License and Collaborative Agreements	6 Months Ended
Jun. 30, 2012
License and Collaborative Agreements	6. License and Collaborative Agreements *License Agreement with the University of Southern California (“USC”)* In April 2000, as amended in June 2002 and April 2005, the Company entered into a license agreement with USC. Under this agreement, USC granted the Company a worldwide, exclusive license with the right to sublicense, the patents for RGI-1 and related technology, for use in human and veterinary diagnostic laboratory services, the sale of clinical diagnostic products, and the sale of research products to the research community. USC retains the right under the agreement to use the technology for research and educational purposes. In consideration for this license, the Company agreed to pay USC royalties based on a percentage of the revenues generated by the use of RGI-1 and related technology. Royalty expense relating to this agreement amounted to $132,913 and $75,938 for the three months ended June 30, 2011 and 2012, respectively and $258,811 and $132,440 for the six months ended June 30, 2011 and 2012, respectively. Such expense is included in cost of revenue in the accompanying statements of operations. *License Agreement with Roche Molecular Systems (“Roche”)* In November 2004, the Company entered into a non-exclusive license to use Roche’s PCR processes. In consideration for these rights, the Company is obligated to pay royalties to Roche, based on a percentage of net sales of products or services that make use of the PCR technology. Royalty expense included in cost of revenue relating to this agreement amounted to $177,821 and $80,418 for the three months ended June 30, 2011 and 2012, respectively and $308,364 and $143,887 for the six months ended June 30, 2011 and 2012, respectively. *Services Agreement with Taiho Pharmaceutical Co., Ltd. (“Taiho”)* In July 2001, the Company entered into an agreement with Taiho pursuant to which it will provide Taiho with RGI-1 generated molecular-based tumor analyses for use in guiding chemotherapy treatment for cancer patients and for use in its business developing and marketing pharmaceutical and diagnostic products for use against cancer. Pursuant to the agreement, the Company appointed Taiho as the exclusive purchaser in Japan of tests and testing services based upon the RGI-1 using gene expression for (i) any one or the combination of specified molecular markers, (ii) the therapeutic use of specified compounds, or (iii) the diagnosis or therapeutic treatment of specified precancerous and cancerous diseases. The Company also granted Taiho the right to be a non-exclusive purchaser in Japan of tests and testing services based upon the RGI-1 using gene expression, other than those for which Taiho has exclusivity, for, (i) any one or combination of molecular markers, (ii) the therapeutic use of any compound or biological product against cancer, or (iii) the diagnosis or therapeutic treatment of precancerous and cancerous diseases. In consideration for the testing services provided, Taiho paid an upfront payment at the commencement of the agreement and is obligated to pay regular testing fees, covering the specific services performed on a monthly basis. In January 2011, the Company amended its agreement with Taiho and the agreement was renewed for an additional three years. According to the terms of the renewal, Taiho’s appointment as an exclusive purchaser in Japan of certain tests and testing services and its minimum purchasing obligations ended on December 31, 2011. Until its minimum purchasing obligations ended on December 31, 2011, Taiho was obligated to purchase a minimum amount of testing services from the Company each calendar quarter. Revenue recognized under this agreement was $346,825 and $292,675 for the three months ended June 30, 2011 and 2012, respectively and $645,100 and $536,800 for the six months ended June 30, 2011 and 2012, respectively. *Services Agreement with SmithKline Beecham Corporation (d.b.a. GlaxoSmithKline or “GSK”)* In January 2006, the Company entered into a master services agreement with GSK, a leading pharmaceutical manufacturer, pursuant to which the Company provides services in connection with profiling the expression of various genes from a range of human cancers. Under the agreement, the Company will provide GSK with testing services as described in individual protocols and GSK will pay the Company for such services based on the pricing schedule established for each particular protocol. GSK is obligated to make minimum annual payments to the Company under the agreement and also was obligated to make a non-refundable upfront payment to the Company, to be credited against work undertaken pursuant to the agreement. In January 2006, the Company received an upfront payment of $2,000,000, which was initially recorded as deferred revenue. There was no remaining deferred revenue balance associated with this agreement as of December 31, 2011 and June 30, 2012. In December 2008, the Company amended and restated its master services agreement with GSK and extended the term of the agreement for a two-year period, with the option for the parties to extend the agreement for additional one-year periods, upon their mutual written agreement. In addition, the Company became a preferred provider to GSK and its affiliates of genetic testing services on a fee-for-service basis and, in anticipation of the services to be provided, GSK agreed to make a non-refundable upfront payment of approximately $1,300,000, which was received in January 2010. There was no amount of deferred revenue balance associated with this agreement as of December 31, 2011 and June 30, 2012. The Company recognized revenue of $1,509,955 and $145,100 relating to the GSK agreement for the three months ended June 30, 2011 and 2012, respectively and $2,522,266 and $222,577 for the six months ended June 30, 2011 and 2012, respectively. *Non-Exclusive License Agreement with GSK* In March 2010, the Company entered into a non-exclusive license agreement with GSK. Under the agreement, the Company granted GSK a non-exclusive, sublicenseable license to its proprietary PCR analysis technology and diagnostic expertise to assess BRAF gene mutations in human tumor samples. As part of the agreement, the Company received a non-refundable technology access fee in consideration for the transfer of the Company’s technology to GSK. The agreement also contains milestone provisions which would allow the Company to earn further payments from GSK. The Company had not earned any milestone payments from GSK as of June 30, 2012. *Master Services Agreement with GlaxoSmithKline Biologicals (“GSK Bio”)* On July 26, 2012, the Company entered into a second amended and restated master services agreement with GSK Bio, the vaccine division of GSK. Pursuant to this agreement, which has an effective date of May 15, 2012, the Company will provide testing services for clinical trials and epidemiology studies relating to GSK Bio’s cancer immunotherapies. The Company will perform these testing services on a fee-for-service basis as embodied in written task orders. The agreement will expire on December 31, 2014, and is terminable by GSK Bio, without cause, upon 90 days’ written notice to the Company. The Company recognized revenue of $1,570,394 and $90,817 relating to the services performed for GSK Bio for the three months ended June 30, 2011 and 2012, respectively, and $3,077,272 and $732,428 for the six months ended June 30, 2011 and 2012. There was no amount of deferred revenue balance associated with this agreement as of December 31, 2011 and June 30, 2012. *Collaboration Agreement with Shanghai BioChip Company, Ltd. (“SBC”)* On March 5, 2007, the Company entered into a collaboration agreement with SBC pursuant to which SBC provides exclusive testing services to the Company’s clients in China. Pursuant to the agreement, the Company has granted SBC an exclusive license in China to provide services in China using the Company’s proprietary RNA extraction technologies. Subject to consent from USC, the Company granted SBC an exclusive sublicense to patents licensed from USC for distribution of testing services in China. In turn, SBC performs RNA extraction from FFPE tissue specimens exclusively for the Company during the term of the agreement. This agreement had an initial term of five years, with an automatic renewal for an additional three-year term unless either party gives 90 days’ notice in advance of the renewal date of its intent not to renew. As of June 30, 2012, neither party has given notice of intent not to renew, and as such the agreement has been renewed for a successive three year period. Pursuant to the agreement, SBC receives a percentage of the gross margin, as defined in the agreement, collected from the Company’s clients in China as compensation for its testing services performed. For the three months ended June 30, 2011 testing services totaled $75,384, there were no testing services for the three months ended June 30, 2012, and $150,237 and $15,355 for the six months ended June 30, 2011 and 2012, respectively. *Commission Agreement with Hitachi Chemical Co., Ltd.* On July 26, 2007, the Company entered into a collaboration agreement with Hitachi Chemical Co., Ltd. (“Hitachi”), a leading diagnostics manufacturer in Japan. Under the terms of this agreement, Hitachi uses the Company's proprietary and patented techniques to extract genetic information from formalin-fixed paraffin-embedded (“FFPE”) tissue samples collected in Southeast Asia, Australia and New Zealand. As part of this collaboration agreement, the Company provides Hitachi with the technical information and assistance necessary to perform the testing services. Hitachi is responsible for expenses related to the cost of laboratory equipment and modification to the laboratory facilities, as well as the cost of reagents. The Southeast Asian countries covered under this agreement include Japan, North Korea, South Korea, Taiwan, Mongolia, Pakistan, Bangladesh, Sri Lanka, Nepal, Singapore, Malaysia, Indonesia, Brunei, Thailand, Myanmar, Laos, Cambodia, Vietnam and the Philippines (the “Territory”). The collaboration agreement had an initial term expiring on June 30, 2010, with an automatic renewal for one year at the end of the original period under the same terms and conditions. Pursuant to the agreement, Hitachi performs certain testing services and receives a percentage of the revenue collected from the Company's clients in the Territory, which totaled $134,720 and $149,175 for the three months ended June 30, 2011 and 2012, respectively and $375,691 and $235,095 for the six months ended June 30, 2011 and 2012, respectively. The Company is currently in negotiations to terminate this agreement with effect prior to June 30, 2013.

6. License and Collaborative Agreements

License Agreement with the University of Southern California (“USC”)

In April 2000, as amended in June 2002 and April 2005, the Company entered into a license agreement with USC. Under this agreement, USC granted the Company a worldwide, exclusive license with the right to sublicense, the patents for RGI-1 and related technology, for use in human and veterinary diagnostic laboratory services, the sale of clinical diagnostic products, and the sale of research products to the research community. USC retains the right under the agreement to use the technology for research and educational purposes.

In consideration for this license, the Company agreed to pay USC royalties based on a percentage of the revenues generated by the use of RGI-1 and related technology. Royalty expense relating to this agreement amounted to $132,913 and $75,938 for the three months ended June 30, 2011 and 2012, respectively and $258,811 and $132,440 for the six months ended June 30, 2011 and 2012, respectively. Such expense is included in cost of revenue in the accompanying statements of operations.

License Agreement with Roche Molecular Systems (“Roche”)

In November 2004, the Company entered into a non-exclusive license to use Roche’s PCR processes. In consideration for these rights, the Company is obligated to pay royalties to Roche, based on a percentage of net sales of products or services that make use of the PCR technology. Royalty expense included in cost of revenue relating to this agreement amounted to $177,821 and $80,418 for the three months ended June 30, 2011 and 2012, respectively and $308,364 and $143,887 for the six months ended June 30, 2011 and 2012, respectively.

Services Agreement with Taiho Pharmaceutical Co., Ltd. (“Taiho”)

In July 2001, the Company entered into an agreement with Taiho pursuant to which it will provide Taiho with RGI-1 generated molecular-based tumor analyses for use in guiding chemotherapy treatment for cancer patients and for use in its business developing and marketing pharmaceutical and diagnostic products for use against cancer. Pursuant to the agreement, the Company appointed Taiho as the exclusive purchaser in Japan of tests and testing services based upon the RGI-1 using gene expression for (i) any one or the combination of specified molecular markers, (ii) the therapeutic use of specified compounds, or (iii) the diagnosis or therapeutic treatment of specified precancerous and cancerous diseases. The Company also granted Taiho the right to be a non-exclusive purchaser in Japan of tests and testing services based upon the RGI-1 using gene expression, other than those for which Taiho has exclusivity, for, (i) any one or combination of molecular markers, (ii) the therapeutic use of any compound or biological product against cancer, or (iii) the diagnosis or therapeutic treatment of precancerous and cancerous diseases.

In consideration for the testing services provided, Taiho paid an upfront payment at the commencement of the agreement and is obligated to pay regular testing fees, covering the specific services performed on a monthly basis. In January 2011, the Company amended its agreement with Taiho and the agreement was renewed for an additional three years. According to the terms of the renewal, Taiho’s appointment as an exclusive purchaser in Japan of certain tests and testing services and its minimum purchasing obligations ended on December 31, 2011.

Until its minimum purchasing obligations ended on December 31, 2011, Taiho was obligated to purchase a minimum amount of testing services from the Company each calendar quarter. Revenue recognized under this agreement was $346,825 and $292,675 for the three months ended June 30, 2011 and 2012, respectively and $645,100 and $536,800 for the six months ended June 30, 2011 and 2012, respectively.

Services Agreement with SmithKline Beecham Corporation (d.b.a. GlaxoSmithKline or “GSK”)

In January 2006, the Company entered into a master services agreement with GSK, a leading pharmaceutical manufacturer, pursuant to which the Company provides services in connection with profiling the expression of various genes from a range of human cancers. Under the agreement, the Company will provide GSK with testing services as described in individual protocols and GSK will pay the Company for such services based on the pricing schedule established for each particular protocol. GSK is obligated to make minimum annual payments to the Company under the agreement and also was obligated to make a non-refundable upfront payment to the Company, to be credited against work undertaken pursuant to the agreement. In January 2006, the Company received an upfront payment of $2,000,000, which was initially recorded as deferred revenue. There was no remaining deferred revenue balance associated with this agreement as of December 31, 2011 and June 30, 2012.

In December 2008, the Company amended and restated its master services agreement with GSK and extended the term of the agreement for a two-year period, with the option for the parties to extend the agreement for additional one-year periods, upon their mutual written agreement. In addition, the Company became a preferred provider to GSK and its affiliates of genetic testing services on a fee-for-service basis and, in anticipation of the services to be provided, GSK agreed to make a non-refundable upfront payment of approximately $1,300,000, which was received in January 2010. There was no amount of deferred revenue balance associated with this agreement as of December 31, 2011 and June 30, 2012.

The Company recognized revenue of $1,509,955 and $145,100 relating to the GSK agreement for the three months ended June 30, 2011 and 2012, respectively and $2,522,266 and $222,577 for the six months ended June 30, 2011 and 2012, respectively.

Non-Exclusive License Agreement with GSK

In March 2010, the Company entered into a non-exclusive license agreement with GSK. Under the agreement, the Company granted GSK a non-exclusive, sublicenseable license to its proprietary PCR analysis technology and diagnostic expertise to assess BRAF gene mutations in human tumor samples. As part of the agreement, the Company received a non-refundable technology access fee in consideration for the transfer of the Company’s technology to GSK. The agreement also contains milestone provisions which would allow the Company to earn further payments from GSK. The Company had not earned any milestone payments from GSK as of June 30, 2012.

Master Services Agreement with GlaxoSmithKline Biologicals (“GSK Bio”)

On July 26, 2012, the Company entered into a second amended and restated master services agreement with GSK Bio, the vaccine division of GSK. Pursuant to this agreement, which has an effective date of May 15, 2012, the Company will provide testing services for clinical trials and epidemiology studies relating to GSK Bio’s cancer immunotherapies. The Company will perform these testing services on a fee-for-service basis as embodied in written task orders. The agreement will expire on December 31, 2014, and is terminable by GSK Bio, without cause, upon 90 days’ written notice to the Company.

The Company recognized revenue of $1,570,394 and $90,817 relating to the services performed for GSK Bio for the three months ended June 30, 2011 and 2012, respectively, and $3,077,272 and $732,428 for the six months ended June 30, 2011 and 2012. There was no amount of deferred revenue balance associated with this agreement as of December 31, 2011 and June 30, 2012.

Collaboration Agreement with Shanghai BioChip Company, Ltd. (“SBC”)

On March 5, 2007, the Company entered into a collaboration agreement with SBC pursuant to which SBC provides exclusive testing services to the Company’s clients in China.

Pursuant to the agreement, the Company has granted SBC an exclusive license in China to provide services in China using the Company’s proprietary RNA extraction technologies. Subject to consent from USC, the Company granted SBC an exclusive sublicense to patents licensed from USC for distribution of testing services in China. In turn, SBC performs RNA extraction from FFPE tissue specimens exclusively for the Company during the term of the agreement.

This agreement had an initial term of five years, with an automatic renewal for an additional three-year term unless either party gives 90 days’ notice in advance of the renewal date of its intent not to renew. As of June 30, 2012, neither party has given notice of intent not to renew, and as such the agreement has been renewed for a successive three year period. Pursuant to the agreement, SBC receives a percentage of the gross margin, as defined in the agreement, collected from the Company’s clients in China as compensation for its testing services performed. For the three months ended June 30, 2011 testing services totaled $75,384, there were no testing services for the three months ended June 30, 2012, and $150,237 and $15,355 for the six months ended June 30, 2011 and 2012, respectively.

Commission Agreement with Hitachi Chemical Co., Ltd.

On July 26, 2007, the Company entered into a collaboration agreement with Hitachi Chemical Co., Ltd. (“Hitachi”), a leading diagnostics manufacturer in Japan. Under the terms of this agreement, Hitachi uses the Company's proprietary and patented techniques to extract genetic information from formalin-fixed paraffin-embedded (“FFPE”) tissue samples collected in Southeast Asia, Australia and New Zealand. As part of this collaboration agreement, the Company provides Hitachi with the technical information and assistance necessary to perform the testing services. Hitachi is responsible for expenses related to the cost of laboratory equipment and modification to the laboratory facilities, as well as the cost of reagents. The Southeast Asian countries covered under this agreement include Japan, North Korea, South Korea, Taiwan, Mongolia, Pakistan, Bangladesh, Sri Lanka, Nepal, Singapore, Malaysia, Indonesia, Brunei, Thailand, Myanmar, Laos, Cambodia, Vietnam and the Philippines (the “Territory”).

The collaboration agreement had an initial term expiring on June 30, 2010, with an automatic renewal for one year at the end of the original period under the same terms and conditions. Pursuant to the agreement, Hitachi performs certain testing services and receives a percentage of the revenue collected from the Company's clients in the Territory, which totaled $134,720 and $149,175 for the three months ended June 30, 2011 and 2012, respectively and $375,691 and $235,095 for the six months ended June 30, 2011 and 2012, respectively. The Company is currently in negotiations to terminate this agreement with effect prior to June 30, 2013.