Related Party Transactions	3 Months Ended
Mar. 31, 2019
Related Party Transactions [Abstract]
Related Party Transactions	Note 15. Related Party Transactions Master Assay Development, Commercialization and Manufacturing Agreement In November 2016, the Company entered into the Governing Agreement, which creates the framework for QML and the Company to combine their technological and commercial strengths to offer biopharmaceutical companies a complete NGS-based solution for the development, manufacture and commercialization of companion diagnostic assays. Under the Governing Agreement, the parties jointly seek companion diagnostic programs with biopharmaceutical companies, QML enters into sponsor project agreements with interested biopharmaceutical companies for specified projects, and QML and the Company enter into statements of work (each, an “SOW”), which set forth the rights and obligations of QML and the Company with respect to each project. There have been no significant modifications or financial events relating to the Governing Agreement since the disclosures made by the Company in its Annual Report on Form 10‑K, filed with the SEC on March 7, 2019, other than with regard to the fourth amendment of the second statement of work under the Governing Agreement (“SOW Two”) discussed below. The Company has determined that SOW One, SOW Two and SOW Three (each defined below) are collaborative arrangements and that QML meets the definition of a customer under ASC 606. Additionally, each SOW is a separate contract with a single performance obligation to provide development services. Under each SOW, QML pays the Company a monthly fee for development work performed by the Company and its subcontractors (collectively, the “Monthly Fee”). The Monthly Fee is based on the employee and materials costs incurred during the month, which is subject to significant variability from period to period and unknown until the costs are incurred. Therefore, the Monthly Fee, which is based on use of hours and costs as a measure of progress, is included in the transaction price and recognized as revenue over time when the costs are incurred, and the Monthly Fee is billed to QML. It is at this time that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company and QML also will share any net profits resulting from performance of the development work as determined pursuant to the Governing Agreement. Such profit sharing payment(s) is deemed to be variable consideration using the expected value method and is included in the transaction price upon completion of the respective SOW deliverables, acceptance of corresponding deliverables, and the mutual agreement by QML and the Company on the calculation of net profit, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Because each SOW has an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations for each SOW. Statement of Work No. One In June 2017, the Company and QML entered into the first statement of work under the Governing Agreement, which has been twice amended in December 2017 and March 2018 (collectively, “SOW One”). SOW One addressed the activities of the Company and QML in support of the development and potential commercialization of a next generation sequencing-based companion diagnostic assay that was the subject of a sponsor project agreement between QML and a biopharmaceutical company (“Pharma One”). In May 2018, SOW One was terminated by QML as a result of Pharma One’s termination of the development project. The Company discontinued development activities related to the project following wind down activities completed in the second quarter of 2018. Revenue of $1,318,718 was included in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2018. Accounts receivable relating to SOW One of $1,298,079 remained in the accompanying condensed consolidated balance sheets as of March 31, 2018. Costs relating to development activities conducted by the Company pursuant to SOW One of $1,046,121 have been included in research and development expense in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2018. There was no revenue or related costs or accounts receivable relating to SOW One in the accompanying condensed consolidated statements of operations or balance sheets for the period ended March 31, 2019. Statement of Work No. Two In October 2017, the Company and QML entered into the second statement of work under the Governing Agreement (“SOW Two”), which was made effective as of June 2, 2017 (“Onset Date”). The Company and QML amended SOW Two twice in August 2018 and two additional times, in September 2018 and in January 2019. SOW Two addresses development activities conducted by the Company and QML since the Onset Date and those expected to be further conducted by the parties in connection with what is expected to be a multi-stage project leading to the potential development and commercialization of an NGS-based companion diagnostic assay in support or one or more therapeutic development and commercialization programs for a third-party biopharmaceutical company. The initial-phase investigational-use-only (“IUO”) development activities under SOW Two have been completed and the first three amendments relate to next phases, which include the use of the IUO assay developed in the initial-phase in a retrospective clinical trial and in additional disease indications. The fourth amendment of SOW Two, effective as of February 5, 2019, contemplates the use of the IUO assay in multiple biopharmaceutical company clinical trials and additional development activities which potentially be included in a future companion diagnostic regulatory submission. Revenue of $257,699, relating to SOW Two Monthly Fees, has been included in collaborative development services revenue in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2019, compared to revenue of $610,991, relating to SOW Two Monthly Fees, for the three months ended March 31, 2018. Accounts receivable relating to SOW Two of $257,699 and $1,007,950 remained in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018, respectively. Costs relating to development activities conducted by the Company pursuant to SOW Two of $209,029 and $343,266 have been included in research and development expense in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018, respectively. Statement of Work No. Three In January 2018, the Company and QML entered into a third statement of work under the Governing Agreement (“SOW Three”) and amended SOW Three in September 2018. SOW Three relates to development activities for a next generation sequencing-based clinical-trial assay (“SOW Three Project”) in connection with a sponsor project agreement between QML and a pharmaceutical company (“Pharma Three”). Initial assay development activities under SOW Three have been completed, and the first amendment to SOW Three provides for the development of an IUO assay, subsequent retrospective testing of clinical trial samples, design verification and, subject to satisfactory achievement of relevant performance and regulatory milestones, regulatory submissions in the United States and European Union necessary for the commercialization of a companion diagnostic for a corresponding Pharma Three drug. Revenue of $282,621, relating to SOW Three Monthly Fees, has been included in collaborative development services revenue in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2019, compared to revenue of $348,906, relating to SOW Three Monthly Fees and $146,491 relating to SOW Three profit sharing payments for the three months ended March 31, 2018. Accounts receivable relating to SOW Three of $131,836 and $363,869 remained in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018, respectively. Costs relating to development activities conducted by the Company pursuant to SOW Three of $218,575 and $226,855 have been included in research and development expense in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018, respectively. QNAH Convertible Note Agreement In October 2017, the Company issued a subordinated convertible promissory note to QNAH in the principal amount of $3.0 million against receipt of cash proceeds equal to such principal amount. There have been no significant modifications or financial events relating to QNAH Convertible Note since disclosures made by the Company in its Annual Report on Form 10-K, filed with the SEC on March 7, 2019).

Related Party Transactions

3 Months Ended

Mar. 31, 2019

Note 15. Related Party Transactions

Master Assay Development, Commercialization and Manufacturing Agreement

In November 2016, the Company entered into the Governing Agreement, which creates the framework for QML and the Company to combine their technological and commercial strengths to offer biopharmaceutical companies a complete NGS-based solution for the development, manufacture and commercialization of companion diagnostic assays. Under the Governing Agreement, the parties jointly seek companion diagnostic programs with biopharmaceutical companies, QML enters into sponsor project agreements with interested biopharmaceutical companies for specified projects, and QML and the Company enter into statements of work (each, an “SOW”), which set forth the rights and obligations of QML and the Company with respect to each project. There have been no significant modifications or financial events relating to the Governing Agreement since the disclosures made by the Company in its Annual Report on Form 10‑K, filed with the SEC on March 7, 2019, other than with regard to the fourth amendment of the second statement of work under the Governing Agreement (“SOW Two”) discussed below.

The Company has determined that SOW One, SOW Two and SOW Three (each defined below) are collaborative arrangements and that QML meets the definition of a customer under ASC 606. Additionally, each SOW is a separate contract with a single performance obligation to provide development services. Under each SOW, QML pays the Company a monthly fee for development work performed by the Company and its subcontractors (collectively, the “Monthly Fee”). The Monthly Fee is based on the employee and materials costs incurred during the month, which is subject to significant variability from period to period and unknown until the costs are incurred. Therefore, the Monthly Fee, which is based on use of hours and costs as a measure of progress, is included in the transaction price and recognized as revenue over time when the costs are incurred, and the Monthly Fee is billed to QML. It is at this time that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company and QML also will share any net profits resulting from performance of the development work as determined pursuant to the Governing Agreement. Such profit sharing payment(s) is deemed to be variable consideration using the expected value method and is included in the transaction price upon completion of the respective SOW deliverables, acceptance of corresponding deliverables, and the mutual agreement by QML and the Company on the calculation of net profit, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

Because each SOW has an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations for each SOW.

Statement of Work No. One

In June 2017, the Company and QML entered into the first statement of work under the Governing Agreement, which has been twice amended in December 2017 and March 2018 (collectively, “SOW One”). SOW One addressed the activities of the Company and QML in support of the development and potential commercialization of a next generation sequencing-based companion diagnostic assay that was the subject of a sponsor project agreement between QML and a biopharmaceutical company (“Pharma One”). In May 2018, SOW One was terminated by QML as a result of Pharma One’s termination of the development project. The Company discontinued development activities related to the project following wind down activities completed in the second quarter of 2018.

Revenue of $1,318,718 was included in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2018. Accounts receivable relating to SOW One of $1,298,079 remained in the accompanying condensed consolidated balance sheets as of March 31, 2018. Costs relating to development activities conducted by the Company pursuant to SOW One of $1,046,121 have been included in research and development expense in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2018. There was no revenue or related costs or accounts receivable relating to SOW One in the accompanying condensed consolidated statements of operations or balance sheets for the period ended March 31, 2019.

Statement of Work No. Two

In October 2017, the Company and QML entered into the second statement of work under the Governing Agreement (“SOW Two”), which was made effective as of June 2, 2017 (“Onset Date”). The Company and QML amended SOW Two twice in August 2018 and two additional times, in September 2018 and in January 2019. SOW Two addresses development activities conducted by the Company and QML since the Onset Date and those expected to be further conducted by the parties in connection with what is expected to be a multi-stage project leading to the potential development and commercialization of an NGS-based companion diagnostic assay in support or one or more therapeutic development and commercialization programs for a third-party biopharmaceutical company.

The initial-phase investigational-use-only (“IUO”) development activities under SOW Two have been completed and the first three amendments relate to next phases, which include the use of the IUO assay developed in the initial-phase in a retrospective clinical trial and in additional disease indications. The fourth amendment of SOW Two, effective as of February 5, 2019, contemplates the use of the IUO assay in multiple biopharmaceutical company clinical trials and additional development activities which potentially be included in a future companion diagnostic regulatory submission.

Revenue of $257,699, relating to SOW Two Monthly Fees, has been included in collaborative development services revenue in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2019, compared to revenue of $610,991, relating to SOW Two Monthly Fees, for the three months ended March 31, 2018. Accounts receivable relating to SOW Two of $257,699 and $1,007,950 remained in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018, respectively. Costs relating to development activities conducted by the Company pursuant to SOW Two of $209,029 and $343,266 have been included in research and development expense in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018, respectively.

Statement of Work No. Three

In January 2018, the Company and QML entered into a third statement of work under the Governing Agreement (“SOW Three”) and amended SOW Three in September 2018. SOW Three relates to development activities for a next generation sequencing-based clinical-trial assay (“SOW Three Project”) in connection with a sponsor project agreement between QML and a pharmaceutical company (“Pharma Three”). Initial assay development activities under SOW Three have been completed, and the first amendment to SOW Three provides for the development of an IUO assay, subsequent retrospective testing of clinical trial samples, design verification and, subject to satisfactory achievement of relevant performance and regulatory milestones, regulatory submissions in the United States and European Union necessary for the commercialization of a companion diagnostic for a corresponding Pharma Three drug.

Revenue of $282,621, relating to SOW Three Monthly Fees, has been included in collaborative development services revenue in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2019, compared to revenue of $348,906, relating to SOW Three Monthly Fees and $146,491 relating to SOW Three profit sharing payments for the three months ended March 31, 2018. Accounts receivable relating to SOW Three of $131,836 and $363,869 remained in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018, respectively. Costs relating to development activities conducted by the Company pursuant to SOW Three of $218,575 and $226,855 have been included in research and development expense in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018, respectively.

QNAH Convertible Note Agreement

In October 2017, the Company issued a subordinated convertible promissory note to QNAH in the principal amount of $3.0 million against receipt of cash proceeds equal to such principal amount. There have been no significant modifications or financial events relating to QNAH Convertible Note since disclosures made by the Company in its Annual Report on Form 10-K, filed with the SEC on March 7, 2019).