Subsequent Events

12 Months Ended

Dec. 31, 2018

Subsequent Events

Subsequent Events

14.    Subsequent Events

In January 2019, the Company amended the existing agreement with one of its vendors to establish non-cancelable contractual commitments for a minimum number of genetic tests to be processed, as well as the price per test processed. The amended agreement has a remaining term of two years starting January 1, 2019. For the next 12 months, total contractual commitments are $9.7 million. The commitments beyond 12 months will be determined at the end of 2019.

In February 2019, the Company entered into a License Agreement with BGI Genomics Co., Ltd (“BGI Genomics”) to develop and commercialize NGS-based genetic testing assays for clinical use. According to the agreement, the Company will receive a total of $50.0 million, comprising $35.0 million in upfront technology licensing fees and prepaid royalties, and $15.0 million in future milestone payments. The Company is committed to pay $6.0 million for future test services. The Company will also prepay $4.0 million to another supplier. The License Agreement has a term of ten years and expires in February 2029. This Agreement is subject to customary closing conditions, including partner government approval.

In March 2019, the Company paid off the final quarterly installment of $1.4 million imposed by the settlement agreement relating to reimbursement-related claims.  As required by the settlement agreement, a letter of credit was secured with a financial institution until the settlement amount was entirely paid off.  The letter of credit expired on March 1, 2019, and accordingly, the funds totaling $4.2 million (see Note 2 under Restricted Cash) were available to the Company.