Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2020 | |
Entity File Number | 001-35092 | |
Entity Registrant Name | EXACT SCIENCES CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 02-0478229 | |
Entity Address, Address Line One | 5505 Endeavor Lane | |
Entity Address, City or Town | Madison | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53719 | |
City Area Code | 608 | |
Local Phone Number | 535-8815 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | EXAS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001124140 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 150,167,320 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 703,926 | $ 177,254 |
Marketable securities | 518,731 | 146,401 |
Accounts receivable, net | 163,608 | 130,667 |
Inventory | 82,215 | 61,724 |
Prepaid expenses and other current assets | 36,378 | 40,913 |
Total current assets | 1,504,858 | 556,959 |
Long-term Assets: | ||
Property, plant and equipment, net | 463,437 | 455,325 |
Operating lease right-of-use assets | 132,751 | 126,444 |
Goodwill | 1,237,672 | 1,203,197 |
Intangible assets, net | 1,105,115 | 1,143,550 |
Other long-term assets, net | 23,902 | 20,293 |
Total assets | 4,467,735 | 3,505,768 |
Current Liabilities: | ||
Accounts payable | 30,998 | 25,973 |
Accrued liabilities | 139,505 | 193,329 |
Operating lease liabilities, current portion | 9,871 | 7,891 |
Debt, current portion | 1,319 | 834 |
Other current liabilities | 40,581 | 8,467 |
Total current liabilities | 222,274 | 236,494 |
Long-term Liabilities: | ||
Convertible notes, net | 1,534,383 | 803,605 |
Long-term debt, less current portion | 22,944 | 24,032 |
Other long-term liabilities | 50,311 | 34,911 |
Operating lease liabilities, less current portion | 126,630 | 118,665 |
Total liabilities | 1,956,542 | 1,217,707 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Preferred stock, $0.01 par value Authorized—5,000,000 shares issued and outstanding—no shares at June 30, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.01 par value Authorized—200,000,000 shares issued and outstanding—149,980,798 and 147,625,696 shares at June 30, 2020 and December 31, 2019 | 1,501 | 1,477 |
Additional paid-in capital | 3,819,798 | 3,406,440 |
Accumulated other comprehensive income (loss) | 1,489 | (100) |
Accumulated deficit | (1,311,595) | (1,119,756) |
Total stockholders’ equity | 2,511,193 | 2,288,061 |
Total liabilities and stockholders’ equity | $ 4,467,735 | $ 3,505,768 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, Issued shares (in shares) | 0 | 0 |
Preferred stock, outstanding shares (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares (in shares) | 200,000,000 | 200,000,000 |
Common stock, Issued shares (in shares) | 149,980,798 | 147,625,696 |
Common stock, outstanding shares (in shares) | 149,980,798 | 147,625,696 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 268,868 | $ 199,870 | $ 616,689 | $ 361,913 |
Operating expenses | ||||
Cost of sales (exclusive of amortization of acquired intangible assets) | 77,892 | 51,139 | 159,498 | 93,966 |
Research and development | 32,673 | 29,972 | 76,182 | 61,757 |
Sales and marketing | 118,862 | 88,190 | 286,611 | 179,129 |
General and administrative | 106,685 | 63,723 | 220,676 | 127,529 |
Amortization of acquired intangible assets | 23,430 | 748 | 46,769 | 1,508 |
Total operating expenses | 359,542 | 233,772 | 789,736 | 463,889 |
Other operating income | 23,665 | 0 | 23,665 | 0 |
Loss from operations | (67,009) | (33,902) | (149,382) | (101,976) |
Other income (expense) | ||||
Investment income, net | 2,912 | 7,669 | 3,009 | 14,324 |
Interest expense | (22,912) | (12,712) | (48,065) | (34,702) |
Total other income (expense) | (20,000) | (5,043) | (45,056) | (20,378) |
Net loss before tax | (87,009) | (38,945) | (194,438) | (122,354) |
Income tax benefit | 867 | 443 | 2,599 | 913 |
Net loss | $ (86,142) | $ (38,502) | $ (191,839) | $ (121,441) |
Net loss per share - basic and diluted (in usd per share) | $ (0.58) | $ (0.30) | $ (1.29) | $ (0.95) |
Weighted average common shares outstanding - basic and diluted (in shares) | 149,727 | 129,182 | 148,938 | 127,723 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (86,142) | $ (38,502) | $ (191,839) | $ (121,441) |
Other comprehensive loss, before tax: | ||||
Unrealized gain on available-for-sale investments | 3,206 | 1,952 | 1,564 | 4,128 |
Foreign currency adjustment | 0 | 0 | 25 | 0 |
Comprehensive loss, before tax | (82,936) | (36,550) | (190,250) | (117,313) |
Income tax expense related to items of other comprehensive loss | 0 | (464) | 0 | (984) |
Comprehensive loss, net of tax | $ (82,936) | $ (37,014) | $ (190,250) | $ (118,297) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning Balance at Dec. 31, 2018 | $ 680,941 | $ 1,232 | $ 1,716,894 | $ (1,422) | $ (1,035,763) |
Balance (in shares) at Dec. 31, 2018 | 123,192,540 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Equity component of convertible notes, net of tax and issuance costs | 268,390 | 268,390 | |||
Shares issued to settle convertible notes (in shares) | 2,158,991 | ||||
Shares issued to settle convertible notes | 182,435 | $ 22 | 182,413 | ||
Settlement of convertible notes, net of tax | (300,768) | (300,768) | |||
Exercise of common stock options | 3,650 | $ 2 | 3,648 | ||
Exercise of common stock options (in shares) | 235,278 | ||||
Issuance of common stock to fund the Company's 401(k) match | 7,409 | $ 1 | 7,408 | ||
Issuance of common stock to fund the Company's 401(k) match (in shares) | 86,532 | ||||
Compensation expense related to issuance of stock options and restricted stock awards | 16,166 | $ 35 | 16,131 | ||
Compensation expense related to issuance of stock options and restricted stock awards (in shares) | 3,410,481 | ||||
Net loss | (82,939) | (82,939) | |||
Accumulated other comprehensive income | 1,656 | 1,656 | |||
Ending Balance at Mar. 31, 2019 | 776,940 | $ 1,292 | 1,894,116 | 234 | (1,118,702) |
Balance (in shares) at Mar. 31, 2019 | 129,083,822 | ||||
Beginning Balance at Dec. 31, 2018 | 680,941 | $ 1,232 | 1,716,894 | (1,422) | (1,035,763) |
Balance (in shares) at Dec. 31, 2018 | 123,192,540 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock for business combinations | 0 | ||||
Net loss | (121,441) | ||||
Ending Balance at Jun. 30, 2019 | 765,532 | $ 1,295 | 1,919,719 | 1,722 | (1,157,204) |
Balance (in shares) at Jun. 30, 2019 | 129,361,048 | ||||
Beginning Balance at Mar. 31, 2019 | 776,940 | $ 1,292 | 1,894,116 | 234 | (1,118,702) |
Balance (in shares) at Mar. 31, 2019 | 129,083,822 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Equity component of convertible notes, net of tax and issuance costs | (22) | (22) | |||
Exercise of common stock options | 1,348 | $ 1 | 1,347 | ||
Exercise of common stock options (in shares) | 78,793 | ||||
Compensation expense related to issuance of stock options and restricted stock awards | 20,143 | $ 1 | 20,142 | ||
Compensation expense related to issuance of stock options and restricted stock awards (in shares) | 104,845 | ||||
Purchase of employee stock purchase plan shares | 4,137 | $ 1 | 4,136 | ||
Purchase of employee stock purchase plan shares (in shares) | 93,588 | ||||
Net loss | (38,502) | (38,502) | |||
Accumulated other comprehensive income | 1,488 | 1,488 | |||
Ending Balance at Jun. 30, 2019 | 765,532 | $ 1,295 | 1,919,719 | 1,722 | (1,157,204) |
Balance (in shares) at Jun. 30, 2019 | 129,361,048 | ||||
Beginning Balance at Dec. 31, 2019 | $ 2,288,061 | $ 1,477 | 3,406,440 | (100) | (1,119,756) |
Balance (in shares) at Dec. 31, 2019 | 147,625,696 | 147,625,696 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Equity component of convertible notes, net of tax and issuance costs | $ 346,641 | 346,641 | |||
Settlement of convertible notes, net of tax | (64,199) | (64,199) | |||
Exercise of common stock options | 4,300 | $ 2 | 4,298 | ||
Exercise of common stock options (in shares) | 160,286 | ||||
Issuance of common stock to fund the Company's 401(k) match | 12,007 | $ 1 | 12,006 | ||
Issuance of common stock to fund the Company's 401(k) match (in shares) | 136,559 | ||||
Compensation expense related to issuance of stock options and restricted stock awards | 29,560 | $ 11 | 29,549 | ||
Compensation expense related to issuance of stock options and restricted stock awards (in shares) | 1,141,376 | ||||
Issuance of common stock for business combinations | 28,597 | $ 4 | 28,593 | ||
Issuance of common stock for business combinations (in shares) | 382,947 | ||||
Net loss | (105,697) | (105,697) | |||
Accumulated other comprehensive income | (1,617) | (1,617) | |||
Ending Balance at Mar. 31, 2020 | 2,537,653 | $ 1,495 | 3,763,328 | (1,717) | (1,225,453) |
Balance (in shares) at Mar. 31, 2020 | 149,446,864 | ||||
Beginning Balance at Dec. 31, 2019 | $ 2,288,061 | $ 1,477 | 3,406,440 | (100) | (1,119,756) |
Balance (in shares) at Dec. 31, 2019 | 147,625,696 | 147,625,696 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Shares issued to settle convertible notes (in shares) | 2,158,991 | ||||
Issuance of common stock for business combinations | $ 28,597 | ||||
Issuance of common stock for business combinations (in shares) | 382,947 | ||||
Net loss | $ (191,839) | ||||
Ending Balance at Jun. 30, 2020 | $ 2,511,193 | $ 1,501 | 3,819,798 | 1,489 | (1,311,595) |
Balance (in shares) at Jun. 30, 2020 | 149,980,798 | 149,980,798 | |||
Beginning Balance at Mar. 31, 2020 | $ 2,537,653 | $ 1,495 | 3,763,328 | (1,717) | (1,225,453) |
Balance (in shares) at Mar. 31, 2020 | 149,446,864 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Exercise of common stock options | 6,638 | $ 2 | 6,636 | ||
Exercise of common stock options (in shares) | 208,434 | ||||
Compensation expense related to issuance of stock options and restricted stock awards | 40,039 | $ 2 | 40,037 | ||
Compensation expense related to issuance of stock options and restricted stock awards (in shares) | 157,579 | ||||
Purchase of employee stock purchase plan shares | 9,799 | $ 2 | 9,797 | ||
Purchase of employee stock purchase plan shares (in shares) | 167,921 | ||||
Net loss | (86,142) | (86,142) | |||
Accumulated other comprehensive income | 3,206 | 3,206 | |||
Ending Balance at Jun. 30, 2020 | $ 2,511,193 | $ 1,501 | $ 3,819,798 | $ 1,489 | $ (1,311,595) |
Balance (in shares) at Jun. 30, 2020 | 149,980,798 | 149,980,798 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders Equity (Parenthetical) - $ / shares | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (191,839) | $ (121,441) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 33,632 | 13,507 |
Loss on disposal of property, plant and equipment | 650 | 211 |
Unrealized loss on revaluation of marketable equity securities | 333 | 0 |
Deferred tax benefit | (3,222) | (984) |
Stock-based compensation | 69,599 | 36,309 |
Loss on settlement of convertible notes | 7,954 | 10,558 |
Amortization of convertible note debt discount and issuance costs | 34,638 | 19,798 |
Amortization of deferred financing costs and other liabilities | (2,505) | (847) |
Amortization of premium on short-term investments | 503 | (2,580) |
Amortization of acquired intangible assets | 46,769 | 1,508 |
Non-cash lease expense | 6,860 | 1,762 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (30,644) | (18,574) |
Inventory, net | (20,260) | (8,633) |
Operating lease liabilities | (4,997) | (1,607) |
Accounts payable and accrued liabilities | (47,587) | 25,725 |
Other assets and liabilities | 43,419 | (11,920) |
Net cash used in operating activities | (56,697) | (57,208) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (640,085) | (511,587) |
Maturities and sales of marketable securities | 268,483 | 447,674 |
Purchases of property, plant and equipment | (33,455) | (79,448) |
Business combination, net of cash acquired | (6,654) | 0 |
Other investing activities | (516) | (380) |
Net cash used in investing activities | (412,227) | (143,741) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible notes, net | 1,125,547 | 729,479 |
Proceeds from exercise of common stock options | 10,938 | 4,998 |
Proceeds in connection with the Company’s employee stock purchase plan | 9,799 | 4,137 |
Payments on settlement of convertible notes | (150,054) | (493,356) |
Other financing activities | (626) | 319 |
Net cash provided by financing activities | 995,604 | 245,577 |
Net increase in cash, cash equivalents and restricted cash | 526,680 | 44,628 |
Cash and cash equivalents, beginning of period | 177,528 | 160,430 |
Cash and cash equivalents, end of period | 704,208 | 205,058 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Property, plant and equipment acquired but not paid | 8,684 | 24,402 |
Unrealized gain on available-for-sale investments, before tax | 1,564 | 4,128 |
Issuance of 136,559 and 86,532 shares of common stock to fund the Company’s 401(k) matching contribution for 2019 and 2018, respectively | 12,007 | 7,409 |
Issuance of 2,158,991 shares of common stock upon settlement of convertible notes | 0 | 182,435 |
Retirement of equity component of convertible notes settled | (64,199) | (300,768) |
Issuance of common stock for business combinations | 28,597 | 0 |
Supplemental disclosure of cash flow information: | ||
Interest paid | $ 3,908 | $ 1,216 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Parenthetical) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Issuance of shares of common stock to fund the Company's 401(k) matching contribution (in shares) | 136,559 | 86,532 |
Issuance of common stock upon convertible notes settlement (in shares) | 2,158,991 | |
Issuance of common stock for business combinations (in shares) | 382,947 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Exact Sciences Corporation (together with its subsidiaries, “Exact,” or the “Company”) was incorporated in February 1995. Exact is a leading global cancer diagnostics company. It has developed some of the most impactful brands in cancer screening and diagnostics, including Cologuard® and Oncotype DX®. Exact is currently working on the development of additional tests for other types of cancer, with the goal of bringing new innovative cancer tests to patients throughout the world. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements, which include the accounts of Exact Sciences Corporation and those of its wholly owned subsidiaries and variable interest entities, are unaudited and have been prepared on a basis substantially consistent with the Company’s audited financial statements and notes as of and for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K (the “2019 Form 10-K”). All intercompany transactions and balances have been eliminated upon consolidation. These condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair statement of its financial position, operating results and cash flows for the periods presented. The condensed balance sheet at December 31, 2019 has been derived from audited financial statements, but does not contain all of the footnote disclosures from the 2019 Form 10-K. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. The statements should be read in conjunction with the audited financial statements and related notes included in the 2019 Form 10-K. Use of Estimates The preparation of the condensed consolidated 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those that affect the Company’s financial statements materially and involve difficult, subjective or complex judgments by management, and actual results could differ from those estimates. These estimates include revenue recognition, valuation of convertible notes, valuation of intangible assets and goodwill, and accounting for income taxes among others. The Company’s critical accounting policies and estimates are explained further in the notes to the condensed consolidated financial statements in this Quarterly Report and the 2019 Form 10-K. The spread of the coronavirus (“COVID-19”) has affected many segments of the global economy, including the cancer screening and diagnostics industry. The COVID-19 outbreak, which the World Health Organization has classified as a pandemic, has prompted governments and regulatory bodies throughout the world to enact broad precautionary measures, including “stay-at-home” orders, restrictions on the performance of “non-essential” services, public gatherings and travel. Health systems, including key markets where the Company operates, have been, or may be, overwhelmed with high volumes of patients suffering from COVID-19. The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions including interest rates, employment rates and health insurance coverage, the speed of the anticipated recovery, access to capital markets, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of June 30, 2020 and through the date of the filing of this Quarterly Report on Form 10-Q. The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts and credit losses, equity investments, software, and the carrying value of the goodwill and other long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in additional material impacts to the Company’s consolidated financial statements in future reporting periods. Despite the Company’s efforts, the ultimate impact of COVID-19 depends on factors beyond the Company’s knowledge or control, including the duration and severity of the outbreak, as well as third-party actions taken to contain its spread and mitigate its public health effects. As a result, the Company is unable to estimate the extent to which COVID-19 will negatively impact its financial results or liquidity. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) In April 2020, the Company received $23.7 million from the United States Department of Health and Human Services (“HHS”) as a distribution from the Public Health and Social Services Emergency Fund provided for in the CARES Act. The fund payments are grants, not loans, and HHS will not require repayment provided the funds are utilized to offset expenses incurred to address COVID-19 or to replace lost revenues. The Company accepted the terms and conditions of the grant in May 2020 and recognized the entire $23.7 million during the three months ended June 30, 2020, due to lost revenue attributable to COVID-19, which is reflected in other operating income in the condensed consolidated statement of operations. The Company cannot predict the extent to which the Company will receive any additional funds to be paid out under the Provider Relief Fund, and to what extent the financial impact of receiving such funds would do to effectively offset the broad implications of the COVID-19 pandemic which include increases in the Company’s costs and lost revenues. Cash and Cash Equivalents The Company considers cash on hand, demand deposits in bank, money market funds, and all highly liquid investments with an original maturity of 90 days or less to be cash and cash equivalents. Marketable Securities Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Debt securities carried at amortized cost are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities not classified as held-to-maturity are classified as available-for-sale. Available-for-sale securities are carried at fair value. The unrealized gains and losses, net of tax, on the Company’s debt securities are reported in other comprehensive income. Marketable equity securities are measured at fair value and the unrealized gains and losses, net of tax, are recognized in other income (expense) in the condensed consolidated statements of operations. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method. Such amortization is included in investment income, net. Realized gains and losses and declines in value as a result of credit losses on available-for-sale securities are included in the condensed consolidated statements of operations as investment income, net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in the condensed consolidated statements of operations as investment income, net. The Company’s investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. Investments in which the Company has the ability and intent, if necessary, to liquidate, in order to support its current operations (including those with a contractual term greater than one year from the date of purchase), are classified as current. The Company periodically evaluates its available-for-sale debt securities in unrealized loss positions to determine whether any impairment is a result of a credit loss or other factors. This evaluation includes, but is not limited to, significant quantitative and qualitative assessments and estimates regarding credit ratings, significance of a security’s loss position, adverse conditions specifically related to the security, and the payment structure of the security. Allowance for Doubtful Accounts The Company estimates an allowance for doubtful accounts against accounts receivable using historical collection trends, aging of accounts, current and future implications surrounding the ability to collect such as economic conditions, and regulatory changes. The allowance for doubtful accounts is evaluated on a regular basis and adjusted when trends, significant events or other substantive evidence indicate that expected collections will be less than applicable accrual rates. At June 30, 2020 and December 31, 2019 the allowance for doubtful accounts recorded was not material to the Company’s condensed consolidated balance sheets. For the three and six months ended June 30, 2020 and 2019, there was an immaterial amount of bad debt expense written off against the allowance and charged to operating expense. Inventory Inventory is stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first out method (“FIFO”). The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale, no longer meet quality specifications, or has a cost basis in excess of its estimated realizable value and records a charge to cost of sales for such inventory as appropriate. Direct and indirect manufacturing costs incurred during process validation with probable future economic benefit are capitalized. Validation costs incurred for other research and development activities, which are not permitted to be sold, have been expensed to research and development in the Company’s condensed consolidated statements of operations. Inventory consisted of the following: (In thousands) June 30, December 31, Raw materials $ 35,713 $ 24,958 Semi-finished and finished goods 46,502 36,766 Total inventory $ 82,215 $ 61,724 Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated using the straight-line method over the assets’ estimated useful lives. Land is stated at cost and does not depreciate. Additions and improvements are capitalized, including direct and indirect costs incurred to validate equipment and bring it to working conditions. Revalidation costs, including maintenance and repairs are expensed when incurred. Software Development Costs Costs related to internal use software, including hosting arrangements, are incurred in three stages: the preliminary project stage, the application development stage, and the post-implementation stage. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred. Costs incurred during the application development stage that meet the criteria for capitalization are capitalized and amortized, when the software is ready for its intended use, using the straight-line basis over the estimated useful life of the software, or the duration of the hosting agreement. Investments in Privately Held Companies The Company determines whether its investments in privately held companies are debt or equity based on their characteristics, in accordance with the applicable accounting guidance for such investments. The Company also evaluates the investee to determine if the entity is a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary of the VIE, in order to determine whether consolidation of the VIE is required. If consolidation is not required and the Company does not have voting control of the entity, the investment is evaluated to determine if the equity method of accounting should be applied. The equity method applies to investments in common stock or in substance common stock where the Company exercises significant influence over the investee. Investments in privately held companies determined to be equity securities are accounted for as non-marketable securities. The Company adjusts the carrying value of its non-marketable equity securities for changes from observable transactions for identical or similar investments of the same issuer, less impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense) in the condensed consolidated statements of operations. Investments in privately held companies determined to be debt securities are accounted for as available-for-sale or held-to-maturity securities, in accordance with the applicable accounting guidance for such investments. Derivative Financial Instruments The Company hedges a portion of its foreign currency exposures related to outstanding monetary assets and liabilities using foreign currency forward contracts. The foreign currency forward contracts are included in prepaid expenses and other current assets or in accrued liabilities in the condensed consolidated balance sheets, depending on the contracts’ net position. These contracts are not designated as hedges, and as a result, changes in their fair value are recorded in other income (expense) in the condensed consolidated statements of operations. There were no gains or losses recorded for the three and six months ended June 30, 2020 and 2019. As of June 30, 2020 and December 31, 2019, the Company had open foreign currency forward contracts with notional amounts of $16.0 million and $17.9 million, respectively. The Company's foreign exchange derivative instruments are classified as Level 2 within the fair value hierarchy as they are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. The fair value of the foreign currency forward contracts was zero at June 30, 2020 and December 31, 2019. Intangible Assets Purchased intangible assets are recorded at fair value. The Company uses a discounted cash flow model to value intangible assets. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, risk, the cost of capital, terminal values and market participants. Patent costs are capitalized as incurred, only if the Company determines that there is some probable future economic benefit derived from the transaction. A capitalized patent is amortized over its estimated useful life, beginning when such patent is approved. Capitalized patent costs are expensed upon disapproval, upon a decision by the Company to no longer pursue the patent or when the related intellectual property is either sold or deemed to be no longer of value to the Company. The Company determined that all patent costs incurred during the three and six months ended June 30, 2020 and 2019 should be expensed and not capitalized as the future economic benefit derived from the patent costs incurred cannot be determined. Acquired In-process Research and Development (IPR&D) Acquired IPR&D represents the fair value assigned to research and development assets that have not reached technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viable products, estimating the resulting revenues from the projects and discounting the net cash flows to present value. The revenues and cost projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success. IPR&D projects acquired in a business combination that are not complete are capitalized and accounted for as indefinite-lived intangible assets until completion or abandonment of the related R&D efforts. Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life. If a project is abandoned, all remaining capitalized amounts are written off immediately. There are often major risks and uncertainties associated with IPR&D projects as we are required to obtain regulatory approvals in order to be able to market the resulting products. Such approvals require completing clinical trials that demonstrate the products effectiveness. Consequently, the eventual realized value of the IPR&D project may vary from its fair value at the date of acquisition, and IPR&D impairment charges may occur in future periods. Capitalized IPR&D projects are tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers various factors for potential impairment, including the current legal and regulatory environment and the competitive landscape. Adverse clinical trial results, significant delays in obtaining marketing approval, the inability to bring a product to market and the introduction or advancement of competitors' products could result in partial or full impairment of the related intangible assets. Goodwill The Company evaluates goodwill for possible impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 on an annual basis during the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting the Company's business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value. Impairment of Long-Lived Assets The Company evaluates the fair value of long-lived assets, which include property, plant and equipment, intangible assets, and investments in privately held companies, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no impairment losses for the periods ended June 30, 2020 and December 31, 2019. Fair Value Measurements The FASB has issued authoritative guidance that requires fair value to be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under that standard, fair value measurements are separately disclosed by level within the fair value hierarchy. The fair value hierarchy establishes and prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Convertible Notes The Company accounts for convertible notes that may be settled in cash or equity upon conversion by separating the liability and equity components of the instruments in a manner that reflects the Company’s nonconvertible debt borrowing rate. The Company determines the carrying amount of the liability component of the convertible notes by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities. Determining the fair value of the debt component requires the use of accounting estimates and assumptions. These estimates and assumptions are judgmental in nature and could have a significant impact on the determination of the debt component, and the associated non-cash interest expense. Leases The Company acts as lessee in its lease agreements, which includes operating leases for corporate offices, laboratory space, warehouse space, vehicles and certain laboratory and office equipment. The Company also has finance leases for certain equipment, which are not material to the Company’s condensed consolidated financial statements. The Company determines whether an arrangement is, or contains, a lease at inception. At the beginning of fiscal year 2019, the company adopted ASC Topic 842. The Company records the present value of operating lease payments as right-of-use (“ROU”) assets and lease liabilities on the condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments based on the present value of lease payments over the lease term. Classification of operating lease liabilities as either current or non-current is based on the expected timing of payments due under the Company’s obligations. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment. In order to determine the appropriate incremental borrowing rates, the Company has used a number of factors including the credit rating, and the lease term. Certain vehicle leases include variable lease payments that depend on an index or rate. Those lease payments are initially measured using the index or rate at the lease commencement date. The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. “Reasonably certain” is assessed internally based on economic, industry, company, strategic and contractual factors. The leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the lease for up to 10 years, and some of which include options to terminate the lease within 1 year. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. The Company accounts for leases acquired in business combinations by measuring the lease liability at the present value of the remaining lease payments as if the acquired lease were a new lease for the Company. This measurement includes recognition of a lease intangible for any below-market terms present in the leases acquired. The below-market lease intangible is included in the ROU asset on the condensed consolidated balance sheets and are amortized over the remaining lease term. The Company has not acquired any leases with above-market terms. The Company has taken advantage of certain practical expedients offered to registrants at adoption of ASC 842. The Company does not apply the recognition requirements of ASC 842 to short-term leases. Instead, those lease payments are recognized in profit or loss on a straight-line basis over the lease term. Further, as a practical expedient, all lease contracts are accounted for as one single lease component, as opposed to separating lease and non-lease components to allocate the consideration within a single lease contract. Net Loss Per Share Basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share is the same because all outstanding common stock equivalents have been excluded, as they are anti-dilutive as a result of the Company’s losses. The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect due to net losses for each period: June 30, (In thousands) 2020 2019 Shares issuable upon exercise of stock options 2,575 2,387 Shares issuable upon the release of restricted stock awards 4,662 4,123 Shares issuable upon conversion of convertible notes 20,309 12,197 27,546 18,707 Accounting for Stock-Based Compensation The Company requires all share-based payments to employees, including grants of employee stock options, restricted stock, restricted stock units and shares purchased under an employee stock purchase plan (if certain parameters are not met), to be recognized in the financial statements based on their grant date fair values. Forfeitures of any share-based awards are recognized as they occur. Revenue Recognition Revenues are recognized when control of the promised services are transferred to the patient’s healthcare provider, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. To determine revenue recognition for the arrangements that the Company determines are within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers , the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 2 for further discussion. Foreign Currency Transactions Prior to 2019, the Company’s international subsidiaries’ functional currency was the local currency and assets and liabilities were translated into U.S. dollars at the period-end exchange rate or historical rates, as appropriate. Condensed consolidated statements of operations were translated at average exchange rates for the period, and the cumulative translation adjustments resulting from changes in exchange rates were included in the Company’s condensed consolidated balance sheet as a component of additional paid-in capital. In 2019 and 2020 the Company’s international subsidiaries use the U.S. dollar as the functional currency, resulting in the Company not being subject to gains and losses from foreign currency translation of the subsidiary financial statements. The Company recognizes gains and losses from foreign currency transactions in the condensed consolidated statements of operations. Net foreign currency transaction gains or losses were not material to the condensed consolidated statements of operations for the periods presented. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements including the amortization of acquired intangible assets, which is now presented as a separate line item on the Company's condensed consolidated statements of operations and was previously included in cost of sales, research and development, and general and administrative expenses. Due to these reclassifications, the Company is no longer presenting gross margin on the Company's condensed consolidated statements of operations. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The updated guidance requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade receivables. The updates also require available-for-sale debt security credit losses to be recognized as allowances rather than a reduction in amortized cost.The guidance was adopted by the Company on January 1, 2020. The requirements of the ASU did not result in the recognition of a material allowance for current expected credit losses, as the Company’s analysis of collectability looks at historical experience as well as current and future implications surrounding the ability to collect. Adoption of the updated guidance did not have a material impact on the Company’s condensed consolidated financial statements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments –Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The updated guidance provides clarity regarding measurement of securities without readily determinable fair values. The guidance was adopted on January 1, 2020 and did not have a material impact on the Company's condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles –Goodwill and Other –Internal-Use Software(Subtopic 350-40) . The update provided guidance for evaluating the accounting for fees paid by a customer in a cloud computing arrangement that is a service contract. The guidance was adopted on a prospective basis, beginning on January 1, 2020 and it did not have a material impact on the Company's condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820); Disclosure Framework -Changes to the Disclosure Requirements for Fair Value Measurement . The guidance provided an update to the disclosure requirements for fair value measurements under the scope of ASC 820. The updates were adopted on January 1, 2020 and did not have a material impact on the Company’s condensed consolidated financial statements. In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808) . The update provided additional guidance regarding the interaction between Topic 808 on Collaborative Arrangements and Topic 606 on Revenue Recognition. The guidance was adopted on January 1, 2020 and did not have a material impact on the Company's condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . The update simplifies the accounting for income taxes through removing exceptions related to certain intraperiod allocations and deferred tax liabilities; clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination; and reflecting enacted changes in tax laws or rates in the annual effective tax rate. The amended guidance is effective for interim and annual periods in 2021, however early adoption is permitted. The guidance was earl |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The Company’s revenue is primarily generated by its laboratory testing services utilizing its Cologuard, Oncotype DX, and COVID-19 tests. The services are completed upon release of a patient’s test result to the ordering healthcare provider. The core principle of ASC 606 is that the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenues from its products in accordance with that core principle, and key aspects considered by the Company include the following: Contracts The Company’s customer is primarily the patient, but the Company does not enter into a formal reimbursement contract with a patient. Accordingly, the Company establishes a contract with a patient in accordance with other customary business practices. However, under some Laboratory Service Agreements (“LSA”s) the Company contracts with a direct bill payer who then becomes the Company’s customer in these situations. • Approval of a contract is established via the order submitted by the patient’s healthcare provider and the receipt of a sample in the laboratory. • The Company is obligated to perform its laboratory services upon acceptance of a sample, and the patient and/or applicable payer are obligated to reimburse the Company for services rendered based on the patient’s insurance benefits. • Payment terms are a function of a patient’s existing insurance benefits, including the impact of coverage decisions with CMS and applicable reimbursement contracts established between the Company and payers. However, when an order is received for a patient with no active insurance or insurance that does not cover our testing services, the Company requires payment from the patient prior to the commencement of the Company’s performance obligations. • Once the Company releases a patient’s test result to the ordering healthcare provider, the Company is legally able to collect payment and bill an insurer, patient, direct bill payer, and/or health system, depending on payer contract status or patient insurance benefit status. • In the case of some of the Company’s LSAs with various organizations, testing services are billed and the direct bill payer is obligated to pay prior to a result. Each provider is contracted to buy an explicit number of testing kits that must be returned to the Company for processing by an established deadline with this deferred revenue being recognized at the point in time results are released to the patient’s healthcare provider. In addition, for these types of LSAs all breakage (tests that are not returned to the Company for processing by their contracted deadline) is recognized as revenue upon the expiration of the contracted deadline. • The Company’s consideration can be deemed variable or fixed depending on the structure of specific payer contracts, and the Company considers collection of such consideration to be probable to the extent that it is unconstrained. Performance obligations A performance obligation is a promise in a contract to transfer a distinct good or service (or a bundle of goods or services) to the customer. The Company’s contracts have a single performance obligation, which is satisfied upon rendering of services, which culminates in the release of a patient’s test result to the ordering healthcare provider. Or, in the context of some of the Company’s LSAs, the satisfaction of the performance obligation occurs at the end of the allotted testing window when a specimen sample is not received back for processing. The Company elects the practical expedient related to the disclosure of unsatisfied performance obligations, as the duration of time between providing testing supplies, the receipt of a specimen sample, and the release of a test result to the ordering healthcare provider is far less than one year. Transaction price The transaction price is the amount of consideration that the Company expects to collect in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration expected from a contract with a customer may include fixed amounts, variable amounts, or both. The consideration derived from the Company’s contracts may consist of fixed amounts, variable amounts or both fixed and variable amounts. Fixed consideration is derived from contracts that exist between the Company and direct bill payers who assume the downstream patient billing. The contracted reimbursement rate is deemed to be fixed as the Company expects to fully collect all amounts billed under these relationships. Variable consideration is primarily derived from third party and patient billing and can result due to several factors such as the amount of contractual adjustments, any patient co-payments, deductibles or patient adherence incentives, the existence of secondary payers, and claim denials. The Company estimates the amount of variable consideration using the expected value method, which represents the sum of probability-weighted amounts in a range of possible consideration amounts. When estimating the amount of variable consideration, the Company considers several factors, such as historical collections experience, patient insurance eligibility and payer reimbursement contracts. The Company limits the amount of variable consideration included in the transaction price to the unconstrained portion of such consideration. In other words, the Company recognizes revenue up to the amount of variable consideration that is not subject to a significant reversal until additional information is obtained or the uncertainty associated with the additional payments or refunds is subsequently resolved. Differences between original estimates and subsequent revisions, including final settlements, represent changes in the estimate of variable consideration and are included in the period in which such revisions are made. Revenue recognized from changes in transaction prices was $3.2 million and $1.8 million for the three months ended June 30, 2020 and 2019, respectively. Revenue recognized from changes in transaction prices was $8.6 million and $3.4 million for the six months ended June 30, 2020 and 2019, respectively. The Company monitors its estimates of transaction price to depict conditions that exist at each reporting date. If the Company subsequently determines that it will collect more or less consideration than it originally estimated for a contract with a patient, it will account for the change as an increase or decrease in the estimate of the transaction price (i.e., an upward or downward revenue adjustment) in the period identified. When the Company does not have significant historical experience or that experience has limited predictive value, the constraint over estimates of variable consideration may result in no revenue being recognized upon release of the performance obligations associated with the Company’s tests, with recognition, generally occurring at the date of cash receipt. Allocate transaction price The transaction price is allocated entirely to the performance obligation contained within the contract with a patient. Point in time recognition The Company’s single performance obligation is satisfied at a point in time. That point in time is defined as the date a patient’s specimen is processed, an outcome is obtained and released to the patient’s ordering healthcare provider or, in the context of some of the Company’s LSAs, that point in time could be the date the allotted testing window ends if a specimen sample is not received back for processing. The point in time in which revenue is recognized by the Company signifies fulfillment of the performance obligation to the patient or direct bill payer. Disaggregation of Revenue The following table presents the Company’s revenues disaggregated by revenue source: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Screening Medicare Parts B & C $ 59,583 $ 103,569 $ 157,742 $ 186,486 Commercial 65,080 88,818 174,449 162,169 Other 6,670 7,483 18,593 13,258 Total Screening 131,333 199,870 350,784 361,913 Precision Oncology Medicare Parts B & C $ 33,994 $ — $ 81,028 $ — Commercial 45,420 — 99,810 — International 19,018 — 39,980 — Other 4,524 — 10,508 — Total Precision Oncology 102,956 — 231,326 — COVID-19 Testing $ 34,579 $ — $ 34,579 $ — Total $ 268,868 $ 199,870 $ 616,689 $ 361,913 Screening revenue primarily includes laboratory service revenue from Cologuard while Precision Oncology revenue primarily includes laboratory service revenue from global Oncotype DX products. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue on the condensed consolidated balance sheets. Generally, billing occurs subsequent to the release of a patient’s test result to the ordering healthcare provider, resulting in an account receivable. However, the Company sometimes receives advance payment from a patient or a direct bill payer before a test result is completed, resulting in deferred revenue. The deferred revenue balance is relieved upon release of the applicable patient’s test result to the ordering healthcare provider. Deferred revenue balances are reported in other current liabilities in the Company’s condensed consolidated balance sheets and were $30.7 million and $0.6 million as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020, $30.2 million of the Company’s deferred revenue balance is a result of the billing terms pursuant to the existing COVID-19 LSAs with customers. Revenue recognized for the three months ended June 30, 2020 and 2019, which was included in the deferred revenue balance at the beginning of each period was $19 thousand and $0.2 million, respectively. Revenue recognized for the six months ended June 30, 2020 and 2019, which was included in the deferred revenue balance at the beginning of each period was $0.2 million and $0.3 million, respectively. Practical Expedients The Company does not adjust the transaction price for the effects of a significant financing component, as at contract inception, the Company expects the collection cycle to be one year or less. The Company expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses in the Company’s condensed consolidated statements of operations. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 6 Months Ended |
Jun. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
MARKETABLE SECURITIES | MARKETABLE SECURITIES The following table sets forth the Company’s cash, cash equivalents, restricted cash, and marketable securities at June 30, 2020 and December 31, 2019: (In thousands) June 30, 2020 December 31, 2019 Cash, cash equivalents, and restricted cash Cash and money market $ 457,019 $ 146,932 Cash equivalents 246,907 30,322 Restricted cash (1) 282 274 Total cash, cash equivalents, and restricted cash 704,208 177,528 Marketable securities Available-for-sale debt securities 517,346 144,685 Equity securities 1,385 1,716 Total marketable securities 518,731 146,401 Total cash and cash equivalents, restricted cash and marketable securities $ 1,222,939 $ 323,929 ______________ (1) Restricted cash is included in other long-term assets on the condensed consolidated balance sheets. There was no restricted cash at June 30, 2019. Available-for-sale debt securities at June 30, 2020 consisted of the following: June 30, 2020 (In thousands) Amortized Cost Gains in Accumulated Losses in Accumulated Estimated Fair Cash equivalents U.S. government agency securities $ 246,905 $ 4 $ (2) $ 246,907 Total cash equivalents 246,905 4 (2) 246,907 Marketable securities Corporate bonds 219,264 1,297 — 220,561 U.S. government agency securities 256,425 102 (1) 256,526 Certificates of deposit 10,000 — — 10,000 Asset backed securities 22,174 85 — 22,259 Commercial paper 7,996 4 — 8,000 Total marketable securities 515,859 1,488 (1) 517,346 Total available-for-sale securities $ 762,764 $ 1,492 $ (3) $ 764,253 Available-for-sale debt securities at December 31, 2019 consisted of the following: December 31, 2019 (In thousands) Amortized Cost Gains in Accumulated Losses in Accumulated Estimated Fair Value Cash equivalents U.S. government agency securities $ 30,320 $ 2 $ — $ 30,322 Total cash equivalents 30,320 2 — 30,322 Marketable securities U.S. government agency securities 140,745 10 (73) 140,682 Corporate bonds 4,017 — (14) 4,003 Total marketable securities 144,762 10 (87) 144,685 Total available-for-sale securities $ 175,082 $ 12 $ (87) $ 175,007 The following table summarizes contractual underlying maturities of the Company’s available-for-sale debt securities at June 30, 2020: Due one year or less Due after one year through four years (In thousands) Cost Fair Value Cost Fair Value Cash equivalents U.S. government agency securities $ 246,905 $ 246,907 $ — $ — Total cash equivalents 246,905 246,907 — — Marketable securities U.S. government agency securities 249,239 249,295 7,186 7,231 Corporate bonds 162,241 162,992 57,023 57,569 Certificates of deposit 10,000 10,000 — — Commercial paper 7,996 8,000 — — Asset backed securities 2,390 2,393 19,784 19,866 Total marketable securities 431,866 432,680 83,993 84,666 Total $ 678,771 $ 679,587 $ 83,993 $ 84,666 The following table summarizes the gross unrealized losses and fair values of available-for-sale debt securities in an unrealized loss position as of June 30, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: Less than one year One year or greater Total (In thousands) Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Cash equivalents U.S. government agency securities $ 81,934 $ (2) $ — $ — $ 81,934 $ (2) Total cash equivalents 81,934 (2) — — 81,934 (2) Marketable securities U.S. government agency securities 99,975 (1) — — 99,975 (1) Total marketable securities 99,975 (1) — — 99,975 (1) Total available-for-sale securities $ 181,909 $ (3) $ — $ — $ 181,909 $ (3) The Company evaluates investments, including investments in privately-held companies, that are in an unrealized loss position for impairment as a result of credit loss. It was determined that no credit losses exist as of June 30, 2020 and December 31, 2019 because the change in market value for those securities in an unrealized loss position has resulted from fluctuating interest rates rather than a deterioration of the credit worthiness of the issuers. The Company recorded a realized gain on available-for-sale debt securities of $0.2 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively, net of insignificant realized losses. The Company recorded a realized gain on available-for-sale debt securities of $0.1 million and $0.3 million for the six months ended June 30, 2020 and 2019, respectively, net of insignificant realized losses. The Company recorded a gain of $0.4 million and a loss of $0.3 million from its equity securities for the three and six months ended June 30, 2020 as compared to no gain or loss for the three and six months ended June 30, 2019. The gains and losses recorded are included in investment income, net in the Company’s condensed consolidated statements of operations. |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT The estimated useful lives of property, plant and equipment are as follows: (In thousands) Estimated June 30, December 31, Property, plant and equipment Land n/a $ 4,466 $ 4,466 Leasehold and building improvements (1) 111,778 80,352 Land improvements 15 years 2,399 1,766 Buildings 30 - 40 years 165,926 112,815 Computer equipment and computer software 3 years 74,447 65,323 Laboratory equipment 3 - 10 years 130,323 104,008 Furniture and fixtures 3 - 10 years 22,698 14,539 Assets under construction n/a 61,628 149,687 Property, plant and equipment, at cost 573,665 532,956 Accumulated depreciation (110,228) (77,631) Property, plant and equipment, net $ 463,437 $ 455,325 ______________ (1) Lesser of remaining lease term, building life, or estimated useful life. Depreciation expense for the three months ended June 30, 2020 and 2019 was $17.6 million and $7.1 million, respectively. Depreciation expense for the six months ended June 30, 2020 and 2019 was $33.4 million and $13.4 million, respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of June 30, 2020: (In thousands) Weighted Average Cost Accumulated Amortization Net Balance at June 30, 2020 Finite-lived intangible assets Trade name 15.4 $ 100,700 $ (4,109) $ 96,591 Customer relationships 13.3 2,700 (314) 2,386 Patents 8.4 22,689 (7,105) 15,584 Acquired developed technology 9.5 814,171 (52,766) 761,405 Supply agreements 7.0 30,000 (2,549) 27,451 Internally developed technology 2.3 1,796 (590) 1,206 Total finite-lived intangible assets 972,056 (67,433) 904,623 In-process research and development n/a 200,000 — 200,000 Internally developed technology in process n/a 492 — 492 Total intangible assets $ 1,172,548 $ (67,433) $ 1,105,115 The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of December 31, 2019: (In thousands) Weighted Average Cost Accumulated Amortization Net Balance at December 31, 2019 Finite-lived intangible assets Trade name 15.9 $ 100,700 $ (961) $ 99,739 Customer relationships 13.6 2,700 (224) 2,476 Patents 8.8 22,690 (5,974) 16,716 Acquired developed technology 9.9 806,371 (12,345) 794,026 Supply agreements 7.5 30,000 (571) 29,429 Internally developed technology 2.5 1,229 (336) 893 Total finite-lived intangible assets 963,690 (20,411) 943,279 In-process research and development n/a 200,000 — 200,000 Internally developed technology in process n/a 271 — 271 Total intangible assets $ 1,163,961 $ (20,411) $ 1,143,550 As of June 30, 2020, the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the five succeeding fiscal years is as follows: (In thousands) 2020 $ 47,158 2021 94,217 2022 94,012 2023 93,724 2024 93,345 Thereafter 482,167 $ 904,623 The Company’s acquired intangible assets are being amortized on a straight-line basis over the estimated useful life. The amortization expense recorded from these intangible assets is reported in amortization of acquired intangible assets on the condensed consolidated statements of operations. Goodwill As a result of the the acquisition of Paradigm Diagnostics, Inc. (“Paradigm”) and Viomics, Inc. (“Viomics”) in March 2020, the Company recognized goodwill of $30.4 million, which includes an immaterial post-acquisition adjustment to goodwill in the second quarter of 2020. Refer to the Company’s 2019 10-K for further discussion on goodwill recorded from previous business combinations. The Company evaluates goodwill for possible impairment in accordance with ASC 350 on an annual basis during the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting the Company's business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value. Due to the impact of COVID-19 on the Company’s operations, the Company performed a qualitative assessment of goodwill to determine if an event indicating impairment was present. No such indicators were identified as of June 30, 2020. There were no impairment losses for the periods ended June 30, 2020 and December 31, 2019. During the six months ended June 30, 2020, the Company recognized a measurement period adjustment to goodwill of $4.0 million related to an increase in Genomic Health’s pre-acquisition deferred tax liability due to finalization of certain income-tax related items. The change in the carrying amount of goodwill for the periods ended June 30, 2020 and December 31, 2019 is as follows: (In thousands) Balance, January 1, 2019 $ 17,279 Genomic Health acquisition 1,185,918 Balance, December 31, 2019 1,203,197 Paradigm & Viomics acquisition 30,431 Genomic Health acquisition adjustment 4,044 Balance, June 30, 2020 $ 1,237,672 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The three levels of the fair value hierarchy established are as follows: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available. The following table presents the Company’s fair value measurements as of June 30, 2020 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. (In thousands) Fair Value at June 30, Quoted Prices Significant Significant Cash, cash equivalents, and restricted cash Cash and money market $ 457,019 $ 457,019 $ — $ — U.S. government agency securities 246,907 — 246,907 — Restricted cash 282 282 — — Marketable securities Corporate bonds 220,561 — 220,561 — U.S. government agency securities 256,526 — 256,526 — Certificates of deposit 10,000 — 10,000 — Asset backed securities 22,259 — 22,259 — Commercial paper 8,000 — 8,000 — Equity Securities 1,385 1,385 — — Liabilities Contingent consideration (2,551) — — (2,551) Total $ 1,220,388 $ 458,686 $ 764,253 $ (2,551) The following table presents the Company’s fair value measurements as of December 31, 2019 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. (In thousands) Fair Value at December 31, Quoted Prices Significant Significant Cash and cash equivalents Cash and money market $ 146,932 $ 146,932 $ — $ — U.S. government agency securities 30,322 — 30,322 — Restricted cash 274 274 — — Marketable securities U.S. government agency securities 140,682 — 140,682 — Corporate bonds 4,003 — 4,003 — Equity securities 1,716 1,716 — — Liabilities Contingent consideration (2,879) — — (2,879) Total $ 321,050 $ 148,922 $ 175,007 $ (2,879) There have been no changes in valuation techniques or transfers between fair value measurement levels during the periods ended June 30, 2020 and December 31, 2019. The fair value of Level 2 instruments classified as cash equivalents and marketable debt securities are valued using a third-party pricing agency where the valuation is based on observable inputs including pricing for similar assets and other observable market factors. The Company’s marketable equity security investment in Biocartis is classified as a Level 1 instrument. See Note 7 for additional information on Biocartis. Contingent Consideration In connection with the Biomatrica Acquisition, a contingent earn-out liability was created to account for an additional $20.0 million in contingent consideration that could be earned based upon certain revenue milestones being met. The following table provides a roll-forward of the fair values of the contingent consideration, which includes Level 3 measurements: (In thousands) Contingent consideration Balance, January 1, 2020 $ (2,879) Changes in fair value — Gains (losses) recognized in earnings — Payments 328 Balance, June 30, 2020 $ (2,551) As of June 30, 2020, the fair value of the contingent earn-out liability is classified as a component of other long-term liabilities in the Company’s condensed consolidated balance sheet. This fair value measurement of contingent consideration related to the Biomatrica acquisition was categorized as a Level 3 liability, as the measurement amount is based primarily on significant inputs not observable in the market. The Company evaluates the fair value of expected contingent consideration and the corresponding liability each annual reporting period using the Monte Carlo Method, which is consistent with the initial measurement of the expected Biomatrica Acquisition earn-out liability. The Company estimates projections during the earn-out period utilizing various potential pay-out scenarios. Probabilities were applied to each potential scenario and the resulting values were discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn-out itself, the related projections, and the overall business. Non-Marketable Equity Investment The Company has non-marketable equity investments which are initially recorded at the estimated fair value based on observable transactions. The Company remeasures the fair value only when an observable transaction occurs during the period that would suggest a change in the carrying value of the investment. As of June 30, 2020 and December 31, 2019, the Company had non-marketable equity investments of $11.8 million, which are classified as a component of other long-term assets in the Company’s condensed consolidated balance sheets. The Company’s preferred stock investment in Epic Sciences represents $10.8 million of the total non-marketable equity investments. There have been no observable transactions during the three and six months ended June 30, 2020 and 2019. See Note 7 for additional information regarding the terms of the investment in Epic Sciences. Fair Value of Long-Term Debt and Convertible Notes The Company measures the fair value of its convertible notes and long-term debt for disclosure purposes. The following table summarizes the Company’s outstanding convertible notes and long-term debt: June 30, 2020 December 31, 2019 (In thousands) Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value 2028 Convertible notes (2) $ 786,711 $ 1,101,413 $ — $ — 2027 Convertible notes (2) 498,707 774,328 483,909 843,741 2025 Convertible notes (2) 248,965 419,015 319,696 592,482 Construction loan (3) 24,263 24,263 24,866 24,866 ______________ (1) The carrying amounts presented are net of debt discounts and debt issuance costs (see Note 12 and Note 15 of the condensed consolidated financial statements for further information). (2) The fair values are based on observable market prices for this debt, which is traded in active markets and therefore is classified as a Level 2 fair value measurement. A portion of the 2025 convertible notes were settled in 2020 resulting in a decrease in the liability. (3) The carrying amount of the construction loan approximates fair value due to the short-term nature of this instrument. The construction loan is privately held with no public market for this debt and therefore is classified as a Level 3 fair value measurement. The change in the fair value was due to payments made on the loan resulting in a decrease in the liability. |
LICENSE AND COLLABORATION AGREE
LICENSE AND COLLABORATION AGREEMENTS | 6 Months Ended |
Jun. 30, 2020 | |
LICENSE AGREEMENTS [Abstract] | |
LICENSE AND COLLABORATION AGREEMENTS | LICENSE AND COLLABORATION AGREEMENTS The Company licenses certain technologies that are, or may be, incorporated into its technology under several license agreements, as well as the rights to commercialize certain diagnostic tests through collaboration agreements. Generally, the license agreements require the Company to pay royalties based on net revenues received using the technologies and may require minimum royalty amounts or maintenance fees. Mayo In June 2009 the Company entered into a license agreement with Mayo Foundation for Medical Education and Research (“Mayo”). The Company’s license agreement with Mayo most recently amended in January 2019. Under the license agreement, Mayo granted the Company an exclusive, worldwide license to certain Mayo patents and patent applications, as well as a non-exclusive, worldwide license with regard to certain Mayo know-how. The scope of the license covers any screening, surveillance or diagnostic test or tool for use in connection with any type of cancer, pre-cancer, disease or condition. The licensed Mayo patents and patent applications contain both method and composition claims that relate to sample processing, analytical testing and data analysis associated with nucleic acid screening for cancers and other diseases. The jurisdictions covered by these patents and patent applications include the U.S., Australia, Canada, the European Union, China, Japan and Korea. Under the license agreement, the Company assumed the obligation and expense of prosecuting and maintaining the licensed Mayo patents and is obligated to make commercially reasonable efforts to bring to market products using the licensed Mayo intellectual property. Pursuant to the Company’s agreement with Mayo, the Company is required to pay Mayo a low-single-digit royalty on the Company’s net sales of current and future products using the licensed Mayo intellectual property each year during the term of the Mayo agreement. The license agreement will remain in effect, unless earlier terminated by the parties in accordance with the agreement, until the last of the licensed patents expires in 2037 (or later, if certain licensed patent applications are issued). However, if the Company is still using the licensed Mayo know-how or certain Mayo-provided biological specimens or their derivatives on such expiration date, the term shall continue until the earlier of the date the Company stops using such know-how and materials and the date that is five years after the last licensed patent expires. The license agreement contains customary termination provisions and permits Mayo to terminate the license agreement if the Company sues Mayo or its affiliates, other than any such suit claiming an uncured material breach by Mayo of the license agreement. In addition to granting the Company a license to the covered Mayo intellectual property, Mayo provides the Company with product development and research and development assistance pursuant to the license agreement and other collaborative arrangements. In connection with this collaboration, the Company incurred charges of $1.0 million and $1.1 million for the three months ended June 30, 2020 and 2019, respectively. The Company incurred charges of $1.9 million and $2.6 million for the six months ended June 30, 2020 and 2019, respectively. The charges incurred in connection with this collaboration are recorded in research and development expenses in the Company’s condensed consolidated statements of operations. Certain of Mayo’s obligations to provide development assistance expired in January 2020. The Company and Mayo are in discussions to amend the license agreement to extend that date. Epic Sciences In June 2016, Genomic Health (now a wholly-owned subsidiary of the Company) entered into a collaboration agreement with Epic Sciences, which was superseded and replaced in March 2019 by a license agreement and laboratory services agreement with Epic Sciences, under which Genomic Health was granted exclusive distribution rights to commercialize Epic Sciences’ AR-V7 Nucleus Detect test in the United States, which is marketed as Oncotype DX AR-V7 Nucleus Detect. The Company has primary responsibility, in accordance with applicable laws and regulations, for marketing and promoting the test, order fulfillment, billing and collections of receivables, claims appeals, customer support, and providing and maintaining order management systems for the test. Epic Sciences is responsible for performing all tests, performing studies including analytic and clinical validation studies, and seeking Medicare coverage and a Medicare payment rate from the CMS for the test. The license and laboratory service agreement has a term of ten years from June 2016, unless terminated earlier under certain circumstances. The Oncotype DX AR-V7 Nucleus Detect test became commercially available in February 2018. The Company recognizes revenues for the test performed under this arrangement and Epic Sciences receives a fee per test performed that represents the fair market value for the testing services they perform. As of June 30, 2020 and December 31, 2019, the Company owns 18,258,838 shares of preferred stock of Epic Sciences recorded at a fair value of $10.8 million which is included in other-long term assets on the Company’s condensed consolidated balance sheets. The Company has concluded it is not the primary beneficiary and thus has not consolidated the investee pursuant to the requirements of ASC 810, Consolidation. The Company will continue to assess its investment and future commitments to the investee and to the extent its relationship with the investee changes, may be required to consolidate the investee in future periods. The Company determined that the investment is an equity investment for which the Company does not have the ability to exercise significant influence. The Company adjusts the carrying value of its non-marketable equity securities for changes from observable transactions for identical or similar investments of the same issuer, less impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense) in the condensed consolidated statements of operations. Biocartis N.V. In September 2017, Genomic Health entered into an exclusive license and development agreement with Biocartis, a molecular diagnostics company based in Belgium, to develop and commercialize an in vitro diagnostic (“IVD”) version of the Oncotype DX Breast Recurrence Score test on the Biocartis Idylla platform. Under the terms of the license and development agreement, the Company has an exclusive, worldwide, royalty-bearing license to develop and commercialize an IVD version of the Oncotype DX Breast Recurrence Score test on the Biocartis Idylla platform, and an option to expand the collaboration to include additional tests in oncology and urology. The Company has primary responsibility for developing, validating and obtaining regulatory authorizations and registrations for IVD Oncotype DX tests to be performed on the Idylla platform. The Company is also responsible for manufacturing and commercialization activities with respect to such tests. Pursuant to the license and development agreement, Genomic Health recorded a one-time upfront license and option fee of $3.2 million. In December 2017, Genomic Health purchased 270,000 ordinary shares of Biocartis, a public company listed on the Euronext exchange, for a total cost of $4.0 million. This investment was subject to a lock-up agreement that expired in December 2018. The investment has been recognized at fair value, which the Company estimated to be $1.4 million and $1.7 million as of June 30, 2020 and December 31, 2019, respectively, and is included in marketable securities on the Company's condensed consolidated balance sheets. Under a November 2018 addendum to the license and development agreement, the Company exercised its option to expand the collaboration to include tests in urology and obtained a right of first refusal to add a test for the non-invasive detection of prostate cancer in a pre-biopsy setting. Additional terms of the license and development agreement and the addendum include the Company’s obligation to pay Biocartis an aggregate of €2.5 million in cash upon achievement of certain milestones and €2.0 million for the expansion of the collaboration to include additional tests in oncology. In addition, the Company will pay royalties based primarily on the future sales volumes of the Company’s tests performed on the Idylla platform. |
PFIZER PROMOTION AGREEMENT
PFIZER PROMOTION AGREEMENT | 6 Months Ended |
Jun. 30, 2020 | |
PFIZER PROMOTION AGREEMENT | |
PFIZER PROMOTION AGREEMENT | PFIZER PROMOTION AGREEMENTIn August 2018, the Company entered into a Promotion Agreement (“Promotion Agreement”) with Pfizer Inc. (“Pfizer”). Under the terms of the Promotion Agreement, Pfizer promotes Cologuard and provides certain sales, marketing, analytical and other commercial operations support. The Company agreed to pay Pfizer for promotion, sales and marketing costs incurred on behalf of the Company. The Company incurred charges of $21.1 million and $16.6 million for promotion, sales and marketing services performed by Pfizer on behalf of the Company during the three months ended June 30, 2020 and 2019, respectively. The Company incurred charges of $40.5 million and $33.9 million for promotion, sales and marketing services performed by Pfizer on behalf of the Company during the six months ended June 30, 2020 and 2019, respectively. These costs are recorded in sales and marketing in the Company’s condensed consolidated statements of operations. The Company also agreed to pay Pfizer a service fee based on incremental gross profits over specified baselines during the term of the Promotion Agreement and royalties for Cologuard related revenues for a specified period after the expiration or termination of the Promotion Agreement. The initial term of the Promotion Agreement runs through December 31, 2021. The Company incurred charges of $2.1 million and $19.4 million for this service fee during the three months ended June 30, 2020 and 2019, respectively. The Company incurred charges of $21.7 million and $38.6 million for this service fee during the six months ended June 30, 2020 and 2019, respectively. These costs are recorded in sales and marketing in the Company’s condensed consolidated statements of operations. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Convertible Notes Settlement Stock Issuance In March 2019, the Company used cash of $494.1 million and an aggregate of 2.2 million shares of the Company’s common stock valued at $182.4 million for total consideration of $676.5 million to settle $493.4 million of the 2025 convertible notes. Refer to Note 15 for further discussion of this settlement transaction. Genomic Health Combination Stock Issuance In November 2019, the Company completed the combination with Genomic Health in a cash and stock transaction valued at $2.5 billion. Of the $2.5 billion purchase price, $1.4 billion was settled through the issuance of 17.0 million shares of common stock. The Company incurred $0.4 million in stock issuance costs as part of the transaction. Refer to Note 16 for further discussion of the consideration transferred as part of the combination with Genomic Health. Paradigm and Viomics Acquisition Stock Issuance In March 2020, the Company completed the acquisitions of Paradigm and Viomics. The purchase price for these acquisitions consisted of cash and stock valued at $40.4 million. Of the $40.4 million purchase price, $32.2 million is expected to be settled through the issuance of 0.4 million shares of common stock. Of the $32.2 million that will be settled through the issuance of common stock, $28.6 million was issued in March 2020, and the remainder was withheld and may become issuable as additional merger consideration on June 3, 2021 subject to the terms and conditions of the acquisition agreements. Changes in Accumulated Other Comprehensive Income (Loss) The amount recognized in accumulated other comprehensive income (loss) (“AOCI”) for the six months ended June 30, 2020 were as follows: (In thousands) Foreign Unrealized Accumulated Balance at December 31, 2019 $ (25) $ (75) $ (100) Other comprehensive income (loss) before reclassifications — 1,564 1,564 Amounts reclassified from accumulated other comprehensive loss 25 — 25 Net current period change in accumulated other comprehensive loss 25 1,564 1,589 Balance at June 30, 2020 $ — $ 1,489 $ 1,489 The amounts recognized in AOCI for the six months ended June 30, 2019 were as follows: (In thousands) Foreign Unrealized Accumulated Balance at December 31, 2018 $ (25) $ (1,397) $ (1,422) Other comprehensive loss before reclassifications — 3,784 3,784 Amounts reclassified from accumulated other comprehensive loss — 344 344 Net current period change in accumulated other comprehensive loss, before tax — 4,128 4,128 Income tax expense related to items of other comprehensive income — (984) (984) Balance at June 30, 2019 $ (25) $ 1,747 $ 1,722 Amounts reclassified from AOCI for the six months ended June 30, 2020 and 2019 were as follows: Affected Line Item in the Six Months Ended June 30, Details about AOCI Components (In thousands) 2020 2019 Change in value of available-for-sale investments Sales and maturities of available-for-sale investments Investment income, net $ — $ 344 Foreign currency adjustment General and administrative 25 — Total reclassifications $ 25 $ 344 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-Based Compensation Plans The Company maintains the 2010 Omnibus Long-Term Incentive Plan (As Amended and Restated Effective July 27, 2017), the 2019 Omnibus Long-Term Incentive Plan, the 2010 Employee Stock Purchase Plan, the 2016 Inducement Award Plan and the 2000 Stock Option and Incentive Plan (collectively, the “Stock Plans”). Stock-Based Compensation Expense The Company records stock-based compensation expense in connection with the amortization of restricted stock and restricted stock unit awards (“RSUs”), stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees, non-employee consultants and non-employee directors. The Company recorded approximately $40.0 million and $20.1 million in stock-based compensation expense during the three months ended June 30, 2020 and 2019, respectively. The Company recorded approximately $69.6 million and $36.3 million in stock-based compensation expense during the six months ended June 30, 2020 and 2019, respectively. In February 2019, the Company issued performance-based equity awards to certain employees which vest upon the achievement of certain performance goals, including financial performance targets and operational milestones. Determining the appropriate amount to expense based on the anticipated achievement of the stated goals requires judgment, including forecasting future financial results. The estimate of the timing of the expense recognition is revised periodically based on the probability of achieving the goals and adjustments are made as appropriate. The cumulative impact of any revision is reflected in the period of the change. If the financial performance targets and operational milestones are not achieved, the award would not vest, so no compensation cost would be recognized and any previously recognized stock-based compensation expense would be reversed. In June 2020, the Company modified certain of the operational milestones within the outstanding performance-based equity awards, which were not deemed to have an impact on vesting and no incremental stock-based compensation expense was recorded for the three and six months ended June 30, 2020. This modification impacted awards held by 36 employees. In connection with the combination with Genomic Health, the Company accelerated the vesting of shares of previously unvested stock options and restricted stock units for employees with qualifying termination events. During the three and six months ended June 30, 2020, the Company accelerated 9,132 shares and 43,480 shares of previously unvested stock options, respectively, and 10,525 shares and 28,814 shares of previously unvested restricted stock units, respectively, and recognized the additional non-cash stock-based compensation expense of $0.6 million and $3.5 million, respectively, for the accelerated awards. As a result of workforce reductions in April 2020 due to the COVID-19 pandemic, the Company accelerated the vesting of previously unvested stock options and restricted stock units for employees that were terminated. The Company accelerated 708 shares of previously unvested stock options and 33,123 shares of previously unvested restricted stock units, and recognized the additional non-cash stock-based compensation expense of $1.8 million for the accelerated awards. Determining Fair Value Valuation and Recognition – The fair value of each service-based option award is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of service-based awards for each restricted stock unit award is determined on the date of grant using the closing stock price on that day. The estimated fair value of these awards is recognized to expense using the straight-line method over the vesting period. For awards that vest when a performance condition is achieved, the Company performs an evaluation of internal and external factors to determine the number of shares that are most likely to vest based on the probability of what performance conditions will be met. The Black-Scholes pricing model utilizes the following assumptions: Expected Term – Expected life of an option award is the average length of time over which the Company expects employees will exercise their options, which is based on historical experience with similar grants. Expected life of a market measure-based award is based on the applicable performance period. Expected Volatility - Expected volatility is based on the Company’s historical stock volatility data over the expected term of the awards. Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent expected term. Forfeitures - The Company recognizes forfeitures as they occur. The fair value of each option is based on the assumptions in the following table: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Option Plan Shares Risk-free interest rates (1) (1) 0.98% - 1.47% 2.54% - 2.59% Expected term (in years) (1) (1) 4.68 - 6.15 6.28 Expected volatility (1) (1) 65.67% - 77.51% 64.95% - 65.00% Dividend yield (1) (1) —% —% Weighted average fair value per share of options granted during the period (1) (1) $58.77 $57.11 ESPP Shares Risk-free interest rates 0.12% - 0.2% 2.31% - 2.44% 0.12% - 0.2% 2.31% - 2.44% Expected term (in years) 0.5 - 2 0.5 - 2 0.5 - 2 0.5 - 2 Expected volatility 63.7% - 89.0% 55.0% - 57.6% 63.7% - 89.0% 55.0% - 57.6% Dividend yield —% —% —% —% Weighted average fair value per share of stock purchase rights granted during the period $30.60 $35.91 $30.60 $35.91 ______________ (1) The Company did not grant options under its 2010 Omnibus Long-Term Incentive Plan or 2019 Omnibus Long-Term Incentive Plan during the period indicated. Stock Option, Restricted Stock, and Restricted Stock Unit Activity A summary of stock option activity under the Stock Plans during the six months ended June 30, 2020 is as follows: Options Shares Weighted Weighted Aggregate (Aggregate intrinsic value in thousands) Outstanding, January 1, 2020 2,700,293 $ 34.01 2.9 Granted 309,143 97.66 Exercised (368,720) 29.67 Forfeited (65,438) 83.87 Outstanding, June 30, 2020 2,575,278 $ 41.01 6.5 $ 123,979 Exercisable, June 30, 2020 1,653,394 $ 26.10 5.5 $ 101,761 ______________ (1) The total intrinsic value of options exercised during the six months ended June 30, 2020 and 2019 was $20.4 million and $22.6 million, respectively, determined as of the date of exercise. A summary of restricted stock and restricted stock unit activity under the Stock Plans during the six months ended June 30, 2020 is as follows: Restricted Weighted Outstanding, January 1, 2020 4,384,005 $ 63.41 Granted 1,835,695 92.25 Released (1,350,088) 47.00 Forfeited (208,076) 79.45 Outstanding, June 30, 2020 4,661,536 $ 78.84 As of June 30, 2020, there was $300.9 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all equity compensation plans. The Company expects to recognize that cost over a weighted average period of 3.0 years. |
NEW MARKET TAX CREDIT
NEW MARKET TAX CREDIT | 6 Months Ended |
Jun. 30, 2020 | |
NEW MARKET TAX CREDIT | |
NEW MARKET TAX CREDIT | (11) NEW MARKET TAX CREDIT During the fourth quarter of 2014, the Company received approximately $2.4 million in net proceeds from financing agreements related to working capital and capital improvements at one of its Madison, Wisconsin facilities. This financing arrangement was structured with an unrelated third-party financial institution (the “Investor”), an investment fund, and its majority owned community development entity in connection with the Company’s participation in transactions qualified under the federal New Markets Tax Credit (“NMTC”) program, pursuant to Section 45D of the Internal Revenue Code of 1986, as amended. The Company is required to be in compliance through December 2021 with various regulations and contractual provisions that apply to the NMTC arrangement. Noncompliance with applicable requirements could result in the Investor’s projected tax benefits not being realized and, therefore, require the Company to indemnify the Investor for any loss or recapture of NMTC related to the financing until such time as the recapture provisions have expired under the applicable statute of limitations. The Company does not anticipate any credit recapture will be required in connection with this financing arrangement. The Investor and its majority owned community development entity are considered Variable Interest Entities (“VIEs”) and the Company is the primary beneficiary of the VIEs. This conclusion was reached based on the following: • the ongoing activities of the VIEs — collecting and remitting interest and fees and NMTC compliance — were all considered in the initial design and are not expected to significantly affect performance throughout the life of the VIE; • contractual arrangements obligate the Company to comply with NMTC rules and regulations and provide various other guarantees to the Investor and community development entity; • the Investor lacks a material interest in the underlying economics of the project; and • the Company is obligated to absorb losses of the VIEs. Because the Company is the primary beneficiary of the VIEs, they have been included in the consolidated financial statements. There are no other assets, liabilities or transactions in these VIEs outside of the financing transactions executed as part of the NMTC arrangement. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | (12) DEBT Construction Loan Agreement During December 2017, the Company entered into a loan agreement with Fifth Third Bank (formerly MB Financial Bank, N.A.) (the “Construction Loan Agreement”), which provides the Company with a non-revolving construction loan (the “Construction Loan”) of $25.6 million. The Company is using the Construction Loan proceeds to finance the construction of an additional clinical laboratory and related facilities in Madison, Wisconsin. The Construction Loan is collateralized by the additional clinical laboratory and related facilities. Pursuant to the Construction Loan Agreement, funds drawn will bear interest at a rate equal to the sum of the 1-month LIBOR rate plus 2.25 percent. Regular monthly payments are interest-only for the first 24 months, with further payments based on a 20-year amortization schedule. Amounts borrowed pursuant to the Construction Loan Agreement may be prepaid at any time without penalty. The maturity date of the Construction Loan Agreement is December 10, 2022. In November 2017, Fifth Third Bank, on behalf of the Company, issued an Irrevocable Standby Letter of Credit in the amount of $0.6 million in favor of the City of Madison, Wisconsin (the “City Letter of Credit”). The City Letter of Credit is deemed to have been issued pursuant to the Construction Loan Agreement. The amount of the City Letter of Credit will reduce, dollar for dollar, the amount available for borrowing under the Construction Loan Agreement. As a condition to Fifth Third’s initial advance of loan proceeds under the Construction Loan Agreement, the Company was required to first invest at least $16.4 million of its own cash into the construction project. The Company fulfilled its required initial investment and made its first draw on the Construction Loan in June 2018. In December 2019, the Company began making monthly payments towards the outstanding principal balance plus accrued interest. As of June 30, 2020 and December 31, 2019, the outstanding balance was $24.5 million and $25.0 million, respectively, including $0.7 million of interest incurred, which is accrued for as an interest reserve and represents a portion of the loan balance. The Company capitalized the $0.7 million of interest to the construction project. The Company incurred approximately $0.2 million of debt issuance costs related to the Construction Loan, which are recorded as a direct deduction from the liability. The debt issuance costs are being amortized over the life of the Construction Loan. The Construction Loan Agreement was amended effective June 30, 2020 to include a financial covenant to maintain a minimum liquidity of $250 million and remove the minimum tangible net worth covenant. Prior to the amendment, the Company was not in compliance with a minimum tangible net worth covenant due to the combination with Genomic Health. As of June 30, 2020, the Company is in compliance with the covenant included in the amended agreement. Tax Increment Financing Loan Agreements The Company entered into two separate Tax Increment Financing Loan Agreements (“TIFs”) in February 2019 and June 2019 with the City of Madison, Wisconsin. The TIFs provide for $4.6 million of financing in the aggregate. In return for the loans, the Company is obligated to create and maintain 500 full-time jobs over a five The Company records the earned financial incentives as the full-time equivalent positions are filled. The amount earned is recorded as a liability and amortized as a reduction of operating expenses over a two By the end of 2019, the Company had earned and received payment of $4.6 million from the City of Madison. As of June 30, 2020 and December 31, 2019, the Company has recorded a liability of $ $1.1 million and $2.7 million, respectively, in other current liabilities on the Company’s condensed consolidated balance sheets, reflecting when the expected benefit of the financial benefits amortization will reduce future operating expenses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (13) COMMITMENTS AND CONTINGENCIES Leases Supplemental disclosure of cash flow information related to the Company’s cash and non-cash activities with its operating leases are as follows: Six Months Ended June 30, 2020 (In thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,289 $ 2,419 Non-cash investing and financing activities: Right-of-use assets obtained in exchange for new operating lease liabilities (1) 13,024 20,511 ______________ (1) For the six months ended June 30, 2019, this includes right-of-use assets obtained from the initial adoption of ASC 842 of approximately $17.9 million. As of June 30, 2020 and December 31, 2019, the Company’s right-of-use assets are $132.8 million and $126.4 million, respectively, which are reported in operating lease right-of-use assets in the Company’s condensed consolidated balance sheets. As of June 30, 2020, the Company has outstanding lease obligations of $136.5 million, of which $9.9 million is reported in operating lease liabilities, current portion and $126.6 million is reported in operating lease liabilities, less current portion in the Company’s condensed consolidated balance sheets. As of December 31, 2019, the Company had outstanding lease obligations of $126.6 million, of which $7.9 million is reported in operating lease liabilities, current portion and $118.7 million is reported in operating lease liabilities, less current portion in the Company’s condensed consolidated balance sheets. The Company calculates its incremental borrowing rates for specific lease terms, used to discount future lease payments, as a function of the U.S. Treasury rate and an indicative Moody’s rating for operating leases. The Company’s weighted average discount rate and weighted average lease term remaining on lease liabilities is approximately 6.83% and 9.20 years, respectively. Legal Matters The United States Department of Justice (“DOJ”) is investigating Genomic Health's compliance with the Medicare Date of Service billing regulation. In March 2017, Genomic Health received a civil investigative demand (“CID”) from the U.S. Attorney's Office for the Eastern District of New York in connection with this matter and has produced specific documents in response to the CID. In July 2019 and January 2020, Genomic Health received additional subpoenas from the DOJ related to this inquiry and the Company is cooperating with those requests. An adverse outcome could include the Company being required to pay treble damages, incur civil and criminal penalties, paying attorneys' fees, entering into a corporate integrity agreement, being excluded from participation in government healthcare programs, including Medicare and Medicaid, and other adverse actions that could materially and adversely affect the Company's business, financial condition and results of operation.. The DOJ's investigation is still in process and the scope and outcome of the investigation is not determinable at this time. See Note 16 for additional information on the Company's fair value determination of this pre-acquisition loss contingency. There can be no assurance that any settlement, resolution, or other outcome of this matter during any subsequent reporting period will not have a material adverse effect on the Company’s results of operations or cash flows for that period or on the Company’s financial position. |
WISCONSIN ECONOMIC DEVELOPMENT
WISCONSIN ECONOMIC DEVELOPMENT TAX CREDITS | 6 Months Ended |
Jun. 30, 2020 | |
WISCONSIN ECONOMIC DEVELOPMENT TAX CREDITS [Abstract] | |
WISCONSIN ECONOMIC DEVELOPMENT TAX CREDITS | (14) WISCONSIN ECONOMIC DEVELOPMENT TAX CREDITS During the first quarter of 2015, the Company entered into an agreement with the Wisconsin Economic Development Corporation (“WEDC”) to earn $9.0 million in refundable tax credits on the condition that the Company expends $26.3 million in capital investments and establishes and maintains 758 full-time positions over a seven seven The Company records the earned tax credits as job creation and capital investments occur. The amount of tax credits earned is recorded as a liability and amortized as a reduction of operating expenses over the expected period of benefit. The tax credits earned from capital investment are recognized as an offset to depreciation expense over the expected life of the acquired capital assets. The tax credits earned related to job creation are recognized as an offset to operational expenses over the life of the agreement, as the Company is required to maintain the minimum level of full-time positions through the seven As of June 30, 2020, the Company has earned all $9.0 million of the refundable tax credits and has received payment of $5.9 million from the WEDC. The unpaid portion is $3.1 million, of which $1.6 million is reported in prepaid expenses and other current assets and $1.5 million is reported in other long-term assets, reflecting when collection of the refundable tax credits is expected to occur. As of June 30, 2020, the Company also has recorded a $1.1 million liability in other current liabilities, which reflects when the expected benefit of the tax credit amortization will reduce future operating expenses. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 6 Months Ended |
Jun. 30, 2020 | |
CONVERTIBLE NOTES [Abstract] | |
CONVERTIBLE NOTES | (15) CONVERTIBLE NOTES Convertible note obligations included in the condensed consolidated balance sheets consisted of the following: (In thousands) Coupon Interest Rate Effective Interest Fair Value of Liability Component at June 30, 2020 December 31, 2019 2028 Convertible notes 0.375% 5.2% $ 790,608 $ 1,150,000 $ — 2027 Convertible notes 0.375% 6.3% 472,501 747,500 747,500 2025 Convertible notes 1.000% 6.0% 227,103 315,049 415,049 Total Convertible notes 2,212,549 1,162,549 Less: Debt discount (2) (648,281) (342,463) Less: Debt issuance costs (3) (29,885) (16,481) Net convertible debt $ 1,534,383 $ 803,605 ______________ (1) As each of the convertible instruments may be settled in cash upon conversion, for accounting purposes, they were separated into a liability component and an equity component. The amount allocated to the equity component is the difference between the principal value of the instrument and the fair value of the liability component at issuance. The resulting debt discount is being amortized to interest expense at the respective effective interest rate over the contractual term of the debt. A portion of the 2025 Convertible Notes have been extinguished or converted. The fair value of the liability component at issuance reflected above represents the liability value at issuance for the applicable portion of the 2025 Notes which remain outstanding at June 30, 2020. The fair value of the liability component of the 2025 Notes at issuance was $654.8 million with the equity component being $269.7 million. (2) The unamortized discount consists of the following: (In thousands) June 30, 2020 December 31, 2019 2028 Convertible notes $ 347,191 $ — 2027 Convertible notes 239,267 253,340 2025 Convertible notes 61,823 89,123 Total unamortized discount $ 648,281 $ 342,463 (3) Debt issuance costs consists of the following: (In thousands) June 30, 2020 December 31, 2019 2028 Convertible notes $ 16,098 $ — 2027 Convertible notes 9,525 10,251 2025 Convertible notes 4,262 6,230 Total debt issuance costs $ 29,885 $ 16,481 Issuances and Settlements In January 2018, the Company issued and sold $690.0 million in aggregate principal amount of 1.0% Convertible Notes (the “January 2025 Notes”) with a maturity date of January 15, 2025. The January 2025 Notes accrue interest at a fixed rate of 1.0% per year, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The net proceeds from the issuance of the January 2025 Notes were approximately $671.1 million, after deducting underwriting discounts and commissions and the offering expenses payable by the Company. In June 2018, the Company issued and sold an additional $218.5 million in aggregate principal amount of 1.0% Convertible Notes (the “June 2025 Notes”). The June 2025 Notes were issued under the same indenture pursuant to which the Company previously issued the January 2025 Notes (the “Indenture”). The January 2025 Notes and the June 2025 Notes (collectively, the “2025 Notes”) have identical terms (including the same January 15, 2025 maturity date) and will be treated as a single series of securities. The net proceeds from the issuance of the June 2025 Notes were approximately $225.3 million, after deducting underwriting discounts and commissions and the offering expenses payable by the Company. In March 2019, the Company issued and sold $747.5 million in aggregate principal amount of 0.375% Convertible Notes (the “2027 Notes”) with a maturity date of March 15, 2027. The 2027 Notes accrue interest at a fixed rate of 0.375% per year, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019. The net proceeds from the issuance of the 2027 Notes were approximately $729.5 million, after deducting underwriting discounts and commissions and the offering expenses payable by the Company. The Company utilized a portion of the proceeds from the issuance of the 2027 Notes to settle a portion of the 2025 Notes in privately negotiated transactions. In March 2019, the Company used cash of $494.1 million and an aggregate of 2.2 million shares of the Company’s common stock valued at $182.4 million for total consideration of $676.5 million to settle $493.4 million of the 2025 Notes, of which $375.0 million was allocated to the liability component, $300.8 million was allocated to the equity component, and $0.7 million was used to pay off interest accrued on the 2025 Notes. The consideration transferred was allocated to the liability and equity components of the 2025 Notes using the equivalent rate that reflected the borrowing rate for a similar non-convertible debt instrument immediately prior to settlement. The transaction resulted in a loss on settlement of convertible notes of $10.6 million, which is recorded in interest expense in the Company’s condensed consolidated statement of operations. The loss represents the difference between (i) the fair value of the liability component and (ii) the sum of the carrying value of the debt component and any unamortized debt issuance costs at the time of repurchase. In February 2020, the Company issued and sold $1,150.0 million in aggregate principal amount of 0.375% Convertible Notes (the “2028 Notes” and, collectively with the 2025 Notes and the 2027 Notes, the “Notes”) with a maturity date of March 1, 2028. The 2028 Notes accrue interest at a fixed rate of 0.375% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2020. The net proceeds from the issuance of the 2028 Notes were approximately $1,125.6 million, after deducting underwriting discounts and commissions and the offering expenses payable by the Company. In February 2020, the Company used $150.1 million of the proceeds from the issuance of the 2028 Notes to settle $100.0 million of the 2025 Notes, of which $85.5 million was allocated to the liability component, $64.2 million, net of a tax impact of $0.3 million, was allocated to the equity component, and $0.1 million was used to pay off interest accrued on the 2025 Notes. The consideration transferred was allocated to the liability and equity components of the 2025 Notes using the equivalent rate that reflected the borrowing rate for a similar non-convertible debt instrument immediately prior to settlement. The transaction resulted in a loss on settlement of convertible notes of $8.0 million, which is recorded in interest expense in the Company’s condensed consolidated statement of operations. The loss represents the difference between (i) the fair value of the liability component and (ii) the sum of the carrying value of the debt component and any unamortized debt issuance costs at the time of repurchase. Summary of Conversion Features Until the six-months immediately preceding the maturity date of the applicable series of Notes, each series of Notes is convertible only upon the occurrence of certain events and during certain periods, as set forth in the Indentures. The Notes will be convertible into cash, shares of the Company’s common stock (plus, if applicable, cash in lieu of any fractional share), or a combination of cash and shares of the Company’s common stock, at the Company’s election. On or after the date that is six-months immediately preceding the maturity date of the applicable series of Notes until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert such Notes at any time. It is the Company’s intent and policy to settle all conversions through combination settlement. The initial conversion rate is 13.26, 8.96, and 8.21 shares of common stock per $1,000 principal amount for the 2025 Notes, 2027 Notes, and 2028 Notes, respectively, which is equivalent to an initial conversion price of approximately $75.43, $111.66, and $121.84 per share of the Company’s common stock for the 2025 Notes, 2027 Notes, and 2028 Notes, respectively. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, holders of the Notes who convert their Notes in connection with a “make-whole fundamental change” (as defined in the Indenture), will, under certain circumstances, be entitled to an increase in the conversion rate. If the Company undergoes a “fundamental change” (as defined in the Indenture), holders of the Notes may require the Company to repurchase for cash all or part of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest. Based on the closing price of our common stock of $86.94 on June 30, 2020, the if-converted values on our Notes do not exceed the principal amount. Ranking of Convertible Notes The Notes are the Company’s senior unsecured obligations and (i) rank senior in right of payment to all of its future indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to all of the Company’s future liabilities that are not so subordinated, unsecured indebtedness; (ii) are effectively junior to all of our existing and future secured indebtedness and other secured obligations, to the extent of the value of the assets securing that indebtedness and other secured obligations; and (iii) are structurally subordinated to all indebtedness and other liabilities of the Company’s subsidiaries. While the Notes are currently classified on the Company’s condensed consolidated balance sheets at June 30, 2020 as long-term, the future convertibility and resulting balance sheet classification of this liability will be monitored at each quarterly reporting date and will be analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods. In the event that the holders of the Notes have the election to convert the Notes at any time during the prescribed measurement period, the Notes would then be considered a current obligation and classified as such. The Company allocates total transaction costs of the Notes to the liability and equity components based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component are netted with the equity component in stockholders’ equity. The following table summarizes the original transaction costs at the time of issuance for each set of Notes and the respective allocation to the liability and equity components: (In thousands) January 2025 Notes June 2025 Notes 2027 Notes 2028 Notes Transaction costs allocated to: Liability component $ 13,569 $ 5,052 $ 11,395 $ 16,811 Equity component 5,340 2,311 6,632 7,642 Total transaction costs $ 18,909 $ 7,363 $ 18,027 $ 24,453 The Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company. Interest expense includes the following: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Debt issuance costs amortization $ 1,139 $ 645 $ 1,961 $ 1,330 Debt discount amortization 18,946 10,074 32,677 18,468 Loss on settlement of convertible notes — — 7,954 10,558 Coupon interest expense 2,567 1,739 4,498 3,846 Total interest expense on convertible notes 22,652 12,458 47,090 34,202 Other interest expense 260 254 975 500 Total interest expense $ 22,912 $ 12,712 $ 48,065 $ 34,702 The remaining period over which the unamortized debt discount will be recognized as non-cash interest expense is 7.67, 6.71, and 4.55 years for the 2028 Notes, 2027 Notes, and 2025 Notes, respectively. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Paradigm Diagnostics, Inc. and Viomics, Inc. On March 3, 2020, the Company acquired all of the outstanding capital stock of Paradigm and Viomics, two related party companies of one another headquartered in Phoenix, Arizona, in transactions that are deemed to be a single business combination in accordance with ASC 805, Business Combinations, (“the Paradigm Acquisition”). Paradigm provides comprehensive genomic-based profiling tests that assist in the diagnosis and therapy recommendations for late-stage cancer. Viomics provides a platform for identification of biomarkers. The Company entered into this acquisition to enhance its product portfolio in cancer diagnostics and to enhance its capabilities for biomarker identification. The acquisition date fair value of the consideration to be transferred for Paradigm and Viomics was $40.4 million which consists of $32.2 million payable in shares of the Company’s common stock and $8.2 million which was settled through a cash payment. Of the $32.2 million to be settled through the issuance of common stock, $28.6 million was issued in March 2020, and the remaining $3.6 million, which was withheld and may become payable as additional merger consideration, is included in other current liabilities in the condensed consolidated balance sheet as of June 30, 2020. The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition as follows: (In thousands) Net operating assets $ 5,373 Goodwill 30,431 Developed technology 7,800 Net operating liabilities (3,203) Total purchase price $ 40,401 The fair value of identifiable intangible assets has been determined using the income approach, which involves significant unobservable inputs (Level 3 inputs). These inputs include projected sales, margin, weighted average cost of capital and tax rate. Developed technology represents purchased technology that had reached technological feasibility and for which development had been completed as of the acquisition date. Fair value was determined using future discounted cash flows related to the projected income stream of the developed technology for a discrete projection period. Cash flows were discounted to their present value as of the closing date. Developed technology is amortized on a straight-line basis over its estimated useful life of 15 years. The calculation of the excess of the purchase price over the estimated fair value of the tangible net assets and intangible assets acquired was recorded to goodwill, which is primarily attributed to the assembled workforce, and expected synergies. The total goodwill related to this acquisition is not deductible for tax purposes. The Company agreed to issue to the previous investors in Viomics equity interests with an acquisition-date fair value of up to $8.4 million in Viomics, vesting over 4 years based on certain retention arrangements. Payment is contingent upon continued employment with the Company over the four The partial year results from the operations of Paradigm and Viomics are included in the Company’s condensed consolidated financial statements and not disclosed separately due to immateriality. Pro forma disclosures have not been included due to immateriality. Genomic Health, Inc. On November 8, 2019, the Company acquired all of the outstanding capital stock of Genomic Health. Genomic Health, headquartered in Redwood City, California, provides genomic-based diagnostic tests that address both the overtreatment and optimal treatment of early and late stage cancer. The Company entered into this combination to create a leading global cancer diagnostics company and provide a robust platform for continued growth. This combination provides the Company with a commercial presence in more than 90 countries in which the combined company expects to continue to increase adoption of current tests, and to bring new innovative cancer tests to patients around the world. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Management determined that the Company functions as a single operating segment, and thus reports as a single reportable segment. This operating segment is focused on the development and global commercialization of clinical laboratory services allowing healthcare providers and patients to make individualized treatment decisions. Management assessed the discrete financial information routinely reviewed by the Company's Chief Operating Decision Maker, its President and Chief Executive Officer, to monitor the Company's operating performance and support decisions regarding allocation of resources to its operations. Performance is continuously monitored at the consolidated level to timely identify deviations from expected results. The following table summarizes total revenue from customers by geographic region. Product revenues are attributed to countries based on ship-to location. Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 United States $ 249,850 $ 199,870 $ 576,709 $ 361,913 Outside of United States 19,018 — 39,980 — Total revenues $ 268,868 $ 199,870 $ 616,689 $ 361,913 Long-lived assets located in countries outside of the United States are not significant. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (18) INCOME TAXES The Company recorded an income tax benefit of $0.9 million and $0.4 million for the three months ended June 30, 2020 and 2019, respectively. The Company recorded an income tax benefit of $2.6 million and $0.9 million for the six months ended June 30, 2020 and 2019, respectively. The Company’s income tax benefit recorded during the three and six months ended June 30, 2020, is primarily related to future limitations on and expiration of certain Federal and State deferred tax assets. As a result of these limitations, the recording of a valuation allowance resulted in a deferred tax liability of approximately $26.5 million remaining as of June 30, 2020, which is included in other long-term liabilities on the Company’s condensed consolidated balance sheet. The Company’s income tax benefit recorded during the three and six months ended June 30, 2019, was primarily related to the intraperiod tax allocation rules that required the Company to allocate the provision for income taxes between continuing operations and other categories of earnings. The Company continues to maintain a full valuation allowance against its deferred tax assets based on management’s determination that it is more likely than not the benefit will not be realized. The Company had $11.3 million and $10.2 million of unrecognized tax benefits at June 30, 2020 and December 31, 2019, respectively. The Company does not anticipate a material change to its unrecognized tax benefits over the next 12 months that would affect its effective tax rate. Unrecognized tax benefits may change during the next 12 months for items that arise in the ordinary course of business. Accrued interest and penalties related to unrecognized tax benefits are recognized as part of the Company’s income tax provision in its condensed consolidated statements of operations. The Company is subject to U.S. federal income tax examinations for the tax years 2001 through 2020, state income tax examinations for the tax years 2003 through 2020, and for the years 2014 through 2020 in foreign jurisdictions. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSIn July 2020, the Company acquired 4.0 million shares of Series B Preferred Stock of Thrive Earlier Detection Corp. (“Thrive”), a private company, for $10.0 million. The Company previously acquired a $1.0 million investment in the Series A Preferred Stock of Thrive. The Series B investment, along with the prior Series A investment, will be reflected as non-marketable equity investments. The Company has evaluated these investments and concluded consolidation is not required as Thrive is not a VIE and the Company does not have the ability to exercise significant influence over the investee. A member of the Company’s Board of Directors holds an investment in Thrive through his investment firm and holds a seat on the Board of Directors of Thrive. The Company has concluded that its investments in Thrive are not deemed to be related party transactions as a result of its director’s separate interests in Thrive. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of ConsolidationThe accompanying condensed consolidated financial statements, which include the accounts of Exact Sciences Corporation and those of its wholly owned subsidiaries and variable interest entities, are unaudited and have been prepared on a basis substantially consistent with the Company’s audited financial statements and notes as of and for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K (the “2019 Form 10-K”). All intercompany transactions and balances have been eliminated upon consolidation. These condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair statement of its financial position, operating results and cash flows for the periods presented. The condensed balance sheet at December 31, 2019 has been derived from audited financial statements, but does not contain all of the footnote disclosures from the 2019 Form 10-K. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. The statements should be read in conjunction with the audited financial statements and related notes included in the 2019 Form 10-K. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those that affect the Company’s financial statements materially and involve difficult, subjective or complex judgments by management, and actual results could differ from those estimates. These estimates include revenue recognition, valuation of convertible notes, valuation of intangible assets and goodwill, and accounting for income taxes among others. The Company’s critical accounting policies and estimates are explained further in the notes to the condensed consolidated financial statements in this Quarterly Report and the 2019 Form 10-K. The spread of the coronavirus (“COVID-19”) has affected many segments of the global economy, including the cancer screening and diagnostics industry. The COVID-19 outbreak, which the World Health Organization has classified as a pandemic, has prompted governments and regulatory bodies throughout the world to enact broad precautionary measures, including “stay-at-home” orders, restrictions on the performance of “non-essential” services, public gatherings and travel. Health systems, including key markets where the Company operates, have been, or may be, overwhelmed with high volumes of patients suffering from COVID-19. The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions including interest rates, employment rates and health insurance coverage, the speed of the anticipated recovery, access to capital markets, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of June 30, 2020 and through the date of the filing of this Quarterly Report on Form 10-Q. The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts and credit losses, equity investments, software, and the carrying value of the goodwill and other long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in additional material impacts to the Company’s consolidated financial statements in future reporting periods. Despite the Company’s efforts, the ultimate impact of COVID-19 depends on factors beyond the Company’s knowledge or control, including the duration and severity of the outbreak, as well as third-party actions taken to contain its spread and mitigate its public health effects. As a result, the Company is unable to estimate the extent to which COVID-19 will negatively impact its financial results or liquidity. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers cash on hand, demand deposits in bank, money market funds, and all highly liquid investments with an original maturity of 90 days or less to be cash and cash equivalents. |
Marketable Securities | Marketable Securities Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Debt securities carried at amortized cost are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities not classified as held-to-maturity are classified as available-for-sale. Available-for-sale securities are carried at fair value. The unrealized gains and losses, net of tax, on the Company’s debt securities are reported in other comprehensive income. Marketable equity securities are measured at fair value and the unrealized gains and losses, net of tax, are recognized in other income (expense) in the condensed consolidated statements of operations. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method. Such amortization is included in investment income, net. Realized gains and losses and declines in value as a result of credit losses on available-for-sale securities are included in the condensed consolidated statements of operations as investment income, net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in the condensed consolidated statements of operations as investment income, net. The Company’s investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. Investments in which the Company has the ability and intent, if necessary, to liquidate, in order to support its current operations (including those with a contractual term greater than one year from the date of purchase), are classified as current. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company estimates an allowance for doubtful accounts against accounts receivable using historical collection trends, aging of accounts, current and future implications surrounding the ability to collect such as economic conditions, and regulatory changes. The allowance for doubtful accounts is evaluated on a regular basis and adjusted when trends, significant events or other substantive evidence indicate that expected collections will be less than applicable accrual rates. At June 30, 2020 and December 31, 2019 the allowance for doubtful accounts recorded was not material to the Company’s condensed consolidated balance sheets. For the three and six months ended June 30, 2020 and 2019, there was an immaterial amount of bad debt expense written off against the allowance and charged to operating expense. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first out method (“FIFO”). The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale, no longer meet quality specifications, or has a cost basis in excess of its estimated realizable value and records a charge to cost of sales for such inventory as appropriate. Direct and indirect manufacturing costs incurred during process validation with probable future economic benefit are capitalized. Validation costs incurred for other research and development activities, which are not permitted to be sold, have been expensed to research and development in the Company’s condensed consolidated statements of operations. Inventory consisted of the following: (In thousands) June 30, December 31, Raw materials $ 35,713 $ 24,958 Semi-finished and finished goods 46,502 36,766 Total inventory $ 82,215 $ 61,724 |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated using the straight-line method over the assets’ estimated useful lives. Land is stated at cost and does not depreciate. Additions and improvements are capitalized, including direct and indirect costs incurred to validate equipment and bring it to working conditions. Revalidation costs, including maintenance and repairs are expensed when incurred. |
Software Development Costs | Software Development Costs Costs related to internal use software, including hosting arrangements, are incurred in three stages: the preliminary project stage, the application development stage, and the post-implementation stage. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred. Costs incurred during the application development stage that meet the criteria for capitalization are capitalized and amortized, when the software is ready for its intended use, using the straight-line basis over the estimated useful life of the software, or the duration of the hosting agreement. |
Investments in Privately Held Companies | Investments in Privately Held Companies The Company determines whether its investments in privately held companies are debt or equity based on their characteristics, in accordance with the applicable accounting guidance for such investments. The Company also evaluates the investee to determine if the entity is a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary of the VIE, in order to determine whether consolidation of the VIE is required. If consolidation is not required and the Company does not have voting control of the entity, the investment is evaluated to determine if the equity method of accounting should be applied. The equity method applies to investments in common stock or in substance common stock where the Company exercises significant influence over the investee. Investments in privately held companies determined to be equity securities are accounted for as non-marketable securities. The Company adjusts the carrying value of its non-marketable equity securities for changes from observable transactions for identical or similar investments of the same issuer, less impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense) in the condensed consolidated statements of operations. Investments in privately held companies determined to be debt securities are accounted for as available-for-sale or held-to-maturity securities, in accordance with the applicable accounting guidance for such investments. |
Derivative Financial Instruments | Derivative Financial Instruments The Company hedges a portion of its foreign currency exposures related to outstanding monetary assets and liabilities using foreign currency forward contracts. The foreign currency forward contracts are included in prepaid expenses and other current assets or in accrued liabilities in the condensed consolidated balance sheets, depending on the contracts’ net position. These contracts are not designated as hedges, and as a result, changes in their fair value are recorded in other income (expense) in the condensed consolidated statements of operations. There were no gains or losses recorded for the three and six months ended June 30, 2020 and 2019. As of June 30, 2020 and December 31, 2019, the Company had open foreign currency forward contracts with notional amounts of $16.0 million and $17.9 million, respectively. The Company's foreign exchange derivative instruments are classified as Level 2 within the fair value hierarchy as they are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. The fair value of the foreign currency forward contracts was zero at June 30, 2020 and December 31, 2019. |
Intangible Assets | Intangible Assets Purchased intangible assets are recorded at fair value. The Company uses a discounted cash flow model to value intangible assets. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, risk, the cost of capital, terminal values and market participants. |
Acquired In-process Research and Development (IPR&D) | Acquired In-process Research and Development (IPR&D) Acquired IPR&D represents the fair value assigned to research and development assets that have not reached technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viable products, estimating the resulting revenues from the projects and discounting the net cash flows to present value. The revenues and cost projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success. IPR&D projects acquired in a business combination that are not complete are capitalized and accounted for as indefinite-lived intangible assets until completion or |
Goodwill | GoodwillThe Company evaluates goodwill for possible impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 on an annual basis during the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Qualitative factors considered in this assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting the Company's business. Based on the qualitative assessment, if it is determined that the fair value of goodwill is more likely than not to be less than its carrying amount, the fair value of a reporting unit will be calculated and compared with its carrying amount and an impairment charge will be recognized for the amount that the carrying value exceeds the fair value. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates the fair value of long-lived assets, which include property, plant and equipment, intangible assets, and investments in privately held companies, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no impairment losses for the periods ended June 30, 2020 and December 31, 2019. |
Fair Value Measurements | Fair Value Measurements The FASB has issued authoritative guidance that requires fair value to be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under that standard, fair value measurements are separately disclosed by level within the fair value hierarchy. The fair value hierarchy establishes and prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. |
Convertible Notes | Convertible Notes The Company accounts for convertible notes that may be settled in cash or equity upon conversion by separating the liability and equity components of the instruments in a manner that reflects the Company’s nonconvertible debt borrowing rate. The Company determines the carrying amount of the liability component of the convertible notes by using assumptions that market participants would use in pricing a debt instrument, including |
Leases | Leases The Company acts as lessee in its lease agreements, which includes operating leases for corporate offices, laboratory space, warehouse space, vehicles and certain laboratory and office equipment. The Company also has finance leases for certain equipment, which are not material to the Company’s condensed consolidated financial statements. The Company determines whether an arrangement is, or contains, a lease at inception. At the beginning of fiscal year 2019, the company adopted ASC Topic 842. The Company records the present value of operating lease payments as right-of-use (“ROU”) assets and lease liabilities on the condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments based on the present value of lease payments over the lease term. Classification of operating lease liabilities as either current or non-current is based on the expected timing of payments due under the Company’s obligations. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment. In order to determine the appropriate incremental borrowing rates, the Company has used a number of factors including the credit rating, and the lease term. Certain vehicle leases include variable lease payments that depend on an index or rate. Those lease payments are initially measured using the index or rate at the lease commencement date. The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. “Reasonably certain” is assessed internally based on economic, industry, company, strategic and contractual factors. The leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the lease for up to 10 years, and some of which include options to terminate the lease within 1 year. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. The Company accounts for leases acquired in business combinations by measuring the lease liability at the present value of the remaining lease payments as if the acquired lease were a new lease for the Company. This measurement includes recognition of a lease intangible for any below-market terms present in the leases acquired. The below-market lease intangible is included in the ROU asset on the condensed consolidated balance sheets and are amortized over the remaining lease term. The Company has not acquired any leases with above-market terms. The Company has taken advantage of certain practical expedients offered to registrants at adoption of ASC 842. The Company does not apply the recognition requirements of ASC 842 to short-term leases. Instead, those lease payments are recognized in profit or loss on a straight-line basis over the lease term. Further, as a practical expedient, all lease contracts are accounted for as one single lease component, as opposed to separating lease and non-lease components to allocate the consideration within a single lease contract. |
Net Loss Per Share | Net Loss Per Share Basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share is the same because all outstanding common stock equivalents have been excluded, as they are anti-dilutive as a result of the Company’s losses. The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect due to net losses for each period: June 30, (In thousands) 2020 2019 Shares issuable upon exercise of stock options 2,575 2,387 Shares issuable upon the release of restricted stock awards 4,662 4,123 Shares issuable upon conversion of convertible notes 20,309 12,197 27,546 18,707 |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company requires all share-based payments to employees, including grants of employee stock options, restricted stock, restricted stock units and shares purchased under an employee stock purchase plan (if certain parameters are not met), to be recognized in the financial statements based on their grant date fair values. Forfeitures of any share-based awards are recognized as they occur. |
Revenue Recognition | Revenue Recognition Revenues are recognized when control of the promised services are transferred to the patient’s healthcare provider, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. To determine revenue recognition for the arrangements that the Company determines are within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers , the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 2 for further discussion. |
Foreign Currency Transactions | Foreign Currency Transactions Prior to 2019, the Company’s international subsidiaries’ functional currency was the local currency and assets and liabilities were translated into U.S. dollars at the period-end exchange rate or historical rates, as appropriate. Condensed consolidated statements of operations were translated at average exchange rates for the period, and the cumulative translation adjustments resulting from changes in exchange rates were included in the Company’s condensed consolidated balance sheet as a component of additional paid-in capital. In 2019 and 2020 the Company’s international subsidiaries use the U.S. dollar as the functional currency, resulting in the Company not being subject to gains and losses from foreign currency translation of the subsidiary financial statements. The Company recognizes gains and losses from foreign currency transactions in the condensed consolidated statements of operations. Net foreign currency transaction gains or losses were not material to the condensed consolidated statements of operations for the periods presented. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements including the amortization of acquired intangible assets, which is now presented as a separate line item on the Company's condensed consolidated statements of operations and was previously included in cost of sales, research and development, and general and administrative expenses. Due to these reclassifications, the Company is no longer presenting gross margin on the Company's condensed consolidated statements of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The updated guidance requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade receivables. The updates also require available-for-sale debt security credit losses to be recognized as allowances rather than a reduction in amortized cost.The guidance was adopted by the Company on January 1, 2020. The requirements of the ASU did not result in the recognition of a material allowance for current expected credit losses, as the Company’s analysis of collectability looks at historical experience as well as current and future implications surrounding the ability to collect. Adoption of the updated guidance did not have a material impact on the Company’s condensed consolidated financial statements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments –Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The updated guidance provides clarity regarding measurement of securities without readily determinable fair values. The guidance was adopted on January 1, 2020 and did not have a material impact on the Company's condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles –Goodwill and Other –Internal-Use Software(Subtopic 350-40) . The update provided guidance for evaluating the accounting for fees paid by a customer in a cloud computing arrangement that is a service contract. The guidance was adopted on a prospective basis, beginning on January 1, 2020 and it did not have a material impact on the Company's condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820); Disclosure Framework -Changes to the Disclosure Requirements for Fair Value Measurement . The guidance provided an update to the disclosure requirements for fair value measurements under the scope of ASC 820. The updates were adopted on January 1, 2020 and did not have a material impact on the Company’s condensed consolidated financial statements. In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808) . The update provided additional guidance regarding the interaction between Topic 808 on Collaborative Arrangements and Topic 606 on Revenue Recognition. The guidance was adopted on January 1, 2020 and did not have a material impact on the Company's condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . The update simplifies the accounting for income taxes through removing exceptions related to certain intraperiod allocations and deferred tax liabilities; clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination; and reflecting enacted changes in tax laws or rates in the annual effective tax rate. The amended guidance is effective for interim and annual periods in 2021, however early adoption is permitted. The guidance was early adopted on January 1, 2020 and did not have a material impact on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The updated guidance provides optional expedients for applying the requirements of certain topics in the codification for contracts that are modified because of reference rate reform. In addition to the optional expedients, the update includes a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. The updated guidance is effective for all entities as of March 12, 2020 and through December 31, 2022. The Company adopted the guidance upon issuance on March 12, 2020. There was no impact on the Company's condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of inventory | Inventory consisted of the following: (In thousands) June 30, December 31, Raw materials $ 35,713 $ 24,958 Semi-finished and finished goods 46,502 36,766 Total inventory $ 82,215 $ 61,724 |
Schedule of potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect due to net losses for each period: June 30, (In thousands) 2020 2019 Shares issuable upon exercise of stock options 2,575 2,387 Shares issuable upon the release of restricted stock awards 4,662 4,123 Shares issuable upon conversion of convertible notes 20,309 12,197 27,546 18,707 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table presents the Company’s revenues disaggregated by revenue source: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Screening Medicare Parts B & C $ 59,583 $ 103,569 $ 157,742 $ 186,486 Commercial 65,080 88,818 174,449 162,169 Other 6,670 7,483 18,593 13,258 Total Screening 131,333 199,870 350,784 361,913 Precision Oncology Medicare Parts B & C $ 33,994 $ — $ 81,028 $ — Commercial 45,420 — 99,810 — International 19,018 — 39,980 — Other 4,524 — 10,508 — Total Precision Oncology 102,956 — 231,326 — COVID-19 Testing $ 34,579 $ — $ 34,579 $ — Total $ 268,868 $ 199,870 $ 616,689 $ 361,913 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table sets forth the Company’s cash, cash equivalents, restricted cash, and marketable securities at June 30, 2020 and December 31, 2019: (In thousands) June 30, 2020 December 31, 2019 Cash, cash equivalents, and restricted cash Cash and money market $ 457,019 $ 146,932 Cash equivalents 246,907 30,322 Restricted cash (1) 282 274 Total cash, cash equivalents, and restricted cash 704,208 177,528 Marketable securities Available-for-sale debt securities 517,346 144,685 Equity securities 1,385 1,716 Total marketable securities 518,731 146,401 Total cash and cash equivalents, restricted cash and marketable securities $ 1,222,939 $ 323,929 ______________ (1) Restricted cash is included in other long-term assets on the condensed consolidated balance sheets. There was no restricted cash at June 30, 2019. |
Schedule of restricted cash and cash equivalents | The following table sets forth the Company’s cash, cash equivalents, restricted cash, and marketable securities at June 30, 2020 and December 31, 2019: (In thousands) June 30, 2020 December 31, 2019 Cash, cash equivalents, and restricted cash Cash and money market $ 457,019 $ 146,932 Cash equivalents 246,907 30,322 Restricted cash (1) 282 274 Total cash, cash equivalents, and restricted cash 704,208 177,528 Marketable securities Available-for-sale debt securities 517,346 144,685 Equity securities 1,385 1,716 Total marketable securities 518,731 146,401 Total cash and cash equivalents, restricted cash and marketable securities $ 1,222,939 $ 323,929 ______________ (1) Restricted cash is included in other long-term assets on the condensed consolidated balance sheets. There was no restricted cash at June 30, 2019. |
Schedule of available-for-sale securities | Available-for-sale debt securities at June 30, 2020 consisted of the following: June 30, 2020 (In thousands) Amortized Cost Gains in Accumulated Losses in Accumulated Estimated Fair Cash equivalents U.S. government agency securities $ 246,905 $ 4 $ (2) $ 246,907 Total cash equivalents 246,905 4 (2) 246,907 Marketable securities Corporate bonds 219,264 1,297 — 220,561 U.S. government agency securities 256,425 102 (1) 256,526 Certificates of deposit 10,000 — — 10,000 Asset backed securities 22,174 85 — 22,259 Commercial paper 7,996 4 — 8,000 Total marketable securities 515,859 1,488 (1) 517,346 Total available-for-sale securities $ 762,764 $ 1,492 $ (3) $ 764,253 Available-for-sale debt securities at December 31, 2019 consisted of the following: December 31, 2019 (In thousands) Amortized Cost Gains in Accumulated Losses in Accumulated Estimated Fair Value Cash equivalents U.S. government agency securities $ 30,320 $ 2 $ — $ 30,322 Total cash equivalents 30,320 2 — 30,322 Marketable securities U.S. government agency securities 140,745 10 (73) 140,682 Corporate bonds 4,017 — (14) 4,003 Total marketable securities 144,762 10 (87) 144,685 Total available-for-sale securities $ 175,082 $ 12 $ (87) $ 175,007 |
Schedule of contractual maturities of available-for-sale investments | The following table summarizes contractual underlying maturities of the Company’s available-for-sale debt securities at June 30, 2020: Due one year or less Due after one year through four years (In thousands) Cost Fair Value Cost Fair Value Cash equivalents U.S. government agency securities $ 246,905 $ 246,907 $ — $ — Total cash equivalents 246,905 246,907 — — Marketable securities U.S. government agency securities 249,239 249,295 7,186 7,231 Corporate bonds 162,241 162,992 57,023 57,569 Certificates of deposit 10,000 10,000 — — Commercial paper 7,996 8,000 — — Asset backed securities 2,390 2,393 19,784 19,866 Total marketable securities 431,866 432,680 83,993 84,666 Total $ 678,771 $ 679,587 $ 83,993 $ 84,666 |
Schedule of gross unrealized losses and fair values of investments in an unrealized loss position | The following table summarizes the gross unrealized losses and fair values of available-for-sale debt securities in an unrealized loss position as of June 30, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: Less than one year One year or greater Total (In thousands) Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Cash equivalents U.S. government agency securities $ 81,934 $ (2) $ — $ — $ 81,934 $ (2) Total cash equivalents 81,934 (2) — — 81,934 (2) Marketable securities U.S. government agency securities 99,975 (1) — — 99,975 (1) Total marketable securities 99,975 (1) — — 99,975 (1) Total available-for-sale securities $ 181,909 $ (3) $ — $ — $ 181,909 $ (3) |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, plant and equipment, net | The estimated useful lives of property, plant and equipment are as follows: (In thousands) Estimated June 30, December 31, Property, plant and equipment Land n/a $ 4,466 $ 4,466 Leasehold and building improvements (1) 111,778 80,352 Land improvements 15 years 2,399 1,766 Buildings 30 - 40 years 165,926 112,815 Computer equipment and computer software 3 years 74,447 65,323 Laboratory equipment 3 - 10 years 130,323 104,008 Furniture and fixtures 3 - 10 years 22,698 14,539 Assets under construction n/a 61,628 149,687 Property, plant and equipment, at cost 573,665 532,956 Accumulated depreciation (110,228) (77,631) Property, plant and equipment, net $ 463,437 $ 455,325 ______________ (1) Lesser of remaining lease term, building life, or estimated useful life. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of net-book value and estimated remaining life and finite lived intangible assets | The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of June 30, 2020: (In thousands) Weighted Average Cost Accumulated Amortization Net Balance at June 30, 2020 Finite-lived intangible assets Trade name 15.4 $ 100,700 $ (4,109) $ 96,591 Customer relationships 13.3 2,700 (314) 2,386 Patents 8.4 22,689 (7,105) 15,584 Acquired developed technology 9.5 814,171 (52,766) 761,405 Supply agreements 7.0 30,000 (2,549) 27,451 Internally developed technology 2.3 1,796 (590) 1,206 Total finite-lived intangible assets 972,056 (67,433) 904,623 In-process research and development n/a 200,000 — 200,000 Internally developed technology in process n/a 492 — 492 Total intangible assets $ 1,172,548 $ (67,433) $ 1,105,115 The following table summarizes the net-book-value and estimated remaining life of the Company’s intangible assets as of December 31, 2019: (In thousands) Weighted Average Cost Accumulated Amortization Net Balance at December 31, 2019 Finite-lived intangible assets Trade name 15.9 $ 100,700 $ (961) $ 99,739 Customer relationships 13.6 2,700 (224) 2,476 Patents 8.8 22,690 (5,974) 16,716 Acquired developed technology 9.9 806,371 (12,345) 794,026 Supply agreements 7.5 30,000 (571) 29,429 Internally developed technology 2.5 1,229 (336) 893 Total finite-lived intangible assets 963,690 (20,411) 943,279 In-process research and development n/a 200,000 — 200,000 Internally developed technology in process n/a 271 — 271 Total intangible assets $ 1,163,961 $ (20,411) $ 1,143,550 |
Schedule of estimated future amortization expense, intangible assets | As of June 30, 2020, the estimated future amortization expense associated with the Company’s finite-lived intangible assets for each of the five succeeding fiscal years is as follows: (In thousands) 2020 $ 47,158 2021 94,217 2022 94,012 2023 93,724 2024 93,345 Thereafter 482,167 $ 904,623 |
Schedule of Carrying Amount of Goodwill | The change in the carrying amount of goodwill for the periods ended June 30, 2020 and December 31, 2019 is as follows: (In thousands) Balance, January 1, 2019 $ 17,279 Genomic Health acquisition 1,185,918 Balance, December 31, 2019 1,203,197 Paradigm & Viomics acquisition 30,431 Genomic Health acquisition adjustment 4,044 Balance, June 30, 2020 $ 1,237,672 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements along with the level within the fair value hierarchy in which the fair value measurements fall | The following table presents the Company’s fair value measurements as of June 30, 2020 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. (In thousands) Fair Value at June 30, Quoted Prices Significant Significant Cash, cash equivalents, and restricted cash Cash and money market $ 457,019 $ 457,019 $ — $ — U.S. government agency securities 246,907 — 246,907 — Restricted cash 282 282 — — Marketable securities Corporate bonds 220,561 — 220,561 — U.S. government agency securities 256,526 — 256,526 — Certificates of deposit 10,000 — 10,000 — Asset backed securities 22,259 — 22,259 — Commercial paper 8,000 — 8,000 — Equity Securities 1,385 1,385 — — Liabilities Contingent consideration (2,551) — — (2,551) Total $ 1,220,388 $ 458,686 $ 764,253 $ (2,551) The following table presents the Company’s fair value measurements as of December 31, 2019 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. (In thousands) Fair Value at December 31, Quoted Prices Significant Significant Cash and cash equivalents Cash and money market $ 146,932 $ 146,932 $ — $ — U.S. government agency securities 30,322 — 30,322 — Restricted cash 274 274 — — Marketable securities U.S. government agency securities 140,682 — 140,682 — Corporate bonds 4,003 — 4,003 — Equity securities 1,716 1,716 — — Liabilities Contingent consideration (2,879) — — (2,879) Total $ 321,050 $ 148,922 $ 175,007 $ (2,879) |
Schedule of fair value of contingent consideration | The following table provides a roll-forward of the fair values of the contingent consideration, which includes Level 3 measurements: (In thousands) Contingent consideration Balance, January 1, 2020 $ (2,879) Changes in fair value — Gains (losses) recognized in earnings — Payments 328 Balance, June 30, 2020 $ (2,551) |
Schedule of fair value of long-term debt and convertible notes | The following table summarizes the Company’s outstanding convertible notes and long-term debt: June 30, 2020 December 31, 2019 (In thousands) Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value 2028 Convertible notes (2) $ 786,711 $ 1,101,413 $ — $ — 2027 Convertible notes (2) 498,707 774,328 483,909 843,741 2025 Convertible notes (2) 248,965 419,015 319,696 592,482 Construction loan (3) 24,263 24,263 24,866 24,866 ______________ (1) The carrying amounts presented are net of debt discounts and debt issuance costs (see Note 12 and Note 15 of the condensed consolidated financial statements for further information). (2) The fair values are based on observable market prices for this debt, which is traded in active markets and therefore is classified as a Level 2 fair value measurement. A portion of the 2025 convertible notes were settled in 2020 resulting in a decrease in the liability. (3) The carrying amount of the construction loan approximates fair value due to the short-term nature of this instrument. The construction loan is privately held with no public market for this debt and therefore is classified as a Level 3 fair value measurement. The change in the fair value was due to payments made on the loan resulting in a decrease in the liability. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of amounts recognized in accumulated other comprehensive income (loss) (AOCI) | The amount recognized in accumulated other comprehensive income (loss) (“AOCI”) for the six months ended June 30, 2020 were as follows: (In thousands) Foreign Unrealized Accumulated Balance at December 31, 2019 $ (25) $ (75) $ (100) Other comprehensive income (loss) before reclassifications — 1,564 1,564 Amounts reclassified from accumulated other comprehensive loss 25 — 25 Net current period change in accumulated other comprehensive loss 25 1,564 1,589 Balance at June 30, 2020 $ — $ 1,489 $ 1,489 The amounts recognized in AOCI for the six months ended June 30, 2019 were as follows: (In thousands) Foreign Unrealized Accumulated Balance at December 31, 2018 $ (25) $ (1,397) $ (1,422) Other comprehensive loss before reclassifications — 3,784 3,784 Amounts reclassified from accumulated other comprehensive loss — 344 344 Net current period change in accumulated other comprehensive loss, before tax — 4,128 4,128 Income tax expense related to items of other comprehensive income — (984) (984) Balance at June 30, 2019 $ (25) $ 1,747 $ 1,722 |
Schedule of amounts reclassified from accumulated other comprehensive income (loss) | Amounts reclassified from AOCI for the six months ended June 30, 2020 and 2019 were as follows: Affected Line Item in the Six Months Ended June 30, Details about AOCI Components (In thousands) 2020 2019 Change in value of available-for-sale investments Sales and maturities of available-for-sale investments Investment income, net $ — $ 344 Foreign currency adjustment General and administrative 25 — Total reclassifications $ 25 $ 344 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of valuation assumptions | The fair value of each option is based on the assumptions in the following table: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Option Plan Shares Risk-free interest rates (1) (1) 0.98% - 1.47% 2.54% - 2.59% Expected term (in years) (1) (1) 4.68 - 6.15 6.28 Expected volatility (1) (1) 65.67% - 77.51% 64.95% - 65.00% Dividend yield (1) (1) —% —% Weighted average fair value per share of options granted during the period (1) (1) $58.77 $57.11 ESPP Shares Risk-free interest rates 0.12% - 0.2% 2.31% - 2.44% 0.12% - 0.2% 2.31% - 2.44% Expected term (in years) 0.5 - 2 0.5 - 2 0.5 - 2 0.5 - 2 Expected volatility 63.7% - 89.0% 55.0% - 57.6% 63.7% - 89.0% 55.0% - 57.6% Dividend yield —% —% —% —% Weighted average fair value per share of stock purchase rights granted during the period $30.60 $35.91 $30.60 $35.91 ______________ (1) The Company did not grant options under its 2010 Omnibus Long-Term Incentive Plan or 2019 Omnibus Long-Term Incentive Plan during the period indicated. |
Summary of stock option activity under the Stock Plans | A summary of stock option activity under the Stock Plans during the six months ended June 30, 2020 is as follows: Options Shares Weighted Weighted Aggregate (Aggregate intrinsic value in thousands) Outstanding, January 1, 2020 2,700,293 $ 34.01 2.9 Granted 309,143 97.66 Exercised (368,720) 29.67 Forfeited (65,438) 83.87 Outstanding, June 30, 2020 2,575,278 $ 41.01 6.5 $ 123,979 Exercisable, June 30, 2020 1,653,394 $ 26.10 5.5 $ 101,761 |
Summary of restricted stock and restricted stock unit activity under the Stock Plans | A summary of restricted stock and restricted stock unit activity under the Stock Plans during the six months ended June 30, 2020 is as follows: Restricted Weighted Outstanding, January 1, 2020 4,384,005 $ 63.41 Granted 1,835,695 92.25 Released (1,350,088) 47.00 Forfeited (208,076) 79.45 Outstanding, June 30, 2020 4,661,536 $ 78.84 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Supplemental disclosure of cash flow information related to our operating leases | Supplemental disclosure of cash flow information related to the Company’s cash and non-cash activities with its operating leases are as follows: Six Months Ended June 30, 2020 (In thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,289 $ 2,419 Non-cash investing and financing activities: Right-of-use assets obtained in exchange for new operating lease liabilities (1) 13,024 20,511 ______________ (1) For the six months ended June 30, 2019, this includes right-of-use assets obtained from the initial adoption of ASC 842 of approximately $17.9 million. |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
CONVERTIBLE NOTES [Abstract] | |
Schedule of Convertible note obligations included in the condensed consolidated balance sheets | (In thousands) Coupon Interest Rate Effective Interest Fair Value of Liability Component at June 30, 2020 December 31, 2019 2028 Convertible notes 0.375% 5.2% $ 790,608 $ 1,150,000 $ — 2027 Convertible notes 0.375% 6.3% 472,501 747,500 747,500 2025 Convertible notes 1.000% 6.0% 227,103 315,049 415,049 Total Convertible notes 2,212,549 1,162,549 Less: Debt discount (2) (648,281) (342,463) Less: Debt issuance costs (3) (29,885) (16,481) Net convertible debt $ 1,534,383 $ 803,605 ______________ (1) As each of the convertible instruments may be settled in cash upon conversion, for accounting purposes, they were separated into a liability component and an equity component. The amount allocated to the equity component is the difference between the principal value of the instrument and the fair value of the liability component at issuance. The resulting debt discount is being amortized to interest expense at the respective effective interest rate over the contractual term of the debt. A portion of the 2025 Convertible Notes have been extinguished or converted. The fair value of the liability component at issuance reflected above represents the liability value at issuance for the applicable portion of the 2025 Notes which remain outstanding at June 30, 2020. The fair value of the liability component of the 2025 Notes at issuance was $654.8 million with the equity component being $269.7 million. (2) The unamortized discount consists of the following: (In thousands) June 30, 2020 December 31, 2019 2028 Convertible notes $ 347,191 $ — 2027 Convertible notes 239,267 253,340 2025 Convertible notes 61,823 89,123 Total unamortized discount $ 648,281 $ 342,463 (3) Debt issuance costs consists of the following: (In thousands) June 30, 2020 December 31, 2019 2028 Convertible notes $ 16,098 $ — 2027 Convertible notes 9,525 10,251 2025 Convertible notes 4,262 6,230 Total debt issuance costs $ 29,885 $ 16,481 |
Schedule of Allocation of Transaction Costs Related to Convertible Debt | The following table summarizes the original transaction costs at the time of issuance for each set of Notes and the respective allocation to the liability and equity components: (In thousands) January 2025 Notes June 2025 Notes 2027 Notes 2028 Notes Transaction costs allocated to: Liability component $ 13,569 $ 5,052 $ 11,395 $ 16,811 Equity component 5,340 2,311 6,632 7,642 Total transaction costs $ 18,909 $ 7,363 $ 18,027 $ 24,453 |
Schedule of interest expense | Interest expense includes the following: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Debt issuance costs amortization $ 1,139 $ 645 $ 1,961 $ 1,330 Debt discount amortization 18,946 10,074 32,677 18,468 Loss on settlement of convertible notes — — 7,954 10,558 Coupon interest expense 2,567 1,739 4,498 3,846 Total interest expense on convertible notes 22,652 12,458 47,090 34,202 Other interest expense 260 254 975 500 Total interest expense $ 22,912 $ 12,712 $ 48,065 $ 34,702 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition as follows: (In thousands) Net operating assets $ 5,373 Goodwill 30,431 Developed technology 7,800 Net operating liabilities (3,203) Total purchase price $ 40,401 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Geographic Areas | The following table summarizes total revenue from customers by geographic region. Product revenues are attributed to countries based on ship-to location. Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 United States $ 249,850 $ 199,870 $ 576,709 $ 361,913 Outside of United States 19,018 — 39,980 — Total revenues $ 268,868 $ 199,870 $ 616,689 $ 361,913 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Apr. 30, 2020USD ($) | Jun. 30, 2020USD ($)stagesInSoftwareDevelopment | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)stagesInSoftwareDevelopment | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Coronavirus, aid, relief, and economic securities act, funds received | $ 23,700,000 | |||||
Minimum contractual term of certain current investments which can be liquidated | 1 year | |||||
Software development stages | stagesInSoftwareDevelopment | 3 | 3 | ||||
Derivative, gain (loss) on derivative, net | $ 0 | $ 0 | $ 0 | $ 0 | ||
Asset impairment charges | $ 0 | $ 0 | ||||
Termination term | 1 year | |||||
Minimum | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Remaining lease terms | 1 year | 1 year | ||||
Maximum | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Remaining lease terms | 15 years | 15 years | ||||
Renewal term of lease | 10 years | 10 years | ||||
Foreign Exchange Forward | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Derivative, notional amount | $ 16,000,000 | $ 16,000,000 | 17,900,000 | |||
Derivative, fair value | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Raw materials | $ 35,713 | $ 24,958 |
Semi-finished and finished goods | 46,502 | 36,766 |
Total inventory | $ 82,215 | $ 61,724 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Loss Per Share (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Common shares not included in the computation of diluted net loss per share | ||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 27,546 | 18,707 |
Shares issuable upon exercise of stock options | ||
Common shares not included in the computation of diluted net loss per share | ||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 2,575 | 2,387 |
Shares issuable upon the release of restricted stock awards | ||
Common shares not included in the computation of diluted net loss per share | ||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 4,662 | 4,123 |
Shares issuable upon conversion of convertible notes | ||
Common shares not included in the computation of diluted net loss per share | ||
Potentially issuable common shares not included in the computation of diluted net loss per share because they would have an anti-dilutive effect | 20,309 | 12,197 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue | $ 30,700 | $ 30,700 | $ 600 | ||
Deferred revenue, revenue recognized during period | 19 | $ 200 | 200 | $ 300 | |
COVID-19 | |||||
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue | 30,200 | 30,200 | |||
Variable consideration | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized from changes in transaction prices | $ 3,200 | $ 1,800 | $ 8,600 | $ 3,400 |
REVENUE - Schedule of Disaggreg
REVENUE - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | $ 268,868 | $ 199,870 | $ 616,689 | $ 361,913 |
Screening | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 131,333 | 199,870 | 350,784 | 361,913 |
Screening | Medicare Parts B & C | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 59,583 | 103,569 | 157,742 | 186,486 |
Screening | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 65,080 | 88,818 | 174,449 | 162,169 |
Screening | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 6,670 | 7,483 | 18,593 | 13,258 |
Precision Oncology | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 102,956 | 0 | 231,326 | 0 |
Precision Oncology | Medicare Parts B & C | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 33,994 | 0 | 81,028 | 0 |
Precision Oncology | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 45,420 | 0 | 99,810 | 0 |
Precision Oncology | International Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 19,018 | 0 | 39,980 | 0 |
Precision Oncology | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 4,524 | 0 | 10,508 | 0 |
COVID-19 Testing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | $ 34,579 | $ 0 | $ 34,579 | $ 0 |
MARKETABLE SECURITIES - Narrati
MARKETABLE SECURITIES - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | ||||
Debt security, available for sale, realized gain | $ 200,000 | $ 200,000 | $ 100,000 | $ 300,000 |
Equity securities, realized gain | $ 400,000 | $ 0 | $ 300,000 | $ 0 |
MARKETABLE SECURITIES - Schedul
MARKETABLE SECURITIES - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Marketable Securities [Line Items] | ||
Cash and cash equivalents, and restricted cash | $ 704,208 | $ 177,528 |
Marketable securities | 764,253 | 175,007 |
Equity securities | 1,385 | 1,716 |
Marketable Securities, Total | 518,731 | 146,401 |
Cash, Cash Equivalents, and Short-term Investments, Total | 1,222,939 | 323,929 |
Cash equivalents | ||
Marketable Securities [Line Items] | ||
Cash and cash equivalents, and restricted cash | 246,907 | 30,322 |
Marketable securities | 246,907 | 30,322 |
Marketable securities | ||
Marketable Securities [Line Items] | ||
Marketable securities | 517,346 | 144,685 |
Cash and money market | ||
Marketable Securities [Line Items] | ||
Cash and cash equivalents, and restricted cash | 457,019 | 146,932 |
Restricted cash | ||
Marketable Securities [Line Items] | ||
Cash and cash equivalents, and restricted cash | $ 282 | $ 274 |
MARKETABLE SECURITIES - Sched_2
MARKETABLE SECURITIES - Schedule of Available For Sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Available-for-sale securities | ||
Amortized Cost | $ 762,764 | $ 175,082 |
Gains in Accumulated Other Comprehensive Income (Loss) | 1,492 | 12 |
Losses in Accumulated Other Comprehensive Income (Loss) | (3) | (87) |
Marketable securities | 764,253 | 175,007 |
Cash equivalents | ||
Available-for-sale securities | ||
Amortized Cost | 246,905 | 30,320 |
Gains in Accumulated Other Comprehensive Income (Loss) | 4 | 2 |
Losses in Accumulated Other Comprehensive Income (Loss) | (2) | 0 |
Marketable securities | 246,907 | 30,322 |
Marketable securities | ||
Available-for-sale securities | ||
Amortized Cost | 515,859 | 144,762 |
Gains in Accumulated Other Comprehensive Income (Loss) | 1,488 | 10 |
Losses in Accumulated Other Comprehensive Income (Loss) | (1) | (87) |
Marketable securities | 517,346 | 144,685 |
U.S. government agency securities | Cash equivalents | ||
Available-for-sale securities | ||
Amortized Cost | 246,905 | 30,320 |
Gains in Accumulated Other Comprehensive Income (Loss) | 4 | 2 |
Losses in Accumulated Other Comprehensive Income (Loss) | (2) | 0 |
Marketable securities | 246,907 | 30,322 |
U.S. government agency securities | Marketable securities | ||
Available-for-sale securities | ||
Amortized Cost | 256,425 | 140,745 |
Gains in Accumulated Other Comprehensive Income (Loss) | 102 | 10 |
Losses in Accumulated Other Comprehensive Income (Loss) | (1) | (73) |
Marketable securities | 256,526 | 140,682 |
Corporate bonds | Marketable securities | ||
Available-for-sale securities | ||
Amortized Cost | 219,264 | 4,017 |
Gains in Accumulated Other Comprehensive Income (Loss) | 1,297 | 0 |
Losses in Accumulated Other Comprehensive Income (Loss) | 0 | (14) |
Marketable securities | 220,561 | $ 4,003 |
Certificates of deposit | Marketable securities | ||
Available-for-sale securities | ||
Amortized Cost | 10,000 | |
Gains in Accumulated Other Comprehensive Income (Loss) | 0 | |
Losses in Accumulated Other Comprehensive Income (Loss) | 0 | |
Marketable securities | 10,000 | |
Commercial paper | Marketable securities | ||
Available-for-sale securities | ||
Amortized Cost | 7,996 | |
Gains in Accumulated Other Comprehensive Income (Loss) | 4 | |
Losses in Accumulated Other Comprehensive Income (Loss) | 0 | |
Marketable securities | 8,000 | |
Asset backed securities | Marketable securities | ||
Available-for-sale securities | ||
Amortized Cost | 22,174 | |
Gains in Accumulated Other Comprehensive Income (Loss) | 85 | |
Losses in Accumulated Other Comprehensive Income (Loss) | 0 | |
Marketable securities | $ 22,259 |
MARKETABLE SECURITIES - Sched_3
MARKETABLE SECURITIES - Schedule of Underlying Maturities of AFS Securities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Available-for-sale securities | |
Due in one year or less, Cost | $ 678,771 |
Due in one year or less, Fair Value | 679,587 |
Due after one year through four years, Cost | 83,993 |
Due after one year through four years, Fair Value | 84,666 |
Cash equivalents | |
Available-for-sale securities | |
Due in one year or less, Cost | 246,905 |
Due in one year or less, Fair Value | 246,907 |
Cash equivalents | U.S. government agency securities | |
Available-for-sale securities | |
Due in one year or less, Cost | 246,905 |
Due in one year or less, Fair Value | 246,907 |
Marketable securities | |
Available-for-sale securities | |
Due in one year or less, Cost | 431,866 |
Due in one year or less, Fair Value | 432,680 |
Due after one year through four years, Cost | 83,993 |
Due after one year through four years, Fair Value | 84,666 |
Marketable securities | U.S. government agency securities | |
Available-for-sale securities | |
Due in one year or less, Cost | 249,239 |
Due in one year or less, Fair Value | 249,295 |
Due after one year through four years, Cost | 7,186 |
Due after one year through four years, Fair Value | 7,231 |
Marketable securities | Corporate bonds | |
Available-for-sale securities | |
Due in one year or less, Cost | 162,241 |
Due in one year or less, Fair Value | 162,992 |
Due after one year through four years, Cost | 57,023 |
Due after one year through four years, Fair Value | 57,569 |
Marketable securities | Certificates of deposit | |
Available-for-sale securities | |
Due in one year or less, Cost | 10,000 |
Due in one year or less, Fair Value | 10,000 |
Due after one year through four years, Cost | 0 |
Due after one year through four years, Fair Value | 0 |
Marketable securities | Commercial paper | |
Available-for-sale securities | |
Due in one year or less, Cost | 7,996 |
Due in one year or less, Fair Value | 8,000 |
Due after one year through four years, Cost | 0 |
Due after one year through four years, Fair Value | 0 |
Marketable securities | Asset backed securities | |
Available-for-sale securities | |
Due in one year or less, Cost | 2,390 |
Due in one year or less, Fair Value | 2,393 |
Due after one year through four years, Cost | 19,784 |
Due after one year through four years, Fair Value | $ 19,866 |
MARKETABLE SECURITIES - Sched_4
MARKETABLE SECURITIES - Schedule of Gross Unrealized Losses And Fair Value of Available For Sale Securities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Marketable Securities [Line Items] | |
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | $ 181,909 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | (3) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer, accumulated loss | 0 |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 181,909 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | (3) |
Cash equivalents | |
Marketable Securities [Line Items] | |
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | 81,934 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | (2) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer, accumulated loss | 0 |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 81,934 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | (2) |
Cash equivalents | U.S. government agency securities | |
Marketable Securities [Line Items] | |
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | 81,934 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | (2) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer, accumulated loss | 0 |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 81,934 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | (2) |
Marketable securities | |
Marketable Securities [Line Items] | |
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | 99,975 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | (1) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer, accumulated loss | 0 |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 99,975 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | (1) |
Marketable securities | U.S. government agency securities | |
Marketable Securities [Line Items] | |
Total fair value of available-for-sale securities in a continuous unrealized loss position for less than twelve months | 99,975 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position for less than twelve months | (1) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months of longer, accumulated loss | 0 |
Total fair value of available-for-sale securities in a continuous unrealized loss position | 99,975 |
Total gross unrealized losses of available-for-sale securities in a continuous unrealized loss position | $ (1) |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT - Schedule of Estimated Useful Lives (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, plant and equipment | |||
Property, plant and equipment, at cost | $ 573,665 | $ 532,956 | |
Accumulated depreciation | (110,228) | (77,631) | |
Property, plant and equipment, net | 463,437 | 455,325 | |
Land | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 4,466 | 4,466 | |
Leasehold and building improvements | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 111,778 | 80,352 | |
Land improvements | |||
Property, plant and equipment | |||
Estimated Useful Life | 15 years | ||
Property, plant and equipment, at cost | 2,399 | 1,766 | |
Buildings | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 165,926 | 112,815 | |
Computer equipment and computer software | |||
Property, plant and equipment | |||
Estimated Useful Life | 3 years | ||
Property, plant and equipment, at cost | 74,447 | 65,323 | |
Laboratory equipment | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 130,323 | 104,008 | |
Furniture and fixtures | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 22,698 | 14,539 | |
Assets under construction | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | $ 61,628 | $ 149,687 | |
Minimum | Buildings | |||
Property, plant and equipment | |||
Estimated Useful Life | 30 years | ||
Minimum | Laboratory equipment | |||
Property, plant and equipment | |||
Estimated Useful Life | 3 years | ||
Minimum | Furniture and fixtures | |||
Property, plant and equipment | |||
Estimated Useful Life | 3 years | ||
Maximum | Buildings | |||
Property, plant and equipment | |||
Estimated Useful Life | 40 years | ||
Maximum | Laboratory equipment | |||
Property, plant and equipment | |||
Estimated Useful Life | 10 years | ||
Maximum | Furniture and fixtures | |||
Property, plant and equipment | |||
Estimated Useful Life | 10 years |
PROPERTY, PLANT, AND EQUIPMEN_3
PROPERTY, PLANT, AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, plant and equipment | |||||
Depreciation | $ 17,600 | $ 7,100 | $ 33,400 | $ 13,400 | |
Property, plant and equipment, at cost | 573,665 | 573,665 | $ 532,956 | ||
Laboratory equipment | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 130,323 | 130,323 | 104,008 | ||
Assets under construction | 11,500 | 11,500 | |||
Expected cost to complete project | 2,900 | 2,900 | |||
Leasehold and building improvements | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 111,778 | 111,778 | 80,352 | ||
Assets under construction | 43,900 | 43,900 | |||
Expected cost to complete project | 6,700 | 6,700 | |||
Computer equipment and computer software | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 74,447 | 74,447 | 65,323 | ||
Assets under construction | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 61,628 | 61,628 | 149,687 | ||
Computer software | |||||
Property, plant and equipment | |||||
Assets under construction | 5,600 | 5,600 | |||
Expected cost to complete project | 2,000 | 2,000 | |||
Furniture and fixtures | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 22,698 | 22,698 | $ 14,539 | ||
Assets under construction | $ 600 | $ 600 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Schedule of Finite Lived Intangible Assets Net Balances and Weighted Average Useful Lives (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 972,056 | $ 963,690 |
Less: Accumulated amortization | (67,433) | (20,411) |
Intangibles, net | 904,623 | 943,279 |
Finite-lived and indefinite-lived intangible assets, gross | 1,172,548 | 1,163,961 |
Finite-lived and indefinite-lived intangible assets, net | 1,105,115 | 1,143,550 |
In-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 200,000 | 200,000 |
Acquired developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 492 | $ 271 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life of finite-lived intangible asset (in years) | 15 years 4 months 24 days | 15 years 10 months 24 days |
Finite-lived intangible assets, gross | $ 100,700 | $ 100,700 |
Less: Accumulated amortization | (4,109) | (961) |
Intangibles, net | $ 96,591 | $ 99,739 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life of finite-lived intangible asset (in years) | 13 years 3 months 18 days | 13 years 7 months 6 days |
Finite-lived intangible assets, gross | $ 2,700 | $ 2,700 |
Less: Accumulated amortization | (314) | (224) |
Intangibles, net | $ 2,386 | $ 2,476 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life of finite-lived intangible asset (in years) | 8 years 4 months 24 days | 8 years 9 months 18 days |
Finite-lived intangible assets, gross | $ 22,689 | $ 22,690 |
Less: Accumulated amortization | (7,105) | (5,974) |
Intangibles, net | $ 15,584 | $ 16,716 |
Acquired developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life of finite-lived intangible asset (in years) | 9 years 6 months | 9 years 10 months 24 days |
Finite-lived intangible assets, gross | $ 814,171 | $ 806,371 |
Less: Accumulated amortization | (52,766) | (12,345) |
Intangibles, net | $ 761,405 | $ 794,026 |
Supply agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life of finite-lived intangible asset (in years) | 7 years | 7 years 6 months |
Finite-lived intangible assets, gross | $ 30,000 | $ 30,000 |
Less: Accumulated amortization | (2,549) | (571) |
Intangibles, net | $ 27,451 | $ 29,429 |
Internally developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average remaining useful life of finite-lived intangible asset (in years) | 2 years 3 months 18 days | 2 years 6 months |
Finite-lived intangible assets, gross | $ 1,796 | $ 1,229 |
Less: Accumulated amortization | (590) | (336) |
Intangibles, net | $ 1,206 | $ 893 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 47,158 | |
2021 | 94,217 | |
2022 | 94,012 | |
2023 | 93,724 | |
2024 | 93,345 | |
Thereafter | 482,167 | |
Intangibles, net | $ 904,623 | $ 943,279 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 03, 2020 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 1,237,672,000 | $ 1,203,197,000 | $ 17,279,000 | ||
Impairment losses | 0 | $ 0 | |||
Paradigm & Viomics | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 30,400,000 | $ 30,431,000 | |||
Merger Agreement with Genomic Health, Inc. | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Genomic Health acquisition adjustment | $ 4,044,000 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL - Schedule of Changes in Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Recognized Goodwill | ||
Goodwill, beginning balance | $ 1,203,197 | $ 17,279 |
Goodwill, ending balance | 1,237,672 | 1,203,197 |
Merger Agreement with Genomic Health, Inc. | ||
Recognized Goodwill | ||
Goodwill acquired during the period | $ 1,185,918 | |
Genomic Health acquisition adjustment | 4,044 | |
Paradigm & Viomics | ||
Recognized Goodwill | ||
Goodwill acquired during the period | $ 30,431 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | $ 704,208 | $ 177,528 |
Marketable securities | 764,253 | 175,007 |
Equity securities | 1,385 | 1,716 |
Restricted cash | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 282 | 274 |
Fair Value, Recurring | ||
Fair value measurements | ||
Equity securities | 1,385 | 1,716 |
Contingent consideration | (2,551) | (2,879) |
Total | 1,220,388 | 321,050 |
Fair Value, Recurring | Corporate bonds | ||
Fair value measurements | ||
Marketable securities | 220,561 | 4,003 |
Fair Value, Recurring | U.S. government agency securities | ||
Fair value measurements | ||
Marketable securities | 256,526 | 140,682 |
Fair Value, Recurring | Certificates of deposit | ||
Fair value measurements | ||
Marketable securities | 10,000 | |
Fair Value, Recurring | Asset backed securities | ||
Fair value measurements | ||
Marketable securities | 22,259 | |
Fair Value, Recurring | Commercial paper | ||
Fair value measurements | ||
Marketable securities | 8,000 | |
Fair Value, Recurring | Cash and money market | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 457,019 | 146,932 |
Fair Value, Recurring | U.S. government agency securities | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 246,907 | 30,322 |
Fair Value, Recurring | Restricted cash | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 282 | 274 |
Level 1 | Fair Value, Recurring | ||
Fair value measurements | ||
Equity securities | 1,385 | 1,716 |
Contingent consideration | 0 | 0 |
Total | 458,686 | 148,922 |
Level 1 | Fair Value, Recurring | Corporate bonds | ||
Fair value measurements | ||
Marketable securities | 0 | 0 |
Level 1 | Fair Value, Recurring | U.S. government agency securities | ||
Fair value measurements | ||
Marketable securities | 0 | 0 |
Level 1 | Fair Value, Recurring | Certificates of deposit | ||
Fair value measurements | ||
Marketable securities | 0 | |
Level 1 | Fair Value, Recurring | Asset backed securities | ||
Fair value measurements | ||
Marketable securities | 0 | |
Level 1 | Fair Value, Recurring | Commercial paper | ||
Fair value measurements | ||
Marketable securities | 0 | |
Level 1 | Fair Value, Recurring | Cash and money market | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 457,019 | 146,932 |
Level 1 | Fair Value, Recurring | U.S. government agency securities | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 0 | 0 |
Level 1 | Fair Value, Recurring | Restricted cash | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 282 | 274 |
Level 2 | Fair Value, Recurring | ||
Fair value measurements | ||
Equity securities | 0 | 0 |
Contingent consideration | 0 | 0 |
Total | 764,253 | 175,007 |
Level 2 | Fair Value, Recurring | Corporate bonds | ||
Fair value measurements | ||
Marketable securities | 220,561 | 4,003 |
Level 2 | Fair Value, Recurring | U.S. government agency securities | ||
Fair value measurements | ||
Marketable securities | 256,526 | 140,682 |
Level 2 | Fair Value, Recurring | Certificates of deposit | ||
Fair value measurements | ||
Marketable securities | 10,000 | |
Level 2 | Fair Value, Recurring | Asset backed securities | ||
Fair value measurements | ||
Marketable securities | 22,259 | |
Level 2 | Fair Value, Recurring | Commercial paper | ||
Fair value measurements | ||
Marketable securities | 8,000 | |
Level 2 | Fair Value, Recurring | Cash and money market | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 0 | 0 |
Level 2 | Fair Value, Recurring | U.S. government agency securities | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 246,907 | 30,322 |
Level 2 | Fair Value, Recurring | Restricted cash | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 0 | 0 |
Level 3 | Fair Value, Recurring | ||
Fair value measurements | ||
Equity securities | 0 | 0 |
Contingent consideration | (2,551) | (2,879) |
Total | (2,551) | (2,879) |
Level 3 | Fair Value, Recurring | Corporate bonds | ||
Fair value measurements | ||
Marketable securities | 0 | 0 |
Level 3 | Fair Value, Recurring | U.S. government agency securities | ||
Fair value measurements | ||
Marketable securities | 0 | 0 |
Level 3 | Fair Value, Recurring | Certificates of deposit | ||
Fair value measurements | ||
Marketable securities | 0 | |
Level 3 | Fair Value, Recurring | Asset backed securities | ||
Fair value measurements | ||
Marketable securities | 0 | |
Level 3 | Fair Value, Recurring | Commercial paper | ||
Fair value measurements | ||
Marketable securities | 0 | |
Level 3 | Fair Value, Recurring | Cash and money market | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 0 | 0 |
Level 3 | Fair Value, Recurring | U.S. government agency securities | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | 0 | 0 |
Level 3 | Fair Value, Recurring | Restricted cash | ||
Fair value measurements | ||
Cash and cash equivalents, and restricted cash | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Contingent consideration, liability | $ 2,551,000 | $ 2,879,000 |
Level 3 | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Non-marketable equity securities | 11,800,000 | 11,800,000 |
Biomatrica, Inc | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Contingent consideration, liability | 20,000,000 | |
Epic Sciences | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment owned, at fair value | $ 10,800,000 | $ 10,800,000 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Contingent Consideration (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Fair Value Disclosures [Abstract] | |
Balance, January 1, 2020 | $ 2,879 |
Changes in fair value | 0 |
Gains (losses) recognized in earnings | 0 |
Payments | 328 |
Balance, June 30, 2020 | $ 2,551 |
FAIR VALUE - Long-Term Debt and
FAIR VALUE - Long-Term Debt and Convertible Notes (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Carrying Amount | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Construction loan | $ 24,263 | $ 24,866 |
Fair Value | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Construction loan | 24,263 | 24,866 |
2028 Convertible notes | Carrying Amount | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible notes | 786,711 | 0 |
2028 Convertible notes | Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible notes | 1,101,413 | 0 |
2027 Convertible notes | Carrying Amount | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible notes | 498,707 | 483,909 |
2027 Convertible notes | Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible notes | 774,328 | 843,741 |
2025 Convertible notes | Carrying Amount | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible notes | 248,965 | 319,696 |
2025 Convertible notes | Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible notes | $ 419,015 | $ 592,482 |
LICENSE AND COLLABORATION AGR_2
LICENSE AND COLLABORATION AGREEMENTS - Mayo (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Research and development | $ 32,673 | $ 29,972 | $ 76,182 | $ 61,757 |
Licensing Agreements | Mayo | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Research and development | $ 1,000 | $ 1,100 | $ 1,900 | $ 2,600 |
LICENSE AND COLLABORATION AGR_3
LICENSE AND COLLABORATION AGREEMENTS - Epic Sciences (Details) - Epic Sciences - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Investment owned (in shares) | 18,258,838 | 18,258,838 |
Investment owned, at fair value | $ 10.8 | $ 10.8 |
Licensing Agreements | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
License And Laboratory Agreement, Term | 10 years |
LICENSE AND COLLABORATION AGR_4
LICENSE AND COLLABORATION AGREEMENTS - Biocartis (Details) - Biocartis N.V € in Millions, $ in Millions | 6 Months Ended | ||||
Jun. 30, 2020EUR (€) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($)shares | Sep. 30, 2017USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Investment owned (in shares) | shares | 270,000 | ||||
Investment owned, at fair value | $ | $ 1.4 | $ 1.7 | $ 4 | ||
Sales Milestone Range One | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payments contingent on milestones | € | € 2.5 | ||||
Expansion Of Collaboration To Oncology | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payments contingent on milestones | € | € 2 | ||||
Licensing Agreements | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
One time fee for license to patents | $ | $ 3.2 |
PFIZER PROMOTION AGREEMENT (Det
PFIZER PROMOTION AGREEMENT (Details) - Pfizer Inc - Cologuard promotion agreement - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Charges for promotion, sales and marketing | $ 21.1 | $ 16.6 | $ 40.5 | $ 33.9 |
Service fee based on incremental gross profits over specified baselines and royalties | $ 2.1 | $ 19.4 | $ 21.7 | $ 38.6 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2020 | Nov. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Subsidiary or Equity Method Investee [Line Items] | |||||||
Repayments of debt in cash | $ 150,054 | $ 493,356 | |||||
Shares issued to settle convertible notes | $ 182,435 | ||||||
Issuance costs | $ 400 | ||||||
Issuance of common stock for business combinations | $ 28,597 | $ 28,597 | $ 0 | ||||
Issuance of common stock for business combinations (in shares) | 400,000 | 17,000,000 | 382,947 | ||||
Merger Agreement with Genomic Health, Inc. | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Business combination, consideration transferred | $ 2,500,000 | ||||||
Issuance of common stock for business combinations | $ 1,400,000 | ||||||
Paradigm & Viomics | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Business combination, consideration transferred | $ 40,400 | ||||||
Issuance of common stock to acquire business | $ 28,600 | $ 32,200 | |||||
2025 Convertible notes | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Settlement of convertible notes (in shares) | 2,200,000 | ||||||
Shares issued to settle convertible notes | $ 182,400 | ||||||
Total consideration | 676,500 | ||||||
Repayments of debt | 493,400 | ||||||
2027 Convertible notes | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Repayments of debt in cash | 494,100 | ||||||
Shares issued to settle convertible notes | 182,400 | ||||||
Total consideration | 676,500 | ||||||
2027 Convertible notes | 2025 Convertible notes | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Repayments of debt in cash | $ 494,100 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of OCI (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 2,288,061 | $ 680,941 |
Other comprehensive loss before reclassifications | 1,564 | 3,784 |
Amounts reclassified from accumulated other comprehensive loss | 25 | 344 |
Net current period change in accumulated other comprehensive loss, before tax | 1,589 | 4,128 |
Income tax expense related to items of other comprehensive income | (984) | |
Ending Balance | 2,511,193 | 765,532 |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (25) | (25) |
Other comprehensive loss before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 25 | 0 |
Net current period change in accumulated other comprehensive loss, before tax | 25 | 0 |
Income tax expense related to items of other comprehensive income | 0 | |
Ending Balance | 0 | (25) |
Unrealized Gain (Loss) on Marketable Securities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (75) | (1,397) |
Other comprehensive loss before reclassifications | 1,564 | 3,784 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 344 |
Net current period change in accumulated other comprehensive loss, before tax | 1,564 | 4,128 |
Income tax expense related to items of other comprehensive income | (984) | |
Ending Balance | 1,489 | 1,747 |
Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (100) | (1,422) |
Ending Balance | $ 1,489 | $ 1,722 |
STOCKHOLDERS' EQUITY - Schedu_2
STOCKHOLDERS' EQUITY - Schedule of amounts reclassified from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Changes in Accumulated Other Comprehensive Income (Loss) | ||||
Investment income, net | $ 2,912 | $ 7,669 | $ 3,009 | $ 14,324 |
Foreign currency adjustment | $ 0 | $ 0 | 25 | 0 |
Reclassification Out Of Accumulated Other Comprehensive Income | ||||
Changes in Accumulated Other Comprehensive Income (Loss) | ||||
Total reclassifications | 25 | 344 | ||
Reclassification Out Of Accumulated Other Comprehensive Income | Unrealized Gain (Loss) on Marketable Securities | ||||
Changes in Accumulated Other Comprehensive Income (Loss) | ||||
Investment income, net | 0 | 344 | ||
Reclassification Out Of Accumulated Other Comprehensive Income | Foreign Currency Translation Adjustments | ||||
Changes in Accumulated Other Comprehensive Income (Loss) | ||||
Foreign currency adjustment | $ 25 | $ 0 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)employeesshares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)employeesshares | Jun. 30, 2019USD ($) | |
Stock-based compensation | ||||
Stock-based compensation expense | $ 40,000,000 | $ 20,100,000 | $ 69,600,000 | $ 36,300,000 |
Incremental share based compensation expense | $ 0 | $ 0 | ||
Number of employees impacted by change in operational milestones | employees | 36 | 36 | ||
Non-cash stock-based compensation expense | $ 1,800,000 | |||
Stock Plans | ||||
Stock-based compensation | ||||
Unrecognized compensation cost | 300,900,000 | $ 300,900,000 | ||
Weighted average period for recognition of cost | 3 years | |||
Merger Agreement with Genomic Health, Inc. | ||||
Stock-based compensation | ||||
Non-cash stock-based compensation expense | $ 600,000 | $ 3,500,000 | ||
Option Plan Shares | ||||
Stock-based compensation | ||||
Accelerated vesting, shares | shares | 708 | |||
Option Plan Shares | Merger Agreement with Genomic Health, Inc. | ||||
Stock-based compensation | ||||
Accelerated vesting, shares | shares | 9,132 | 43,480 | ||
Restricted Shares and RSUs | ||||
Stock-based compensation | ||||
Accelerated vesting, shares | shares | 33,123 | |||
Restricted Shares and RSUs | Merger Agreement with Genomic Health, Inc. | ||||
Stock-based compensation | ||||
Accelerated vesting, shares | shares | 10,525 | 28,814 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value and Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Option Plan Shares | |||||
Valuation assumptions | |||||
Risk-free interest rates, minimum (as a percent) | 0.98% | 2.54% | |||
Risk-free interest rates, maximum (as a percent) | 1.47% | 2.59% | |||
Expected term (in years) | 6 years 3 months 10 days | ||||
Expected volatility, minimum (as a percent) | 65.67% | 64.95% | |||
Expected volatility, maximum (as a percent) | 77.51% | 65.00% | |||
Dividend yield (as a percent) | 0.00% | 0.00% | |||
Weighted average fair value per share of options granted during the period (in dollars per share) | $ 58.77 | $ 57.11 | |||
Option Plan Shares | Minimum | |||||
Valuation assumptions | |||||
Expected term (in years) | 4 years 8 months 4 days | ||||
Option Plan Shares | Maximum | |||||
Valuation assumptions | |||||
Expected term (in years) | 6 years 1 month 24 days | ||||
ESPP Shares | |||||
Valuation assumptions | |||||
Risk-free interest rates, minimum (as a percent) | 0.12% | 2.31% | 0.12% | 2.31% | |
Risk-free interest rates, maximum (as a percent) | 0.20% | 2.44% | 0.20% | 2.44% | |
Expected volatility, minimum (as a percent) | 63.70% | 55.00% | 63.70% | 55.00% | |
Expected volatility, maximum (as a percent) | 89.00% | 57.60% | 89.00% | 57.60% | |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | |
Weighted average fair value per share of options granted during the period (in dollars per share) | $ 30.60 | $ 35.91 | $ 30.60 | $ 35.91 | |
ESPP Shares | Minimum | |||||
Valuation assumptions | |||||
Expected term (in years) | 6 months | 6 months | 6 months | 6 months | |
ESPP Shares | Maximum | |||||
Valuation assumptions | |||||
Expected term (in years) | 2 years | 2 years | 2 years | 2 years | |
Restricted Shares and RSUs | |||||
Restricted Shares and RSUs | |||||
Outstanding at the beginning of the period (in shares) | 4,384,005 | ||||
Granted (in shares) | 1,835,695 | ||||
Released (in shares) | (1,350,088) | ||||
Forfeited (in shares) | (208,076) | ||||
Outstanding at the end of the period (in shares) | 4,661,536 | 4,661,536 | 4,384,005 | ||
Weighted Average Grant Date Fair Value | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 63.41 | ||||
Granted (in dollars per share) | 92.25 | ||||
Released (in dollars per share) | 47 | ||||
Forfeited (in dollars per share) | 79.45 | ||||
Outstanding at the end of the period (in dollars per share) | $ 78.84 | $ 78.84 | $ 63.41 | ||
Stock Plans | |||||
Shares | |||||
Outstanding at the beginning of the period (in shares) | 2,700,293 | ||||
Granted (in shares) | 309,143 | ||||
Exercised (in shares) | (368,720) | ||||
Forfeited (in shares) | (65,438) | ||||
Outstanding at the end of the period (in shares) | 2,575,278 | 2,575,278 | 2,700,293 | ||
Exercisable at the end of the period (in shares) | 1,653,394 | 1,653,394 | |||
Weighted Average Exercise Price | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 34.01 | ||||
Granted (in dollars per share) | 97.66 | ||||
Exercised (in dollars per share) | 29.67 | ||||
Forfeited (in dollars per share) | 83.87 | ||||
Outstanding at the end of the period (in dollars per share) | $ 41.01 | 41.01 | $ 34.01 | ||
Exercisable at the end of the period (in dollars per share) | $ 26.10 | $ 26.10 | |||
Weighted Average Remaining Contractual Term | |||||
Outstanding at the end of the period | 6 years 6 months | 2 years 10 months 24 days | |||
Exercisable at the end of the period | 5 years 6 months | ||||
Aggregate Intrinsic Value | |||||
Outstanding at the end of the period | $ 123,979 | $ 123,979 | |||
Exercisable at the end of the period | $ 101,761 | 101,761 | |||
Total intrinsic value of options exercised | $ 20,400 | $ 22,600 |
NEW MARKET TAX CREDIT (Details)
NEW MARKET TAX CREDIT (Details) - New Market Tax Credit Program $ in Millions | 3 Months Ended |
Dec. 31, 2014USD ($)facility | |
Disclosures related to New Market Tax Credit | |
Net proceeds received from financing arrangements | $ | $ 2.4 |
Number of facilities receiving working capital and capital improvements from financing agreements | facility | 1 |
DEBT (Details)
DEBT (Details) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Jun. 30, 2020USD ($)employeeagreement | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Nov. 30, 2017USD ($) | |
Long-term debt | |||||
Timeframe when amount will be repaid through property taxes | 2 years | ||||
Other current liabilities | $ 40,581,000 | $ 8,467,000 | |||
Construction Loan Agreement | |||||
Long-term debt | |||||
Face amount | $ 25,600,000 | ||||
Amortization period | 20 years | ||||
Initial investment | $ 16,400,000 | ||||
Amount drawn from loan | 24,500,000 | 25,000,000 | |||
Interest incurred, accrued for as an interest reserve | 700,000 | 700,000 | |||
Interest costs capitalized | 700,000 | ||||
Debt issuance costs, net | 200,000 | ||||
Minimum liquidity covenant for construction loan | 250,000,000 | ||||
Construction Loan Agreement | 1-month LIBOR | |||||
Long-term debt | |||||
Variable rate | 2.25% | ||||
Tax Increment Financing | |||||
Long-term debt | |||||
Face amount | $ 4,600,000 | 4,600,000 | |||
Number of agreements | agreement | 2 | ||||
Number of jobs required to create and maintain | employee | 500 | ||||
Term | 5 years | ||||
Tax Increment Financing | Short-term other liabilities | |||||
Long-term debt | |||||
Other current liabilities | $ 1,100,000 | $ 2,700,000 | |||
City Letter of Credit | |||||
Long-term debt | |||||
Interest-only payment, period | 24 months | ||||
City Letter of Credit | Construction Loan Agreement | |||||
Long-term debt | |||||
Maximum borrowing capacity | $ 600,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash paid for amounts included in the measurement of liabilities | ||
Operating cash flows from operating leases | $ 12,289 | $ 2,419 |
Non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 13,024 | 20,511 |
Accounting Standards Update 2016-02 | ||
Non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 17,900 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Right-of-use assets | $ 132,751 | $ 126,444 |
Additional amount to be recognized at lease commencement for the lease liability | 136,500 | 126,600 |
Operating lease liabilities, current portion | 9,871 | 7,891 |
Operating lease liabilities, less current portion | $ 126,630 | $ 118,665 |
Weighted average discount rate | 6.83% | |
Weighted average lease term remaining on lease liabilities | 9 years 2 months 12 days |
WISCONSIN ECONOMIC DEVELOPMEN_2
WISCONSIN ECONOMIC DEVELOPMENT TAX CREDIT (Details) - Wisconsin Economic Development Tax Credit Agreement $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2015USD ($)item | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | |
Agreements | |||||
Refundable tax credits available, contingent | $ 9 | ||||
Capital investment expenditures over specified period, requirement to earn the refundable tax credits | $ 26.3 | ||||
Full-time positions that must be created over a specified time period to earn the refundable tax credits | item | 758 | ||||
Period over which the capital investment expenditures must be incurred and the creation of full-time positions must be completed | 7 years | ||||
Refundable tax credits earned | $ 9 | ||||
Refundable tax credit received | 5.9 | ||||
Refundable tax credit receivable | $ 3.1 | 3.1 | |||
Amortization of tax credits | 0.6 | $ 0.6 | 1.2 | $ 1.2 | |
Prepaid expenses and other current assets | |||||
Agreements | |||||
Refundable tax credit receivable | 1.6 | 1.6 | |||
Other long-term assets | |||||
Agreements | |||||
Refundable tax credit receivable | 1.5 | 1.5 | |||
Short-term other liabilities | |||||
Agreements | |||||
Refundable tax credit, offsetting liability | $ 1.1 | $ 1.1 |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | Mar. 08, 2019 | Jun. 12, 2018 | Jan. 17, 2018 |
Convertible Notes | ||||||
Long-term debt | ||||||
Coupon Interest Rate | 1.00% | |||||
Notes | ||||||
Long-term debt | ||||||
Coupon Interest Rate | 0.375% | |||||
Total Convertible notes | $ 2,212,549 | $ 1,162,549 | ||||
Less: Debt discount | (648,281) | (342,463) | ||||
Less: Debt issuance costs | (29,885) | (16,481) | ||||
Net convertible debt including current maturities | $ 1,534,383 | 803,605 | ||||
2028 Convertible notes | ||||||
Long-term debt | ||||||
Coupon Interest Rate | 0.375% | 0.375% | ||||
Effective interest rate (as a percent) | 5.20% | |||||
Fair Value of Liability Component at Issuance | $ 790,608 | |||||
Total Convertible notes | 1,150,000 | 0 | ||||
Less: Debt discount | $ (347,191) | 0 | ||||
2027 Convertible notes | ||||||
Long-term debt | ||||||
Coupon Interest Rate | 0.375% | |||||
Effective interest rate (as a percent) | 6.30% | |||||
Fair Value of Liability Component at Issuance | $ 472,501 | |||||
Total Convertible notes | 747,500 | 747,500 | ||||
Less: Debt discount | $ (239,267) | (253,340) | ||||
2025 Convertible notes | ||||||
Long-term debt | ||||||
Coupon Interest Rate | 1.00% | |||||
Effective interest rate (as a percent) | 6.00% | |||||
Fair Value of Liability Component at Issuance | $ 227,103 | |||||
Total Convertible notes | 315,049 | 415,049 | ||||
Less: Debt discount | $ (61,823) | $ (89,123) | ||||
Liability component | $ 654,800 | |||||
Equity component | $ 269,700 |
CONVERTIBLE NOTES - Unamortized
CONVERTIBLE NOTES - Unamortized discount and debt issuance costs (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Notes | ||
Convertible notes | ||
Unamortized discount | $ 648,281 | $ 342,463 |
Debt issuance costs, gross | 29,885 | 16,481 |
2028 Convertible notes | ||
Convertible notes | ||
Unamortized discount | 347,191 | 0 |
Debt issuance costs, gross | 16,098 | 0 |
2027 Convertible notes | ||
Convertible notes | ||
Unamortized discount | 239,267 | 253,340 |
Debt issuance costs, gross | 9,525 | 10,251 |
2025 Convertible notes | ||
Convertible notes | ||
Unamortized discount | 61,823 | 89,123 |
Debt issuance costs, gross | $ 4,262 | $ 6,230 |
CONVERTIBLE NOTES - Schedule of
CONVERTIBLE NOTES - Schedule of Underlying Equity and Liability Allocation of Transaction Costs (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Mar. 08, 2019 | Jun. 12, 2018 | Jan. 17, 2018 |
January 2025 Notes | ||||
Long-term debt | ||||
Transaction costs allocated to liability component | $ 13,569 | |||
Transaction costs allocated to equity component | 5,340 | |||
Total transaction costs | $ 18,909 | |||
June 2025 Notes | ||||
Long-term debt | ||||
Transaction costs allocated to liability component | $ 5,052 | |||
Transaction costs allocated to equity component | 2,311 | |||
Total transaction costs | $ 7,363 | |||
2027 Convertible notes | ||||
Long-term debt | ||||
Transaction costs allocated to liability component | $ 11,395 | |||
Transaction costs allocated to equity component | 6,632 | |||
Total transaction costs | $ 18,027 | |||
2028 Convertible notes | ||||
Long-term debt | ||||
Transaction costs allocated to liability component | $ 16,811 | |||
Transaction costs allocated to equity component | 7,642 | |||
Total transaction costs | $ 24,453 |
CONVERTIBLE NOTES - Additional
CONVERTIBLE NOTES - Additional information (Details) | Feb. 29, 2020USD ($) | Mar. 08, 2019USD ($) | Jun. 12, 2018USD ($) | Jan. 17, 2018USD ($) | Feb. 29, 2020USD ($) | Mar. 31, 2019USD ($)shares | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($) |
Long-term debt | |||||||||||
Net proceeds from issuance | $ 1,125,547,000 | $ 729,479,000 | |||||||||
Repayments of debt in cash | $ 150,054,000 | 493,356,000 | |||||||||
Issuance of common stock upon convertible notes settlement (in shares) | shares | 2,158,991 | ||||||||||
Shares issued to settle convertible notes | $ 182,435,000 | ||||||||||
Retirement of equity component of convertible notes settled | $ (64,199,000) | (300,768,000) | |||||||||
Closing price of common stock | $ / shares | $ 86.94 | $ 86.94 | |||||||||
Interest expense | |||||||||||
Debt issuance costs amortization | $ 1,139,000 | $ 645,000 | $ 1,961,000 | 1,330,000 | |||||||
Debt discount amortization | 18,946,000 | 10,074,000 | 32,677,000 | 18,468,000 | |||||||
Loss on settlement of convertible notes | $ 8,000,000 | $ 10,600,000 | 0 | 0 | 7,954,000 | 10,558,000 | |||||
Coupon interest expense | 2,567,000 | 1,739,000 | 4,498,000 | 3,846,000 | |||||||
Total interest expense on convertible notes | 22,652,000 | 12,458,000 | 47,090,000 | 34,202,000 | |||||||
Other interest expense | 260,000 | 254,000 | 975,000 | 500,000 | |||||||
Total interest expense | $ 22,912,000 | $ 12,712,000 | $ 48,065,000 | $ 34,702,000 | |||||||
Convertible Notes | |||||||||||
Long-term debt | |||||||||||
Fixed interest rate (as a percent) | 1.00% | ||||||||||
Net proceeds from issuance | $ 671,100,000 | ||||||||||
Notes | |||||||||||
Long-term debt | |||||||||||
Amount issued and sold | $ 747,500,000 | ||||||||||
Fixed interest rate (as a percent) | 0.375% | ||||||||||
Net proceeds from issuance | $ 729,500,000 | ||||||||||
Repurchase price, as percentage of principal amount, if company undergoes change of control | 100 | ||||||||||
January 2018 Notes | |||||||||||
Long-term debt | |||||||||||
Amount issued and sold | $ 690,000,000 | ||||||||||
Fixed interest rate (as a percent) | 1.00% | ||||||||||
June 2018 Notes | |||||||||||
Long-term debt | |||||||||||
Amount issued and sold | $ 218,500,000 | ||||||||||
Fixed interest rate (as a percent) | 1.00% | ||||||||||
Net proceeds from issuance | $ 225,300,000 | ||||||||||
2025 Convertible notes | |||||||||||
Long-term debt | |||||||||||
Fixed interest rate (as a percent) | 1.00% | 1.00% | |||||||||
Repayments of debt in cash | 150,100,000 | ||||||||||
Repayments of debt | 493,400,000 | ||||||||||
Total consideration, allocated to liability component | 85,500,000 | 375,000,000 | |||||||||
Amount of debt extinguished | 100,000,000 | ||||||||||
Retirement of equity component of convertible notes settled | $ 64,200,000 | 300,800,000 | |||||||||
Debt instrument, convertible, equity component, tax impact | 300,000 | ||||||||||
Amount used to pay off interest accrued | 100,000 | 700,000 | |||||||||
Conversion rate, number of shares to be issued per $1,000 of principal amount (in shares) | 13.26 | ||||||||||
Conversion price (in dollars per share) | $ / shares | $ 75.43 | $ 75.43 | |||||||||
Interest expense amortization term | 4 years 6 months 18 days | ||||||||||
2027 Convertible notes | |||||||||||
Long-term debt | |||||||||||
Fixed interest rate (as a percent) | 0.375% | 0.375% | |||||||||
Repayments of debt in cash | $ 494,100,000 | ||||||||||
Issuance of common stock upon convertible notes settlement (in shares) | shares | 2,200,000 | ||||||||||
Shares issued to settle convertible notes | $ 182,400,000 | ||||||||||
Total consideration | $ 676,500,000 | ||||||||||
Conversion rate, number of shares to be issued per $1,000 of principal amount (in shares) | 8.96 | ||||||||||
Conversion price (in dollars per share) | $ / shares | $ 111.66 | $ 111.66 | |||||||||
Total transaction costs | 18,027,000 | ||||||||||
Transaction costs allocated to liability component | $ 11,395,000 | ||||||||||
Interest expense amortization term | 6 years 8 months 15 days | ||||||||||
2028 Convertible notes | |||||||||||
Long-term debt | |||||||||||
Amount issued and sold | $ 1,150,000,000 | $ 1,150,000,000 | |||||||||
Fixed interest rate (as a percent) | 0.375% | 0.375% | 0.375% | 0.375% | |||||||
Net proceeds from issuance | $ 1,125,600,000 | ||||||||||
Conversion rate, number of shares to be issued per $1,000 of principal amount (in shares) | 8.21 | ||||||||||
Conversion price (in dollars per share) | $ / shares | $ 121.84 | $ 121.84 | |||||||||
Total transaction costs | $ 24,453,000 | ||||||||||
Transaction costs allocated to liability component | $ 16,811,000 | ||||||||||
Interest expense amortization term | 7 years 8 months 1 day |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | Mar. 03, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Cash payments to acquire business, net of cash acquired | $ 6,654 | $ 0 | |||
Equity interests issued or issuable to previous investors | $ 8,400 | ||||
Acquired developed technology | |||||
Business Acquisition [Line Items] | |||||
Developed technology useful life (in years) | 9 years 6 months | 9 years 10 months 24 days | |||
Paradigm & Viomics | |||||
Business Acquisition [Line Items] | |||||
Business combination, consideration transferred | $ 40,400 | ||||
Cash payments to acquire business, net of cash acquired | $ 8,200 | ||||
Issuance of common stock to acquire business | $ 28,600 | $ 32,200 | |||
Amount of shares held for future issuance | $ 3,600 | ||||
Equity interests issued or issuable to previous investors, vesting period | 4 years | ||||
Paradigm & Viomics | Acquired developed technology | |||||
Business Acquisition [Line Items] | |||||
Developed technology useful life (in years) | 15 years |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Assets Acquired and Liabilities Assumed From Paradigm Diagnostics Acquisition (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Mar. 03, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,237,672 | $ 1,203,197 | $ 17,279 | ||
Paradigm & Viomics | |||||
Business Acquisition [Line Items] | |||||
Net operating assets | $ 5,373 | ||||
Goodwill | $ 30,400 | 30,431 | |||
Developed technology | 7,800 | ||||
Net operating liabilities | (3,203) | ||||
Total purchase price | $ 40,401 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 268,868 | $ 199,870 | $ 616,689 | $ 361,913 |
United States | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 249,850 | 199,870 | 576,709 | 361,913 |
Outside of United States | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 19,018 | $ 0 | $ 39,980 | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Income tax benefit (expense) | $ 867 | $ 443 | $ 2,599 | $ 913 | |
Deferred tax liabilities | 26,500 | 26,500 | |||
Unrecognized tax benefits | $ 11,300 | $ 11,300 | $ 10,200 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Thrive - USD ($) shares in Millions, $ in Millions | Jul. 31, 2020 | Dec. 31, 2019 |
Series A Preferred Stock | ||
Subsequent Event [Line Items] | ||
Non-marketable equity investment | $ 1 | |
Subsequent Event | Series B Preferred Stock | ||
Subsequent Event [Line Items] | ||
Investment owned (in shares) | 4 | |
Non-marketable equity investment | $ 10 |