Collaboration Agreements

9 Months Ended

Sep. 30, 2020

Deferred Revenue Disclosure [Abstract]

Collaboration Agreements

Collaboration Agreements

Lam Research Corporation

    In August 2017, the Company entered into a collaboration agreement with Lam with respect to the development of the Company’s Hyb & Seq platform product candidate and related assays. Pursuant to the terms of the collaboration agreement, Lam contributed up to an aggregate of $50.0 million towards the project. Lam is eligible to receive certain single-digit percentage royalty payments from the Company on net sales of certain products and technologies developed under the collaboration agreement, if any such net sales are ever recorded. The maximum amount of royalties payable to Lam will be capped at an amount up to three times the amount of development funding actually provided by Lam.

    During the three and nine months ended September 30, 2020, the Company recognized revenue related to the Lam agreement of $1.4 million and $4.3 million, respectively. During the three and nine months ended September 30, 2019, the Company recognized revenue related to the Lam agreement of $4.0 million and $13.2 million, respectively. At September 30, 2020, the Company had recorded customer deposits of $0.5 million representing amounts received in advance. As of December 31, 2019, Lam had provided the full development funding commitment of $50.0 million and the Company does not expect to receive any further funding from Lam in future periods.

    In January 2020, having received the full commitment of development funding from Lam, the remaining warrants for shares of the Company’s common stock became exercisable and Lam elected to net exercise, in full, its warrant for 1.0 million shares of common stock, for which the Company issued an aggregate of 407,247 shares to Lam. In connection with Lam’s exercise of the warrant, the Company agreed to waive certain restrictions associated with the sale of the common stock in exchange for commitments by Lam related to the method and timing of Lam’s sale of the shares.