ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 20-5455398 (I.R.S. Employer Identification Number) |
Title of Each Class | Name of Each Exchange on Which Registered | |||
Common Stock, par value $0.001 per share | The NASDAQ Stock Market LLC |
Large accelerated filer | o | Accelerated filer | ý | Non-accelerated filer | o | Smaller reporting company | o |
(Do not check if a smaller reporting company) |
Item No. | Page No. |
• | Revenue for the three- and twelve-month periods ended December 31, 2016 was $18.3 million and $65.1 million, respectively, an increase of 30% and 31% over the prior year. |
• | Afirma Gene Expression Classifier (GEC) Reported Volume for the three- and twelve-month periods ended December 31, 2016 was 6,313 and 23,237, respectively, an increase of 13% and 20% over the prior year. |
• | Operating Expenses for the three- and twelve-month periods ended December 31, 2016, were $21.9 million and $93.9 million, respectively, an increase of 0% and 13% over the prior year. |
• | Net Loss and Comprehensive Loss for the three- and twelve-month periods ended December 31, 2016 was ($4.4) million and ($31.4) million, respectively, a 45% and 7% reduction from the prior year. |
• | Cash and cash equivalents was $59.2 million at December 31, 2016. During the twelve-month period ended December 31, 2016, the company raised $51.1 million in capital, including $19.2 million in net proceeds from its March 2016 debt financing and $31.9 million in net proceeds from a public offering of common stock. |
• | Cash Burn for the three- and twelve-month periods ended December 31, 2016 (which is defined as net cash used in operating activities and purchases of property and equipment), was $4.7 million and $32.2 million, respectively, a 33% and 3% improvement compared to the prior year. |
• | Executed a Blues group-purchasing agreement in April 2016, accelerating Blues plan in-network contracting and overall reimbursement for the Afirma GEC thyroid cancer test. As of February 28, 2017, the company has more than 70 million Blues plan members under coverage and nearly 25 million under contract. |
• | Expanded overall covered lives for the Afirma GEC by 50 million to nearly 225 million and overall contracted lives by 25 million to over 155 million as of February 28, 2017. |
• | Achieved draft Medicare coverage policies for the Percepta Bronchial Genomic Classifier for use in lung cancer screening and diagnosis, leading to two final policies scheduled to become effective in March 2017. |
• | Clinical utility and cost-effectiveness data for the Percepta classifier were presented at the American Thoracic Society and the CHEST annual meetings, further suggesting that use of the Percepta classifier changes patient care and reduces healthcare costs as intended. |
• | Launched the Envisia Genomic Classifier at the CHEST annual meeting in October 2016, in conjunction with the presentation of new data suggesting the test’s ability to significantly improve the diagnosis of IPF without the need for risky, expensive surgery. |
• | Presented data at the American Thyroid Association meeting in September 2016, demonstrating the potential for a next-generation Afirma GEC, planned for 2017 introduction, to substantially increase the percentage of patients with benign thyroid nodules who may be able to avoid unnecessary surgery. |
• | Data were published in the Journal of the National Cancer Institute suggesting the potential for the “field of injury” technology behind Veracyte’s Percepta classifier to enable lung cancer detection using a simple, non-invasive nasal swab test. |
• | Enhanced Afirma GEC - We are developing a product enhancement to our current Afirma test, which we believe will maintain the Afirma GEC's high sensitivity and negative predictive value, while potentially further increasing the test's specificity and thus the number of benign surgeries that can potentially be avoided. |
• | Risk of Recurrence - We are in the discovery phase for a risk of recurrence classifier. |
• | Expanded Indications for the Percepta Classifier - We are evaluating enhancements to our product, which we envision would allow us to expand the intended use population for our test. |
• | Nasal Classifier - We are in the discovery phase for a nasal test, based on our proprietary “field of injury” technology, that would potentially allow us to test patients at a different point in the clinical pathway of care. |
• | Rx Response - We are in the discovery phase for a test that could help guide treatment decisions for IPF patients based upon their genomic profile. |
• | Compile a Growing Library of Peer-reviewed Studies that Demonstrate the Test Is Effective - To date, several peer-reviewed articles and review papers have been published and have helped support our efforts aimed at widespread adoption and reimbursement of our genomic tests. In each disease area we pursue, we intend to conduct studies in order to develop robust library of evidence. |
• | Meet the Evidence Standards Necessary to Be Consistent with Leading Clinical Guidelines - We believe inclusion in leading clinical practice guidelines plays an important role in payers' coverage decisions. For example, the data published on the Afirma GEC to date is consistent with the recommendations of the widely-recognized American Thyroid Association and National Comprehensive Cancer Network clinical practice guidelines. |
• | Execute an Internal Managed Care and Claims Adjudication Function as Part of Our Core Business Operations - We believe that obtaining adequate and widespread reimbursement is a critical factor in our long-term success. We employ a team of in-house claims processing and reimbursement specialists who work with payers, physician practices and patients to obtain maximum reimbursement. |
• | Cultivate a Network of Key Opinion Leaders - Key opinion leaders are able to influence clinical practice by publishing research and determining whether new tests should be integrated into practice guidelines. We collaborate with key opinion leaders early in the development process to ensure our clinical studies are designed and executed in a way that clearly demonstrates the benefits of our tests to patients, physicians and payers. Ongoing studies to support real world experience with our tests are also a key component of our efforts to collaborate with physician thought leaders. |
• | Established Payer Relationships and In-network Contracts - We believe that positive engagement with payers leads to coverage decisions and facilitates our efforts on coverage and contract decisions for subsequent tests. |
• | Medicare accounted for 27%, 26% and 26% of our revenue; |
• | UnitedHealthcare accounted for 12%, 14% and 18% of our revenue; and |
• | Aetna accounted for 8%, 9% and 11% of our revenue. |
• | the ability of the test to answer the appropriate clinical question at the right point in the clinical pathway; |
• | the quality and strength of clinical validation and utility data; |
• | confidence in diagnostic results backed by analytical verification data; |
• | the extent of reimbursement and in-network payer contracts; |
• | inclusion in practice guidelines; |
• | cost-effectiveness; and |
• | ease of use. |
• | not experimental or investigational; |
• | pre-authorized and appropriate for the specific patient; |
• | cost-effective; |
• | supported by peer-reviewed publications; and |
• | included in clinical practice guidelines. |
• | differences between the list price for our tests and the reimbursement rates of payers; |
• | compliance with complex federal and state regulations related to billing Medicare; |
• | risk of government audits related to billing Medicare; |
• | disputes among payers as to which party is responsible for payment; |
• | differences in coverage and in information and billing requirements among payers, including the need for prior authorization and/or advanced notification; |
• | the effect of patient co-payments or co-insurance; |
• | changes to billing codes used for our tests; |
• | incorrect or missing billing information; and |
• | the resources required to manage the billing and claims appeals process. |
• | expend significant funds to conduct substantial research and development; |
• | conduct successful analytical and clinical studies; |
• | scale our laboratory processes to accommodate new tests; and |
• | build the commercial infrastructure to market and sell new products. |
• | failure to identify a genomic signature in biomarker discovery; |
• | inability to secure sufficient numbers of samples at an acceptable cost and on an acceptable timeframe to conduct analytical and clinical studies; or |
• | failure of clinical validation studies to support the effectiveness of the test. |
• | the Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which established comprehensive federal standards with respect to the privacy and security of protected health information and requirements for the use of certain standardized electronic transactions, and amendments made in 2013 to HIPAA under the Health Information Technology for Economic and Clinical Health Act, or HITECH, which strengthen and expand HIPAA privacy and security compliance requirements, increase penalties for violators, extend enforcement authority to state attorneys general, and impose requirements for breach notification; |
• | Medicare billing and payment regulations applicable to clinical laboratories; |
• | the Federal Anti-Kickback Statute, which prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal healthcare program; |
• | the Federal Stark physician self-referral law (and state equivalents), which prohibits a physician from making a referral for certain designated health services covered by the Medicare program, including laboratory and pathology services, if the physician or an immediate family member has a financial relationship with the entity providing the designated health services, unless the financial relationship falls within an applicable exception to the prohibition; |
• | the Federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or state health care program beneficiary if the person knows or should know it is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies; |
• | the Federal False Claims Act, which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government; |
• | other federal and state fraud and abuse laws, such as anti-kickback laws, prohibitions on self-referral, fee-splitting restrictions, prohibitions on the provision of products at no or discounted cost to induce physician or patient adoption, and false claims acts, which may extend to services reimbursable by any third-party payer, including private insurers; |
• | the prohibition on reassignment of Medicare claims, which, subject to certain exceptions, precludes the reassignment of Medicare claims to any other party; |
• | the rules regarding billing for diagnostic tests reimbursable by the Medicare program, which prohibit a physician or other supplier from marking up the price of the technical component or professional component of a diagnostic test ordered by the physician or other supplier and supervised or performed by a physician who does not "share a practice" with the billing physician or supplier; |
• | state laws that prohibit other specified practices related to billing such as billing physicians for testing that they order, waiving co-insurance, co-payments, deductibles, and other amounts owed by patients, and billing a state Medicaid program at a price that is higher than what is charged to other payers; and |
• | the Foreign Corrupt Practices Act of 1977, and other similar laws, which apply to our international activities. |
• | multiple, conflicting and changing laws and regulations such as tax laws, privacy laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; |
• | failure by us to obtain regulatory approvals where required for the use of our solutions in various countries; |
• | complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems; |
• | logistics and regulations associated with shipping tissue samples, including infrastructure conditions and transportation delays; |
• | challenges associated with establishing laboratory partners, including proper sample collection techniques, inventory management, sample logistics, billing and promotional activities; |
• | limits on our ability to penetrate international markets if we are not able to process tests locally; |
• | financial risks, such as longer payment cycles, difficulty in collecting from payers, the effect of local and regional financial crises, and exposure to foreign currency exchange rate fluctuations; |
• | natural disasters, political and economic instability, including wars, terrorism, and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and |
• | regulatory and compliance risks that relate to maintaining accurate information and control over activities that may fall within the purview of the Foreign Corrupt Practices Act of 1977, including both its books and records provisions and its anti-bribery provisions. |
• | actual or anticipated variations in our and our competitors' results of operations; |
• | announcements by us or our competitors of new products, commercial relationships or capital commitments; |
• | changes in reimbursement by current or potential payers, including governmental payers; |
• | issuance of new securities analysts' reports or changed recommendations for our stock; |
• | fluctuations in our revenue, due in part to the way in which we recognize revenue; |
• | actual or anticipated changes in regulatory oversight of our products; |
• | developments or disputes concerning our intellectual property or other proprietary rights; |
• | commencement of, or our involvement in, litigation; |
• | announced or completed acquisitions of businesses or technologies by us or our competitors; |
• | any major change in our management; and |
• | general economic conditions and slow or negative growth of our markets. |
• | authorize our board of directors to issue, without further action by the stockholders, up to 5.0 million shares of undesignated preferred stock; |
• | require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; |
• | specify that special meetings of our stockholders can be called only by our board of directors, our chairman of the board, or our chief executive officer; |
• | establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; |
• | establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered terms; |
• | provide that our directors may be removed only for cause; |
• | provide that vacancies on our board of directors may, except as otherwise required by law, be filled only by a majority of directors then in office, even if less than a quorum; |
• | specify that no stockholder is permitted to cumulate votes at any election of directors; and |
• | require a super-majority of votes to amend certain of the above-mentioned provisions. |
Name | Age | Position | |||
Bonnie H. Anderson | 58 | Chairman, President and Chief Executive Officer | |||
Julie A. Brooks | 71 | General Counsel and Secretary | |||
Keith S. Kennedy | 47 | Chief Financial Officer | |||
Christopher M. Hall | 48 | Chief Operating Officer |
High | Low | ||||||
2016 | |||||||
Fourth Quarter | $ | 8.45 | $ | 5.82 | |||
Third Quarter | $ | 7.96 | $ | 4.83 | |||
Second Quarter | $ | 5.98 | $ | 4.81 | |||
First Quarter | $ | 7.31 | $ | 4.21 | |||
2015 | |||||||
Fourth Quarter | $ | 8.15 | $ | 4.69 | |||
Third Quarter | $ | 12.47 | $ | 4.59 | |||
Second Quarter | $ | 12.20 | $ | 7.24 | |||
First Quarter | $ | 9.74 | $ | 6.50 |
October 30, 2013 | December 31, 2013 | December 31, 2014 | December 31, 2015 | December 31, 2016 | |||||||||||||||
Veracyte, Inc. | $ | 100.00 | $ | 109.00 | $ | 73.00 | $ | 54.00 | $ | 58.00 | |||||||||
NASDAQ Global Market Index | $ | 100.00 | $ | 107.00 | $ | 121.00 | $ | 128.00 | $ | 137.00 | |||||||||
NASDAQ Biotechnology Index | $ | 100.00 | $ | 109.00 | $ | 147.00 | $ | 164.00 | $ | 129.00 |
Year Ended December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Statements of Operations Data: | |||||||||||||||||||
Revenue | $ | 65,085 | $ | 49,503 | $ | 38,190 | $ | 21,884 | $ | 11,628 | |||||||||
Operating expenses: | |||||||||||||||||||
Cost of revenue(1) | 25,462 | 21,497 | 16,606 | 12,607 | 7,584 | ||||||||||||||
Research and development(1) | 15,324 | 12,796 | 9,804 | 7,810 | 6,608 | ||||||||||||||
Selling and marketing(1) | 28,248 | 25,293 | 21,932 | 12,540 | 8,447 | ||||||||||||||
General and administrative(1) | 23,787 | 22,583 | 18,854 | 12,100 | 7,918 | ||||||||||||||
Intangible asset amortization | 1,067 | 800 | — | — | — | ||||||||||||||
Total operating expenses(1) | 93,888 | 82,969 | 67,196 | 45,057 | 30,557 | ||||||||||||||
Loss from operations | (28,803 | ) | (33,466 | ) | (29,006 | ) | (23,173 | ) | (18,929 | ) | |||||||||
Interest expense | (2,757 | ) | (378 | ) | (439 | ) | (233 | ) | — | ||||||||||
Other income (expense), net | 202 | 140 | 72 | (2,174 | ) | 280 | |||||||||||||
Net loss | $ | (31,358 | ) | $ | (33,704 | ) | $ | (29,373 | ) | $ | (25,580 | ) | $ | (18,649 | ) | ||||
Net loss per common share, basic and diluted | $ | (1.09 | ) | $ | (1.30 | ) | $ | (1.36 | ) | $ | (6.15 | ) | $ | (28.68 | ) | ||||
Shares used in computing net loss per common share, basic and diluted | 28,830,472 | 25,994,193 | 21,639,374 | 4,158,664 | 650,333 | ||||||||||||||
Other Operating Data: | |||||||||||||||||||
GECs reported | 23,237 | 19,421 | 14,061 | 9,716 | 4,993 |
(1) | Includes employee stock-based compensation as follows: |
Year Ended December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Cost of revenue | $ | 126 | $ | 100 | $ | 51 | $ | 34 | $ | 26 | |||||||||
Research and development | 1,322 | 1,178 | 790 | 250 | 131 | ||||||||||||||
Selling and marketing | 1,594 | 1,326 | 707 | 169 | 111 | ||||||||||||||
General and administrative | 3,336 | 2,998 | 2,000 | 794 | 407 | ||||||||||||||
Total stock-based compensation | $ | 6,378 | $ | 5,602 | $ | 3,548 | $ | 1,247 | $ | 675 |
As of December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Cash and cash equivalents | $ | 59,219 | $ | 39,084 | $ | 35,014 | $ | 71,220 | $ | 14,002 | |||||||||
Working capital | 62,093 | 33,192 | 26,203 | 61,019 | 7,390 | ||||||||||||||
Total assets | 101,034 | 75,247 | 64,839 | 79,630 | 19,067 | ||||||||||||||
Convertible preferred stock | — | — | — | — | 63,372 | ||||||||||||||
Accumulated deficit | (180,084 | ) | (148,726 | ) | (115,022 | ) | (85,649 | ) | (60,069 | ) | |||||||||
Total stockholders' equity (deficit) | 59,581 | 51,252 | 41,374 | 56,443 | (58,471 | ) |
• | Revenue for the three- and twelve-month periods ended December 31, 2016 was $18.3 million and $65.1 million, respectively, an increase of 30% and 31% over the prior year. |
• | Afirma Gene Expression Classifier (GEC) Reported Volume for the three- and twelve-month periods ended December 31, 2016 was 6,313 and 23,237, respectively, an increase of 13% and 20% over the prior year. |
• | Operating Expenses for the three- and twelve-month periods ended December 31, 2016, were $21.9 million and $93.9 million, respectively, an increase of 0% and 13% over the prior year. |
• | Net Loss and Comprehensive Loss for the three- and twelve-month periods ended December 31, 2016 was ($4.4) million and ($31.4) million, respectively, a 45% and 7% reduction from the prior year. |
• | Cash and cash equivalents was $59.2 million at December 31, 2016. During the twelve-month period ended December 31, 2016, the company raised $51.1 million in capital, including $19.2 million in net proceeds from its March 2016 debt financing and $31.9 million in net proceeds from a public offering of common stock. |
• | Cash Burn for the three- and twelve-month periods ended December 31, 2016 (which is defined as net cash used in operating activities and purchases of property and equipment), was $4.7 million and $32.2 million, respectively, a 33% and 3% improvement compared to the prior year. |
• | Executed a Blues group-purchasing agreement in April 2016, accelerating Blues plan in-network contracting and overall reimbursement for the Afirma GEC thyroid cancer test. As of February 28, 2017, the company has more than 70 million Blues plan members under coverage and nearly 25 million under contract. |
• | Expanded overall covered lives for the Afirma GEC by 50 million to nearly 225 million and overall contracted lives by 25 million to over 155 million as of February 28, 2017. |
• | Achieved draft Medicare coverage policies for the Percepta Bronchial Genomic Classifier for use in lung cancer screening and diagnosis, leading to two final policies scheduled to become effective in March 2017. |
• | Clinical utility and cost-effectiveness data for the Percepta classifier were presented at the American Thoracic Society and the CHEST annual meetings, further suggesting that use of the Percepta classifier changes patient care and reduces healthcare costs as intended. |
• | Launched the Envisia Genomic Classifier at the CHEST annual meeting in October 2016, in conjunction with the presentation of new data suggesting the test’s ability to significantly improve the diagnosis of IPF without the need for risky, expensive surgery. |
• | Presented data at the American Thyroid Association meeting in September 2016, demonstrating the potential for a next-generation Afirma GEC, planned for 2017 introduction, to substantially increase the percentage of patients with benign thyroid nodules who may be able to avoid unnecessary surgery. |
• | Data were published in the Journal of the National Cancer Institute suggesting the potential for the “field of injury” technology behind Veracyte’s Percepta classifier to enable lung cancer detection using a simple, non-invasive nasal swab test. |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Medicare | 27 | % | 26 | % | 26 | % | ||
UnitedHealthcare | 12 | % | 14 | % | 18 | % | ||
Aetna | 8 | % | 9 | % | 11 | % | ||
47 | % | 49 | % | 55 | % |
Year Ended December 31, | |||||||||||||||||||||||||
2016 | Change | % | 2015 | Change | % | 2014 | |||||||||||||||||||
Revenue | $ | 65,085 | $ | 15,582 | 31 | % | $ | 49,503 | $ | 11,313 | 30 | % | $ | 38,190 | |||||||||||
Operating expense: | |||||||||||||||||||||||||
Cost of revenue | 25,462 | 3,965 | 18 | % | 21,497 | 4,891 | 29 | % | 16,606 | ||||||||||||||||
Research and development | 15,324 | 2,528 | 20 | % | 12,796 | 2,992 | 31 | % | 9,804 | ||||||||||||||||
Selling and marketing | 28,248 | 2,955 | 12 | % | 25,293 | 3,361 | 15 | % | 21,932 | ||||||||||||||||
General and administrative | 23,787 | 1,204 | 5 | % | 22,583 | 3,729 | 20 | % | 18,854 | ||||||||||||||||
Intangible asset amortization | 1,067 | 267 | 33 | % | 800 | 800 | — | — | |||||||||||||||||
Total operating expenses | 93,888 | 10,919 | 13 | % | 82,969 | 15,773 | 23 | % | 67,196 | ||||||||||||||||
Loss from operations | (28,803 | ) | 4,663 | 14 | % | (33,466 | ) | (4,460 | ) | (15 | )% | (29,006 | ) | ||||||||||||
Interest expense | (2,757 | ) | (2,379 | ) | 629 | % | (378 | ) | 61 | 14 | % | (439 | ) | ||||||||||||
Other income (expense), net | 202 | 62 | 44 | % | 140 | 68 | 94 | % | 72 | ||||||||||||||||
Net loss and comprehensive loss | $ | (31,358 | ) | $ | 2,346 | 7 | % | $ | (33,704 | ) | $ | (4,331 | ) | (15 | )% | $ | (29,373 | ) |
Year Ended December 31, | ||||||||||||||||||||
2016 | % | 2015 | % | 2014 | % | |||||||||||||||
Revenue recognized on an accrual basis | $ | 47,099 | 72 | % | $ | 27,043 | 55 | % | $ | 12,545 | 33 | % | ||||||||
Revenue recognized when cash is received | 17,986 | 28 | % | 22,460 | 45 | % | 25,645 | 67 | % | |||||||||||
Total | $ | 65,085 | 100 | % | $ | 49,503 | 100 | % | $ | 38,190 | 100 | % |
Year Ended December 31, | |||||||||||||||||||||||||
2016 | Change | % | 2015 | Change | % | 2014 | |||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||||
Reagents, chips, consumables and related | $ | 9,639 | $ | 2,131 | 28 | % | $ | 7,508 | $ | 2,238 | 42 | % | $ | 5,271 | |||||||||||
Cytopathology fees and related costs | 5,963 | 427 | 8 | % | 5,536 | 975 | 21 | % | 4,561 | ||||||||||||||||
Sample collection | 3,458 | 334 | 11 | % | 3,124 | 593 | 23 | % | 2,531 | ||||||||||||||||
Direct labor | 3,195 | 667 | 26 | % | 2,528 | 719 | 40 | % | 1,809 | ||||||||||||||||
Other | 3,207 | 406 | 14 | % | 2,801 | 366 | 15 | % | 2,434 | ||||||||||||||||
Total | $ | 25,462 | $ | 3,965 | 18 | % | $ | 21,497 | $ | 4,891 | 29 | % | $ | 16,606 |
Year Ended December 31, | |||||||||||||||||||||||||
2016 | Change | % | 2015 | Change | % | 2014 | |||||||||||||||||||
Research and development expense: | |||||||||||||||||||||||||
Personnel-related expense | $ | 6,846 | $ | 932 | 16 | % | $ | 5,914 | $ | 1,380 | 30 | % | $ | 4,534 | |||||||||||
Stock-based compensation expense | 1,322 | 144 | 12 | % | 1,178 | 388 | 49 | % | 790 | ||||||||||||||||
Direct R&D expense | 4,202 | 796 | 23 | % | 3,406 | 672 | 25 | % | 2,734 | ||||||||||||||||
Other expense | 2,954 | 656 | 29 | % | 2,298 | 552 | 32 | % | 1,746 | ||||||||||||||||
Total | $ | 15,324 | $ | 2,528 | 20 | % | $ | 12,796 | $ | 2,992 | 31 | % | $ | 9,804 |
Year Ended December 31, | |||||||||||||||||||||||||
2016 | Change | % | 2015 | Change | % | 2014 | |||||||||||||||||||
Selling and marketing expense: | |||||||||||||||||||||||||
Genzyme co-promotion expense, net | $ | 5,103 | $ | (264 | ) | (5 | )% | $ | 5,367 | $ | (4,366 | ) | (45 | )% | $ | 9,733 | |||||||||
Personnel-related expense | 15,473 | $ | 3,406 | 28 | % | 12,067 | 3,946 | 49 | % | 8,121 | |||||||||||||||
Stock-based compensation expense | 1,594 | $ | 268 | 20 | % | 1,326 | 619 | 88 | % | 707 | |||||||||||||||
Direct marketing expense | 2,957 | $ | 89 | 3 | % | 2,868 | 1,324 | 86 | % | 1,544 | |||||||||||||||
Other expense | 3,121 | $ | (544 | ) | (15 | )% | 3,665 | 1,838 | 101 | % | 1,827 | ||||||||||||||
Total | $ | 28,248 | $ | 2,955 | 12 | % | $ | 25,293 | $ | 3,361 | 15 | % | $ | 21,932 |
Year Ended December 31, | |||||||||||||||||||||||||
2016 | Change | % | 2015 | Change | % | 2014 | |||||||||||||||||||
General and administrative expense: | |||||||||||||||||||||||||
Personnel-related expense | $ | 12,630 | $ | 2,235 | 22 | % | $ | 10,395 | $ | 832 | 9 | % | $ | 9,563 | |||||||||||
Stock-based compensation expense | 3,336 | $ | 338 | 11 | % | 2,998 | 998 | 50 | % | 2,000 | |||||||||||||||
Professional fees expense | 4,455 | $ | (623 | ) | (12 | )% | 5,078 | 553 | 12 | % | 4,525 | ||||||||||||||
Rent and other facilities expense | 2,470 | $ | (156 | ) | (6 | )% | 2,626 | 1,122 | 75 | % | 1,504 | ||||||||||||||
Other expense | 896 | $ | (590 | ) | (40 | )% | 1,486 | 224 | 18 | % | 1,262 | ||||||||||||||
Total | $ | 23,787 | $ | 1,204 | 5 | % | $ | 22,583 | $ | 3,729 | 20 | % | $ | 18,854 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Cash used in operating activities | $ | (27,982 | ) | $ | (26,965 | ) | $ | (27,632 | ) | ||
Cash used in investing activities | (4,212 | ) | (6,698 | ) | (9,010 | ) | |||||
Cash provided by financing activities | 52,329 | 37,733 | 436 |
Payments Due by Period | |||||||||||||||||||
Fiscal Year 2017 | Fiscal Year 2018 to 2019 | Fiscal Year 2020 to 2021 | Fiscal Year 2022 and Beyond | Total | |||||||||||||||
Operating lease obligations | $ | 2,143 | $ | 4,128 | $ | 4,226 | $ | 9,812 | $ | 20,309 | |||||||||
Long-term debt obligations | — | — | 22,212 | 3,173 | 25,385 | ||||||||||||||
Supplies purchase commitments | 1,727 | — | — | — | 1,727 | ||||||||||||||
Capital lease obligation | 317 | 634 | — | — | 951 | ||||||||||||||
Total | $ | 4,187 | $ | 4,762 | $ | 26,438 | $ | 12,985 | $ | 48,372 |
Page No. | |
As of December 31, | |||||||
2016 | 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 59,219 | $ | 39,084 | |||
Accounts receivable | 8,756 | 3,503 | |||||
Supplies inventory | 3,475 | 3,767 | |||||
Prepaid expenses and other current assets | 2,057 | 1,442 | |||||
Restricted cash | 120 | 118 | |||||
Total current assets | 73,627 | 47,914 | |||||
Property and equipment, net | 11,480 | 10,314 | |||||
Finite-lived intangible assets, net | 14,133 | 15,200 | |||||
Goodwill | 1,057 | 1,057 | |||||
Restricted cash | 603 | 603 | |||||
Other assets | 134 | 159 | |||||
Total assets | $ | 101,034 | $ | 75,247 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,424 | $ | 5,085 | |||
Accrued liabilities | 9,110 | 8,689 | |||||
Deferred Genzyme co-promotion fee | — | 948 | |||||
Total current liabilities | 11,534 | 14,722 | |||||
Long-term debt | 24,918 | 4,990 | |||||
Capital lease liability, net of current portion | 599 | — | |||||
Deferred rent, net of current portion | 4,402 | 4,283 | |||||
Total liabilities | 41,453 | 23,995 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding as of December 31, 2016 and 2015 | — | — | |||||
Common stock, $0.001 par value; 125,000,000 shares authorized, 33,762,278 and 27,685,291 shares issued and outstanding as of December 31, 2016 and 2015, respectively | 34 | 28 | |||||
Additional paid-in capital | 239,631 | 199,950 | |||||
Accumulated deficit | (180,084 | ) | (148,726 | ) | |||
Total stockholders' equity | 59,581 | 51,252 | |||||
Total liabilities and stockholders' equity | $ | 101,034 | $ | 75,247 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Revenue | $ | 65,085 | $ | 49,503 | $ | 38,190 | |||||
Operating Expenses: | |||||||||||
Cost of revenue | 25,462 | 21,497 | 16,606 | ||||||||
Research and development | 15,324 | 12,796 | 9,804 | ||||||||
Selling and marketing | 28,248 | 25,293 | 21,932 | ||||||||
General and administrative | 23,787 | 22,583 | 18,854 | ||||||||
Intangible asset amortization | 1,067 | 800 | — | ||||||||
Total operating expenses | 93,888 | 82,969 | 67,196 | ||||||||
Loss from operations | (28,803 | ) | (33,466 | ) | (29,006 | ) | |||||
Interest expense | (2,757 | ) | (378 | ) | (439 | ) | |||||
Other income, net | 202 | 140 | 72 | ||||||||
Net loss and comprehensive loss | $ | (31,358 | ) | $ | (33,704 | ) | $ | (29,373 | ) | ||
Net loss per common share, basic and diluted | $ | (1.09 | ) | $ | (1.30 | ) | $ | (1.36 | ) | ||
Shares used to compute net loss per common share, basic and diluted | 28,830,472 | 25,994,193 | 21,639,374 |
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||
Shares | Amount | |||||||||||||||||
Balance at December 31, 2013 | 21,143,313 | $ | 21 | $ | 142,071 | $ | (85,649 | ) | $ | 56,443 | ||||||||
Issuance of common stock on exercise of stock options | 402,100 | 1 | 674 | — | 675 | |||||||||||||
Issuance of common stock on cashless exercise of stock warrant | 13,739 | — | — | — | — | |||||||||||||
Common stock subject to repurchase | — | 3 | — | 3 | ||||||||||||||
Issuance of common stock for acquisition | 964,377 | 1 | 10,077 | 10,078 | ||||||||||||||
Stock-based compensation expense (employee) | — | — | 3,388 | — | 3,388 | |||||||||||||
Stock-based compensation expense (non-employee) | — | — | 160 | — | 160 | |||||||||||||
Net loss and comprehensive loss | — | — | — | (29,373 | ) | (29,373 | ) | |||||||||||
Balance at December 31, 2014 | 22,523,529 | 23 | 156,373 | (115,022 | ) | 41,374 | ||||||||||||
Issuance of common stock on exercise of stock options | 253,787 | — | 722 | — | 722 | |||||||||||||
Sale of common stock in a private placement, net of issuance costs of $2,742 | 4,907,975 | 5 | 37,253 | — | 37,258 | |||||||||||||
Stock-based compensation expense (employee) | — | — | 5,302 | — | 5,302 | |||||||||||||
Stock-based compensation expense (non-employee) | — | — | 110 | — | 110 | |||||||||||||
Stock-based compensation expense (ESPP) | — | — | 190 | — | 190 | |||||||||||||
Net loss and comprehensive loss | — | — | — | (33,704 | ) | (33,704 | ) | |||||||||||
Balance at December 31, 2015 | 27,685,291 | 28 | 199,950 | (148,726 | ) | 51,252 | ||||||||||||
Issuance of common stock on exercise of stock options | 212,740 | — | 538 | — | 538 | |||||||||||||
Issuance of common stock under employee stock purchase plan (ESPP) | 140,947 | — | 678 | — | 678 | |||||||||||||
Sale of common stock in a public offering, net of issuance costs of $2,247 | 5,723,300 | 6 | 32,087 | 32,093 | ||||||||||||||
Stock-based compensation expense (employee) | — | — | 6,046 | — | 6,046 | |||||||||||||
Stock-based compensation expense (non-employee) | — | — | 15 | — | 15 | |||||||||||||
Stock-based compensation expense (ESPP) | — | — | 317 | — | 317 | |||||||||||||
Net loss and comprehensive loss | — | — | — | (31,358 | ) | (31,358 | ) | |||||||||||
Balance at December 31, 2016 | 33,762,278 | $ | 34 | $ | 239,631 | $ | (180,084 | ) | $ | 59,581 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Operating activities | |||||||||||
Net loss | $ | (31,358 | ) | $ | (33,704 | ) | $ | (29,373 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 3,511 | 2,254 | 1,175 | ||||||||
Bad debt expense | 68 | 105 | 54 | ||||||||
Loss on disposal of property and equipment | 12 | — | — | ||||||||
Genzyme co-promotion fee amortization | (948 | ) | (1,897 | ) | (2,269 | ) | |||||
Stock-based compensation | 6,378 | 5,602 | 3,548 | ||||||||
Conversion of accrued interest to long-term debt | 385 | — | — | ||||||||
Amortization of debt discount and issuance costs | 173 | 46 | 97 | ||||||||
Interest on debt balloon payment and prepayment penalty | 206 | 79 | 81 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (5,321 | ) | (558 | ) | (1,961 | ) | |||||
Supplies inventory | 292 | (71 | ) | (1,129 | ) | ||||||
Prepaid expenses and current other assets | (415 | ) | 304 | (38 | ) | ||||||
Other assets | 25 | (42 | ) | (46 | ) | ||||||
Accounts payable | (1,441 | ) | (3,546 | ) | 1,874 | ||||||
Accrued liabilities and deferred rent | 451 | 4,463 | 355 | ||||||||
Net cash used in operating activities | (27,982 | ) | (26,965 | ) | (27,632 | ) | |||||
Investing activities | |||||||||||
Purchases of property and equipment | (4,210 | ) | (6,165 | ) | (2,024 | ) | |||||
Cash remitted for acquisition, net of cash received | — | — | (6,916 | ) | |||||||
Change in restricted cash | (2 | ) | (533 | ) | (70 | ) | |||||
Net cash used in investing activities | (4,212 | ) | (6,698 | ) | (9,010 | ) | |||||
Financing activities | |||||||||||
Proceeds from the issuance of long-term debt, net of debt issuance costs | 24,452 | — | — | ||||||||
Proceeds from issuance of common stock in a private placement, net of issuance costs | — | 37,258 | — | ||||||||
Proceeds from issuance of common stock in a public offering, net of issuance costs | 31,949 | ||||||||||
Commissions and issuance costs relating to initial public offering | — | — | (129 | ) | |||||||
Payment of long-term debt | (5,000 | ) | — | — | |||||||
Payment of end-of-term debt obligation and prepayment penalty | (288 | ) | — | (110 | ) | ||||||
Payment of deferred stock offering costs | — | (247 | ) | — | |||||||
Proceeds from the exercise of common stock options and employee stock purchases | 1,216 | 722 | 675 | ||||||||
Net cash provided by financing activities | 52,329 | 37,733 | 436 | ||||||||
Net increase (decrease) in cash and cash equivalents | 20,135 | 4,070 | (36,206 | ) | |||||||
Cash and cash equivalents at beginning of period | 39,084 | 35,014 | 71,220 | ||||||||
Cash and cash equivalents at end of period | $ | 59,219 | $ | 39,084 | $ | 35,014 | |||||
Supplementary cash flow information of non-cash investing and financing activities: | |||||||||||
Fair value of common stock issued for acquisition | — | — | $ | 10,078 | |||||||
Non-cash issuance of long-term debt | — | — | 5,000 | ||||||||
Non-cash repayment of long-term debt | — | — | (5,000 | ) | |||||||
Net receivable for reimbursement of public offering issuance costs | $ | 144 | — | — | |||||||
Purchases of property and equipment included in accounts payable and accrued liabilities | 363 | $ | 1,825 | 383 | |||||||
Issuance of common stock from the non-cash exercise of common stock warrants | — | — | 187 | ||||||||
Supplementary cash flow information: | |||||||||||
Cash paid for interest on debt | 2,149 | 278 | 307 | ||||||||
Cash paid for tax | 7 | 22 | — |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Medicare | 27 | % | 26 | % | 26 | % | ||
UnitedHealthcare | 12 | % | 14 | % | 18 | % | ||
Aetna | 8 | % | 9 | % | 11 | % | ||
47 | % | 49 | % | 55 | % |
December 31, | |||||
2016 | 2015 | ||||
Medicare | 18 | % | 31 | % | |
UnitedHealthcare | 8 | % | 25 | % | |
Aetna | 4 | % | 23 | % |
Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | ||||||||||||||||||
Revenue recognized on the accrual basis | $ | 47,099 | 72 | % | $ | 27,043 | 55 | % | $ | 12,545 | 33 | % | ||||||||
Revenue recognized on the cash basis | 17,986 | 28 | % | 22,460 | 45 | % | 25,645 | 67 | % | |||||||||||
Total | $ | 65,085 | 100 | % | $ | 49,503 | 100 | % | $ | 38,190 | 100 | % |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Shares of common stock subject to outstanding options | 5,093,454 | 4,086,640 | 3,035,614 | |||||
Employee stock purchase plan | 36,651 | 15,561 | — | |||||
Restricted stock units | 25,000 | — | — | |||||
Total common stock equivalents | 5,155,105 | 4,102,201 | 3,035,614 |
Veracyte common stock | $ | 10,078 | |
Cash | 2,725 | ||
Payment of outstanding indebtedness | 4,290 | ||
Total acquisition consideration | $ | 17,093 |
Cash and cash equivalents | $ | 29 | |
Other assets, net | 7 | ||
In-process research and development (IPR&D) | 16,000 | ||
Goodwill | 1,057 | ||
Total net assets acquired | $ | 17,093 |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Revenue | $ | 38,190 | $ | 21,884 | |||
Net loss | $ | (29,090 | ) | $ | (28,605 | ) |
• | The reversal of costs related to transaction bonuses and other payments to employees and acquisition-related expenses directly related to the Merger of $2.2 million for the year ended December 31, 2014; and |
• | the elimination of interest expense related to Allegro indebtedness of $2.3 million and $4.5 million for the years ended December 31, 2014 and 2013, respectively. |
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
Leasehold improvements | $ | 5,861 | $ | 789 | |||
Laboratory equipment | 6,441 | 5,501 | |||||
Computer equipment | 1,177 | 1,046 | |||||
Software, including software developed for internal use | 1,937 | 1,353 | |||||
Furniture and fixtures | 1,131 | 242 | |||||
Construction-in-process | 1,769 | 6,823 | |||||
Total property and equipment, at cost | 18,316 | 15,754 | |||||
Accumulated depreciation and amortization | (6,836 | ) | (5,440 | ) | |||
Total property and equipment, net | $ | 11,480 | $ | 10,314 |
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
Accrued compensation expense | $ | 6,120 | $ | 4,212 | |||
Accrued Genzyme co-promotion fees | — | 2,089 | |||||
Accrued other | 2,990 | 2,388 | |||||
Total accrued liabilities | $ | 9,110 | $ | 8,689 |
• | Level I: Inputs which include quoted prices in active markets for identical assets and liabilities. |
• | Level II: Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Year Ending December 31, | Amounts | ||
2017 | $ | 2,143 | |
2018 | 2,102 | ||
2019 | 2,026 | ||
2020 | 2,082 | ||
2021 | 2,144 | ||
Thereafter | 9,812 | ||
Total minimum lease payments | $ | 20,309 |
December 31, 2016 | |||
Debt principal | $ | 25,385 | |
Unamortized debt issuance costs | (467 | ) | |
Net debt obligation | $ | 24,918 |
Year Ending December 31, | |||
2020 | $ | 9,519 | |
2021 | 12,693 | ||
2022 | 3,173 | ||
Total | $ | 25,385 |
2015 | |||
Debt and unpaid accrued end-of-term payment | $ | 5,082 | |
Unamortized note discount | (92 | ) | |
Net debt obligation | $ | 4,990 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Nominal interest | $ | 2,378 | $ | 253 | $ | 296 | |||||
Amortization and write-off of debt discount and debt issuance costs | 173 | 46 | 62 | ||||||||
End-of-term payment interest and prepayment penalty | 206 | 79 | 81 | ||||||||
Total | $ | 2,757 | $ | 378 | $ | 439 |
December 31, | |||||
2016 | 2015 | ||||
Stock options and restricted stock units issued and outstanding | 5,251,832 | 4,179,521 | |||
Stock options and restricted stock units available for grant under stock option plans | 887,724 | 1,058,359 | |||
Common stock available for the Employee Stock Purchase Plan | 609,053 | 750,000 | |||
Total | 6,748,609 | 5,987,880 |
Shares Available for Grant | Stock Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||||
Balance—December 31, 2015 | 1,058,359 | 4,179,521 | $ | 8.03 | 7.50 | $ | 6,511 | ||||||||
Additional shares authorized | 1,114,416 | — | |||||||||||||
Granted - stock options | (1,618,250 | ) | 1,618,250 | 6.30 | |||||||||||
Granted - restricted stock units | (25,000 | ) | 25,000 | ||||||||||||
Canceled | 358,199 | (358,199 | ) | 10.29 | |||||||||||
Exercised | — | (212,740 | ) | 2.53 | |||||||||||
Balance—December 31, 2016 | 887,724 | 5,251,832 | $ | 7.56 | 7.24 | $ | 8,515 | ||||||||
Options vested and exercisable—December 31, 2016 | 2,628,328 | $ | 7.42 | 5.89 | $ | 6,008 | |||||||||
Options vested and expected to vest—December 31, 2016 | 4,962,370 | $ | 7.58 | 7.16 | $ | 8,254 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Cost of revenue | $ | 126 | $ | 100 | $ | 51 | |||||
Research and development | 1,322 | 1,178 | 790 | ||||||||
Selling and marketing | 1,594 | 1,326 | 707 | ||||||||
General and administrative | 3,336 | 2,998 | 2,000 | ||||||||
Total stock-based compensation expense | $ | 6,378 | $ | 5,602 | $ | 3,548 |
Year Ended December 31, | |||||
2016 | 2015 | 2014 | |||
Weighted-average volatility | 52.49 - 56.36% | 52.56 - 68.82% | 70.19 - 78.54% | ||
Weighted-average expected term (years) | 5.50 - 6.27 | 5.50 - 6.08 | 5.50 - 6.08 | ||
Risk-free interest rate | 1.16 - 2.09% | 1.55 - 2.03% | 1.66 - 2.04% | ||
Expected dividend yield | — | — | — |
Year Ended December 31, | |||||
2016 | 2015 | 2014 | |||
Weighted-average volatility | 52.77 - 65.85% | 64.72 - 74.48% | 73.20 - 74.48% | ||
Weighted-average expected term (years) | 7.80 - 8.56 | 7.92 - 10.00 | 8.75 - 10.00 | ||
Risk-free interest rate | 1.39 - 2.30% | 1.78 - 2.29% | 2.09 - 2.20% | ||
Expected dividend yield | — | — | — |
Year Ended December 31, | |||
2016 | 2015 | ||
Weighted-average volatility | 46.38 - 75.72% | 53.57 - 58.10% | |
Weighted-average expected term (years) | 0.50 - 1.00 | 0.49 - 0.99 | |
Risk-free interest rate | 0.40 - 0.50% | 0.17 - 0.33% | |
Expected dividend yield | — | — |
Year Ended December, 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
U.S. federal taxes at statutory rate | $ | (10,662 | ) | $ | (11,459 | ) | $ | (9,987 | ) | ||
State tax (net of federal benefit) | 20 | (30 | ) | 5 | |||||||
Permanent differences | 153 | 96 | 64 | ||||||||
Incentive stock options | 1,095 | 789 | 672 | ||||||||
Tax credits | (677 | ) | (581 | ) | (461 | ) | |||||
Change in valuation allowance | 10,071 | 11,185 | 9,707 | ||||||||
Total | $ | — | $ | — | $ | — |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | 61,674 | $ | 52,262 | $ | 41,971 | |||||
Research and development credits | 3,174 | 2,497 | 1,916 | ||||||||
Stock-based compensation | 2,847 | 1,825 | 826 | ||||||||
Genzyme co-promotion agreement | — | 330 | 995 | ||||||||
Accruals, deferred rent and other | 4,511 | 4,698 | 3,381 | ||||||||
Gross deferred tax assets | 72,206 | 61,612 | 49,089 | ||||||||
Valuation allowance | (65,975 | ) | (55,101 | ) | (43,439 | ) | |||||
Net deferred tax assets | 6,231 | 6,511 | 5,650 | ||||||||
Deferred tax liabilities: | |||||||||||
Property and equipment | (1,180 | ) | (1,215 | ) | (60 | ) | |||||
In-process research and development | (5,051 | ) | (5,296 | ) | (5,590 | ) | |||||
Gross deferred tax liabilities | (6,231 | ) | (6,511 | ) | (5,650 | ) | |||||
Net deferred tax liabilities | (6,231 | ) | (6,511 | ) | (5,650 | ) | |||||
Net deferred taxes | $ | — | $ | — | $ | — |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Unrecognized tax benefits, beginning of period | $ | 1,871 | $ | 1,571 | $ | 727 | |||||
Gross increases—tax position in prior period | — | — | 548 | ||||||||
Gross decreases—tax position in prior period | — | — | — | ||||||||
Gross increases—current period tax position | 351 | 300 | 296 | ||||||||
Lapse of statute of limitations | — | — | — | ||||||||
Unrecognized tax benefits, end of period | $ | 2,222 | $ | 1,871 | $ | 1,571 |
Quarter Ended | March 31 | June 30 | September 30 | December 31 | |||||||||||
2016: | |||||||||||||||
Revenue | $ | 13,550 | $ | 14,675 | $ | 18,603 | $ | 18,257 | |||||||
Net loss | (10,075 | ) | (11,243 | ) | (5,637 | ) | (4,403 | ) | |||||||
Net loss per common share, basic and diluted | (0.36 | ) | (0.40 | ) | (0.20 | ) | (0.14 | ) | |||||||
Shares used to compute net loss per common share, basic and diluted | 27,817,993 | 27,859,918 | 27,916,819 | 31,705,603 | |||||||||||
2015: | |||||||||||||||
Revenue | $ | 11,218 | $ | 11,908 | $ | 12,335 | $ | 14,042 | |||||||
Net loss | (7,610 | ) | (9,136 | ) | (8,945 | ) | (8,013 | ) | |||||||
Net loss per common share, basic and diluted | (0.34 | ) | (0.35 | ) | (0.32 | ) | (0.29 | ) | |||||||
Shares used to compute net loss per common share, basic and diluted | 22,539,723 | 26,048,934 | 27,640,806 | 27,672,806 |
(a) | Documents filed as part of this report |
(b) | Exhibits |
Exhibit Number | Description | ||
3.1 | Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed November 8, 2013). | ||
3.2 | Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed November 8, 2013). | ||
4.1 | Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | ||
4.2 | Second Amended and Restated Investors Rights Agreement, dated November 6, 2012, between the Registrant and certain investors (incorporated by reference to Exhibit 4.2 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | ||
4.3 | Amendment to Second Amended and Restated Investors Rights Agreement, dated June 14, 2013, between the Registrant and certain investors (incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | ||
10.1 | # | Form of Indemnification Agreement between the Registrant and its officers and directors (incorporated by reference to Exhibit 10.1 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | |
10.2 | # | 2008 Stock Plan and forms of agreements thereunder (incorporated by reference to Exhibit 10.2 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | |
10.3 | # | 2013 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | |
Exhibit Number | Description | ||
10.4 | # * | Forms of agreements under the 2013 Stock Incentive Plan. | |
10.5 | # | Veracyte, Inc. Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, as amended). | |
10.6 | Lease Agreement between Riata Holdings, L.P., as landlord, and the Registrant, as tenant, dated November 28, 2012 (incorporated by reference to Exhibit 10.6 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | ||
10.7 | First Amendment to Lease Agreement dated as of January 7, 2014 by and between Riata Holdings, L.P. and the Registrant (incorporated by reference to Exhibit 10.7 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013 filed March 20, 2014). | ||
10.8 | Office Building Lease by and between American Fund US Investments LP and the Registrant dated April 29, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, as amended). | ||
10.9 | * | First Amendment to Office Building Lease dated May 3, 2016 by and between American Fund US Investments LP and the Registrant. | |
10.10 | * | Second Amendment to Office Building Lease dated February 8, 2017 by and between CRP 6000 Shoreline, L.L.C. and the Registrant. | |
10.11 | # | Employment Agreement, dated as of February 15, 2008, between Bonnie Anderson and the Registrant (incorporated by reference to Exhibit 10.10 to the Registrant's Registration Statement on Form S-1 (File No. 333- 191282), as amended, declared effective on October 29, 2013). | |
10.12 | # | Amendment to Bonnie Anderson Employment Agreement, dated as of December 22, 2008, between Bonnie Anderson and the Registrant (incorporated by reference to Exhibit 10.11 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | |
10.13 | # | Amendment No. 2 to Bonnie Anderson Employment Agreement, effective as of March 11, 2009, between Bonnie Anderson and the Registrant (incorporated by reference to Exhibit 10.12 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | |
10.14 | # | Amended and Restated Change of Control and Severance Agreement, effective as of May 14, 2015, between Bonnie Anderson and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, as amended). | |
10.15 | # | Amended and Restated Change of Control and Severance Agreement, effective as of May 14, 2015, between Christopher Hall and the Registrant (incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, as amended). | |
10.16 | # | Amended and Restated Change of Control and Severance Agreement, effective as of May 14, 2015, between Shelly Guyer and the Registrant (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, as amended). | |
10.17 | # | Amended and Restated Change of Control and Severance Agreement, effective as of May 14, 2015, between Julie Brooks and the Registrant (incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, as amended). | |
10.18 | # * | Change of Control and Severance Agreement, effective as of February 15, 2017, between Keith Kennedy and the Registrant. | |
Exhibit Number | Description | ||
10.19 | # | Offer Letter dated as of April 8, 2013 with Shelly D. Guyer (incorporated by reference to Exhibit 10.17 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | |
10.20 | # | Offer Letter dated as of January 28, 2010 with Christopher M. Hall (incorporated by reference to Exhibit 10.18 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | |
10.21 | † | Pathology Services Agreement dated as of November 12, 2010 between Brazos Valley Pathology, P.A. D/B/A Reitpath and the Registrant (incorporated by reference to Exhibit 10.19 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | |
10.22 | Approval of the Registrant to the Assignment of the Pathology Services Agreement with Brazos Valley Pathology to Thyroid Cytopathology Partners, P.A. as of May 18, 2011 (incorporated by reference to Exhibit 10.20 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | ||
10.23 | First Amendment to Pathology Services Agreement dated as of December 19, 2012 between Thyroid Cytopathology Partners, P.A. and the Registrant (incorporated by reference to Exhibit 10.21 to the Registrant's Registration Statement on Form S-1 (File No. 333-191282), as amended, declared effective on October 29, 2013). | ||
10.24 | Second Amendment to Pathology Services Agreement dated as of January 1, 2014 by and between the Registrant and Thyroid Cytopathology Partners, P.A. (incorporated by reference to Exhibit 10.23 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013). | ||
10.25 | † | Ex-U.S. Co-Promotion Agreement between the Registrant and Genzyme Corporation (incorporated by reference to Exhibit 10.26 to the Registrant's Annual Report Form 10-K for the year ended December 31, 2015, as amended). | |
10.26 | Credit Agreement dated as of March 25, 2016 by and among Veracyte, Inc. as Borrower, Visium Healthcare Partners, LP, as Administrative Agent, the Guarantors from time to time party thereto and the Lenders from time to time party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016). | ||
10.27 | Security Agreement dated March 30, 2016 between Veracyte, Inc. and Visium Healthcare Partners, LP, as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016). | ||
10.28 | Pledge Agreement dated March 30, 2016 between Veracyte, Inc. and Visium Healthcare Partners, LP, as Administrative Agent (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016). | ||
10.29 | Letter agreement regarding potential opportunity to purchase common equity interests dated March 30, 2016 between Veracyte, Inc. and Visium Healthcare Partners, LP (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016). | ||
10.30 | * | First Amendment to Credit Agreement dated as of December 14, 2016 by and among Veracyte, Inc. as Borrower, Visium Healthcare Partners, LP, as Administrative Agent, the Guarantors from time to time party thereto and the Lenders from time to time party thereto. | |
12.1 | * | Statement Regarding Computation of Ratios. | |
23.1 | * | Consent of independent registered public accounting firm. | |
24.1 | * | Power of Attorney (see the signature page of this Annual Report on Form 10-K). |
Exhibit Number | Description | ||
31.1 | * | Principal Executive Officer's Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | * | Principal Financial Officer's Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | * ** | Certification Pursuant to 18 U.S.C. § 1350 (Section 906 of the Sarbanes-Oxley Act of 2002). | |
32.2 | * ** | Certification Pursuant to 18 U.S.C. § 1350 (Section 906 of the Sarbanes-Oxley Act of 2002). | |
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | ||
† | Confidential treatment has been granted with respect to certain portions of this Exhibit. | |
# | Indicates management contract or compensatory plan or arrangement. | |
* | Filed herewith. | |
** | In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-K and will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933 except to the extent that the registrant specifically incorporates it by reference. |
(c) | Financial Statement Schedules |
VERACYTE, INC. | |||
By: | /s/ BONNIE H. ANDERSON | ||
Bonnie H. Anderson Chairman and Chief Executive Officer |
Signature | Title | Date | ||
/s/ BONNIE H. ANDERSON | Chairman and Chief Executive Officer (Principal Executive Officer) | March 1, 2017 | ||
Bonnie H. Anderson | ||||
/s/ KEITH S. KENNEDY | Chief Financial Officer (Principal Financial and Accounting Officer) | March 1, 2017 | ||
Keith S. Kennedy | ||||
/s/ JOHN L. BISHOP | Lead Independent Director | March 1, 2017 | ||
John L. Bishop | ||||
/s/ FRED E. COHEN, M.D., D.PHIL. | Director | March 1, 2017 | ||
Fred E. Cohen, M.D., D.Phil. | ||||
/s/ KARIN EASTHAM | Director | March 1, 2017 | ||
Karin Eastham | ||||
/s/ ROBERT S. EPSTEIN | Director | March 1, 2017 | ||
Robert S. Epstein | ||||
/s/ KEVIN K. GORDON | Director | March 1, 2017 | ||
Kevin K. Gordon | ||||
/s/ EVAN JONES | Director | March 1, 2017 | ||
Evan Jones | ||||
/s/ TINA S. NOVA, PH.D. | Director | March 1, 2017 | ||
Tina S. Nova, Ph.D. | ||||
/s/ JESSE I. TREU, PH.D. | Director | March 1, 2017 | ||
Jesse I. Treu, Ph.D. |
Name of Optionee: | [Name of Optionee] |
Total Number of Option Shares Granted: | [Total Number of Shares] |
Type of Option: | □ Incentive Stock Option |
□ Nonstatutory Stock Option | |
Exercise Price Per Share: | $ |
Grant Date: | [Date of Grant] |
Vesting Commencement Date: | [Vesting Commencement Date] |
Vesting Schedule: | [This Option becomes exercisable with respect to the first 1/4th of the Shares subject to this Option when you complete 12 months of continuous Service as an Employee or a Consultant from the Vesting Commencement Date. Thereafter, this Option becomes exercisable with respect to an additional 1/48th of the Shares subject to this Option when you complete each additional month of such Service.] [Vesting TBD by Bd or comm.] |
Expiration Date: | [Expiration Date] This Option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement. |
OPTIONEE: | Veracyte, Inc. | |
By: | ||
Optionee’s Signature | ||
Title: | ||
Optionee’s Printed Name |
Tax Treatment | This Option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code or a nonstatutory option, as provided in the Notice of Stock Option Grant. Even if this Option is designated as an incentive stock option, it shall be deemed to be a nonstatutory option to the extent required by the $100,000 annual limitation under Section 422(d) of the Internal Revenue Code. | |
Vesting | This Option becomes exercisable in installments, as shown in the Notice of Stock Option Grant. This Option will in no event become exercisable for additional Shares after your Service as an Employee or a Consultant has terminated for any reason. | |
Term | This Option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the Notice of Stock Option Grant (fifth anniversary for a more than 10% shareholder as provided under the Plan if this is an incentive stock option). This Option may expire earlier if your Service terminates, as described below. | |
Regular Termination | If your Service terminates for any reason except death or “Total and Permanent Disability” (as defined in the Plan), then this Option will expire at the close of business at Company headquarters on the date three (3) months after the date your Service terminates (or, if earlier, the Expiration Date). The Company determines when your Service terminates for this purpose and all purposes under the Plan and its determinations are conclusive and binding on all persons. | |
Death | If your Service terminates because of death, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date). During that period of up to 12 months, your estate or heirs may exercise the Option. | |
Disability | If your Service terminates because of your Total and Permanent Disability, then this Option will expire at the close of business at Company headquarters on the date 12 months after the date your Service terminates (or, if earlier, the Expiration Date). | |
Leaves of Absence | For purposes of this Option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. | |
If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. Notwithstanding the foregoing, except as otherwise required by applicable laws, vesting of this Option will be suspended during any unpaid leave of absence. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule. | ||
Restrictions on Exercise | The Company will not permit you to exercise this Option if the issuance of Shares at that time would violate any law or regulation. The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of the Company stock pursuant to this Option shall relieve the Company of any liability with respect to the non-issuance or sale of the Company stock as to which such approval shall not have been obtained. | |
Notice of Exercise | When you wish to exercise this Option you must provide a notice of exercise form in accordance with such procedures as are established by the Company and communicated to you from time to time. Any notice of exercise must specify how many Shares you wish to purchase and how your Shares should be registered. The notice of exercise will be effective when it is received by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so. | |
Form of Payment | When you submit your notice of exercise, you must include payment of the Option exercise price for the Shares you are purchasing. Payment may be made in the following form(s): | |
* | Your personal check, a cashier’s check or a money order. |
* | Certificates for Shares that you own, along with any forms needed to effect a transfer of those Shares to the Company. The value of the Shares, determined as of the effective date of the Option exercise, will be applied to the Option exercise price. Instead of surrendering Shares, you may attest to the ownership of those Shares on a form provided by the Company and have the same number of Shares subtracted from the Shares issued to you upon exercise of the Option. However, you may not surrender or attest to the ownership of Shares in payment of the exercise price if your action would cause the Company to recognize a compensation expense (or additional compensation expense) with respect to this Option for financial reporting purposes. | |
* | By delivery on a form approved by the Company of an irrevocable direction to a securities broker approved by the Company to sell all or part of the Shares that are issued to you when you exercise this Option and to deliver to the Company from the sale proceeds an amount sufficient to pay the Option exercise price and any withholding taxes. The balance of the sale proceeds, if any, will be delivered to you. The directions must be given by providing a notice of exercise form approved by the Company. | |
* | By delivery on a form approved by the Company of an irrevocable direction to a securities broker or lender approved by the Company to pledge Shares that are issued to you when you exercise this Option as security for a loan and to deliver to the Company from the loan proceeds an amount sufficient to pay the Option exercise price and any withholding taxes. The directions must be given by providing a notice of exercise form approved by the Company. | |
* | If permitted by the Committee, by a “net exercise” arrangement pursuant to which the number of Shares issuable upon exercise of the Option shall be reduced by the largest whole number of Shares having an aggregate Fair Market Value that does not exceed the aggregate exercise price (plus tax withholdings, if applicable) and any remaining balance of the aggregate exercise price (and/or applicable tax withholdings) not satisfied by such reduction in the number of whole Shares to be issued shall be paid by you in cash other form of payment permitted under this Option. The directions must be given by providing a notice of exercise form approved by the Company. | |
* | Any other form permitted by the Committee in its sole discretion. | |
Notwithstanding the foregoing, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion. | ||
Withholding Taxes and Stock Withholding | Regardless of any action the Company or your actual employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option grant, including the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate your liability for Tax-Related Items. Prior to exercise of the Option, you shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or the Employer. With the Company’s consent, these arrangements may also include, if permissible under local law, (a) withholding Shares that otherwise would be issued to you when you exercise this Option, provided that the Company only withholds the amount of Shares necessary to satisfy the minimum statutory withholding amount, (b) having the Company withhold taxes from the proceeds of the sale of the Shares, either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization), or (c) any other arrangement approved by the Company. The Fair Market Value of these Shares, determined as of the effective date of the Option exercise, will be applied as a credit against the withholding taxes. Finally, you shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan or your purchase of Shares that cannot be satisfied by the means previously described. The Company may refuse to honor the exercise and refuse to deliver the Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section. | |
Restrictions on Resale | You agree not to sell any Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify. |
Transfer of Option | In general, only you can exercise this Option prior to your death. You may not sell, transfer, assign, pledge or otherwise dispose of this Option, other than as designated by you by will or by the laws of descent and distribution, except as provided below. For instance, you may not use this Option as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may in any event dispose of this Option in your will. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your Option in any other way. | |
However, if this Option is designated as a nonstatutory stock option in the Notice of Stock Option Grant, then the Committee may, in its sole discretion, allow you to transfer this Option as a gift to one or more family members. For purposes of this Agreement, “family member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships), any individual sharing your household (other than a tenant or employee), a trust in which one or more of these individuals have more than 50% of the beneficial interest, a foundation in which you or one or more of these persons control the management of assets, and any entity in which you or one or more of these persons own more than 50% of the voting interest. | ||
In addition, if this Option is designated as a nonstatutory stock option in the Notice of Stock Option Grant, then the Committee may, in its sole discretion, allow you to transfer this option to your spouse or former spouse pursuant to a domestic relations order in settlement of marital property rights. | ||
The Committee will allow you to transfer this Option only if both you and the transferee(s) execute the forms prescribed by the Committee, which include the consent of the transferee(s) to be bound by this Agreement. | ||
Retention Rights | Neither your Option nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause. | |
Shareholder Rights | Your Options carry neither voting rights nor rights to dividends. You, or your estate or heirs, have no rights as a shareholder of the Company unless and until you have exercised this Option by giving the required notice to the Company and paying the exercise price. No adjustments will be made for dividends or other rights if the applicable record date occurs before you exercise this Option, except as described in the Plan. | |
Adjustments | The number of Shares covered by this Option and the exercise price per Share shall be subject to adjustment in the event of a stock split, a stock dividend or a similar change in Company Shares, and in other circumstances, as set forth in the Plan. | |
Successors and Assigns | Except as otherwise provided in the Plan or this Agreement, every term of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees and assigns. | |
Notice | Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto. | |
Applicable Law | This Agreement will be interpreted and enforced under the laws of the State of California (without regard to their choice-of-law provisions). |
Miscellaneous | You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company and your employer have reserved the right to amend, suspend or terminate the Plan at any time, (iii) the grant of an option does not in any way create any contractual or other right to receive additional grants of options (or benefits in lieu of options) at any time or in any amount and (iv) all determinations with respect to any additional grants, including (without limitation) the times when options will be granted, the number of Shares offered, the exercise price and the vesting schedule, will be at the sole discretion of the Company. The value of this Option shall be an extraordinary item of compensation outside the scope of your employment contract, if any, and shall not be considered a part of your normal or expected compensation for purposes of calculating severance, resignation, redundancy or end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. You understand and acknowledge that participation in the Plan ceases upon termination of your Service for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement. You hereby authorize and direct your employer to disclose to the Company or any Subsidiary any information regarding your employment, the nature and amount of your compensation and the fact and conditions of your participation in the Plan, as your employer deems necessary or appropriate to facilitate the administration of the Plan. You consent to the collection, use and transfer of personal data as described in this subsection. You understand and acknowledge that the Company, your employer and the Company’s other Subsidiaries hold certain personal information regarding you for the purpose of managing and administering the Plan, including (without limitation) your name, home address, telephone number, date of birth, social insurance number, salary, nationality, job title, any Shares or directorships held in the Company and details of all options or any other entitlements to Shares awarded, canceled, exercised, vested, unvested or outstanding in the your favor (the “Data”). You further understand and acknowledge that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan and that the Company and/or any Subsidiary may each further transfer Data to any third party assisting the Company in the implementation, administration and management of the Plan. You understand and acknowledge that the recipients of Data may be located in the United States or elsewhere. You authorize such recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of administering your participation in the Plan, including a transfer to any broker or other third party with whom you elect to deposit Shares acquired under the Plan of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf. You may, at any time, view the Data, require any necessary modifications of Data or withdraw the consents set forth in this subsection by contacting the Human Resources Department of the Company in writing. | |
The Plan and Other Agreements | The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in the Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded. This Agreement may be amended by the Committee without your consent; however, if any such amendment would materially impair your rights or obligations under the Agreement, this Agreement may be amended only by another written agreement, signed by you and the Company. |
OPTIONEE INFORMATION: | |||||||
Name: | Social Security Number: | ||||||
Address: | Employee Number: | ||||||
OPTION INFORMATION: | |||||||
Date of Grant: | _______________, 20___ | Type of Stock Option: | |||||
Exercise Price per Share: $______________ | ___ | Nonstatutory (NSO) | |||||
Total number of Shares of Veracyte, Inc. (the “Company”) covered by option: __________ | ___ | Incentive (ISO) |
□ | Check for $ , payable to “Veracyte, Inc.” |
The certificate for the Purchased Shares should be sent to the following address: | ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ |
1. | I understand that all sales of Purchased Shares are subject to compliance with the Company’s policy on securities trades. |
2. | I hereby acknowledge that I received and read a copy of the prospectus describing the Company’s 2013 Stock Incentive Plan and the tax consequences of an exercise. |
3. | In the case of a nonstatutory option, I understand that I must recognize ordinary income equal to the spread between the fair market value of the Purchased Shares on the date of exercise and the exercise price. I further understand that I am required to pay withholding taxes at the time of exercising a nonstatutory option. |
4. | In the case of an incentive stock option, I agree to notify the Company if I dispose of the Purchased Shares before I have met both of the tax holding periods applicable to incentive stock options (that is, if I make a disqualifying disposition). |
SIGNATURE AND DATE: | |||
__, 20__ |
Name of Participant: | [-] |
Total Number of Stock Units Granted: | [-] |
Date of Grant: | [-] |
Vesting Commencement Date: | [-] |
Vesting Schedule: | The Stock Units subject to this Award vest when you complete each [12 months] of continuous Service as an Employee or a Consultant from the Vesting Commencement Date.] [Sample language - actual vesting schedule to be inserted as approved on grant-by-grant basis.] |
[Name of Participant] | VERACYTE, Inc. | ||
By: | |||
Its: | |||
Print Name |
Payment for Stock Units | No cash payment is required for the Stock Units you receive. You are receiving the Stock Units in consideration for Services rendered by you. |
Vesting | The Stock Units that you are receiving will vest in installments, as shown in the Notice of Stock Unit Award. No additional Stock Units vest after your Service as an Employee or a Consultant has terminated for any reason [, except as provided in your Change of Control and Severance Agreement to the extent in effect at the time of termination]. [reference to Change of Control and Severance Agreement included only if applicable to the Participant] |
Forfeiture | If your Service terminates for any reason, then your Award expires immediately as to the number of Stock Units that have not vested before the termination date and do not vest as a result of termination. This means that the unvested Stock Units will immediately be cancelled. You receive no payment for Stock Units that are forfeited. The Company determines when your Service terminates for this purpose and all purposes under the Plan and its determinations are conclusive and binding on all persons. |
Leaves of Absence | For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave of absence was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Unit Award may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. Notwithstanding the foregoing, except as otherwise required by applicable laws, vesting of your Stock Units will be suspended during any unpaid leave of absence. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Stock Unit Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule. |
Nature of Stock Units | Your Stock Units are mere bookkeeping entries. They represent only the Company’s unfunded and unsecured promise to issue Shares on a future date. As a holder of Stock Units, you have no rights other than the rights of a general creditor of the Company. |
No Voting Rights or Dividends | Your Stock Units carry neither voting rights nor rights to dividends. You, or your estate or heirs, have no rights as a shareholder of the Company unless and until your Stock Units are settled by issuing Shares. No adjustments will be made for dividends or other rights if the applicable record date occurs before your Shares are issued, except as described in the Plan. |
Stock Units Nontransferable | You may not sell, transfer, assign, pledge or otherwise dispose of any Stock Units. For instance, you may not use your Stock Units as security for a loan. If you attempt to do any of these things, your Stock Units will immediately become invalid. |
Settlement of Stock Units | Each of your vested Stock Units will be settled when it vests; provided, however, that settlement of each Stock Unit will be deferred to the first “permissible trading day” for the Shares, if later than the applicable vesting date, but in no event later than March 15th of the calendar year following the calendar year in which the applicable vesting date occurs. For purposes of this Agreement, “permissible trading day” means a day that satisfies all of the following requirements: (a) the exchange on which the Shares are traded is open for trading on that day; (b) you are permitted to sell Shares on that day without incurring liability under section 16(b) of the Exchange Act, (c) either (i) you are not in possession of material non-public information that would make it illegal for you to sell Shares on that day under Rule 10b-5 under the Exchange Act or (ii) Rule 10b5-1(c) under the Exchange Act would apply to the sale; (d) you are permitted to sell Shares on that day under such written insider trading policy as may have been adopted by the Company; and (e) you are not prohibited from selling Shares on that day by a written agreement between you and the Company or a third party. At the time of settlement, you will receive one Share for each vested Stock Unit; provided, however, that no fractional Shares will be issued or delivered pursuant to the Plan or this Agreement, and the Committee will determine whether cash will be paid in lieu of any fractional Share or whether such fractional Share and any rights thereto will be canceled, terminated or otherwise eliminated. In addition, the Shares are issued to you subject to the condition that the issuance of the Shares not violate any law or regulation. |
Withholding Taxes and Stock Withholding | Regardless of any action the Company or your actual employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the settlement of the Stock Units, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends; and (2) do not commit to structure the terms of the Award or any aspect of the Stock Units to reduce or eliminate your liability for Tax-Related Items. Prior to any relevant taxable or tax withholding event, as applicable, you shall pay or make adequate arrangements satisfactory to the Company and/or the Employer, as applicable, to satisfy all Tax-Related Items. In this regard, you authorize the Company and/or the Employer (and their respective agents) to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following, as determined at the sole discretion of the Company and only to the extent permissible under local law: (1) withholding from your wages or other cash compensation paid to you by the Company and/or the Employer; (2) withholding from proceeds of the sale of Shares acquired upon settlement of the Stock Units either through a voluntary sale or through a mandatory sale (3) arranged by the Company (on your behalf pursuant to this authorization); withholding of Shares to otherwise be issued upon settlement of the Stock Units; or (4) any other arrangement approved by the Company. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested Stock Units, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan. The Fair Market Value of any Shares withheld or sold to satisfy the obligations with regard to all Tax-Related Items, determined as of the effective date of the Stock Units vesting, will be applied as a credit against the amount of Tax-Related Items. Finally, you shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan or your purchase of Shares that cannot be satisfied by the means previously described. The Company may refuse to deliver the Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section, and your rights to the Shares shall be forfeited if you do not comply with such obligations on or before the scheduled settlement deadline. |
Restrictions on Resale | You agree not to sell any Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify. |
No Retention Rights | Neither your Award nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause. |
Adjustments | The number of Stock Units covered by this Award shall be subject to adjustment in the event of a stock split, a stock dividend or a similar change in Company Shares, and in other circumstances, as set forth in the Plan. The forfeiture provisions and restrictions provided for in this Agreement will apply to all new, substitute or additional Stock Units or securities to which you are entitled by reason of this Award. |
Successors and Assigns | Except as otherwise provided in the Plan or this Agreement, every term of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees and assigns. |
Notice | Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto. |
Applicable Law and Choice of Venue | This Agreement will be interpreted and enforced under the laws of the State of California (without regard to their choice-of-law provisions). For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this Award or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed. |
Miscellaneous | You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company and your employer have reserved the right to amend, suspend or terminate the Plan at any time, (iii) the grant of your Award does not in any way create any contractual or other right to receive additional grants of awards (or benefits in lieu of awards) at any time or in any amount and (iv) all determinations with respect to any additional grants, including (without limitation) the times when awards will be granted, the number of Shares subject to the awards, and the vesting schedule, will be at the sole discretion of the Company. The value of this Award shall be an extraordinary item of compensation outside the scope of your employment contract, if any, and shall not be considered a part of your normal or expected compensation for purposes of calculating severance, resignation, redundancy or end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. You understand and acknowledge that participation in the Plan ceases upon termination of your Service for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement. You hereby authorize and direct your employer to disclose to the Company or any Subsidiary any information regarding your employment, the nature and amount of your compensation and the fact and conditions of your participation in the Plan, as your employer deems necessary or appropriate to facilitate the administration of the Plan. You consent to the collection, use and transfer of personal data as described in this subsection. You understand and acknowledge that the Company, your employer and the Company’s other Subsidiaries hold certain personal information regarding you for the purpose of managing and administering the Plan, including (without limitation) your name, home address, telephone number, date of birth, social insurance number, salary, nationality, job title, any Shares or directorships held in the Company and details of all awards or any other entitlements to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor (the “Data”). You further understand and acknowledge that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan and that the Company and/or any Subsidiary may each further transfer Data to any third party assisting the Company in the implementation, administration and management of the Plan. You understand and acknowledge that the recipients of Data may be located in the United States or elsewhere. You authorize such recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of administering your participation in the Plan, including a transfer to any broker or other third party with whom you elect to deposit Shares acquired under the Plan of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf. You may, at any time, view the Data, require any necessary modifications of Data or withdraw the consents set forth in this subsection by contacting the Human Resources Department of the Company in writing. |
The Plan and Other Agreements | The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in this Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded. This Agreement may be amended by the Committee without your consent; however, if any such amendment would materially impair your rights or obligations under the Agreement, this Agreement may be amended only by another written agreement, signed by you and the Company. |
Vesting Schedule: | [The Shares subject to this Award vest when you complete twelve months of continuous Service as an Employee or a Consultant from the Vesting Commencement Date.] [Sample language - actual vesting to be inserted.] |
[NAME OF RECIPIENT] | VERACYTE, INC. | ||
By: | |||
Title |
Payment For Shares | No cash payment is required for the Shares you receive. You are receiving the Shares in consideration for Services rendered by you. |
Vesting | The Shares that you are receiving will vest in installments, as shown in the Notice of Restricted Stock Award. |
No additional Shares vest after your Service as an Employee or a Consultant has terminated for any reason. | |
Shares Restricted | Unvested Shares will be considered “Restricted Shares.” Except to the extent permitted by the Committee, you may not sell, transfer, assign, pledge or otherwise dispose of Restricted Shares. |
Forfeiture | If your Service terminates for any reason, then your Shares will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of termination. This means that the Restricted Shares will immediately revert to the Company. You receive no payment for Restricted Shares that are forfeited. The Company determines when your Service terminates for this purpose and all purposes under the Plan and its determinations are conclusive and binding on all persons. |
Leaves Of Absence | For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. |
If you go on a leave of absence, then the vesting schedule specified in the Notice of Restricted Stock Award may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. Notwithstanding the foregoing, except as otherwise required by applicable laws, vesting of the Restricted Shares will be suspended during any unpaid leave of absence. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Restricted Stock Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule. | |
Stock Certificates | The certificates for the Restricted Shares have stamped on them a special legend referring to the forfeiture restrictions. In addition to or in lieu of imposing the legend, the Company may hold the certificates in escrow. As your vested percentage increases, you may request (at reasonable intervals) that the Company release to you a non-legended certificate for your vested Shares. |
Shareholder Rights | During the period of time between the date of grant and the date the Restricted Shares become vested, you shall have all the rights of a shareholder with respect to the Restricted Shares except for the right to transfer the Restricted Shares, as set forth above. Accordingly, you shall have the right to vote the Restricted Shares and to receive any cash dividends paid with respect to the Restricted Shares. |
Withholding Taxes | Regardless of any action the Company or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or your Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the shares received under this Award, including the award or vesting of such shares, the subsequent sale of shares under this Award and the receipt of any dividends; and (2) do not commit to structure the terms of the award to reduce or eliminate your liability for Tax-Related Items. No stock certificates will be released to you, unless you have paid or made adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or your Employer. In this regard, you authorize the Company and/or your Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or your Employer. With the Company’s consent, these arrangements may also include, if permissible under local law, a) withholding shares that otherwise would be delivered to you when they vest having a Fair Market Value equal to the amount necessary to satisfy the minimum statutory withholding amount , b) having the Company withhold taxes from the proceeds of the sale of the Shares, either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization), or (c) any other arrangement approved by the Company. The fair market value of these shares, determined as of the date when taxes otherwise would have been withheld in cash, will be applied as a credit against the withholding taxes. Finally, you shall pay to the Company or your Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan or your acquisition of shares that cannot be satisfied by the means previously described. The Company may refuse to deliver the shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section. |
Restrictions On Resale | You agree not to sell any Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify. |
No Retention Rights | Neither your Award nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause. |
Adjustments | In the event of a stock split, a stock dividend or a similar change in Company Shares, or an extraordinary dividend, or a merger or a reorganization of the Company, the forfeiture provisions described above will apply to all new, substitute or additional securities or other assets to which you are entitled by reason of your ownership of the Shares. |
Successors and Assigns | Except as otherwise provided in the Plan or this Agreement, every term of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees and assigns. |
Notice | Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following mailing with postage and fees prepaid, addressed to the other party hereto at the address last known in the Company’s records or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto. |
Applicable Law | This Agreement will be interpreted and enforced under the laws of the State of California (without regard to their choice-of-law provisions). |
Miscellaneous | You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company and your employer have reserved the right to amend, suspend or terminate the Plan at any time, (iii) the grant of your Award does not in any way create any contractual or other right to receive additional grants of awards (or benefits in lieu of awards) at any time or in any amount and (iv) all determinations with respect to any additional grants, including (without limitation) the times when awards will be granted, the number of shares offered, the purchase price and the vesting schedule, will be at the sole discretion of the Company. The value of this Award shall be an extraordinary item of compensation outside the scope of your employment contract, if any, and shall not be considered a part of your normal or expected compensation for purposes of calculating severance, resignation, redundancy or end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. You understand and acknowledge that participation in the Plan ceases upon termination of your Service for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement. You hereby authorize and direct your employer to disclose to the Company or any Subsidiary any information regarding your employment, the nature and amount of your compensation and the fact and conditions of your participation in the Plan, as your employer deems necessary or appropriate to facilitate the administration of the Plan. You consent to the collection, use and transfer of personal data as described in this subsection. You understand and acknowledge that the Company, your employer and the Company’s other Subsidiaries hold certain personal information regarding you for the purpose of managing and administering the Plan, including (without limitation) your name, home address, telephone number, date of birth, social insurance number, salary, nationality, job title, any shares or directorships held in the Company and details of all awards or any other entitlements to shares awarded, canceled, exercised, vested, unvested or outstanding in the your favor (the “Data”). You further understand and acknowledge that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan and that the Company and/or any Subsidiary may each further transfer Data to any third party assisting the Company in the implementation, administration and management of the Plan. You understand and acknowledge that the recipients of Data may be located in the United States or elsewhere. You authorize such recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of administering your participation in the Plan, including a transfer to any broker or other third party with whom you elect to deposit shares acquired under the Plan of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares on your behalf. You may, at any time, view the Data, require any necessary modifications of Data or withdraw the consents set forth in this subsection by contacting the Human Resources Department of the Company in writing. |
The Plan and Other Agreements | The text of the Plan is incorporated in this Agreement by reference. All capitalized terms in this Agreement shall have the meanings assigned to them in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded. This Agreement may be amended by the Committee without your consent; however, if any such amendment would materially impair your rights or obligations under the Agreement, this Agreement may be amended only by another written agreement, signed by you and the Company. |
Landlord: CRP 6000 Shoreline, L.L.C. c/o David A. Kingery, Managing Director US Real Estate The Carlyle Group 3675 Mt. Diablo Boulevard, Suite 310 Lafayette, California 94549 | With a copy to: Douglas Kniveton Nancy Tam CB Richard Ellis 101 California Street, 22nd Floor San Francisco, California 94111 |
Landlord: CRP 6000 Shoreline, L.L.C. a Delaware limited liability company | Tenant: Veracyte, Inc. a Delaware corporation | ||
By: | /s/ David A. Kingery | By: | /s/ Julie A. Brooks |
Name: | David A. Kingery | Name: | Julie A. Brooks |
Its: | Vice President | Its: | EVP, General Counsel |
By: | /s/ Christopher M. Hall | ||
Name: | Christopher M. Hall | ||
Its: | Chief Operating Officer |
COMPANY | VERACYTE, INC. | |
By: | /s/ Bonnie H. Anderson | |
Title: | Chairman of the Board, President & Chief Executive Officer | |
Date: | February 21, 2017 | |
EXECUTIVE | By: | /s/ Keith S. Kennedy |
Title: | Chief Financial Officer | |
Date: | February 15, 2017 |
COMPANY | VERACYTE, INC. | |
By: | ||
Name: | ||
Chairman of the Board, President & CEO | ||
Title: | ||
Dated: | ||
EXECUTIVE | ||
(Signature) | ||
Dated: |
BORROWER: | VERACYTE, INC.,: | |||
a Delaware corporation | ||||
By: | /s/ Bonnie Anderson | |||
Name: | Bonnie Anderson | |||
Title | President and CEO | |||
ADMINISTRATIVE | VISIUM HEALTHCARE PARTNERS, LP, | ||||
AGENT: | a Delaware limited partnership | ||||
By: | VISIUM HEALTHCARE ADVISORS, LP, | ||||
its General Partner | |||||
By: | JG Asset II, LLC, | ||||
its General Partner | |||||
By: | /s/ Mark Gottlieb | ||||
Name: | Mark Gottlieb | ||||
Title | Authorized Signatory | ||||
LENDERS: | VISIUM HEALTHCARE PARTNERS, LP, | ||||
a Delaware limited partnership | |||||
By: | VISIUM HEALTHCARE ADVISORS, LP, | ||||
its General Partner | |||||
By: | JG Asset II, LLC, | ||||
its General Partner | |||||
By: | /s/ Mark Gottlieb | ||||
Name: | Mark Gottlieb | ||||
Title | Authorized Signatory | ||||
VISIUM HEALTHCARE ADVISORS (CAYMAN MASTER) | |||||
FUNDS, LP | |||||
By: | VISIUM HEALTHCARE ADVISORS, LP, | ||||
its General Partner | |||||
By: | JG Asset II, LLC, | ||||
its General Partner | |||||
By: | /s/ Mark Gottlieb | ||||
Name: | Mark Gottlieb | ||||
Title | Authorized Signatory | ||||
For the year ended December 31, | |||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||
Earnings (deficiency): | |||||||||||||||||||
Net loss | $ | (18,649 | ) | $ | (25,580 | ) | $ | (29,373 | ) | $ | (33,704 | ) | $ | (31,358 | ) | ||||
Add: | |||||||||||||||||||
Fixed charges | 24 | 294 | 511 | 455 | 2,855 | ||||||||||||||
Earnings (deficiency) | $ | (18,625 | ) | $ | (25,286 | ) | $ | (28,862 | ) | $ | (33,249 | ) | $ | (28,503 | ) | ||||
Fixed Charges: | |||||||||||||||||||
Interest expense | — | $ | 266 | $ | 483 | $ | 378 | $ | 2,757 | ||||||||||
Estimated interest portion of rental expense | 24 | 28 | 28 | 77 | 98 | ||||||||||||||
Total fixed charges | $ | 24 | $ | 294 | $ | 511 | $ | 455 | $ | 2,855 | |||||||||
Deficiency in the coverage of fixed charges | $ | (18,649 | ) | $ | (25,580 | ) | $ | (29,373 | ) | $ | (33,704 | ) | $ | (31,358 | ) | ||||
Ratio of Earnings to Fixed Charges(1)(2) | NM | NM | NM | NM | NM | ||||||||||||||
(1) The ratio of earnings to fixed charges is computed by dividing loss before taxes plus fixed charges by fixed charges. Fixed charges consist of interest expense (including interest expense from capital leases), debt financing expense and the estimated portion of rental expense deemed by us to be representative of the interest factor of rental payments under operating leases. Earnings were insufficient to cover fixed charges by the amounts set forth in the table above under the heading “Deficiency in the coverage of fixed charges.” | |||||||||||||||||||
(2) NM—Not meaningful. | |||||||||||||||||||
For the periods presented above, there were no outstanding shares of preferred stock with required dividend payments. Therefore, earnings were insufficient to cover combined fixed charges and preferred stock dividends in the same amounts referenced in the line entitled “Deficiency in the coverage of fixed charges” in the table above. |
(1) | Registration Statements (Forms S-8 Nos. 333-191992, 333-203097, 333-205206 and 333-210185) pertaining to the 2013 Stock Incentive Plan, 2008 Stock Plan and Employee Stock Purchase Plan of Veracyte, Inc., and |
Date: | March 1, 2017 | |
/s/ Bonnie H. Anderson | ||
Bonnie H. Anderson | ||
Chairman and Chief Executive Officer | ||
(Principal Executive Officer) |
Date: | March 1, 2017 | |
/s/ Keith S. Kennedy | ||
Keith S. Kennedy | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 1, 2017 | |
/s/ Bonnie H. Anderson | ||
Bonnie H. Anderson | ||
Chairman and Chief Executive Officer | ||
(Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 1, 2017 | |
/s/ Keith S. Kennedy | ||
Keith S. Kennedy | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
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Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Feb. 24, 2017 |
Jun. 30, 2016 |
|
Document and Entity Information | |||
Entity Registrant Name | VERACYTE, INC. | ||
Entity Central Index Key | 0001384101 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 87.5 | ||
Entity Common Stock, Shares Outstanding | 33,848,284 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY |
Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 33,762,278 | 27,685,291 |
Common stock, shares outstanding | 33,762,278 | 27,685,291 |
Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Statement [Abstract] | |||
Revenue | $ 65,085 | $ 49,503 | $ 38,190 |
Operating Expenses: | |||
Cost of revenue | 25,462 | 21,497 | 16,606 |
Research and development | 15,324 | 12,796 | 9,804 |
Selling and marketing | 28,248 | 25,293 | 21,932 |
General and administrative | 23,787 | 22,583 | 18,854 |
Intangible asset amortization | 1,067 | 800 | 0 |
Total operating expenses | 93,888 | 82,969 | 67,196 |
Loss from operations | (28,803) | (33,466) | (29,006) |
Interest expense | (2,757) | (378) | (439) |
Other income, net | 202 | 140 | 72 |
Net loss | (31,358) | (33,704) | (29,373) |
Comprehensive loss | $ (31,358) | $ (33,704) | $ (29,373) |
Net loss per common share, basic and diluted (in dollars per share) | $ (1.09) | $ (1.30) | $ (1.36) |
Shares use to compute net loss per common share, basic and diluted (in shares) | 28,830,472 | 25,994,193 | 21,639,374 |
Organization and Description of Business |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Veracyte, Inc. ("Veracyte" or the "Company") was incorporated in the state of Delaware on August 15, 2006 as Calderome, Inc. Calderome operated as an incubator until early 2008. On March 4, 2008, the Company changed its name to Veracyte, Inc. Veracyte is a molecular diagnostics company that uses genomic technology to resolve diagnostic ambiguity. The Company targets diseases in which large numbers of patients undergo invasive and costly diagnostic procedures that could have been avoided with a more accurate diagnosis from a cytology sample. By improving diagnosis, the Company helps patients avoid such unnecessary invasive procedures and surgeries while reducing healthcare costs. The Company's first commercial solution, the Afirma® Thyroid FNA Analysis, centers on the proprietary Afirma Gene Expression Classifier ("GEC"). The Afirma GEC helps physicians reduce the number of unnecessary surgeries by employing a proprietary 142-gene signature to determine whether thyroid nodules previously classified by cytopathology as indeterminate can be reclassified as benign. The Afirma GEC is offered directly or as part of a comprehensive solution that also includes cytopathology. Additionally, the Afirma Malignancy Classifiers were launched in May 2014. The Company currently markets and sells Afirma in the United States, in select foreign countries through a co-promotion agreement with Genzyme Corporation, a subsidiary of Sanofi, and through other distributors. In April 2015, the Company entered the lung cancer diagnostics market with the Percepta® Bronchial Genomic Classifier, a genomic test to resolve ambiguity in lung cancer diagnosis. In October 2016, the Company introduced a second product in pulmonology, the Envisia™ Genomic Classifier, designed to help in the assessment of patients suspected to have idiopathic pulmonary fibrosis. The Company's operations are based in South San Francisco, California and Austin, Texas, and it operates in one segment in the United States. |
Summary of Significant Accounting Policies |
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Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The financial statements include the accounts of the Company and its former wholly-owned subsidiary, which was dissolved in June 2015. For periods prior to the subsidiary dissolution, all intercompany accounts and transactions were eliminated in consolidation. Certain amounts have been reclassified on the balance sheet at December 31, 2015 to conform with the adoption of Accounting Standards Update (“ASU”) No. 2015-3, Simplifying the Presentation of Debt Issuance Costs. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates include: revenue recognition; contractual allowances; the useful lives of property and equipment; the recoverability of long-lived assets; the estimation of the fair value of intangible assets; stock options; income tax uncertainties, including a valuation allowance for deferred tax assets; and contingencies. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. Liquidity The Company has incurred net losses since its inception and expects to incur additional losses in 2017 and in future years. As of December 31, 2016, the Company had an accumulated deficit of $180.1 million. The Company may never achieve revenue sufficient to offset its expenses. The Company believes its cash and cash equivalents of $59.2 million as of December 31, 2016 and its revenue from sales in 2017 will be sufficient to meet its anticipated cash requirements for at least the next 12 months. In November 2016, the Company issued and sold 5,723,300 shares of its common stock in a public offering, at a price of $6.00 per share. The Company raised $32.1 million in net proceeds, after deducting expenses of $2.2 million. In March 2016, the Company entered into a credit agreement and drew down the initial $25.0 million term loan of which, $5.0 million was used to pay the outstanding balance of the Company’s existing long-term debt as discussed in Note 8 - Debt. In April 2015, the Company issued and sold 4,907,975 shares of its common stock in a private placement, at a price of $8.15 per share. The Company received $37.3 million in net proceeds, after deducting expenses of $2.7 million. If the Company is not able to generate revenue to finance its cash requirements, the Company will need to finance future cash needs primarily through public or private equity offerings, debt financings, borrowings or strategic collaborations or licensing arrangements. If the Company is not able to secure additional funding when needed, on acceptable terms, it may have to delay, reduce the scope of or eliminate one or more research and development programs or selling and marketing initiatives which may have a material adverse effect on the Company's business, results of operations, financial condition and/or its ability to fund its scheduled obligations on a timely basis or at all. Concentrations of Credit Risk and Other Risks and Uncertainties The majority of the Company's cash and cash equivalents are deposited with one major financial institution in the United States. Deposits in this institution may exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on its deposits of cash and cash equivalents. Several of the components of the Company's sample collection kit and test reagents are obtained from single-source suppliers. If these single-source suppliers fail to satisfy the Company's requirements on a timely basis, it could suffer delays in being able to deliver its diagnostic solutions, a possible loss of revenue, or incur higher costs, any of which could adversely affect its operating results. The Company is also subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers' financial condition and generally does not require collateral. Through December 31, 2016, all of the Company's revenue have been derived from the sale of Afirma. To date, Afirma has been delivered primarily to physicians in the United States. The Company's third-party payers in excess of 10% of revenue and their related revenue as a percentage of total revenue were as follows:
The Company's significant third-party payers and their related accounts receivable balance as a percentage of total accounts receivable were as follows:
No other third-party payer represented more than 10% of the Company's accounts receivable balances as of those dates. Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist of amounts invested in a money market account primarily consisting of U.S. Treasury reserves. Restricted Cash The Company had deposits of $120,000 and $118,000 as of December 31, 2016 and December 31, 2015, respectively, included in current assets. The deposit at December 31, 2016 was a pledge for corporate credit cards and the deposit at December 31, 2015 was restricted from withdrawal and held by a bank in the form of collateral for irrevocable standby letters of credit held as security for the lease of the Company's former headquarters and laboratory facilities in South San Francisco that expired March 31, 2016. The Company also had deposits of $603,000 included in long-term assets as of December 31, 2016 and December 31, 2015, restricted from withdrawal and held by a bank in the form of collateral for an irrevocable standby letter of credit held as security for the lease of the Company's South San Francisco facility signed in April 2015. Supplies Inventory Supplies inventory consists of test reagents and other consumables primarily used in the sample collection kits and in cytopathology and GEC test processing and are valued at the lower of cost or market value. Cost is determined using actual costs on a first-in, first-out basis. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three and five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the lease. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the statements of operations and comprehensive loss in the period realized. Business Combination The Company accounts for acquisitions using the acquisition method of accounting which requires the recognition of tangible and identifiable intangible assets acquired and liabilities assumed at their estimated fair values as of the business combination date. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. Transaction costs are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company's operating results from the date of acquisition. Finite-lived Intangible Assets Finite-lived intangible assets relate to intangible assets reclassified from indefinite-lived intangible assets, following the launch of Percepta in April 2015. The Company amortizes finite-lived intangible assets using the straight-line method over their estimated useful life. The estimated useful life of 15 years was used for the intangible asset related to the Percepta test based on management's estimate of product life, product life of other diagnostic tests and patent life. The Company tests this finite-lived intangible asset for impairment when events or circumstances indicate a reduction in the fair value below its carrying amount. There was no impairment for either of the years ended December 31, 2016 or 2015. Goodwill Goodwill, derived from the Company's acquisition of Allegro Diagnostics Corp. (Allegro), is reviewed for impairment on an annual basis or more frequently if events or circumstances indicate that it may be impaired. The Company's goodwill evaluation is based on both qualitative and quantitative assessments regarding the fair value of goodwill relative to its carrying value. The Company has determined that it operates in a single segment and has a single reporting unit associated with the development and commercialization of diagnostic products. In the event the Company determines that it is more likely than not the carrying value of the reporting unit is higher than its fair value, quantitative testing is performed comparing recorded values to estimated fair values. If impairment is present, the impairment loss is measured as the excess of the recorded goodwill over its implied fair value. The Company performs its annual evaluation of goodwill during the fourth quarter of each fiscal year. There was no impairment for the years ended December 31, 2016, 2015 or 2014. Fair Value of Financial Instruments The carrying amounts of certain financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Revenue Recognition The Company recognizes revenue in accordance with the provision of ASC 954-605, Health Care Entities—Revenue Recognition ("ASC 954"). The Company's revenue is generated from the provision of diagnostic services. The service is completed upon the delivery of test results to the prescribing physician, at which time the Company bills for the service. The Company recognizes revenue related to billings for tests delivered on an accrual basis when amounts that will ultimately be realized can be estimated. The estimates of amounts that will ultimately be realized requires significant judgment by management. Until a contract has been negotiated with a commercial payer or governmental program, the Company's tests may or may not be covered by these entities' existing reimbursement policies. In addition, patients do not enter into direct agreements with the Company that commit them to pay any portion of the cost of the tests in the event that their insurance declines to reimburse the Company. The Company may bill the patient directly for these amounts in the form of co-payments and co-insurance in accordance with their insurance carrier and health plans. In the absence of contracted reimbursement or the ability to estimate the amount that will ultimately be realized for the Company's services, revenue is recognized on the cash basis. Revenue recognized for the years ended December 31, 2016, 2015 and 2014 was as follows (in thousands of dollars):
Prior to July 1, 2016, the Company believes it did not have a consistent enough payment history to accrue a significant portion of its Afirma tests delivered to customers and, as noted above, recognized revenue on the cash basis for such tests. The Company has been analyzing the amounts received for tests performed since commercialization and during the quarter ended September 30, 2016, sufficient information developed to support a reasonable estimate of the amount of revenue to accrue upon test delivery for a number of payers that had been previously recognized on the cash basis. In determining the amount to accrue for a particular test, the Company considered factors such as payer coverage, whether there is a reimbursement contract between the payer and the Company, timeliness of payment, payment as a percentage of agreed upon rate (if applicable), amount paid per test and any current developments or changes that could impact reimbursement. As a result, the Company recognized $3.5 million of incremental revenue during the quarter ended September 30, 2016 upon test delivery that previously would not have been recognized until cash was received. Tests performed prior to July 1, 2016 that did not meet the Company’s accrual criteria at the time of delivery will continue to be recognized as revenue on the cash basis. However, the Company expects the amount of revenue to be recognized on the cash basis for Afirma to decline in future periods since subsequent to September 2016 relatively few tests will be performed for which a reasonable estimate of revenue to accrue will not have been made at the time of delivery. The incremental accrued revenue and decrease in loss from operations as a result of additional payers meeting the Company's accrual revenue recognition criteria was $4.1 million, $0.7 million and $0.8 million for tests delivered in the years ended December 31, 2016, 2015 and 2014, respectively. The incremental accrued revenue decreased loss per common share by $0.13, $0.03 and $0.04 for the years ended December 31, 2016, 2015 and 2014, respectively. Cost of Revenue Cost of revenue is expensed as incurred and includes material and service costs, cytopathology testing services performed by a third-party pathology group, stock-based compensation expense, direct labor costs, equipment and infrastructure expenses associated with testing samples, shipping charges to transport samples, and allocated overhead including rent, information technology, equipment depreciation and utilities. Research and Development Research and development expenses are charged to operations as incurred. Research and development expenses include payroll and personnel-related expenses, stock-based compensation expense, prototype materials, laboratory supplies, consulting costs, costs associated with setting up and conducting clinical studies at domestic and international sites, and allocated overhead including rent, information technology, equipment depreciation and utilities. Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. The Company's assessment of an uncertain tax position begins with the initial determination of the position's sustainability and is measured at the largest amount of benefit that is more-likely-than-not of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit may change as new information becomes available. Stock-based Compensation Stock-based compensation expense for equity instruments issued to employees is measured based on the grant-date fair value of the awards. The fair value of each employee stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The Company recognizes compensation costs on a straight-line basis for all employee stock-based compensation awards that are expected to vest over the requisite service period of the awards, which is generally the awards' vesting period. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Equity awards issued to non-employees are valued using the Black-Scholes option-pricing model and are subject to re-measurement as the underlying equity awards vest. Net Loss per Common Share Basic net loss per common share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. Potentially dilutive securities consisting of options to purchase common stock, restricted stock units and shares subject to purchase under our employee stock purchase plan are considered to be common stock equivalents and were excluded from the calculation of diluted net loss per common share because their effect would be anti-dilutive for all periods presented. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company will adopt the new revenue standard as of January 1, 2018 using the modified retrospective method. The Company has also completed its assessment of the first step which included identifying the Company’s customers. The Company is currently assessing the remainder of the steps and is in the process of evaluating the effect of adoption of the new revenue standard on its financial statements. In August 2014, FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments: (1) provide a definition of the term substantial doubt; (2) require an evaluation every reporting period including interim periods; (3) provide principles for considering the mitigating effect of management’s plans; (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans; (5) require an express statement and other disclosures when substantial doubt is not alleviated; and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 will be effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016 with early adoption permitted. ASU 2014-15 is effective for the Company beginning with its annual report for 2016 and interim periods thereafter. The Company has adopted this ASU and there is no impact on its financial statements. In April 2015, the FASB issued ASU No. 2015-3, Simplifying the Presentation of Debt Issuance Costs, to require debt issuance costs to be presented as an offset against debt outstanding. The update does not change current guidance on the recognition and measurement of debt issuance costs. The ASU is effective for interim and annual periods beginning after December 15, 2015. Adoption of the ASU is retrospective to each prior period presented. The Company has adopted this ASU and the retrospective adjustment of the prior period presentation was not material. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. The ASU requires that deferred tax assets and liabilities be classified as noncurrent in the statement of financial position, thereby simplifying the guidance that required an entity to separate deferred assets and liabilities into current and noncurrent amounts, and was effective for the Company beginning in the first quarter of 2016. The Company early-adopted this ASU as of December 31, 2015 and the impact of adoption on its statement of financial position was not material. In February 2016, the FASB issued ASU No. 2016-2, Leases. This ASU is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The ASU will be effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the potential effect of this standard on its financial statements. In March 2016, the FASB issued ASU 2016-9, Compensation - Stock Compensation, related to the tax effects of share-based awards. The ASU requires that all the tax effects of share-based awards be recorded through the income statement, thereby simplifying the current guidance that requires excess tax benefits and certain excess tax deficiencies to be recorded in equity. The ASU is effective for interim and annual periods beginning after December 15, 2016. The Company does not anticipate that the adoption of this ASU will have a significant impact on its financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash. This ASU requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU will be effective for interim and annual periods beginning after December 15, 2017. The Company does not anticipate that the adoption of this ASU will have a significant impact on its financial statements. |
Net Loss Per Share |
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Net Loss Per Share | Net Loss Per Share The following outstanding common stock equivalents have been excluded from diluted net loss per common share for the years ended December 31, 2016, 2015 and 2014 because their inclusion would be anti-dilutive:
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Business Combination |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination | Business Combination In September 2014, the Company acquired Allegro via a merger with Full Moon Acquisition, Inc., a wholly-owned subsidiary of the Company focused on the development of genomic tests to improve the preoperative diagnosis of lung cancer. Allegro merged with Full Moon, (the "Merger"), with Allegro surviving the Merger as a wholly-owned subsidiary of the Company. The subsidiary was dissolved in June 2015. At the effective time of the Merger, each share of the common stock of Full Moon issued and outstanding immediately prior to the effective time of the Merger was automatically converted into one share of common stock of Allegro and represented the only outstanding common stock of Allegro at the effective time of the Merger; all previously issued and outstanding shares of common stock of Allegro were canceled. The Series A preferred stock of Allegro issued and outstanding immediately prior to the effective time of the Merger was canceled and automatically converted into the right to receive a total of 964,377 shares of the Company's common stock and $2.7 million in cash. Outstanding indebtedness of Allegro totaling $4.3 million was settled in cash by the Company on the effective date of the Merger. All outstanding stock options under Allegro's equity incentive plan were canceled. The acquisition of Allegro accelerated the Company's entry into the pulmonology diagnostics market. Allegro's lung cancer test is designed to help physicians determine which patients with lung nodules who have had an inconclusive bronchoscopy result are at low risk for cancer and can thus be safely monitored with CT scans rather than undergoing invasive procedures. The Company launched the Percepta test in April 2015. The Merger was accounted for using the acquisition method of accounting with the Company treated as the accounting acquirer. The purchase price was allocated based on the estimated fair value of the assets acquired and liabilities assumed at the date of the acquisition. The Company incurred approximately $0.5 million in acquisition-related costs related to the Merger, which primarily consisted of legal, accounting and valuation-related expenses. In addition, the Company incurred $1.2 million related to transaction bonuses and severance payments to former Allegro employees associated with the Merger. These expenses were recorded in general and administrative expense in the accompanying statements of operations and comprehensive loss. The acquisition consideration was comprised of (in thousands of dollars):
The common stock consideration of $10.1 million was determined based on the closing price of the Company's common stock on September 16, 2014 ($10.45 per share). The fair value of the assets acquired and liabilities assumed at the closing date of the Merger are summarized below (in thousands of dollars):
The fair value of IPR&D was determined using the multi-period excess earnings method of the income approach, which estimates the economic benefits of the IPR&D over multiple time periods by identifying the cash flows associated with the use of the asset, based on forecasts prepared by management, and deducting a periodic charge reflecting a fair return for the use of contributory assets. The forecasted cash flows were discounted based on a discount rate of 18.5%. The discount rate represents the Company's weighted average return on assets and was benchmarked against the internal rate of return and cost of capital of guideline publicly traded companies. The fair value of the IPR&D was capitalized as of the closing date of the Merger and was accounted for as an indefinite-lived intangible asset prior to the beginning of amortization. Amortization of the IPR&D began in April 2015 when research and development activities were deemed to be completed and is recorded on a straight-line basis. The amortization period of the IPR&D is over its estimated useful life of 15 years after taking into consideration expected use of the asset, legal or regulatory provisions that may limit or extend the life of the asset, as well as the effects of obsolescence and other economic factors. Amortization of $1.1 million and $0.8 million was recorded for the years ended December 31, 2016 and 2015, respectively, and accumulated amortization was $1.9 million and $0.8 million as of December 31, 2016 and 2015, respectively. Amortization expense will be approximately $1.1 million per year. Goodwill, which represents the purchase price in excess of the fair value of net assets acquired, is not expected to be deductible for income tax purposes. This goodwill is reflective of the value derived from the acceleration of the Company's entry into the pulmonology market. Pro Forma Financial Information (Unaudited) The following pro forma financial information is based on the historical financial statements of the Company and presents the Company's results as if the Merger had occurred as of January 1, 2013 (in thousands of dollars):
The pro forma results present the combined historical results of operations with adjustments to reflect one-time charges including:
The pro forma information presented does not purport to present what the actual results would have been had the Merger actually occurred on January 1, 2013, nor is the information intended to project results for any future period. |
Balance Sheet Components |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Balance Sheet Components Property and Equipment, Net Property and equipment consisted of the following (in thousands of dollars):
Depreciation and amortization expense was $2.4 million, $1.5 million and $1.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Equipment under a capital lease was purchased in December 2016 but was not available for use at December 31, 2016, and as such, there was no amortization expense for equipment under capital lease in 2016. Accrued Liabilities Accrued liabilities consisted of the following (in thousands of dollars):
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The Company records its financial assets and liabilities at fair value. The carrying amounts of certain financial instruments of the Company, including cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The carrying value of the Company's debt approximates its fair value because the interest rate approximates market rates that the Company could obtain for debt with similar terms. The estimated fair value of the Company’s debt is estimated using the net present value of the payments, discounted at an interest rate that is consistent with market interest rates, which is a Level II input. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:
The fair value of the Company's financial assets, which consist only of money market funds, was $58.7 million and $37.5 million as of December 31, 2016 and 2015 respectively, and are Level I assets as described above. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | ommitments and Contingencies Operating Leases The Company leases its headquarters and laboratory facilities in South San Francisco, California under a non-cancelable lease agreement for approximately 59,000 square feet. The lease began in June 2015 and ends in March 2026 and contains extension of lease term and expansion options. Certain expansion options were waived by the Company on February 8, 2017 in exchange for consideration of $500,000. The Company had deposits of $603,000 included in long-term assets as of December 31, 2016 and 2015, restricted from withdrawal and held by a bank in the form of collateral for an irrevocable standby letter of credit held as security for the lease of the South San Francisco facility. The Company also leases laboratory and office space in Austin, Texas under a lease that expires on July 31, 2018. The Company provided a cash security deposit of $75,000, which is included in other assets in the Company's balance sheets as of December 31, 2016 and 2015. Future minimum lease payments under non-cancelable operating leases as of December 31, 2016 are as follows (in thousands of dollars):
The Company recognizes rent expense on a straight-line basis over the non-cancelable lease period. Rent expense was $2.0 million, $1.9 million and $852,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Capital Lease The Company entered into a capital lease in December 2016 for $1.2 million of equipment and the associated equipment has not been placed into service as of December 31, 2016. Amortization of the equipment will commence when the equipment is placed into service and ready for its intended use. The Company paid an upfront amount of $330,000 and the present value of the total future minimum lease payments of $874,000, which is a non-cash investing transaction for 2016, comprises a short-term portion of $275,000, included in accrued liabilities, and a long-term portion of $599,000, included in capital lease liability, on the Company's balance sheet as of December 31, 2016. As of December 31, 2016, the annual future minimum lease payments will be $317,000 for each of 2017, 2018 and 2019. Supplies Purchase Commitments The Company had non-cancelable purchase commitments with suppliers to purchase a minimum quantity of supplies for approximately $1.7 million at December 31, 2016. Contingencies From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. The Company believes there is no litigation pending that could have, individually or in the aggregate, a material adverse effect on its financial position, results of operations or cash flows. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Credit Agreement In March 2016, the Company entered into a credit agreement (the “Credit Agreement”) with Visium Healthcare Partners, LP (“Visium”). Under the Credit Agreement, two term loans are available to the Company with an aggregate principal amount of up to $40.0 million. The Company drew down the initial $25.0 million term loan (the “Initial Term Loan”) on March 30, 2016, of which $5.0 million was used to pay the outstanding balance of the Company’s existing long-term debt, which was cancelled at that date. On or prior to June 30, 2017, the Company may request the second term loan of up to $15.0 million (the “Second Term Loan” and together with the Initial Term Loan, the “Term Loans”). The Term Loans mature on March 31, 2022. The Term Loans bear interest at a fixed rate of 12.0% per annum, payable quarterly at the end of each March, June, September and December. No principal payments will be due during an interest-only period, commencing on the funding date for the Initial Term Loan (the “Initial Borrowing Date”) and continuing through and including March 31, 2020. The Company is obligated to repay the outstanding principal amounts under the Term Loans in eight equal installments during the final two years under the Credit Agreement. For any quarterly interest payment through and including the 16th interest payment date after the Initial Borrowing Date, so long as no event of default has occurred and is then continuing, the Company may elect to pay interest in cash on the outstanding principal amounts of the Term Loans at a fixed rate of 9.0%, with the remaining 3.0% of the 12.0% interest paid-in-kind by adding such paid-in-kind interest to the outstanding principal amounts of the Term Loans. The Company elected to pay interest in-kind for the quarters ended June 30, 2016 and September 30, 2016 and has recorded $385,000 of paid-in-kind interest through December 31, 2016. The Company may prepay the outstanding principal amount under the Term Loans subject to a minimum of $5.0 million of principal amount or a whole multiple of $1 million in excess thereof plus accrued and unpaid interest and a prepayment premium. The prepayment premium will be assessed on the principal amount repaid and will equal (i) 24.0% less the aggregate amount of all interest payments in cash, if the prepayment is made on or prior to March 31, 2018, (ii) 4.0%, if the prepayment is made after March 31, 2018 and on or prior to March 31, 2019, (iii) 2.0%, if the prepayment is made after March 31, 2019 and on or prior to March 31, 2020, and (iv) 1.0%, if the prepayment is made after March 31, 2020 and on or prior to March 31, 2021. After March 31, 2021 there is no prepayment premium. The Company’s obligations under the Credit Agreement are secured by a security interest in substantially all of its assets. The Credit Agreement contains customary representations, warranties and events of default, as well as affirmative and negative covenants. The negative covenants include, among other provisions, covenants that limit or restrict the Company’s ability to incur liens, make investments, incur indebtedness, merge with or acquire other entities, dispose of assets, make dividends or other distributions to holders of its equity interests, engage in any material new line of business or enter into certain transactions with affiliates, in each case subject to certain exceptions. To the extent the Company forms or acquires certain subsidiaries domiciled in the United States, those subsidiaries are required to be guarantors of the Company’s obligations under the Credit Agreement. As of December 31, 2016, the Company was in compliance with the loan covenants. Concurrent with entering into the Credit Agreement, the Company entered into an agreement with Visium pursuant to which, for a period of one year following the Initial Borrowing Date, Visium has the right to participate in certain future equity financings of the Company in an amount of up to $5.0 million with no preferential terms. As of December 31, 2016, the net debt obligation for borrowings made under the Credit Agreement was as follows (in thousands of dollars):
Future principal payments under the Credit Agreement are as follows (in thousands of dollars):
Loan and Security Agreement In June 2013, the Company entered into a loan and security agreement ("Original Loan") with a financial institution. The Original Loan provided for term loans of up to $10.0 million in aggregate. The Company drew down $5.0 million in funds under the agreement in June 2013, and did not draw the remaining $5.0 million on or before the expiration date of March 31, 2014. The Company was required to repay the outstanding principal in 30 equal installments beginning 18 months after the date of the borrowing and was due in full in June 2017. The Original Loan had an interest rate of 6.06% per annum, carried prepayment penalties of 2.25% and 1.50% for prepayment within one and two years, respectively, and 0.75% thereafter. In December 2014, the Company amended certain terms and conditions of the Original Loan ("Amended Loan"). The Amended Loan provided for term loans of up to $15.0 million in aggregate, in three tranches of $5.0 million each. The Company borrowed $5.0 million under the first tranche in December 2014 and used the funds for repayment of the $5.0 million in principal outstanding under the Original Loan, in a cashless transaction. In addition, the Company paid the accrued but unpaid interest of $14,000 due on the Original Loan and the related end-of-term payment of $110,000. The Amended Loan waived the prepayment premium of $75,000 under the Original Loan and reduced the end-of-term payment of $225,000 under the Original Loan to $110,000. In November 2015, the Company further amended the loan to extend the availability of the second $5.0 million tranche under the Amended Loan through June 30, 2016 from December 31, 2015 originally. The carrying value of the debt approximated its fair value because the interest rate approximated market rates that the Company could have obtained for debt with similar terms. Under the Amended Loan borrowing, the Company was required to repay the outstanding principal in 24 equal installments beginning 24 months after the date of the borrowing and was due in full in December 2018. The first tranche of the Amended Loan bore interest at a rate of 5.00% per annum. The Amended Loan carried prepayment penalties of 2.00% and 1.00% for prepayments within one and two years, respectively, and no prepayment penalty thereafter. In connection with the Amended Loan, the Company paid approximately $45,000 in third-party fees. The Amended Loan resulted in a debt modification under ASC 470-50, Modifications and Extinguishments, as the change in present value of the remaining cash flows associated with the Original Loan and Amended Loan was not substantial. Upon execution of the Original Loan, the Company issued the financial institution a warrant to purchase shares of Series C convertible preferred stock at $7.56 per share. At the time of issuance, the aggregate fair value of the warrant for the 24,801 shares exercisable under the warrant was $175,000. The fair value of the warrant was deducted from total proceeds, resulting in a debt discount to be amortized to interest expense over 48 months, through the maturity date of the Original Loan, using the effective interest rate method, and was recorded as a preferred stock warrant liability. The warrant was converted to a warrant to purchase the Company's common stock upon the completion of the Company's IPO. The financial institution exercised the warrant with respect to 24,801 shares through a cashless exercise in March 2014, resulting in the issuance of 13,739 shares of the Company's common stock. Borrowings under the 2013 Loan Agreement totaled $5.0 million, which was outstanding at January 1, 2015 and into 2016 until such amount was repaid upon the Company entering into the Credit Agreement discussed above. As of December 31, 2015, the net debt obligation under the Amended Loan was as follows (in thousands of dollars):
Interest Expense Interest expense was as follows (in thousands of dollars):
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Stockholders' Equity (Deficit) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity (Deficit) | Stockholders' Equity Common Stock The Company's Restated Certificate of Incorporation authorizes the Company to issue 125,000,000 shares of common stock with a par value of $0.001 per share. The holder of each share of common stock shall have one vote for each share of stock. The common stockholders are also entitled to receive dividends whenever funds and assets are legally available and when declared by the Board of Directors, subject to the prior rights of holders of all series of convertible preferred stock outstanding. No dividends have been declared as of December 31, 2016. As of December 31, 2016 and 2015, the Company had reserved shares of common stock for issuance as follows:
In November 2016, the Company completed a public offering of 5,723,300 shares of its common stock at a price of $6.00 per share. Gross proceeds to the Company were $34.3 million and the Company raised net proceeds of $32.1 million, after deducting underwriting discounts and commissions and other expenses of $2.2 million. At December 31, 2016, the Company had $200,000 receivable from the underwriters for reimbursement of other expenses, which is included in prepaid expenses and other current assets in the Company's balance sheet. In April 2015, the Company completed a private placement of 4,907,975 shares of its common stock to certain accredited investors at a purchase price of $8.15 per share. Gross proceeds to the Company were $40.0 million and the Company received $37.3 million in net proceeds, after deducting placement agent fees and other expenses of $2.7 million. |
Stock Incentive Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plans | Stock Incentive Plans Stock Plans In February 2008, the Company adopted the 2008 Stock Plan (the "2008 Plan"). The 2008 Plan provides for the granting of options to purchase common stock and common stock to employees, directors and consultants of the Company. The Company may grant incentive stock options ("ISOs"), non-statutory stock options ("NSOs") or restricted stock under the 2008 Plan. ISOs may only be granted to Company employees (including directors who are also considered employees). NSOs and restricted stock may be granted to Company employees, directors and consultants. Options may be granted for terms of up to ten years from the date of grant, as determined by the Board of Directors, provided however, that with respect to an ISO granted to a person who owns stock representing more than 10% of the voting power of all classes of stock of the Company, the term shall be for no more than five years from the date of grant. The exercise price of options granted must be at a price no less than 100% of the estimated fair value of the shares on the date of grant, as determined by the Board of Directors, provided however, that with respect to an ISO granted to an employee who at the time of grant of such option owns stock representing more than 10% of the voting power of all classes of stock of the Company, the exercise price shall not be less than 110% of the estimated fair value of the shares on the date of grant. In October 2013, the Company adopted the 2013 Stock Incentive Plan (the "2013 Plan"). The 2013 Plan was subsequently approved by the Company's stockholders and became effective on November 4, 2013, immediately before the closing of the Company's IPO. Following the effectiveness of the 2013 Plan, no additional options will be granted under the 2008 Plan. An aggregate of 1,700,000 shares were initially reserved for issuance under the 2013 Plan. In addition, to the extent that any awards outstanding or subject to vesting restrictions under the 2008 Plan are subsequently forfeited or terminated for any reason before being exercised or settled, the shares of common stock reserved for issuance pursuant to such awards as of the closing of the IPO will become available for issuance under the 2013 Plan. The remaining shares available for grant under the 2008 Plan became available for issuance under the 2013 Plan upon the closing of the IPO. On the first day of each year from 2014 to 2023, the 2013 Plan authorizes an annual increase of the lesser of 4% of outstanding shares on the last day of the immediately preceding fiscal year or a lesser amount as determined by the Company's Board of Directors. As of December 31, 2016, 887,724 shares were available for future issuance under the 2013 Plan. Pursuant to the 2013 Plan, stock options, restricted shares, stock units, including restricted stock units and stock appreciation rights may be granted to employees, consultants, and outside directors of the Company. Options granted may be either ISOs or NSOs. Stock options are governed by stock option agreements between the Company and recipients of stock options. ISOs and NSOs may be granted under the 2013 Plan at an exercise price of not less than 100% of the fair market value of the common stock on the date of grant, determined by the Compensation Committee of the Board of Directors. Options become exercisable and expire as determined by the Compensation Committee, provided that the term of ISOs may not exceed ten years from the date of grant. Stock option agreements may provide for accelerated exercisability in the event of an optionee's death, disability, or retirement or other events. Stock units are governed by stock unit agreements between the Company and recipients of stock units. Stock units may be granted under the 2013 Plan and the number of stock units awarded are determined by the Compensation Committee of the Board of Directors. Stock units vest and expire as determined by the Compensation Committee. Stock unit agreements may provide for accelerated vesting in the event of a stock unit holder's death, disability, or retirement or other events. Any outside director who was not previously an employee and who first joins the Company's Board of Directors on or after the effective date of the 2013 Plan will be automatically granted an initial NSO to purchase 35,000 shares of common stock upon first becoming a member of the Board of Directors. Twenty-five percent of the shares subject to the initial option will vest and become exercisable on the first anniversary of the date of grant. The balance (i.e., the remaining 75%) will vest and become exercisable over three years in equal monthly installments. On the first business day after each regularly scheduled annual meeting of stockholders, each outside director who was not elected to the Board of Directors for the first time at such meeting and who will continue serving as a member of the Board of Directors thereafter will be automatically granted an option to purchase 10,000 shares of common stock, provided that the outside director has served on the Board of Directors for at least six months. Each annual option will vest and become exercisable on the first anniversary of the date of grant, or immediately prior to the next regular annual meeting of the Company's stockholders following the date of grant if the meeting occurs prior to the first anniversary date. The options granted to outside directors will have a per share exercise price equal to 100% of the fair market value of the underlying shares on the date of grant and will become fully vested in the event of a change of control. In addition, such options will terminate on the earlier of (i) the day before the 10th anniversary of the date of grant or (ii) the date 12 months after the termination of the outside director's service for any reason. The following table summarizes activity under the Company's stock incentive plans (aggregate intrinsic value in thousands):
The aggregate intrinsic value was calculated as the difference between the exercise price of the options to purchase common stock and the fair market value of the Company's common stock, which was $7.74 and $7.20 per share as of December 31, 2016 and 2015, respectively. The weighted average fair value of options to purchase common stock granted was $3.35, $5.12 and $9.08 for the years ended December 31, 2016, 2015 and 2014, respectively. The aggregate estimated grant date fair value of employee options to purchase common stock vested during the years ended December 31, 2016, 2015 and 2014 was $5.8 million, $5.3 million and $1.6 million, respectively. The intrinsic value of stock options exercised was $0.9 million, $1.8 million and $3.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. The weighted average fair value of restricted stock units granted was $7.47 for the year ended December 31, 2016. Restricted stock units were first issued in December 2016 and there were no restricted stock units vested for the year ended December 31, 2016. Employee Stock Purchase Plan In May 2015, the Company's stockholders approved the Company's Employee Stock Purchase Plan ("ESPP"). The ESPP provides eligible employees with an opportunity to purchase common stock from the Company and to pay for their purchases through payroll deductions. The ESPP will be implemented through a series of offerings of purchase rights to eligible employees. Under the ESPP, the Compensation Committee of the Company's Board of Directors may specify offerings with a duration of not more than 12 months, and may specify shorter purchase periods within each offering. During each purchase period, payroll deductions will accumulate, without interest. On the last day of the purchase period, accumulated payroll deductions will be used to purchase common stock for employees participating in the offering. The purchase price will be specified pursuant to the offering, but cannot, under the terms of the ESPP, be less than 85% of the fair market value per share of the Company's common stock on either the offering date or on the purchase date, whichever is less. The Company's Board of Directors has determined that the purchase periods initially shall have a duration of six months, that the first purchase period began on August 3, 2015 and that the purchase price will be 85% of the fair market value per share of the Company's common stock on either the offering date or the purchase date, whichever is less. The length of the purchase period applicable to U.S. employees and the purchase price may not be changed without the approval of the independent members of the Compensation Committee of the Company's Board of Directors. The Compensation Committee has determined that if the fair market value of a share of the Company's common stock on any purchase date within a particular offering period is less than the fair market value on the start date of that offering period, then the offering period will automatically terminate and the employees in that offering period will automatically be transferred and enrolled in a new offering period which will begin on the next day following such purchase date. No employee is permitted to accrue, under the ESPP, a right to purchase stock of the Company having a value in excess of $25,000 of the fair market value of such stock (determined at the time the right is granted) for each calendar year. Stock-based Compensation The following table summarizes stock-based compensation expense related to stock options, restricted stock units and the ESPP for the years ended December 31, 2016, 2015 and 2014, and are included in the statements of operations and comprehensive loss as follows (in thousands of dollars):
As of December 31, 2016, the Company had $9.3 million of unrecognized compensation expense related to unvested stock options and restricted stock units, which is expected to be recognized over an estimated weighted-average period of 2.50 years. The estimated grant-date fair value of employee stock options was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
The estimated fair value of non-employee stock options was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
The estimated grant date fair value of the ESPP shares was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
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Genzyme Co-promotion Agreement |
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Dec. 31, 2016 | |
Genzyme Co-promotion Agreement | |
Genzyme Co-promotion Agreement | Genzyme Co-Promotion Agreement In January 2012, the Company and Genzyme Corporation ("Genzyme") executed a co-promotion agreement for the co-exclusive rights and license to promote and market the Company's Afirma thyroid diagnostic solution in the United States and in 40 named countries. In exchange, the Company received a $10.0 million upfront co-promotion fee from Genzyme in February 2012. Under the terms of the agreement, Genzyme received a percentage of U.S. cash receipts that the Company has received related to Afirma as co-promotion fees. The percentage was 50% in 2012, 40% from January 2013 through February 2014, and 32% beginning in February 2014. In November 2014, the Company signed an Amended and Restated U.S. Co-Promotion Agreement ("Amended Agreement") with Genzyme. Under the Amended Agreement, the co-promotion fees Genzyme receives as a percentage of U.S. cash receipts were reduced from 32% to 15% beginning January 1, 2015. Through August 11, 2014, the Company amortized the $10.0 million upfront co-promotion fee on a straight-line basis over a four-year period, which was management's estimate of the life of the agreement, in part because after that period either party could have terminated the agreement without penalty. Effective August 12, 2014, the Company extended the amortization period from January 2016 to June 2016, the modified earliest period either party could terminate the agreement without penalty. The Company accounted for the change in accounting estimate prospectively. The agreement was terminable by either party with six months prior notice, however, under the Amended Agreement, neither party could terminate the agreement for convenience prior to June 30, 2016. The agreement with Genzyme was to expire in 2027. On March 9, 2016, the Company gave Genzyme notice of termination of the Amended Agreement effective September 9, 2016 and the amortization of the upfront co-promotion fee was further extended to that date. The extension of the amortization period had no impact on the Company's 2016 financial statements on an annual basis. In February 2015, the Company entered into an Ex-U.S. Co-promotion Agreement with Genzyme for the promotion of the Afirma GEC test with exclusivity in five countries outside the United States initially and in other countries agreed to from time to time. The agreement commenced on January 1, 2015 and continues until December 31, 2019, with extension of the agreement possible upon agreement of the parties. Country-specific terms have been established under this agreement for Brazil and Singapore and a right of first negotiation has been established for Canada, the Netherlands and Italy. The Company pays Genzyme 25% of net revenue from the sale of the Afirma GEC test in Brazil and Singapore over a five-year period commencing January 1, 2015. These payments have been immaterial for all periods presented. Beginning in the fourth year of the agreement, if the Company terminates the agreement for convenience, the Company may be required to pay a termination fee contingent on the number of GEC billable results generated during the 12 months immediately prior to the notice of termination. The Company incurred $6.1 million, $7.3 million and $12.0 million in co-promotion expense, excluding the amortization of the upfront co-promotion fee, in the years ended December 31, 2016, 2015 and 2014, respectively, which is included in selling and marketing expenses in the statements of operations and comprehensive loss. The Company had no obligation to Genzyme at December 31, 2016 compared to $2.1 million at December 31, 2015, which is included in accrued liabilities on the Company's balance sheets. The Company amortized $0.9 million, $1.9 million and $2.3 million of the $10.0 million upfront co-promotion fee in the years ended December 31, 2016, 2015 and 2014, respectively, which is reflected as a reduction to selling and marketing expenses in the statements of operations and comprehensive loss. |
Thyroid Cytopathology Partners |
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Dec. 31, 2016 | |
Thyroid Cytopathology Partners | |
Thyroid Cytopathology Partners | Thyroid Cytopathology Partners In 2010, the Company entered into an arrangement with Pathology Resource Consultants, P.A. ("PRC") to set up and manage a specialized pathology practice to provide testing services to the Company. There is no direct monetary compensation from the Company to PRC as a result of this arrangement. The Company's service agreement is with the specialized pathology practice, Thyroid Cytopathology Partners, ("TCP"), and was effective through December 31, 2015, and thereafter automatically renews every year unless either party provides notice of intent not to renew at least 12 months prior to the end of the then-current term. Under the service agreement, the Company pays TCP based on a fixed price per test schedule, which is reviewed periodically for changes in market pricing. Subsequent to December 2012, an amendment to the service agreement allows TCP to sublease a portion of the Company's facility in Austin, Texas. The Company does not have an ownership interest in or provide any form of financial or other support to TCP. The Company has concluded that TCP represents a variable interest entity and that the Company is not the primary beneficiary as it does not have the ability to direct the activities that most significantly impact TCP's economic performance. Therefore, the Company does not consolidate TCP. All amounts paid to TCP under the service agreement are expensed as incurred and included in cost of revenue in the statements of operations and comprehensive loss. The Company incurred $5.1 million, $4.7 million and $4.0 million for the years ended December 31, 2016, 2015 and 2014, respectively, in cytopathology testing and evaluation services expenses with TCP. The Company's outstanding obligations to TCP for cytopathology testing services were $426,000 and $820,000 as of December 31, 2016 and 2015, respectively, and are included in accounts payable in the Company's balance sheets. TCP reimburses the Company for TCP's proportionate share of the Company's rent and related operating expenses for the leased facility. TCP's portion of rent and related operating expenses for the shared space at the Austin, Texas facility was $103,000, $90,000 and $86,000 for the years ended December 31, 2016, 2015 and 2014 and is included other income, net in the Company's statements of operations and comprehensive loss. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company generated a pretax loss of $31.4 million, $33.7 million and $29.4 million in the United States for the years ended December 31, 2016, 2015 and 2014, respectively. Since inception, the Company has not generated any pretax income or loss outside of the United States. The Company recorded no provision for income taxes during the years ended December 31, 2016, 2015 or 2014. The Company follows FASB ASC No. 740, Income Taxes for the Computation and Presentation of its Tax Provision. The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company's tax expense for the periods presented (in thousands of dollars):
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows (in thousands of dollars):
In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, related to balance sheet classification of deferred taxes. The ASU requires that deferred tax assets and liabilities be classified as noncurrent in the statement of financial position, thereby simplifying the guidance that required an entity to separate deferred assets and liabilities into current and noncurrent amounts, and was effective for the Company beginning in the first quarter of 2016. The Company early-adopted the ASU as of December 31, 2015 and its statement of financial position as of this date reflects the revised classification of current deferred tax assets and liabilities as noncurrent. The Company has established a full valuation allowance against its net deferred tax assets due to the uncertainty surrounding realization of such assets. The valuation allowance increased $10.9 million, $11.7 million and $10.6 million during the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016, the Company had net operating loss carryforwards of approximately $169.1 million and $84.2 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. Of these amounts, $1.6 million represent federal and state excess tax deductions from stock-based compensation, which will be recorded as an adjustment to additional paid-in capital when they reduce tax payable. The U.S. federal net operating loss carryforwards will begin to expire in 2026 while for state purposes, the net operating losses began to expire in 2016. As of December 31, 2016, the Company had net credit carryforwards of approximately $3.3 million and $2.7 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. The federal credit carryforwards begin to expire in 2028. California credits have no expiration date. Other state credit carryforwards begin to expire in 2023. On December 18, 2015, The Consolidated Appropriations Act of 2014 was signed into law, which retroactively reinstated and made permanent the federal research tax credit provisions from January 1, 2015 through December 31, 2015. The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses and tax credits in the event of an "ownership change" of a corporation. Accordingly, a company's ability to use net operating losses and tax credits may be limited as prescribed under Internal Revenue Code Section 382 and 383 ("IRC Section 382"). Events which may cause limitations in the amount of the net operating losses or tax credits that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 rules and similar state provisions. In the event the Company has any changes in ownership, net operating losses and research and development credit carryovers could be limited and may expire unutilized. Uncertain Tax Positions As of December 31, 2016, the Company had unrecognized tax benefits of $2.2 million, none of which would currently affect the Company's effective tax rate if recognized due to the Company's deferred tax assets being fully offset by a valuation allowance. The Company does not anticipate that the amount of unrecognized tax benefits relating to tax positions existing at December 31, 2016 will significantly increase or decrease within the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands of dollars):
It is the Company's policy to include penalties and interest expense related to income taxes as a component of other income (expense), net, and interest expense, respectively, as necessary. There was no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2016. The Company's major tax jurisdictions are the United States and California. All of the Company's tax years will remain open for examination by the Federal and state tax authorities for three and four years, respectively, from the date of utilization of the net operating loss or research and development credit. The Company does not have any tax audits pending. |
401(k) Plan |
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Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
401(k) Plan | 401(k) Plan The Company sponsors a 401(k) defined contribution plan covering all employees. Employer contributions to the plan were $262,000 and $103,000 for the years ended December 31, 2016 and 2015, respectively. There were no employer contributions to the plan for the year ended December 31, 2014. |
Selected Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following table presents selected unaudited financial data for each of the eight quarters in the two-year period ended December 31, 2016. The Company believes this information reflects all recurring adjustments necessary to fairly present this information when read in conjunction with the Company's financial statements and the related notes. Net loss per common share, basic and diluted, for the four quarters of each fiscal year may not sum to the total for the fiscal year because of the different number of shares outstanding during each period. The results of operations for any quarter are not necessarily indicative of the results to be expected for any future period (in thousands of dollars, except for share and per share data):
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The financial statements include the accounts of the Company and its former wholly-owned subsidiary, which was dissolved in June 2015. For periods prior to the subsidiary dissolution, all intercompany accounts and transactions were eliminated in consolidation. Certain amounts have been reclassified on the balance sheet at December 31, 2015 to conform with the adoption of Accounting Standards Update (“ASU”) No. 2015-3, Simplifying the Presentation of Debt Issuance Costs. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates include: revenue recognition; contractual allowances; the useful lives of property and equipment; the recoverability of long-lived assets; the estimation of the fair value of intangible assets; stock options; income tax uncertainties, including a valuation allowance for deferred tax assets; and contingencies. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. |
Concentrations of Credit Risk and Other Risks and Uncertainties | Concentrations of Credit Risk and Other Risks and Uncertainties The majority of the Company's cash and cash equivalents are deposited with one major financial institution in the United States. Deposits in this institution may exceed the amount of insurance provided on such deposits. The Company has not experienced any losses on its deposits of cash and cash equivalents. Several of the components of the Company's sample collection kit and test reagents are obtained from single-source suppliers. If these single-source suppliers fail to satisfy the Company's requirements on a timely basis, it could suffer delays in being able to deliver its diagnostic solutions, a possible loss of revenue, or incur higher costs, any of which could adversely affect its operating results. The Company is also subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers' financial condition and generally does not require collateral. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist of amounts invested in a money market account primarily consisting of U.S. Treasury reserves. |
Restricted Cash | Restricted Cash The Company had deposits of $120,000 and $118,000 as of December 31, 2016 and December 31, 2015, respectively, included in current assets. The deposit at December 31, 2016 was a pledge for corporate credit cards and the deposit at December 31, 2015 was restricted from withdrawal and held by a bank in the form of collateral for irrevocable standby letters of credit held as security for the lease of the Company's former headquarters and laboratory facilities in South San Francisco that expired March 31, 2016. The Company also had deposits of $603,000 included in long-term assets as of December 31, 2016 and December 31, 2015, restricted from withdrawal and held by a bank in the form of collateral for an irrevocable standby letter of credit held as security for the lease of the Company's South San Francisco facility signed in April 2015. |
Supplies Inventory | Supplies Inventory Supplies inventory consists of test reagents and other consumables primarily used in the sample collection kits and in cytopathology and GEC test processing and are valued at the lower of cost or market value. Cost is determined using actual costs on a first-in, first-out basis. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three and five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the lease. Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the statements of operations and comprehensive loss in the period realized. |
Business Combination | Business Combination The Company accounts for acquisitions using the acquisition method of accounting which requires the recognition of tangible and identifiable intangible assets acquired and liabilities assumed at their estimated fair values as of the business combination date. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. Transaction costs are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company's operating results from the date of acquisition. |
Finite-lived Intangible Assets | Finite-lived Intangible Assets Finite-lived intangible assets relate to intangible assets reclassified from indefinite-lived intangible assets, following the launch of Percepta in April 2015. The Company amortizes finite-lived intangible assets using the straight-line method over their estimated useful life. The estimated useful life of 15 years was used for the intangible asset related to the Percepta test based on management's estimate of product life, product life of other diagnostic tests and patent life. The Company tests this finite-lived intangible asset for impairment when events or circumstances indicate a reduction in the fair value below its carrying amount. There was no impairment for either of the years ended December 31, 2016 or 2015. |
Goodwill | Goodwill Goodwill, derived from the Company's acquisition of Allegro Diagnostics Corp. (Allegro), is reviewed for impairment on an annual basis or more frequently if events or circumstances indicate that it may be impaired. The Company's goodwill evaluation is based on both qualitative and quantitative assessments regarding the fair value of goodwill relative to its carrying value. The Company has determined that it operates in a single segment and has a single reporting unit associated with the development and commercialization of diagnostic products. In the event the Company determines that it is more likely than not the carrying value of the reporting unit is higher than its fair value, quantitative testing is performed comparing recorded values to estimated fair values. If impairment is present, the impairment loss is measured as the excess of the recorded goodwill over its implied fair value. The Company performs its annual evaluation of goodwill during the fourth quarter of each fiscal year. There was no impairment for the years ended December 31, 2016, 2015 or 2014. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of certain financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with the provision of ASC 954-605, Health Care Entities—Revenue Recognition ("ASC 954"). The Company's revenue is generated from the provision of diagnostic services. The service is completed upon the delivery of test results to the prescribing physician, at which time the Company bills for the service. The Company recognizes revenue related to billings for tests delivered on an accrual basis when amounts that will ultimately be realized can be estimated. The estimates of amounts that will ultimately be realized requires significant judgment by management. Until a contract has been negotiated with a commercial payer or governmental program, the Company's tests may or may not be covered by these entities' existing reimbursement policies. In addition, patients do not enter into direct agreements with the Company that commit them to pay any portion of the cost of the tests in the event that their insurance declines to reimburse the Company. The Company may bill the patient directly for these amounts in the form of co-payments and co-insurance in accordance with their insurance carrier and health plans. In the absence of contracted reimbursement or the ability to estimate the amount that will ultimately be realized for the Company's services, revenue is recognized on the cash basis. |
Cost of Revenue | Cost of Revenue Cost of revenue is expensed as incurred and includes material and service costs, cytopathology testing services performed by a third-party pathology group, stock-based compensation expense, direct labor costs, equipment and infrastructure expenses associated with testing samples, shipping charges to transport samples, and allocated overhead including rent, information technology, equipment depreciation and utilities. |
Research and Development | Research and Development Research and development expenses are charged to operations as incurred. Research and development expenses include payroll and personnel-related expenses, stock-based compensation expense, prototype materials, laboratory supplies, consulting costs, costs associated with setting up and conducting clinical studies at domestic and international sites, and allocated overhead including rent, information technology, equipment depreciation and utilities. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. The Company's assessment of an uncertain tax position begins with the initial determination of the position's sustainability and is measured at the largest amount of benefit that is more-likely-than-not of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit may change as new information becomes available. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense for equity instruments issued to employees is measured based on the grant-date fair value of the awards. The fair value of each employee stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The Company recognizes compensation costs on a straight-line basis for all employee stock-based compensation awards that are expected to vest over the requisite service period of the awards, which is generally the awards' vesting period. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Equity awards issued to non-employees are valued using the Black-Scholes option-pricing model and are subject to re-measurement as the underlying equity awards vest. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. Potentially dilutive securities consisting of options to purchase common stock, restricted stock units and shares subject to purchase under our employee stock purchase plan are considered to be common stock equivalents and were excluded from the calculation of diluted net loss per common share because their effect would be anti-dilutive for all periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company will adopt the new revenue standard as of January 1, 2018 using the modified retrospective method. The Company has also completed its assessment of the first step which included identifying the Company’s customers. The Company is currently assessing the remainder of the steps and is in the process of evaluating the effect of adoption of the new revenue standard on its financial statements. In August 2014, FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments: (1) provide a definition of the term substantial doubt; (2) require an evaluation every reporting period including interim periods; (3) provide principles for considering the mitigating effect of management’s plans; (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans; (5) require an express statement and other disclosures when substantial doubt is not alleviated; and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 will be effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016 with early adoption permitted. ASU 2014-15 is effective for the Company beginning with its annual report for 2016 and interim periods thereafter. The Company has adopted this ASU and there is no impact on its financial statements. In April 2015, the FASB issued ASU No. 2015-3, Simplifying the Presentation of Debt Issuance Costs, to require debt issuance costs to be presented as an offset against debt outstanding. The update does not change current guidance on the recognition and measurement of debt issuance costs. The ASU is effective for interim and annual periods beginning after December 15, 2015. Adoption of the ASU is retrospective to each prior period presented. The Company has adopted this ASU and the retrospective adjustment of the prior period presentation was not material. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes. The ASU requires that deferred tax assets and liabilities be classified as noncurrent in the statement of financial position, thereby simplifying the guidance that required an entity to separate deferred assets and liabilities into current and noncurrent amounts, and was effective for the Company beginning in the first quarter of 2016. The Company early-adopted this ASU as of December 31, 2015 and the impact of adoption on its statement of financial position was not material. In February 2016, the FASB issued ASU No. 2016-2, Leases. This ASU is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The ASU will be effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the potential effect of this standard on its financial statements. In March 2016, the FASB issued ASU 2016-9, Compensation - Stock Compensation, related to the tax effects of share-based awards. The ASU requires that all the tax effects of share-based awards be recorded through the income statement, thereby simplifying the current guidance that requires excess tax benefits and certain excess tax deficiencies to be recorded in equity. The ASU is effective for interim and annual periods beginning after December 15, 2016. The Company does not anticipate that the adoption of this ASU will have a significant impact on its financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash. This ASU requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU will be effective for interim and annual periods beginning after December 15, 2017. The Company does not anticipate that the adoption of this ASU will have a significant impact on its financial statements. |
Summary of Significant Accounting Policies (Tables) |
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Schedule of Revenue recognized when cash is received and on an accrual basis | Revenue recognized for the years ended December 31, 2016, 2015 and 2014 was as follows (in thousands of dollars):
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Schedule of the Company's third-party payers as a percentage of total | The Company's third-party payers in excess of 10% of revenue and their related revenue as a percentage of total revenue were as follows:
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Gross receivables concentration risk | Accounts receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Company's third-party payers as a percentage of total | The Company's significant third-party payers and their related accounts receivable balance as a percentage of total accounts receivable were as follows:
|
Net Loss Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share | The following outstanding common stock equivalents have been excluded from diluted net loss per common share for the years ended December 31, 2016, 2015 and 2014 because their inclusion would be anti-dilutive:
|
Business Combination (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of pro forma financial information as if the Merger had occurred as of January 1, 2013 | The following pro forma financial information is based on the historical financial statements of the Company and presents the Company's results as if the Merger had occurred as of January 1, 2013 (in thousands of dollars):
|
||||||||||||||||||||||||||||||||||||||||||||||||
Allegro | |||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of acquisition consideration | The acquisition consideration was comprised of (in thousands of dollars):
|
||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of assets acquired and liabilities assumed | The fair value of the assets acquired and liabilities assumed at the closing date of the Merger are summarized below (in thousands of dollars):
|
Balance Sheet Components (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property and equipment | Property and equipment consisted of the following (in thousands of dollars):
|
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Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands of dollars):
|
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases as of December 31, 2016 are as follows (in thousands of dollars):
|
Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of interest expense on debt | Interest expense was as follows (in thousands of dollars):
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Line of Credit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future principal payments under the Amended Loan | Future principal payments under the Credit Agreement are as follows (in thousands of dollars):
|
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Schedule of net debt obligation | As of December 31, 2016, the net debt obligation for borrowings made under the Credit Agreement was as follows (in thousands of dollars):
|
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Term Loan | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net debt obligation | As of December 31, 2015, the net debt obligation under the Amended Loan was as follows (in thousands of dollars):
|
Stockholders' Equity (Deficit) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reserved shares of common stock for issuance | As of December 31, 2016 and 2015, the Company had reserved shares of common stock for issuance as follows:
|
Stock Incentive Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock incentive plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of activity under the Company's stock option plans | The following table summarizes activity under the Company's stock incentive plans (aggregate intrinsic value in thousands):
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Stock-based Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock incentive plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of share-based compensation expense | The following table summarizes stock-based compensation expense related to stock options, restricted stock units and the ESPP for the years ended December 31, 2016, 2015 and 2014, and are included in the statements of operations and comprehensive loss as follows (in thousands of dollars):
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Stock-based Compensation, employees | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock incentive plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assumptions used to calculate estimated grant date fair value of stock options using the Black-Scholes option-pricing valuation model | The estimated grant-date fair value of employee stock options was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
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Stock-based Compensation, non-employees | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock incentive plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assumptions used to calculate estimated grant date fair value of stock options using the Black-Scholes option-pricing valuation model | The estimated fair value of non-employee stock options was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
|
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ESPP | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock incentive plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assumptions used to calculate estimated grant date fair value of stock options using the Black-Scholes option-pricing valuation model | The estimated grant date fair value of the ESPP shares was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of tax expense computed at the statutory federal rate and the Company's tax expense | The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company's tax expense for the periods presented (in thousands of dollars):
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Schedule of significant components of the Company's deferred tax assets and liabilities | Significant components of the Company's deferred tax assets and liabilities are as follows (in thousands of dollars):
|
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Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands of dollars):
|
Selected Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of selected quarterly financial data (unaudited) | The results of operations for any quarter are not necessarily indicative of the results to be expected for any future period (in thousands of dollars, except for share and per share data):
|
Net Loss Per Share (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share | |||
Shares of common stock subject to outstanding options | 5,155,105 | 4,102,201 | 3,035,614 |
Options | |||
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share | |||
Shares of common stock subject to outstanding options | 5,093,454 | 4,086,640 | 3,035,614 |
Employee stock purchase plan | |||
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share | |||
Shares of common stock subject to outstanding options | 36,651 | 15,561 | 0 |
Restricted stock units (RSUs) | |||
Outstanding shares of common stock equivalents that have been excluded from diluted net loss per common share | |||
Shares of common stock subject to outstanding options | 25,000 | 0 | 0 |
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Accrued Liabilities | ||
Accrued compensation expenses | $ 6,120 | $ 4,212 |
Accrued Genzyme co-promotion fees | 0 | 2,089 |
Accrued other | 2,990 | 2,388 |
Total accrued liabilities | $ 9,110 | $ 8,689 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Money Market Funds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | $ 58.7 | $ 37.5 |
Commitments and Contingencies (Details) ft² in Thousands, $ in Thousands |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Apr. 30, 2015
ft²
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Feb. 08, 2017
USD ($)
|
|
Future minimum lease payments under non-cancelable operating leases | |||||
2017 | $ 2,143 | ||||
2018 | 2,102 | ||||
2019 | 2,026 | ||||
2020 | 2,082 | ||||
2021 | 2,144 | ||||
Thereafter | 9,812 | ||||
Total minimum lease payments | 20,309 | ||||
Facilities rent expense | 2,000 | $ 1,900 | $ 852 | ||
Supplies Purchase Commitments | |||||
Non-cancelable purchase commitment | 1,700 | ||||
Headquarters and laboratory facilities, South San Francisco, Lease signed in April 2015 | |||||
Operating Leases | |||||
Amount of space leased | ft² | 59 | ||||
Security deposit | 603 | ||||
Laboratory facilities, Austin, Texas | |||||
Operating Leases | |||||
Security deposit | $ 75 | $ 75 | |||
Subsequent event | Headquarters and laboratory facilities, South San Francisco, Lease signed in April 2015 | |||||
Operating Leases | |||||
Lease Modification, Consideration Received | $ 500 |
Commitments and Contingencies Capital Lease (Details) - Equipment $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Capital Leased Assets [Line Items] | |
Capital leased assets | $ 1,200 |
Capital lease, upfront payment | 330 |
Capital leases, future minimum payments, present value of net minimum payments | 874 |
Future minimum payments due, 2017 | 317 |
Future minimum payments due, 2018 | 317 |
Future minimum payments due, 2019 | 317 |
Accrued Liabilities | |
Capital Leased Assets [Line Items] | |
Future minimum payments due | 275 |
Capital Lease Obligations | |
Capital Leased Assets [Line Items] | |
Future minimum payments due | $ 599 |
Debt Credit Agreement- Tabular (Details) - Line of Credit |
Dec. 31, 2016
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Debt instrument, face amount | $ 25,385,000 |
Debt instrument, unamortized discount | (467,000) |
Long-term debt | 24,918,000 |
2020 | 9,519,000 |
2021 | 12,693,000 |
2022 | $ 3,173,000 |
Debt Loan and Security Agreement- Tabular (Details) - Term Loan $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Long-term debt and accrued end of term payment | $ 5,082 |
Debt instrument, unamortized discount | 92 |
Long-term debt | $ 4,990 |
Interest Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Interest Expense, Debt [Abstract] | |||
End-of-term payment | $ 206 | $ 79 | $ 81 |
Term Loan | |||
Interest Expense, Debt [Abstract] | |||
Nominal interest | 2,378 | 253 | 296 |
Amortization of debt discount and debt issuance costs | 173 | 46 | 62 |
End-of-term payment | 206 | 79 | 81 |
Total | $ 2,757 | $ 378 | $ 439 |
Stock Incentive Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Stock incentive plans | |||
Weighted average fair value of options to purchase common stock granted (in dollars per share) | $ 3.35 | $ 5.12 | $ 9.08 |
Intrinsic value of stock options exercised (in dollars) | $ 0.9 | $ 1.8 | $ 3.2 |
Weighted average grant date fair value (in usd per share) | $ 7.47 | ||
Common Stock | |||
Stock incentive plans | |||
Share Price (in usd per share) | $ 7.74 | $ 7.20 | |
Employee stock options | |||
Stock incentive plans | |||
Total estimated grant date fair value of options to purchase common stock vested (in dollars) | $ 5.8 | $ 5.3 | $ 1.6 |
Stock Incentive Plans Stock Incentive Plans- ESPP (Details) - ESPP |
1 Months Ended |
---|---|
May 31, 2015
USD ($)
| |
Stock incentive plans | |
Maximum offering period | 12 months |
Purchase period | 6 months |
Maximum fair market value of shares an employee can purchase per calendar year | $ 25,000 |
Minimum | |
Stock incentive plans | |
Minimum purchase price as a percentage of fair market value | 85.00% |
Thyroid Cytopathology Partners (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Thyroid Cytopathology Partners | |||
Outstanding obligations | $ 2,424 | $ 5,085 | |
Thyroid Cytopathology Partners | |||
Thyroid Cytopathology Partners | |||
Notice of intent not to renew period | 12 months | ||
Expenses for cytopathology testing and evaluation services | $ 5,100 | 4,700 | $ 4,000 |
Outstanding obligations | 426 | 820 | |
Reduction to rent expense for TCP's portion of costs for shared space | $ (103) | $ (90) | $ (86) |
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Unrecognized tax benefits, beginning of period | $ 1,871 | $ 1,571 | $ 727 |
Gross increases-tax position in prior period | 0 | 548 | |
Gross increases-current period tax position | 351 | 300 | 296 |
Unrecognized tax benefits, end of period | 2,222 | $ 1,871 | $ 1,571 |
Interest expense or penalties related to unrecognized tax benefits | 0 | ||
Federal | |||
Credit carryforwards | |||
Credit carryforwards available to reduce future taxable income | 3,300 | ||
State | |||
Credit carryforwards | |||
Credit carryforwards available to reduce future taxable income | $ 2,700 |
Income Taxes - Income Tax Examination (Details) |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Federal | |
Income tax examination | |
Income tax examination period | 3 years |
State | |
Income tax examination | |
Income tax examination period | 4 years |
401(k) Plan (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Compensation and Retirement Disclosure [Abstract] | |||
Employer contributions to the plan | $ 262,000 | $ 103,000 | $ 0 |
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Total revenues | $ 18,257 | $ 18,603 | $ 14,675 | $ 13,550 | $ 14,042 | $ 12,335 | $ 11,908 | $ 11,218 | $ 65,085 | $ 49,503 | $ 38,190 |
Net loss | $ (4,403) | $ (5,637) | $ (11,243) | $ (10,075) | $ (8,013) | $ (8,945) | $ (9,136) | $ (7,610) | $ (31,358) | $ (33,704) | $ (29,373) |
Net loss per common share, basic and diluted | $ (0.14) | $ (0.20) | $ (0.40) | $ (0.36) | $ (0.29) | $ (0.32) | $ (0.35) | $ (0.34) | $ (1.09) | $ (1.30) | $ (1.36) |
Shares use to compute net loss per common share, basic and diluted (in shares) | 31,705,603 | 27,916,819 | 27,859,918 | 27,817,993 | 27,672,806 | 27,640,806 | 26,048,934 | 22,539,723 | 28,830,472 | 25,994,193 | 21,639,374 |
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