Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity

A summary of the Company’s stock option activity under the 2012 Stock Plan (as amended and restated, the “2012 Plan”) and the 2018 Incentive Award Plan (the “2018 Plan”) and related information is as follows:

		Options Outstanding
	Shares Available for Grant	Shares Subject to Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
	(unaudited)
						(in thousands)
Balance as of December 31, 2019	2,726,225	4,494,889	$	10.90	7.7	$	306,392
2018 Plan annual increase(1)	3,689,000	—
Granted	(78,476)	78,476	76.01
Exercised	—	(654,557)	5.42
Canceled	12,406	(49,806)	8.79
Restricted stock units granted	(126,834)	—	—
Restricted stock units canceled	33,355	—	—
Market-based restricted stock units granted	(3,391,148)	—	—
Balance as of June 30, 2020	2,864,528	3,869,002	$	13.18	7.3	$	266,316
Vested and Exercisable as of June 30, 2020		2,014,893	$	6.90	6.9	$	150,268

(1)Effective as of January 1, 2020, an additional 3,689,000 shares of common stock became available for issuance under the 2018 Plan, as a result of the operation of an automatic annual increase provision therein.

Schedule of Restricted Stock Activity

A summary of the Company’s restricted stock unit activity excluding the market-based restricted stock units under the 2012 Plan and the 2018 Plan and related information is as follows:

	Restricted Stock Units Outstanding	Weighted-Average Grant Date Fair Value
	(unaudited)
Balance as of December 31, 2019	496,131	$	82.08
Granted	126,834	75.96
Vested	(25,602)	80.27
Canceled	(33,355)	75.94
Balance as of June 30, 2020	564,008	$	81.15

Schedule of Performance-based Restricted Stock Units Vesting Conditions

The following table presents additional information relating to each MSU award:

Tranche	Price Goal	Number of RSUs
Tranche 1	$120 per share	565,192
Tranche 2	$150 per share	565,191
Tranche 3	$200 per share	565,191

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

The following table presents the effect of employee and non-employee related stock-based compensation expense:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(unaudited)
	(in thousands)
Cost of precision oncology testing	$	407	$	126	$	710	$	296
Research and development expense	2,622		1,428		4,986		2,638
Sales and marketing expense	2,167		646		3,965		1,472
General and administrative expense	20,619		1,015		22,492		1,992
Total stock-based compensation expense	$	25,815	$	3,215	$	32,153	$	6,398

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions

The grant date fair value of stock options was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
	(unaudited)
Expected term (in years)	5.50 – 6.10	5.50 – 6.16	5.50 – 6.10	5.50 – 6.22
Expected volatility	66.5% – 68.5%	66.9% – 68.3%	66.5% – 73.3%	66.7% – 68.3%
Risk-free interest rate	0.4% – 0.4%	1.9%	0.4% – 1.6%	1.9% – 2.7%
Expected dividend yield	—%	—%	—%	—%

The grant date fair value of the stock purchase right granted under the ESPP was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
	(unaudited)
Expected term (in years)	0.5	0.5	0.5	0.5
Expected volatility	73.2%	60.2%	73.2%	60.2%
Risk-free interest rate	0.2%	2.5%	0.2%	2.5%
Expected dividend yield	—%	—%	—%	—%