR testing, general and administrative expenses, COVID-19 | 0 | $ 800 | |
COVID-19, deferred social security payroll tax | $ 3,000 | $ 3,000 |
Summary of Significant Accounting Policies (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
ft²
|
Mar. 31, 2022
USD ($)
ft²
|
Dec. 31, 2021
USD ($)
|
|
Accounting Changes and Error Corrections [Abstract] | |||
Square feet owned | ft² | 43,560 | 43,560 | |
Assets held for sale | $ 0 | $ 0 | $ 10,050 |
Proceeds from sale of property | $ 12,100 | ||
Gain on sale of property | $ 2,000 |
Acquisitions - Pro Forma Information (Details) - Inivata $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Business Acquisition [Line Items] | |
Net revenue | $ 115,452 |
Net loss | $ (27,895) |
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 527,115 | $ 527,115 |
Clinical Services | ||
Goodwill [Line Items] | ||
Goodwill | 462,603 | 462,603 |
Pharma Services | ||
Goodwill [Line Items] | ||
Goodwill | $ 64,512 | $ 64,512 |
Goodwill and Intangible Assets - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangibles | $ 8,490 | $ 2,458 |
Cost of Sales | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangibles | 4,853 | 0 |
General and Administrative Expense | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangibles | $ 3,637 | $ 2,458 |
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) $ in Thousands |
Mar. 31, 2022
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2022 | $ 25,389 |
2023 | 33,899 |
2024 | 33,899 |
2025 | 33,798 |
2026 | 33,485 |
Thereafter | 259,918 |
Total | $ 420,388 |
Stock-Based Compensation - Fair Value of Each Stock Option Award Granted (Details) |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate (%) | 1.60% |
Dividend yield (%) | 0.00% |
Weighted average fair value/share at grant date (in dollars per share) | $ 9.98 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 4 years |
Expected volatility (%) | 42.00% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 5 years 6 months |
Expected volatility (%) | 49.00% |
Stock-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Number of shares | |
Beginning balance (in shares) | shares | 851,403 |
Granted (in shares) | shares | 516,014 |
Vested (in shares) | shares | (171,687) |
Forfeited (in shares) | shares | (357,205) |
Ending balance (in shares) | shares | 838,525 |
Weighted average price | |
Beginning balance (in dollars per share) | $ / shares | $ 36.00 |
Granted (in dollars per share) | $ / shares | 25.67 |
Vested (in dollars per share) | $ / shares | 35.13 |
Forfeited (in dollars per share) | $ / shares | 30.71 |
Ending balance (in dollars per share) | $ / shares | $ 32.07 |
Revenue Recognition - Narrative (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
USD ($)
segment
|
Mar. 31, 2021
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||
Number of operating segments | segment | 2 | |
Revenue payment terms | Collection of consideration the Company expects to receive typically occurs within 30 to 60 days of billing for commercial insurance, Medicare and other governmental and self-pay payers and within 60 to 90 days of billing for client payers. | |
Pharma contract liability, revenue recognized | $ 3.1 | $ 2.7 |
Amortization of contract commissions | $ 0.1 | $ 0.2 |
Revenue Recognition - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Contract with Customer, Asset, Net [Abstract] | ||
Current pharma contract assets | $ 1,643 | $ 1,738 |
Long-term pharma contract assets | 261 | 236 |
Total pharma contract assets | 1,904 | 1,974 |
Capitalized Contract Cost [Abstract] | ||
Current pharma capitalized commissions | 168 | 109 |
Long-term pharma capitalized commissions | 972 | 882 |
Total pharma capitalized commissions | 1,140 | 991 |
Contract with Customer, Liability [Abstract] | ||
Current pharma contract liabilities | 6,119 | 5,192 |
Long-term pharma contract liabilities | 1,081 | 917 |
Total pharma contract liabilities | $ 7,200 | $ 6,109 |
Net Loss Per Share - Schedule of Basic and Diluted Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share [Abstract] | ||
NET LOSS | $ (49,408) | $ (22,114) |
Basic weighted average shares outstanding (in shares) | 123,630 | 116,199 |
Diluted weighted average shares outstanding (in shares) | 123,630 | 116,199 |
Basic net income (loss) per share (in dollars per share) | $ (0.40) | $ (0.19) |
Diluted net income (loss) per share (in dollars per share) | $ (0.40) | $ (0.19) |
Commitments and Contingencies (Details) $ in Millions |
Jan. 20, 2021
patent
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
---|---|---|---|
Patent Infringement Complaint | |||
Contractual Obligation [Line Items] | |||
Number of patents allegedly infringed upon | patent | 2 | ||
Federal Healthcare Program Revenue | |||
Contractual Obligation [Line Items] | |||
Loss contingency accrual | $ | $ 11.2 | $ 11.2 |
Related Party Transactions (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Inivata Limited | Strategic Alliance With Inivata Limited | |
Related Party Transaction [Line Items] | |
Payments to related party | $ 0.4 |
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