UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Indicate by check mark whether the Registrantregistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

The information at September 30, 2016,2017, and for the three and nine months ended September 30, 20162017 and 2015,2016, is unaudited. For further information, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 20152016 included in the Company’s 20152016 Annual Report on Form 10-K. Operating results for any quarter are historically seasonal in nature and are not necessarily indicative of the results expected for the full year.

For 20162017 and 2015,2016, the Company’s fiscal year will end or has ended on December 31, 2017 and January 1, 2017, and January 3, 2016, respectively. For 20162017 and 2015,2016, the Company’s third quarter ended on October 1, 2017 and October 2, 2016, and September 27, 2015, respectively. For ease of reference, the calendar quarter end dates are used herein. The three and nine month periods ended September 30, 20162017 and 20152016 each included 13 and 39 weeks, respectively.

Comprehensive Loss

Use of Estimates

Revenue Recognition

The Company records revenues primarily from product sales. These revenues are recorded net of rebates and other discounts. These rebates and discounts that are estimated at the time of sale, and are largely driven by various customer program offerings, including special pricing agreements, promotions and other volume-based incentives. RevenueRevenues from product sales are recorded upon passage of title and risk of loss to the customer. Passage of title to the product and recognition of revenue occurs upon delivery to the customer when sales terms are free on board (“FOB”) destination and at the time of shipment when the sales terms are FOB shipping point and there is no right of return.

A portion of product sales includes revenues for diagnostic kits, which are utilized on leased instrument systems under the Company’s “reagent rental” program. The reagent rental program provides customers the right to use the instruments at no separate cost to the customer in consideration for a multi-year agreement to purchase annual minimum amounts of consumables (“reagents” or “diagnostic kits”). When an instrument is placed with a customer under a reagent rental agreement, the Company retains title to the equipment and it remains capitalized on the Company’s Consolidated Balance Sheets as property and equipment. The instrument is depreciated on a straight-line basis over the life of the instrument. Depreciation expense is recorded in cost of sales included in the Consolidated Statements of Operations. The reagent rental agreements represent one unit of accounting as the instrument and consumables (reagents) are interdependent in producing a diagnostic result and neither has a stand-alone value with respect to these agreements. No revenue is recognized at the time of instrument placement. All revenue is recognized when the title and risk of loss for the diagnostic kits have passed to the customer.

Royalty incomerevenue from the grant of license rights is recognized during the period in which the revenue is earned and the amount is determinable from the licensee.

The Company earns income from grants for research and commercialization activities. On November 6, 2012, the Company was awarded a milestone-based grant totaling up to $8.3 million from the Bill and Melinda Gates Foundation to develop, manufacture and validate a quantitative, low-cost, nucleic acid assay for HIV drug treatment monitoring on the integrated Savanna MDx platform for use in limited resource settings. Upon execution of the grant agreement, the Company received $2.6 million to fund subsequent research and development activities and received milestone payments totaling $2.5 million in 2013. On September 10, 2014, the Company entered into an amended grant agreement with the Bill and Melinda Gates Foundation for additional funding of up to $12.6 million in order to accelerate the development of the Savanna MDx platform in the developing world. Upon execution of the amended grant agreement, the Company received $10.6 million in cash. The Company received payments of $2.4 million in April 2015 and $2.8 million in July 2016 based on milestone achievements for both the original and the amended grant agreements. Under the original and amended grant agreements, the Company recognizesrecognized grant revenue on the basis of the lesser of the amount recognized on a proportional performance basis or the amount of cash payments that arewere non-refundable as of the end of each reporting period. The Company recognized grant revenue of $3.8 million and $0.8$6.5 million as grant revenue for the three months ended September 30, 2016 and 2015, respectively, and recognized $6.5 million and $3.2 million for the nine months ended September 30, 2016, and 2015, respectively. Cash payments received arewere restricted as to use until expenditures contemplated in the grant arewere incurred or committed. As of September 30, 2016 all payment related milestones have beenwere achieved and all of the grant revenue of $20.9 million has been recorded.was fully recognized. As such, the Company recognized no grant revenue during the nine months ended September 30, 2017.

Fair Value Measurements

The carrying amounts of the Company’s financial instruments, including cash, receivables, accounts payable and accrued liabilities approximate their fair values due to their short-term nature.

Recent Accounting Pronouncements

considerations. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods therein.

The Company has assigned internal resources to assist in the adoption of the new standard and is currently evaluating the impact of this guidancethe new standard on its accounting policies, processes and expectssystem requirements. The Company has begun the process of identifying, categorizing and analyzing its various revenue streams, but has not yet completed its assessment of the impact. The Company will continue to evaluate the future impact and method of adoption of ASU 2014-09 and related amendments on the Consolidated Financial Statements and related disclosures throughout the remainder of 2017. The Company will adopt the new standard in the first quarter ofbeginning January 2018.

Note 2. Computation of LossEarnings (Loss) Per Share

Note 3. Inventories

Note 4. Other Current Liabilities

Note 5. Income Taxes

Note 6. Debt

The Convertible Senior Notes will be convertible into cash, shares of common stock, or a combination of cash and shares of common stock based on an initial conversion rate, subject to adjustment, of 31.1891 shares per $1,000 principal amount of the Convertible Senior Notes (which represents an initial conversion price of approximately $32.06 per share) on the business day immediately preceding September 15, 2020.. The conversion will occur in the following circumstances and to the following extent: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2015, if the last reported sales price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the notes in effect on each applicable trading day; (2) during the five consecutive business day period following any five consecutive trading day period in which the trading price per $1,000 principal amount of the Convertible Senior NoteNotes for each such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such day; or (3) upon the occurrence of specified events described in the indenture for the Convertible Senior Notes. On or after September 15, 2020 until the close of business on the second scheduled trading day immediately preceding the stated maturity date, holders may surrender their notes for conversion at any time, regardless of the foregoing circumstances.

It is the Company’s intent and policy to settle conversions through combination settlement, which essentially involves repayment of an amount of cash equal to the “principal portion” and delivery of the “share amount” in excess of the principal portion in shares of common stock or cash. In general, for each $1,000 in principal, the “principal portion” of cash upon settlement is defined as the lesser of $1,000, or the conversion value during the 25-day observation period as described in the indenture for the Convertible Senior Notes. The conversion value is the sum of the daily conversion value, which is the product of the effective conversion rate divided by 25 days and the daily volume weighted averageweighted-average price (“VWAP”) of the Company’s common stock. The “share amount” is the cumulative “daily share amount” during the observation period, which is calculated by dividing the daily VWAP into the difference between the daily conversion value (i.e., conversion rate x daily VWAP) and $1,000.

The Company pays 3.25% interest per annum on the principal amount of the Convertible Senior Notes semi-annually in arrears in cash on June 15 and December 15 of each year. The Convertible Senior Notes mature on December 15, 2020. During the nine months ended September 30, 2017 and 2016, the Company recorded total interest expense of $8.2 million related to the Convertible Senior Notes, of which $4.1 million related to the amortization of the debt discount and issuance costs and $4.1 million related to the coupon due semi-annually. During the nine months ended September 30, 2015, the Company recorded total interest expense of $8.2 million related to the Convertible Senior Notes of which $4.0 million related to the amortization of the debt discount and issuance costs and $4.2 million related to the coupon due semi-annually.

If a fundamental change, as defined in the indenture for the Convertible Senior Notes, such as an acquisition, merger or liquidation of the Company, occurs prior to the maturity date, subject to certain limitations, holders of the Convertible Senior Notes may require the Company to repurchase all or a portion of their Convertible Senior Notes for cash at a repurchase price equal to 100% of the principal amount of the Convertible Senior Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date.

The Company accounts separately for the liability and equity components of the Convertible Senior Notes in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. The guidance requires the carrying amount of the liability component to be estimated by measuring the fair value of a similar liability that does not have an associated conversion feature. Because the Company had no outstanding non-convertible public debt, the Company determined that senior, unsecured corporate bonds traded on the market represent a similar liability to the Convertible Senior Notes without the conversion option. Based on market data available for publicly traded, senior, unsecured corporate bonds issued by companies in the same industry with similar credit ratings and with similar maturity, the Company estimated the implied interest rate of its Convertible Senior Notes to be 6.9%, assuming no conversion option. Assumptions used in the estimate represent what market participants would use in pricing the liability component, which were defined as Level 2 observable inputs. The estimated implied interest rate was applied to the Convertible Senior Notes, which resulted in a fair value of the liability component of $141.9 million upon issuance, calculated as the present value of implied future payments based on the $172.5 million aggregate principal amount. The $30.7 million difference between the cash proceeds of $172.5 million and the estimated fair value of the liability component was recorded in additional paid-in capital, net of tax and issuance costs, as the Convertible Senior Notes were not considered redeemable.

As a policy election under applicable guidance related to the calculation of diluted net EPS, the Company elected the combination settlement method as its stated settlement policy and applied the treasury stock method in the calculation of dilutive impact of the Convertible Senior Notes. The Convertible Senior Notes were not convertible as of September 30, 20162017 and 2015;2016; therefore there was no dilutive impact during the three and nine months ended September 30, 20162017 and 2015.2016. If the Convertible Senior Notes were converted as of September 30, 2016,2017, the if-converted value would not exceed the principal amount.

On August 10, 2012,October 6, 2017, the Company entered into an amended and restated $140.0a Credit Agreement (the “Credit Agreement”), which provided the Company with a $245.0 million senior secured syndicatedterm loan facility (the “Term Loan”) and a $25.0 million revolving credit facility (the “Revolving Credit Facility”), together (the “Senior Credit Facility”). The Term Loan and the Revolving Credit Facility will mature on October 6, 2022. On the closing date of the Credit Agreement, the Company borrowed the entire

The Credit Agreement includes an accordion feature that maturesallows the facility to be increased by $50.0 million upon the satisfaction of certain conditions. The Financing is guaranteed by certain material domestic subsidiaries of the Company (the “Guarantors”) and is secured by liens on August 10, 2017. Assubstantially all of the assets of the Company and the Guarantors, excluding real property and certain other types of excluded assets. If the Company does not consummate a sale leaseback transaction with respect to the Summers Ridge property acquired as part of this amendment,the Triage Business within 180 days of the closing of the Credit Agreement, the Company incurred an additional $1.0 million in deferred financing costs relatedwill also be required to grant the SeniorLenders a mortgage on the real property associated with the Summers Ridge property.

Loans under the Credit Facility. Deferred financing costs are amortized on a straight-line basis over the term of the Senior Credit Facility. As of September 30, 2016, the Company had deferred financing costs related to the Senior Credit Facility of $0.3 million included as a portion of prepaid expenses and other current assets. As of December 31, 2015, the Company had deferred financing costs related to the Senior Credit Facility of $0.2 million included as a portion of other non-current assets and $0.3 million included as a portion of prepaid expenses and other current assets. The Senior Credit Facility bearsAgreement will bear interest at eithera rate equal to (i) the London Interbank Offered Rate (“LIBOR”) plus the “applicable rate” or (ii) the base rate, plus, in each case, an applicable margin. The base rate is equal to“base rate” (defined as the highest of (i)(a) the lender’sBank of America prime rate, (ii)(b) the federal fundsFederal Funds rate plus one-half of one percent and (iii)(c) LIBOR plus one percent.percent) plus the “applicable rate.” The initial applicable margin is generallyrate will be 2.50% per annum for base rate loans and 3.50% per annum for LIBOR rate loans, and thereafter will be determined in accordance with a performance pricing grid based on the Company’s leverage ratio and rangesConsolidated Leverage Ratio (as defined in the Credit Agreement) ranging from 1.25%2.50% to 2.50%3.50% per annum for LIBOR rate loans and from 0.25%1.50% to 1.50%2.50% per annum for base rate loans. In addition, the Company will pay a commitment fee on the unused portion of the Credit Agreement based on the Company’s Consolidated Leverage Ratio ranging from 0.10% to 0.50% per annum.

The agreement governingTerm Loan is subject to quarterly amortization of the Seniorprincipal amount on the last business day of each fiscal quarter of the Company (commencing on March 30, 2018) in such amounts as are set forth in the Credit Agreement. The Term Loan and the Revolving Credit Facility includes certain customary covenants, including among others, limitations on: liens; mergers, consolidations and dispositionswill mature on October 6, 2022, provided that if any of assets; debt; dividends, stock redemptionsthe Company’s 3.25% Convertible Senior Notes due 2020 (the “Convertible Senior Notes”) remain outstanding on the date that is 91 days prior to the maturity date of the Convertible Senior Notes and the redemption and/Company has not satisfied certain Refinancing Conditions (as defined in the Credit Agreement), then the maturity date for the Term Loan and the Revolving Credit Facility will be the date that is 91 days prior to the maturity date of the Convertible Senior Notes.

The Company must prepay loans outstanding under the Credit Agreement in an amount equal to 50% of Excess Cash Flow (as defined in the Credit Agreement) for each fiscal year (commencing with fiscal 2018) less any amount voluntarily prepaid during such fiscal year, but only if the Consolidated Senior Secured Leverage Ratio (as defined in the Credit Agreement) as of the last day of such fiscal year is greater than or prepaymentequal to 1.25 to 1.00. The Company must also prepay loans outstanding under the Credit Agreement in an amount equal to 100% of the Net Cash Proceeds (as defined in the Credit Agreement) from (i) certain property dispositions and (ii) the receipt of certain other debt;amounts not in the ordinary course of business, in each case, if not reinvested within a specified time period as contemplated in the Credit Agreement, and with a carve out of up to 30% of the Net Cash Proceeds of the contemplated sale leaseback transaction relating to the Company’s Summers Ridge property to the extent the excluded amounts are used for specified purposes.

The Credit Agreement contains affirmative and negative covenants that are customary for credit agreements of this nature. The negative covenants include, among other things, limitations on asset sales, mergers, indebtedness, liens, investments (including loans and advances) and acquisitions; and transactions with affiliates. The Company is also subject toCredit Agreement contains two financial covenants, which includecovenants: (i) a funded debt to adjusted EBITDA ratiomaximum Consolidated Leverage Ratio (as defined in the Senior Credit Facility, with adjusted EBITDA generally calculatedAgreement) as earnings before, among other adjustments, interest, taxes, depreciation, amortization,of the last day of each fiscal quarter for the most recently completed four fiscal quarters of (a) 5.00 to 1.00 for the fiscal quarter ending December 31, 2017, (b) 4.25 to 1.00 for the fiscal quarters ending March 31, 2018 through December 31, 2018 and stock-based compensation) not(c) 3.50 to exceed 3:11.00 for the fiscal quarter ending March 31, 2019 and each fiscal quarter thereafter; and (ii) a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of 1.25 to 1.00 as of the end of eachany fiscal quarter and (ii) an interest coverage ratio of not less than 3:1 as offor the end of eachmost recently completed four fiscal quarter. Funded debt is defined as outstanding borrowings on the Senior Credit Facility plus Convertible Senior Notes, less the Company’s domestic cash and cash equivalents in excess of $15.0 million. The Senior Credit Facility is secured by substantially all present and future assets and properties of the Company and is senior to the Convertible Senior Notes.

Note 7. Stockholders’ Equity

Total compensation expense recognized for the three and nine months ended September 30, 2017 includes $1.0 million and $3.1 million related to stock options and $0.9 million and $2.8 million related to RSUs. Total compensation expense recognized for the three and nine months ended September 30, 2016 includes $1.1 million and $3.5 million related to stock options and $0.6 million and $2.3 million related to RSUs, respectively. Total compensation expense recognized for the three and nine months ended September 30, 2015 includes $1.1 million and $3.5 million related to stock options and $0.6 million and $2.2 million related to RSUs, respectively.RSUs. As of September 30, 2016,2017, total unrecognized compensation expense related to non-vested stock options was $6.9$5.3 million, which is expected to be recognized over a weighted-average period of approximately 2.52.1 years. As of September 30, 2016,2017, total unrecognized compensation expense related to non-vested RSUsrestricted stock was $3.5$6.1 million, which is expected to be recognized over a weighted-average period of approximately 2.62.4 years. Compensation expense capitalized to inventory and compensation expense related to the Company’s ESPP were not material for the three and nine months ended September 30, 20162017 or 2015.2016.

The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants.

The weighted-average fair value of stock options granted during the nine months ended September 30, 2017 and 2016 was $8.71 and 2015 was $5.97, and $9.60, respectively. The Company granted 670,733253,844 and 616,994670,733 stock options during the nine months ended September 30, 20162017 and 2015, respectively. The weighted-average fair value of RSUs granted during the nine months ended September 30, 2016, and 2015 was $16.06 and $23.47, respectively. The Company granted 182,425 and 146,164 shares of

Note 8. Industry and Geographic Information

The Company had sales to individual customers in excess of 10% of total revenues, as follows:

As of September 30, 20162017 and December 31, 2015,2016, accounts receivable from customers with balances due in excess of 10% of total accounts receivable totaled $18.5$34.2 million and $12.0$13.9 million, respectively.

Note 9. Commitments and Contingencies

Licensing Arrangements

Research and Development Agreements

Note 10. Fair Value Measurements

There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 categories of the fair value hierarchy during the three and nine month periods ended September 30, 20162017 and the year ended December 31, 2015.2016.

The Company used Level 1 inputs to determine the fair value of its cash equivalents, which primarily consist of funds held in government money market accountaccounts and commercial paper. As such, the carrying value of cash equivalents approximates fair value. AsDuring the third quarter of 2017, the Company converted all cash equivalents to cash, and therefore, had no cash equivalents as of September 30, 2016 and2017. As of December 31, 2015,2016, the carrying value of cash equivalents was $133.5 million.

Changes in estimated fair value of contingent consideration liabilities from December 31, 20152016 through September 30, 20162017 are as follows (in thousands):

Note 11. Acquisition

On October 6, 2017, the Company acquired the Triage Business and BNP Business from Alere Inc. In connection with the acquisition of the Triage Business, the Company paid $400.0 million in cash (subject to certain inventory related adjustments set forth in the Amended and Restated Triage Purchase Agreement) and assumed certain liabilities. These acquisitions significantly enhance the Company's revenue profile and expands the Company's geographic and product diversity. The Company used proceeds from the Term Loan of $245.0 million and cash on hand to pay (i) the consideration for the Triage Business and (ii) fees and expenses incurred in connection with the acquisition was $5.5 million, which included $5.1of the Triage Business and BNP Business. In connection with the acquisition of the BNP Business, the Company will: (i) pay (subject to certain inventory related adjustments set forth in the Amended and Restated BNP Purchase Agreement) (A) up to $40.0 million in initial cash, paymentspayable in five annual installments of $8.0 million, the first of which will be paid on April 30, 2018, and $0.4(B) $240.0 million in fair valuecash, payable in six annual installments of contingent consideration based upon achievement$40.0 million each, the first of certain revenue targets through September 2024. The Immutopics portfolio of productswhich will be included withpaid on April 30, 2018; and (ii) assume certain liabilities. See Note 6 for further discussion of the Company's MicroVue products that serve the bone health research community.Senior Credit Agreement entered into on October 6, 2017.

Future Uncertainties and Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws that involve material risks, assumptions and uncertainties. Many possible events or factors could affect our future financial results and performance, such that our actual results and performance may differ materially from those that may be described or implied in the forward-looking statements. As such, no forward-looking statement can be guaranteed. Differences in actual results and performance may arise as a result of a number of factors including, without limitation, the risks set forth in Part II, Item 1A of this Form 10-Q; our reliance on development of new technologies, fluctuations in our operating results resulting from seasonality, the timing of the onset, length and severity of cold and flu seasons, seasonality, government and media attention focused on influenza and the related potential impact on humans from novel influenza viruses, adverse changes in competitive conditions in domestic and international markets, changes in sales levels as it relates to the absorption of our fixed costs, lower than anticipated market penetration of our products, the reimbursement system currently in place and future changes to that system, changes in economic conditions in our domestic and international markets, lower than anticipated market penetration of our products, the quantity of our product in our distributors’ inventory or distribution channels, changes in the buying patterns of our distributors, and changes in the healthcare market and consolidation of our customer base; our development and protection of intellectual property;proprietary technology rights; our development of new technologies, products and markets; our reliance on a limited number of key distributors; our reliance on sales of our influenza diagnostics tests; our ability to manage our growth strategy, including our ability to effect strategic acquisitions and to integrate companies or technologies we have acquired or may acquire;acquire including our ability to achieve anticipated synergies and process improvements; intellectual property risks, including but not limited to, infringement litigation; our debt service requirements; our inability to settle conversions of our Convertible Senior Notes in cash; the effect on our operating results from the trigger of the conditional conversion feature of our Convertible Senior Notes; limitationsthe amount of, and covenants in our Senior Credit Facility;ability to repay, renew or extend, our outstanding debt and its impact on our operations and our ability to obtain financing; our ability to generate cash, including to service our debt; our need for additional funds to finance our capital or operating needs; volatilitythe financial soundness of our customers and disruption in the global capital and credit markets;suppliers; acceptance of our products among physicians and other healthcare providers; competition with other providers of diagnostic products; adverse actions or delays in new product reviews or related to currently-marketed products by the U.S. Food and Drug Administration (the “FDA”); or other regulatory authorities or loss of any previously received regulatory approvals or clearances; changes in government policies; compliance with other government regulations, such as safe working conditions, manufacturing practices, environmental protection, fire hazard and disposal of hazardous substances; third-party reimbursement policies; our ability to meet demand for our products; interruptions in our supply of raw materials; product defects; business risks not covered by insurance and exposure to other litigation claims; interruption to our computer systems; competition for and loss of management and key personnel; international risks, including but not limited to, compliance with product registration requirements, exposure to currency exchange fluctuations and foreign currency exchange risk sharing arrangements, longer payment cycles, lower selling prices and greater difficulty in collecting accounts receivable, reduced protection of intellectual property rights, political and economic instability, taxes, and diversion of lower priced international products into U.S. markets; our significant debt service requirements; the possibility that we may incur additional indebtedness; dilution resulting from future sales of our equity; volatility in our stock price; provisions in our charter documents, Delaware law and the indenture governing our Convertible Senior Notes that might delay or impede stockholder actions with respect to business combinations or similar transactions; and our intention of not paying dividends. Forward-looking statements typically are identified by the use of terms such as “may,” “will,” “should,” “might,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “goal,” “project,” “strategy,” “future,” and similar words, although some forward-looking statements are expressed differently. Forward-looking statements in this Quarterly Report include, among others, statements concerning: our outlook for the remainder of the 2016 fiscal year; projected capital expenditures for the remainder of the 20162017 fiscal year and our source of funds for such expenditures; the sufficiency of our liquidity and capital resources; our strategy, goals and objectives; anticipated new product and development results; expected growth and the sources of that growth;future commitments under existing research development agreements; the impact and timing of expected adoption of new accounting standards; that we will continue to make substantial expenditures for sales and marketing, manufacturing and research and development activities; that we may enter into additional foreign currency exchange risk sharing arrangements; our exposure to claims and litigation; expectations regarding grant revenues and expenditures in the remainder of 2016; and our intention to continue to evaluate new product lines, technology and acquisition opportunities. The risks described under “Risk Factors” in Item 1A of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2015,2016, and elsewhere herein and in reports and registration statements that we file with the Securities and Exchange Commission (the “SEC”) from time to time, should be carefully considered. You are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Quarterly Report.

The following should be read in conjunction with the Consolidated Financial Statements and Notes thereto beginning on page 3 of this Quarterly Report. Except as required by law, we undertake no obligation to publicly release the results of any revision or update of these forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

Outlook

For the three months ended September 30, 2016,2017, total revenue increased to $49.3$50.9 million from $46.8$49.3 million in the prior period. The Company realized declinesincreases in the infectious disease category primarilyimmunoassay revenues due to lowergrowth in Influenza, product sales slightly offset with an increase in sales of Strep A products.and RSV products, as well as the addition of InflammaDry® and AdenoPlus® diagnostic products acquired from RPS. The increase in the women's health categoryour molecular revenues was driven by continued gains on our Bone Health, Autoimmune/Complement and Thyretain product lines. The acquisition of Immutopics, Inc. ("Immutopics") contributed to the growthSolana platform. These increases were partially offset by a decline in our Bone Health product line. Royalty, license fees and grant revenue increased year over year due primarily to timing of grant revenues associated withof approximately $3.8 million as the amended Bill and Melinda Gates Foundation grant and our Savanna MDx development program.was fully recognized by the third quarter of 2016.

Operating Expenses

Research and Development Expense

Research and development expenses include direct external costs such as fees paid to third-party contractors and consultants, and internal direct and indirect costs such as compensation and other expenses for research and development personnel, supplies and materials, clinical trials and studies, facility costs and depreciation. Our research and development spending will continue to be centered around our immunoassay and molecular platforms.

Sales and Marketing Expense

General and Administrative Expense

Amortization of Intangible Assets from Acquired Businesses and Technology

Interest Expense, net

For the nine months ended September 30, 2016,2017, total revenue decreasedincreased to $138.8$162.9 million from $143.7$138.8 million in the prior year. The Company realized declinesincreases in the infectious disease categoryimmunoassay revenues due primarily to lower sales ofgrowth in Influenza and other Respiratory products slightly offset with an increase in sales of Strep A products.products,

bolstered by a robust cold and flu season. In addition, the immunoassay category increased with the addition of InflammaDry and AdenoPlus diagnostic products acquired from RPS. The increase in the women's health categoryour molecular revenues was driven by continued gains on our Bone Health, Autoimmune/Complement and ThyretainSolana platform. These increases were partially offset by a decrease in virology product lines. The acquisition of Immutopics contributedrevenues as we continue to see customers moving to the growth in our Bone Health product line. For the nine months ended September 30, 2016, royalty, grantmolecular platforms. Royalties, grants and other revenue increased by $3.1 million due primarily to timing of grant revenues associated with the amendeddecreased as Bill and Melinda Gates Foundation grant and our Savanna MDx development program.was fully recognized by the third quarter of 2016.

Cost of Sales

Operating Expenses

Research and Development Expense

Sales and Marketing Expense

General and Administrative Expense

Amortization of Intangible Assets from Acquired Businesses and Technology

Interest Expense, net

Income Taxes

Liquidity and Capital Resources

In December 2014, we issued Convertible Senior Notes in the aggregate principleprincipal amount of $172.5 million. The Convertible Senior Notes have a coupon rate of 3.25% and are due 2020. The Convertible Senior Notes were not convertible as of September 30, 2016.2017. For detailed information of the terms of the Convertible Senior Notes, see Note 6 of the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report, under the heading “3.25% Convertible Senior Notes due 2020,” which is incorporated by reference herein.

On August 10, 2012, we entered into an amended and restated $140.0 million Senior Credit Facility that matures on August 10, 2017. As of September 30, 2016, the Company had no borrowings under the Senior Credit Facility and due to the limitations of the interest coverage ratio, we had no borrowing capacity under the Senior Credit Facility. At the current time, we do not anticipate the need in the near term to utilize the Senior Credit Facility. For detailed information of the terms of the Senior Credit Facility see Note 6 of the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report under the heading “Line of Credit,” which is incorporated by reference herein.

We expect our revenue and operating expenses will significantly impact our cash management decisions. Our future capital requirements and the adequacy of our available funds to service our long-term debt and to fund working capital expenditures and business development efforts will depend on many factors, including:

Cash usedprovided by operating activities was $4.8$16.5 million during the nine months ended September 30, 2016.2017. The add back of non-cash items associated with depreciation, amortization and stock-based compensation contributed $27.9 million to operating cash flows during the nine months ended September 30, 2017. Offsetting this were a net loss of $3.1 million and a net working capital use of $8.4 million. For the nine months ended September 30, 2016, cash used by operating activities was $4.8 million. The major contributionscontributors to the use of cash during the nine months ended September 30, 2016 were a net loss of $11.9 million, a change in deferred tax assets and liabilities of $7.4 million and a net working capital use of $9.7 million. Offsetting this use of cash was the add back of non-cash items of $27.7 million associated with depreciation, amortization and stock-based compensation. For the nine months ended September 30, 2015, operating activities generated cash of $20.3 million. The add back of non-cash items was $27.5 million related to depreciation, amortization and stock based compensation. Working capital also had a cash contribution

Our investing activities used $27.2 million during the nine months ended September 30, 2017 primarily for the acquisition of $3.6the InflammaDry and AdenoPlus diagnostic businesses from RPS, as more fully described in Note 11 in the Notes to the Consolidated Financial Statements for approximately $13.7 million. Offsetting these cash generating activities was a net loss of $5.7Additionally, we used $12.8 million on production equipment, building improvements, Sofia and a change in deferred tax assetsSolana instruments available for lease and liabilities of $6.4 million.

We are currently planning approximately $4.5$5.0 million in capital expenditures for the remainder of 2016.2017. The primary purpose for our capital expenditures is to acquire manufacturing and scientific equipment, to purchase or develop information technology, Sofia and Solana instruments and to implement facility improvements. We plan to fund these capital expenditures with the cash on our balance sheet.

Cash provided by financing activities was $14.1 million during the nine months ended September 30, 2017 and was primarily related to proceeds from the issuance of common stock of $15.2 million, partially offset by repurchases of common stock of $0.5 million and payments on acquisition-related contingencies of $0.5 million. Cash used by financing activities was $20.4 million during the nine months ended September 30, 2016, of which $20.1 million was used for repurchases of common stock primarily related to our share repurchase program, and $4.5 million was used for the repurchase of Convertible Senior Notes. These amounts were partially offset by proceeds from the issuance of

Seasonality

Off-Balance Sheet Arrangements

Recent Accounting Pronouncements

Critical Accounting Policies and Estimates

A comprehensive discussion of our critical accounting policies and management estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2015.2016.

ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk

We are not subject to interest rate risk on our Convertible Senior Notes as the notes have a fixed interest rate of 3.25%.rate. For fixed rate debt, changes in interest rates will generally affect the fair value of the debt instrument, but not our earnings or cash flows. Under our current policies, we do not use interest rate derivative instruments to manage our exposure to changes in interest rates.

The Company’sOur current investment policy with respect to our cash and cash equivalents focuses on maintaining acceptable levels of interest rate risk and liquidity. Although the Company continually evaluates thewe periodically evaluate our placement of investments, as of

ITEM 4.    Controls and Procedures

PART II OTHER INFORMATION

ITEM 1.    Legal Proceedings

ITEM 1A.    Risk Factors

ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

ITEM 3.    Defaults Upon Senior Securities

ITEM 4.    Mine Safety Disclosures

ITEM 5.    Other Information

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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