Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 23, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36536 | ||
Entity Registrant Name | CAREDX, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 94-3316839 | ||
Entity Address, Address Line One | 8000 Marina Boulevard | ||
Entity Address, City or Town | Brisbane | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94005 | ||
City Area Code | 415 | ||
Local Phone Number | 287-2300 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | CDNA | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.1 | ||
Entity Common Stock, Shares Outstanding | 53,674,392 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement relating to the 2023 Annual Meeting of Stockholders, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement, or an amendment to this Annual Report on Form 10-K, will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2022. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001217234 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | San Jose, California |
Auditor Firm ID | 34 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 89,921 | $ 348,485 |
Marketable securities | 203,168 | 0 |
Accounts receivable | 66,312 | 59,761 |
Inventory | 19,232 | 17,186 |
Prepaid and other current assets | 9,216 | 7,928 |
Total current assets | 387,849 | 433,360 |
Property and equipment, net | 35,529 | 22,044 |
Operating leases right-of-use assets | 34,689 | 17,993 |
Intangible assets, net | 43,051 | 50,195 |
Goodwill | 37,523 | 36,983 |
Restricted cash | 522 | 211 |
Other assets | 3,828 | 5,835 |
Total assets | 542,991 | 566,621 |
Current liabilities: | ||
Accounts payable | 9,942 | 13,337 |
Accrued compensation | 16,902 | 26,042 |
Accrued and other liabilities | 49,131 | 37,922 |
Total current liabilities | 75,975 | 77,301 |
Deferred tax liability | 0 | 415 |
Common stock warrant liability | 32 | 139 |
Deferred payments for intangible assets | 2,418 | 5,041 |
Operating lease liability, less current portion | 33,406 | 17,394 |
Other liabilities | 249 | 455 |
Total liabilities | 112,080 | 100,745 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock: $0.001 par value; 10,000,000 shares authorized at December 31, 2022 and 2021; no shares issued and outstanding at December 31, 2022 and 2021 | 0 | 0 |
Common stock: $0.001 par value; 100,000,000 shares authorized at December 31, 2022 and 2021; 53,583,301 and 52,923,360 shares issued at December 31, 2022 and 2021, respectively; 53,533,250 and 52,923,360 shares outstanding at December 31, 2022 and 2021, respectively | 52 | 52 |
Additional paid-in capital | 898,806 | 853,683 |
Accumulated other comprehensive loss | (7,503) | (4,670) |
Accumulated deficit | (460,444) | (383,189) |
Total stockholders’ equity | 430,911 | 465,876 |
Total liabilities and stockholders’ equity | $ 542,991 | $ 566,621 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 53,583,301 | 52,923,360 |
Common stock, shares outstanding (in shares) | 53,533,250 | 52,923,360 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues [Abstract] | |||
Revenue | $ 321,793 | $ 296,397 | $ 192,194 |
Operating expenses: | |||
Research and development | 90,388 | 76,525 | 48,941 |
Sales and marketing | 96,027 | 77,245 | 53,858 |
General and administrative | 100,397 | 74,964 | 48,806 |
Total operating expenses | 399,024 | 326,123 | 214,722 |
Loss from operations | (77,231) | (29,726) | (22,528) |
Other income (expense): | |||
Interest income, net | 3,762 | 160 | 271 |
Change in estimated fair value of common stock warrant liability | 107 | 106 | (1,495) |
CARES Act Provider Relief Fund | 0 | 0 | 4,813 |
Other expense, net | (2,872) | (2,628) | (811) |
Total other income (expense) | 997 | (2,362) | 2,778 |
Loss before income taxes | (76,234) | (32,088) | (19,750) |
Income tax (expense) benefit | (379) | 1,426 | 1,036 |
Net loss | $ (76,613) | $ (30,662) | $ (18,714) |
Net loss per share (Note 3): | |||
Basic (in dollars per share) | $ (1.44) | $ (0.59) | $ (0.40) |
Diluted (in dollars per share) | $ (1.44) | $ (0.59) | $ (0.40) |
Weighted-average shares used to compute net loss per share: | |||
Basic (in shares) | 53,321,625 | 52,241,076 | 46,481,772 |
Diluted (in shares) | 53,321,625 | 52,241,076 | 46,481,772 |
Testing services revenue | |||
Revenues [Abstract] | |||
Revenue | $ 263,748 | $ 259,285 | $ 163,610 |
Operating expenses: | |||
Cost of testing services, product, patient and digital solutions | 72,286 | 71,251 | 43,932 |
Product revenue | |||
Revenues [Abstract] | |||
Revenue | 29,251 | 26,832 | 19,302 |
Operating expenses: | |||
Cost of testing services, product, patient and digital solutions | 17,639 | 18,930 | 13,847 |
Patient and digital solutions | |||
Revenues [Abstract] | |||
Revenue | 28,794 | 10,280 | 9,282 |
Operating expenses: | |||
Cost of testing services, product, patient and digital solutions | $ 22,287 | $ 7,208 | $ 5,338 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (76,613) | $ (30,662) | $ (18,714) |
Other comprehensive loss: | |||
Foreign currency translation adjustments, net of tax | (2,833) | (2,574) | 3,109 |
Net comprehensive loss | $ (79,446) | $ (33,236) | $ (15,605) |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity - USD ($) $ in Thousands | Total | Public Offering | At The Market Equity Offering | Common Stock | Common Stock Public Offering | Common Stock At The Market Equity Offering | Additional Paid-In Capital | Additional Paid-In Capital Public Offering | Additional Paid-In Capital At The Market Equity Offering | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 42,498,430 | ||||||||||
Beginning balance at Dec. 31, 2019 | $ 99,000 | $ 42 | $ 437,976 | $ (5,205) | $ (333,813) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Common stock shares issued (in shares) | 4,492,187 | 1,000,000 | |||||||||
Issuance of common shares, net of commissions and offering costs | $ 134,584 | $ 23,451 | $ 4 | $ 1 | $ 134,580 | $ 23,450 | |||||
Issuance of common stock under employee stock purchase plan (in shares) | 76,723 | ||||||||||
Issuance of common stock under employee stock purchase plan | 1,393 | 1,393 | |||||||||
RSU settlements, net of shares withheld (in shares) | 333,178 | ||||||||||
RSU settlements, net of shares withheld | (4,529) | (4,529) | |||||||||
Issuance of common stock for services (in shares) | 11,116 | ||||||||||
Issuance of common stock for services | 315 | 315 | |||||||||
Issuance of common stock for cash upon exercise of stock options (in shares) | 691,318 | ||||||||||
Issuance of common stock for cash upon exercise of stock options | 8,007 | $ 1 | 8,006 | ||||||||
Issuance of common stock for cash upon exercise of warrants (in shares) | 338,214 | ||||||||||
Issuance of common stock for cash upon exercise of warrants | 8,008 | $ 1 | 8,007 | ||||||||
Employee stock-based compensation expense | 23,055 | 23,055 | |||||||||
Foreign currency translation adjustment | 3,109 | 3,109 | |||||||||
Net loss | (18,714) | (18,714) | |||||||||
Ending balance (in shares) at Dec. 31, 2020 | 49,441,166 | ||||||||||
Ending balance at Dec. 31, 2020 | 277,679 | $ 49 | 632,253 | (2,096) | (352,527) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Common stock shares issued (in shares) | 2,211,538 | ||||||||||
Issuance of common shares, net of commissions and offering costs | $ 188,855 | $ 2 | $ 188,853 | ||||||||
Contingent consideration classified as equity | (222) | (222) | |||||||||
Issuance of common stock under employee stock purchase plan (in shares) | 45,464 | ||||||||||
Issuance of common stock under employee stock purchase plan | 2,139 | 2,139 | |||||||||
RSU settlements, net of shares withheld (in shares) | 464,693 | ||||||||||
RSU settlements, net of shares withheld | (18,441) | (18,441) | |||||||||
Issuance of common stock for services (in shares) | 3,984 | ||||||||||
Issuance of common stock for services | 296 | 296 | |||||||||
Issuance of common stock for cash upon exercise of stock options (in shares) | 753,383 | ||||||||||
Issuance of common stock for cash upon exercise of stock options | 12,776 | $ 1 | 12,775 | ||||||||
Issuance of common stock for cash upon exercise of warrants (in shares) | 3,132 | ||||||||||
Issuance of common stock for cash upon exercise of warrants | 205 | 205 | |||||||||
Employee stock-based compensation expense | 35,825 | 35,825 | |||||||||
Foreign currency translation adjustment | (2,574) | (2,574) | |||||||||
Net loss | (30,662) | (30,662) | |||||||||
Ending balance (in shares) at Dec. 31, 2021 | 52,923,360 | ||||||||||
Ending balance at Dec. 31, 2021 | 465,876 | $ 52 | 853,683 | (4,670) | (383,189) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock under employee stock purchase plan (in shares) | 93,422 | ||||||||||
Issuance of common stock under employee stock purchase plan | 2,230 | 2,230 | |||||||||
Repurchase and retirement of common stock (in shares) | (50,051) | ||||||||||
Repurchase and retirement of common stock | (642) | (642) | |||||||||
RSU settlements, net of shares withheld (in shares) | 411,176 | ||||||||||
RSU settlements, net of shares withheld | (6,067) | (6,067) | |||||||||
Issuance of common stock for services (in shares) | 12,764 | ||||||||||
Issuance of common stock for services | $ 319 | 319 | |||||||||
Issuance of common stock for cash upon exercise of stock options (in shares) | 142,579 | 142,579 | |||||||||
Issuance of common stock for cash upon exercise of stock options | $ 2,435 | 2,435 | |||||||||
Employee stock-based compensation expense | 46,206 | 46,206 | |||||||||
Foreign currency translation adjustment | (2,833) | (2,833) | |||||||||
Net loss | (76,613) | (76,613) | |||||||||
Ending balance (in shares) at Dec. 31, 2022 | 53,533,250 | ||||||||||
Ending balance at Dec. 31, 2022 | $ 430,911 | $ 52 | $ 898,806 | $ (7,503) | $ (460,444) |
Consolidated Statements of Co_2
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2020 | |
Public Offering | ||
Common stock, offering costs | $ 12,495 | $ 9,166 |
At The Market Equity Offering | ||
Common stock, offering costs | $ 785 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net loss | $ (76,613) | $ (30,662) | $ (18,714) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Stock-based compensation | 46,553 | 36,081 | 23,401 |
Asset impairments and write-downs | 840 | 2,437 | 0 |
Depreciation and amortization | 11,595 | 8,797 | 7,006 |
Amortization of right-of-use assets | 4,412 | 3,088 | 2,538 |
Unrealized loss on long-term marketable equity securities | 1,181 | 1,743 | 0 |
Revaluation of common stock warrant liability to estimated fair value | (107) | (106) | 1,495 |
Revaluation of contingent consideration to estimated fair value | 727 | (609) | 309 |
Amortization of premium on short-term marketable securities, net | 390 | 1,129 | 0 |
Other non-cash items | 0 | (222) | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (6,660) | (24,416) | (10,402) |
Inventory | (2,859) | (6,927) | (3,196) |
Prepaid and other assets | (1,049) | (5,144) | (41) |
Accounts payable | (2,054) | 1,789 | 4,389 |
Accrued compensation | (9,251) | 7,516 | 5,737 |
Accrued and other liabilities | 11,327 | 10,690 | 2,911 |
Operating lease liabilities, net | (3,456) | (2,603) | (1,475) |
Refund liability - CMS advance payment | 0 | (20,496) | 20,496 |
Change in deferred taxes | (215) | (1,379) | (1,023) |
Net cash (used in) provided by operating activities | (25,239) | (19,294) | 33,431 |
Investing activities: | |||
Maturities of short-term marketable securities | 111,587 | 88,905 | 0 |
Purchases of short-term marketable securities | (315,145) | 0 | 0 |
Purchases of long-term marketable securities | 0 | (5,500) | (90,034) |
Additions of capital expenditures | (21,234) | (13,559) | (7,110) |
Acquisition of intangible assets | (3,100) | (6,700) | (3,250) |
Acquisition of business, net of cash acquired | (610) | (15,434) | 0 |
Net cash (used in) provided by investing activities | (228,502) | 47,712 | (100,394) |
Financing activities: | |||
Payment of contingent consideration | (2,625) | 0 | 0 |
Principal payments on finance lease obligations | 0 | (66) | (183) |
Repurchase and retirement of common stock | (642) | 0 | 0 |
Proceeds from exercise of warrants | 0 | 4 | 352 |
Proceeds from exercise of stock options | 2,435 | 12,775 | 8,006 |
Proceeds from issuance of common stock under employee stock purchase plan | 2,230 | 2,139 | 1,368 |
Taxes paid related to net share settlement of restricted stock units | (5,933) | (18,065) | (4,529) |
Net cash (used in) provided by financing activities | (4,535) | 185,642 | 163,149 |
Effect of exchange rate changes on cash and cash equivalents | 23 | (303) | 274 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (258,253) | 213,757 | 96,460 |
Cash, cash equivalents, and restricted cash at beginning of period | 348,696 | 134,939 | 38,479 |
Cash, cash equivalents, and restricted cash at end of period | 90,443 | 348,696 | 134,939 |
Supplemental disclosures of cash information | |||
Cash paid for interest | 8 | 1 | 10 |
Cash paid for income taxes | 392 | 14 | 80 |
Supplemental disclosures of cash flow information | |||
Shares issued in lieu of payment | 319 | 296 | 315 |
Operating lease right-of-use assets | 22,267 | 6,079 | 55 |
Purchases of capital expenditures in accounts payable and accrued liabilities | 1,423 | 3,953 | 274 |
Employee stock purchase plan shares included in accrued compensation | 686 | 1,521 | 800 |
Contingent consideration | 0 | 5,341 | 0 |
Public Offering | |||
Financing activities: | |||
Proceeds from issuance of common shares | 0 | 188,855 | 134,684 |
At The Market Equity Offering | |||
Financing activities: | |||
Proceeds from issuance of common shares | $ 0 | $ 0 | $ 23,451 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | ORGANIZATION AND DESCRIPTION OF BUSINESS CareDx, Inc. (“CareDx” or the “Company”), together with its subsidiaries, is a leading precision medicine company focused on the discovery, development and commercialization of clinically differentiated, high-value diagnostic solutions for transplant patients and caregivers. The Company’s headquarters are in Brisbane, California. The primary operations are in Brisbane, California; Omaha, Nebraska; Fremantle, Australia; and Stockholm, Sweden. See also Note 16. The Company’s commercially available testing services consist of AlloSure® Kidney, a donor-derived cell-free DNA (“dd-cfDNA”) solution for kidney transplant patients, AlloMap® Heart, a gene expression solution for heart transplant patients, AlloSure® Heart, a dd-cfDNA solution for heart transplant patients, and AlloSure® Lung, a dd-cfDNA solution for lung transplant patients. The Company has initiated several clinical studies to generate data on its existing and planned future testing services. In April 2020, the Company announced its first biopharma research partnership for AlloCell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy transplants. The Company also offers high-quality products that increase the chance of successful transplants by facilitating a better match between a donor and a recipient of stem cells and organs. The Company also provides digital solutions to transplant centers following the acquisitions of Ottr Complete Transplant Management (“Ottr”) and XynManagement, Inc. (“XynManagement”), as well as the acquisitions of TransChart LLC (“TransChart”), MedActionPlan.com, LLC (“MedActionPlan”) and The Transplant Pharmacy, LLC (“TTP”) in 2021 . Testing Services AlloSure Kidney has been a covered service for Medicare beneficiaries since October 2017. The Medicare reimbursement rate for AlloSure Kidney is currently $2,841. AlloSure Kidney has received positive coverage decisions from several commercial payers , and is reimbursed by other private payers on a case-by-case basis . AlloMap Heart has been a covered service for Medicare beneficiaries since January 2006. The Medicare reimbursement rate for AlloMap Heart is currently $3,240. AlloMap Heart has also received positive coverage decisions for reimbursement from many of the largest U.S. private payers. In October 2020, the Company received a final Palmetto MolDx Medicare coverage decision for AlloSure Heart. In November 2020, Noridian Healthcare Solutions, the Company's Medicare Administrative Contractor, issued a parallel coverage policy granting coverage when used in conjunction with AlloMap Heart, which became effective in December 2020. The Medicare reimbursement rate for AlloSure Heart is currently $2,753. In May 2021, the Company purchased a minority investment of common stock in the biotechnology company Miromatrix for $5.0 million, and the investment is marked to market. Miromatrix works to eliminate the need for an organ transplant waiting list through the development of implantable engineered biological organs. Clinical Studies In January 2018, the Company initiated the Kidney Allograft Outcomes AlloSure Kidney Registry study ( “K-OAR” ), to develop additional data on the clinical utility of AlloSure Kidney for surveillance of kidney transplant recipients. K-OAR is a multicenter, non-blinded, prospective observational cohort study which has enrolled more than 1,700 renal transplant patients who will receive AlloSure Kidney long-term surveillance. In September 2018, the Company initiated the Surveillance HeartCare ™ Outcomes Registry (“SHORE”). SHORE is a prospective, multi-center, observational registry of patients receiving HeartCare for surveillance. HeartCare combines the gene expression profiling technology of AlloMap Heart with the dd-cfDNA analysis of AlloSure ® Heart in one surveillance solution. In February 2019, AlloSure ® Lung became available for lung transplant patients through a compassionate use program while the test is undergoing further studies. In June 2020, the Company submitted an AlloSure Lung application to the Palmetto MolDx Technical Assessment program seeking coverage and reimbursement for Medicare beneficiaries. In September 2019, the Company announced the commencement of the Outcomes of KidneyCare on Renal Allografts (“OKRA”) study, which is an extension of K-OAR. OKRA is a prospective, multi-center, observational, registry of patients receiving KidneyCare for surveillance. KidneyCare combines the dd-cfDNA analysis of AlloSure Kidney with the gene expression profiling technology of AlloMap Kidney and the predictive artificial intelligence technology of iBox for a multimodality surveillance solution. The Company has not yet made any applications to private payers for reimbursement coverage of AlloMap Kidney or KidneyCare. Products The Company’s suite of AlloSeq products are commercial next generation sequencing (“NGS”)-based kitted solutions. These products include: AlloSeq ™ Tx, a high-resolution Human Leukocyte Antigen (“HLA”) typing solution, AlloSeq ™ cfDNA, a surveillance solution designed to measure dd-cfDNA in blood to detect active rejection in transplant recipients, and AlloSeq ™ HCT, a solution for chimerism testing for stem cell transplant recipients. The Company's other HLA typing products include: Olerup SSP ® , based on the sequence specific primer (“SSP”) technology; and QTYPE ® , which uses real-time polymerase chain reaction (“PCR”) methodology, to perform HLA typing . In March 2021, the Company acquired certain assets of BFS Molecular S.R.L. (“BFS Molecular”), a software company focused on NGS-based patient testing solutions. BFS Molecular brings extensive software and algorithm development capabilities for NGS transplant surveillance products. Patient and Digital Solutions Following the acquisitions of both Ottr and XynManagement, the Company is a leading provider of transplant patient management software (“Ottr software”), as well as of transplant quality tracking and waitlist management solutions. Ottr software provides comprehensive solutions for transplant patient management and enables integration with electronic medical record ("EMR") systems providing patient surveillance management tools and outcomes data to transplant centers. XynManagement provides two unique solutions, XynQAPI software (“XynQAPI”) and XynCare. XynQAPI simplifies transplant quality tracking and Scientific Registry of Transplant Recipients reporting. XynCare includes a team of transplant assistants who maintain regular contact with patients on the waitlist to help prepare for their transplant and maintain eligibility. In September 2020, the Company launched AlloCare, a mobile app that provides a patient-centric resource for transplant recipients to manage medication adherence, coordinate with Patient Care Managers for AlloSure scheduling and measure health metrics. In January 2021, the Company acquired TransChart. TransChart provides EMR software to hospitals throughout the U.S. to care for patients who have or may need an organ transplant. As part of the Company's acquisition of TransChart in January 2021, the Company acquired Tx Access, a cloud-based service that allows nephrologists and dialysis centers to electronically submit referrals to transplant programs, closely follow and assist patients through the transplant waitlist process, and ultimately, through transplantation. In June 2021, the Company acquired the Transplant Hero patient application. The application helps patients manage their medications through alarms and interactive logging of medication events. Also in June 2021, the Company entered into a strategic agreement with OrganX to develop clinical decision support tools across the transplant patient journey. Together, the Company and OrganX will develop advanced analytics that integrate AlloSure, the first transplant specific dd-cfDNA assay, with large transplant databases to provide clinical data solutions. This partnership delivers the next level of innovation beyond multi-modality by incorporating a variety of clinical inputs to create a universal composite scoring system. The Company has agreed to potential future milestone payments. In November 2021, the Company acquired MedActionPlan, a New Jersey-based provider of medication safety, medication adherence and patient education. MedActionPlan is a leader in patient medication management for transplant patients and beyond. In December 2021, the Company acquired TTP, a transplant focused pharmacy located in Mississippi. TTP provides individualized transplant pharmacy services for patients at multiple transplant centers located throughout the U.S. COVID-19 Pandemic The full impact of the continued COVID-19 pandemic, including the impact associated with preventative and precautionary measures that the Company, other businesses and governments have taken and may take, continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company, but the pandemic may materially affect the Company's financial condition, liquidity and future results of operations. In the final weeks of March and during April 2020, with hospitals increasingly caring for COVID-19 patients, hospital administrators chose to limit or even defer, non-emergency procedures. Immunosuppressed transplant patients either self-prescribed or were asked to avoid transplant centers and caregiver visits to reduce the risk of contracting COVID-19. As a result, with transplant surveillance visits down, the Company experienced a slowdown in testing services volumes in the final weeks of March and during April 2020. As a response to the COVID-19 pandemic, and to enable immune-compromised transplant patients to continue to have their blood drawn, in late March 2020, the Company launched RemoTraC, a remote home-based blood draw solution using mobile phlebotomy for AlloSure and AlloMap surveillance tests, as well as for other standard monitoring tests. There continues to be uncertainty around the COVID-19 pandemic as the Omicron variant, including its sub-variants, has periodically caused increases in COVID-19 cases globally, which in turn impacted the availability of medical personnel in transplant centers and the volume of transplant procedures. A sustained reduction in transplant volume can negatively impact the Company's testing volumes, as the Company saw in the early part of the first quarter of 2022. The Company's product business experienced a reduction in sales volume throughout the second and third quarters of 2020, as it was unable to undertake onsite discussions and demonstrations of its recently launched NGS products, including AlloSeq Tx 17, which was awarded CE mark authorization in May 2020. The Company's product business regained normalized sales volumes during the fourth quarter of 2020. The Company is maintaining its testing, manufacturing, and distribution facilities while implementing specific protocols to reduce contact among employees. In areas where COVID-19 continues to impact healthcare operations, the Company's field-based sales and clinical support teams are supporting providers through virtual platforms. In addition, the Company created, and continues to have, a COVID-19 task force that is responsible for crisis decision making, employee communications, and enforcing all safety, monitoring and testing protocols in line with local regulations. Liquidity and Capital Resources The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $460.4 million at December 31, 2022. As of December 31, 2022, the Company had cash and cash equivalents and marketable securities of $293.1 million. CMS Accelerated and Advance Payment Program for Medicare Providers On March 27, 2020 the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Pursuant to the CARES Act, the Centers for Medicare & Medicaid Services (“CMS”) expanded its Accelerated and Advance Payment Program in order to increase cash flow to providers of services and suppliers impacted by the COVID-19 pandemic. CMS is authorized to provide accelerated or advance payments during the period of the public health emergency to any Medicare provider who submitted a request to the appropriate Medicare Administrative Contractor and met the required qualifications. During April 2020, the Company received an advance payment from CMS of approximately $20.5 million, and recorded the payment as Deferred revenue - CMS advance payment on the Company's consolidated balance sheet. During December 2020, the Company reassessed the Deferred revenue - CMS advance payment and repaid the entire amount in January 2021. Refer to Note 8, Balance Sheet Components, for further explanation. January 2021 Underwritten Public Offering of Common Stock On January 25, 2021, the Company sold 1,923,077 shares of its common stock through an underwritten public offering at a public offering price of $91.00 per share. The net proceeds to the Company from the offering were approximately $164.0 million, after deducting underwriting discounts and commissions and offering expenses. On February 11, 2021, the Company sold 288,461 shares of its common stock pursuant to the full exercise of the overallotment option granted to the underwriters in connection with the January 2021 offering. The net proceeds to the Company from the full exercise of the underwriters' overallotment option were approximately $24.7 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its subsidiaries. Intercompany transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in the consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to transaction price estimates used for testing revenue; standalone fair value of patient and digital solutions revenue performance obligations; accrued expenses for clinical studies; inventory valuation; the fair value of issued common stock warrants and embedded derivatives; the fair value of assets and liabilities acquired in a business combination or an assets acquisition (including identifiable intangible assets acquired); the fair value of contingent consideration recorded in connection with a business combination or an asset acquisition; the grant date fair value assumptions used to estimate stock-based compensation expense; income taxes; impairment of long-lived assets and indefinite-lived assets (including goodwill); and legal contingencies. Actual results could differ from those estimates. Concentrations of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. The Company’s policy is to invest its cash and cash equivalents in money market funds, obligations of U.S. government agencies and government-sponsored entities, commercial paper, corporate debt securities and various bank deposit accounts. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company is exposed to credit risk in the event of default by the financial institutions to the extent of amounts recorded on the balance sheets that may be in excess of insured limits. The Company is also subject to credit risk from its accounts receivable, which are derived from revenue earned from AlloSure Kidney, AlloSure Heart and AlloMap Heart tests provided for patients located in the U.S. and Canada, and billed to various third-party payers, from sales of products to distributors, strategic partners and transplant laboratories in Europe, Asia, the Middle East, Africa, the U.S., Latin America and other geographic regions, from sales of patient and digital solutions software. The Company has not experienced any significant credit losses and does not require collateral on receivables. For the years ended December 31, 2022, 2021 and 2020, approximately 53%, 59% and 57%, respectively, of total revenue was billed to Medicare. No other payers represented more than 10% of total revenue for the years ended December 31, 2022, 2021 and 2020. As of December 31, 2022 and 2021, approximately 27% and 27%, respectively, of accounts receivable was due from Medicare. No other payer represented more than 10% of accounts receivable at either December 31, 2022 or 2021. Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. Restricted Cash As a condition of the lease agreements for certain facilities the Company must maintain letters of credit and certain minimum collateral requirements. The cash used to support these arrangements of $0.5 million is classified as long-term restricted cash on the accompanying consolidated balance sheets. Marketable Securities The Company considers all highly liquid investments in securities with a maturity of greater than three months at the time of purchase to be marketable securities. As of December 31, 2022, the Company’s short-term marketable securities consisted of corporate debt securities with maturities of greater than three months but less than twelve months at the time of purchase, which were classified as current assets on the consolidated balance sheet . The Company classifies its short-term marketable securities as held-to-maturity at the time of purchase and reevaluates such designation at each balance sheet date. The Company has the positive intent and ability to hold these marketable securities to maturity. Short-term marketable securities are carried at amortized cost and are adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income, net on the consolidated statements of operations. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on short-term marketable securities are included in interest income, net. The cost of securities sold will be determined using specific identification. The Company considers investments in securities with remaining maturities of over one year as long-term investments. As of December 31, 2022, the Company's long-term marketable securities consisted of corporate equity securities. The long-term marketable securities are classified as other assets on the consolidated balance sheet. The Company classifies its long-term marketable debt securities as available-for-sale and reevaluates such designation at each balance sheet date. Unrealized gains and losses from the reevaluation of the long-term marketable debt securities, if any, are included in other comprehensive gain (loss) in the consolidated statement of comprehensive income (loss). Realized gains and losses and declines in value judged to be other-than-temporary, if any, on long-term marketable securities are included in interest income, net. The Company records its long-term marketable equity securities at fair market value. Unrealized gains and losses from the remeasurement of the long-term marketable equity securities to fair value are included in other income (expense), net, in the consolidated statements of operations. Inventory Inventory is finished goods, work in progress, and raw materials and consists of reagent plates, laboratory supplies, reagents and finished goods kits. Inventories are used in connection with tests performed, kits produced and prescription drugs, and may also be used for research and product development efforts. Laboratory supplies subsequently designated for research and product development use are expensed. Obsolete or damaged inventories are written off. Certain inventories are stated at the lower of purchased cost, determined on an average cost basis, or net realizable value. Inventories are stated at the lower of actual purchased cost, determined on an average cost basis, on a first-in, first-out basis, or at net realizable value. Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful life is generally three The Company capitalizes certain costs incurred for software developed or obtained for internal use, including hosting arrangements. These costs include software licenses and consulting services, as well as employee payroll and payroll-related costs. Capitalized internal-use software costs are usually amortized over a period of three Business Combinations The Company determines and allocates the purchase price of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values as of the business combination date, including separately identifiable intangible assets, which are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, royalty rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. In those circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under Accounting Standard Codification (“ASC”), Topic 480, Distinguishing Liabilities from Equity , the Company recognizes a liability equal to the fair value of the contingent payments that the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records changes in the fair value as a component of operating expenses. In circumstances where the contingent consideration is classified as equity, the Company recognizes it at fair value at the acquisition date. Contingent consideration classified as equity is not subsequently remeasured. Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition. Acquired Intangible Assets Amortizable intangible assets include customer relationships, developed technology, commercialization rights, trademarks and in-process technology assets acquired as part of a business combination or asset acquisition. Intangible assets subject to amortization are amortized over their estimated useful lives. Acquired in-process technology assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, which generally occurs if and when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. Impairment of Goodwill, Intangible Assets and Long-lived Assets Goodwill Goodwill recorded in a business combination is not subject to amortization. Instead, it is tested for impairment on an annual basis and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. The Company’s annual impairment test date is December 1 st . A qualitative assessment is initially made to determine whether it is necessary to perform a quantitative assessment. A qualitative assessment includes, among others, consideration of: (i) past, current and projected future earnings; (ii) recent trends and market conditions; and (iii) valuation metrics involving similar companies that are publicly-traded and acquisitions of similar companies, if available. If this qualitative assessment indicates that it is more likely than not that an impairment exists, or if the Company decides to bypass this option, it proceeds to the quantitative assessment. The quantitative assessment consists of a comparison between the estimated fair value of the Company’s reporting unit and its respective carrying amount including goodwill. Where the carrying value of the reporting unit exceeds its estimated fair value, the Company will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. When necessary, to determine the reporting unit’s fair value under the quantitative approach, the Company uses a combination of income and market approaches, such as estimated discounted future cash flows of that reporting unit, multiples of earnings or revenues, and analysis of recent sales or offerings of comparable entities. The Company also considers its market capitalization on the date of the analysis to ensure the reasonableness of the reporting unit’s fair value. In connection with the Company’s annual goodwill assessment on December 1, 2022, the Company performed a qualitative assessment taking into consideration past, current and projected future earnings, recent trends and market conditions; and the Company's market capitalization. Based on this analysis, the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount. As such, it was not necessary to perform the quantitative goodwill impairment assessment at that time. As of December 31, 2022, no impairment of goodwill has been identified. Intangible assets not subject to amortization The Company evaluates the carrying value of intangible assets not subject to amortization, related to acquired in-process technology assets, which are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. Accordingly, amortization of the acquired in-process technology assets will not occur until the products reach commercialization. During the period the assets are considered indefinite-lived, they are tested for impairment on an annual basis, as well as between annual tests if the Company becomes aware of any events occurring or changes in circumstances that would indicate that the fair value of the acquired in-process technology assets are less than their carrying amounts. An impairment loss would be recorded when the fair value of an acquired in-process technology asset is less than its carrying value. If and when development is complete, which generally occurs when the products are made commercially available, the associated acquired in-process technology asset will be deemed finite-lived and will then be amortized based on its estimated useful life. As of December 31, 2022, no impairment of acquired in-process technology assets has been identified. Intangible assets and long-lived assets subject to amortization The Company evaluates its finite-lived intangible assets and its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company then compares the carrying amounts of the assets with the future net undiscounted cash flows expected to be generated by such asset. If an impairment exists, the Company measures the impairment based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. The Company has not identified any material impairment losses to date. Fair Value of Financial Instruments Fair value is defined as the price that would be received from selling an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and it takes into consideration the assumptions that market participants would use when pricing the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement of an asset or liability requires management to make judgments and to consider specific characteristics of that asset or liability. The carrying amounts of certain financial instruments of the Company, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their short maturities. The carrying amount of the contingent consideration liability also represents its fair value. Leases The Company adopted ASC Topic 842, Leases (“ASC 842”) and determines if an arrangement is or contains a lease at contract inception. A right-of-use (“ROU”) asset, representing the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the consolidated balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company also has lease arrangements with lease and non-lease components. The Company elected the practical expedient not to separate non-lease components from lease components for the Company's facility leases. The Company also elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for leases with an initial term of 12 months or less. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. As of December 31, 2022, the Company’s leases had remaining terms of 0.92 years to 10.09 years, some of which include options to extend the lease term. Revenue The Company recognizes revenue from testing services, product sales, and patient and digital solutions revenue in the amount that reflects the consideration that it expects to be entitled in exchange for goods or services as it transfers control to its customers. Revenue is recorded considering a five-step revenue recognition model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation. Testing Services Revenue AlloSure Kidney, AlloMap Heart, AlloSure Heart and AlloSure Lung patient tests are ordered by healthcare providers. The Company receives a test requisition form with payer information along with a collected patient blood sample. The Company considers the patient to be its customer and the test requisition form to be the contract. Testing services are performed in the Company’s laboratory. Testing services represent one performance obligation in a contract and are performed when results of the test are provided to the healthcare provider, at a point in time. The healthcare providers that order the tests and on whose behalf the Company provides testing services are generally not responsible for the payment of these services. The first and second revenue recognition criteria are satisfied when the Company receives a test requisition form with payer information from the healthcare provider. Generally, the Company bills third-party payers upon delivery of an AlloSure Kidney, AlloMap Heart, AlloSure Heart or AlloSure Lung test result to the healthcare provider. Amounts received may vary amongst payers based on coverage practices and policies of the payer. The Company has used the portfolio approach under ASC Topic 606, Revenue from Contracts with Customers , to identify financial classes of payers. Revenue recognized for Medicare and other contracted payers is based on the agreed current reimbursement rate per test, adjusted for historical collection trends where applicable. The Company estimates revenue for non-contracted payers and self-payers using transaction prices determined for each financial class of payers using history of reimbursements. This includes analysis of an average reimbursement per test and a percentage of tests reimbursed. This estimate requires significant judgment. The Company monitors revenue estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Changes in transaction price estimates are updated quarterly based on actual cash collected or changes made to contracted rates. Product Revenue Product revenue is recognized from the sale of products to end-users, distributors and strategic partners when all revenue recognition criteria are satisfied. The Company generally has a contract or a purchase order from a customer with the specified required terms of order, including the number of products ordered. Transaction prices are determinable and products are delivered and risk of loss passed to the customer upon either shipping or delivery, as per the terms of the agreement. Patient and Digital Solutions Revenue Patient and digital solutions revenue is mainly derived from a combination of SaaS and perpetual software license agreements entered into with various transplant centers, which are the Company's customers for this class of revenue. The main performance obligations in connection with the Company's SaaS and perpetual software license agreement are the following: (i) implementation services and delivery of the perpetual software license are considered a single performance obligation, and (ii) post contract support. The Company allocates the transaction price to each performance obligation based on relative stand-alone selling prices of each distinct performance obligation. Digital revenue in connection with perpetual software license agreements is recognized over time based on the Company’s satisfaction of each distinct performance obligation in each agreement. Perpetual software license agreements typically require advance payments from customers upon the achievement of certain milestones. The Company records deferred revenue in relation to these agreements when cash payments are received, or invoices are issued in advance of the Company’s performance, and generally recognizes revenue over the contractual term, as performance obligations are fulfilled. In addition, the Company derives patient and digital solutions revenue from software subscriptions and medication sales. The Company generally bills software subscription fees in advance. Revenue from software subscriptions is deferred and recognized ratably over the subscription term. The medication sales revenue is recognized based on the negotiated contract price with the governmental, commercial and non-commercial payers with any applicable patient co-pay. The Company recognizes revenue from medication sales when prescriptions are delivered. Cost of Testing Services Cost of testing services reflects the aggregate costs incurred in delivering the Company’s testing services. The components of cost of testing services are materials and service costs, direct labor costs, stock-based compensation, equipment and infrastructure expenses associated with testing samples, shipping, logistics and specimen processing charges to collect and transport samples, and allocated overhead including rent, information technology, equipment depreciation, utilities and royalties. Royalties for licensed technology, calculated as a percentage of testing services revenues, are recorded as license fees in cost of testing services at the time the testing services revenues are recognized. Cost of Product Cost of product reflects the aggregate costs incurred in delivering the Company’s products to customers. The components of cost of product are materials costs, manufacturing and kit assembly costs, direct labor costs, equipment and infrastructure expenses associated with preparing kitted products for shipment, shipping, and allocated overhead including rent, information technology, equipment depreciation and utilities. Cost of product also includes amortization of acquired developed technology and adjustments to inventory values, including write-downs of impaired, slow moving or obsolete inventory. Cost of Patient and Digital Solutions Cost of patient and digital solutions primarily consists of personnel-related costs associated with developing, installing and maintaining software, depreciation of servers and equipment, amortization of acquired intangible assets, support of the functionality of the software's platforms, including stock-based compensation expenses, cost of prescription drugs and allocated costs of facilities and information technology. Research and Development Expenses Research and development expenses, including clinical operations, represent costs incurred to develop diagnostic products and services, high quality evidence to support use of the Company’s tests, as well as continued efforts related to improving the Company’s existing products and patient and digital solutions service lines. These expenses include payroll and related expenses, consulting expenses, laboratory supplies, clinical studies and certain allocated expenses as well as amounts incurred under certain collaborative agreements. Research and development costs are expensed as incurred. The Company records accruals for estimated study costs comprised of work performed by contract research organizations under contract terms. Stock-based Compensation The Company uses the Black-Scholes Model, which requires the use of estimates such as stock price volatility and expected option lives, to value employee stock options. The Company estimates the expected option lives using historical data, estimates volatility using its own historical stock prices, estimates risk-free rates using the implied yield currently available in the U.S. Treasury zero-coupon issues with a remaining term equal to the expected option lives, and estimates dividend yield using the Company’s expectations and historical data. The fair value of each restricted stock unit is calculated based upon the closing price of the Company’s common stock on the date of the grant. The Company uses the straight-line attribution method for recognizing compensation expense. Compensation expense is recognized on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on the Company’s historical experience. Compensation expense for stock options issued to nonemployees is calculated using the Black-Scholes Model and is recorded over the service performance period using the straight-line attribution method. Options subject to vesting are required to be periodically remeasured over their service performance period, which is generally the same as the vesting period. Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. The Company’s assessment of an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit may change as new information becomes available. Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for each entity, including the Swedish Krona, Australian dollar and the Euro. The revenue and expenses of such subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting cumulative translation adjustments are reported in other comprehensive loss. Foreign currency translation gains and losses on revenue and expenses are recognized in the consolidated statements of operations. Comprehensive Loss Comprehensive loss consists of net loss and other losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income or loss. For the Company, such items consist of foreign currency losses on the translation of foreign assets and liabilities. Recent Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance , which contains amendments that require annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model. The disclosures include (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. The amendments set forth in this ASU are effective for all entities for annual periods beginning after December 15, 2021. Early application of the amendments in this ASU is permitted. The amendments in this ASU should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company adopted the standard prospectively on January 1, 2022. The adoption of this new standard had no impact on the Company's consolidated financial statements and disclosures. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. The amendments set forth in this ASU are effective for fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted. The amendments in this ASU should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company adopted the standard prospectively on January 1, 2022. The adoption of this new standard had no impact on the Company's consolidated financial statements and disclosures. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) , which contains amendments that clarify and reduce diversity in an issuer's accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The amendments set forth in this ASU are effective for all entities for annual periods beginning after December 15, 2021. Early application of the amendments in this ASU is permitted for all entities. The amendments in this ASU should be applied prospecti |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NET LOSS PER SHARE Basic and diluted net loss per share have been computed by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of common share equivalents as their effect would have been antidilutive. For the years ended December 31, 2022, 2021 and 2020, all common share equivalents have been excluded from the calculation of diluted net loss per share, as their effect would be antidilutive. The following tables set forth the computation of the Company’s basic and diluted net loss per share (in thousands, except shares and per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net loss used to compute basic net loss per share $ (76,613) $ (30,662) $ (18,714) Net loss used to compute diluted net loss per share $ (76,613) $ (30,662) $ (18,714) Denominator: Weighted-average shares used to compute basic net loss per share 53,321,625 52,241,076 46,481,772 Weighted-average shares used to compute diluted net loss per share 53,321,625 52,241,076 46,481,772 Net loss per share: Basic $ (1.44) $ (0.59) $ (0.40) Diluted $ (1.44) $ (0.59) $ (0.40) The following potentially dilutive securities have been excluded from diluted net loss per share because their effect would be antidilutive: Year Ended December 31, 2022 2021 2020 Shares of common stock subject to outstanding options 2,921,925 1,863,633 2,670,398 Shares of common stock subject to outstanding common stock warrants 3,132 3,132 6,264 Restricted stock units 3,092,467 2,047,657 1,878,866 Total common stock equivalents 6,017,524 3,914,422 4,555,528 During April 2020, the Company issued and sold 1,000,000 shares of its common stock under the Sales Agreement pursuant to an “at-the-market” equity offering. On June 15, 2020, the Company completed an underwritten public offering pursuant to which the Company sold 4,492,187 shares of common stock. On January 25, 2021 and February 11, 2021, the Company completed an underwritten public offering, including the sale of shares pursuant to the exercise of the underwriters' over-allotment option, pursuant to which the Company sold 1,923,077 and 288,461 shares of common stock, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company records its financial assets and liabilities at fair value. The carrying amounts of certain financial instruments of the Company, including cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: • Level 1: Inputs that include quoted prices in active markets for identical assets and liabilities. • Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table sets forth the Company’s financial assets and liabilities, measured at fair value on a recurring basis, as of December 31, 2022 and 2021 (in thousands): December 31, 2022 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Cash equivalents: Money market funds $ 66,594 $ — $ — $ 66,594 Long-term marketable securities: Corporate equity securities 2,076 — — 2,076 Total $ 68,670 $ — $ — $ 68,670 Liabilities Short-term liabilities: Contingent consideration $ — $ — $ 1,025 $ 1,025 Long-term liabilities: Contingent consideration — — 2,418 2,418 Common stock warrant liability — — 32 32 Total $ — $ — $ 3,475 $ 3,475 December 31, 2021 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Cash equivalents: Money market funds $ 335,107 $ — $ — $ 335,107 Marketable securities: Corporate equity securities 3,257 — — 3,257 Corporate debt securities — 500 — 500 Total $ 338,364 $ 500 $ — $ 338,864 Liabilities Short-term liabilities: Contingent consideration $ — $ — $ 2,114 $ 2,114 Long-term liabilities: Contingent consideration — — 3,227 3,227 Common stock warrant liability — — 139 139 Total $ — $ — $ 5,480 $ 5,480 The following table presents the issuances, exercises, changes in fair value and reclassifications of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands): Common Stock Warrant Liability and Contingent Consideration (Level 3) Balance at December 31, 2020 $ 447 Exercise of warrants (202) Change in estimated fair value of common stock warrant liability (106) Change in estimated fair value of contingent consideration 5,341 Balance at December 31, 2021 5,480 Change in estimated fair value of common stock warrant liability (107) Additions to contingent consideration 727 Payment related to contingent consideration (2,625) Balance at December 31, 2022 $ 3,475 As of December 31, 2022, the Company had one investment in convertible preferred shares carried at cost. In the event the Company had to calculate the fair value of this investment, it would be based on Level 3 inputs. This investment is not considered material to the Company's consolidated financial statements. In determining fair value, the Company uses various valuation approaches within the fair value measurement framework. The valuation methodologies used for the Company’s instruments measured at fair value and their classification in the valuation hierarchy are summarized below: • Money market funds — Investments in money market funds are classified within Level 1. Money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. At December 31, 2022 and 2021, money market funds were included as cash and cash equivalents in the consolidated balance sheets. • Short-term marketable securities — Investments in short-term marketable securities are classified within Level 2. The securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly. • Long-term marketable equity and debt securities — Investments in long-term marketable equity securities are classified within Level 1. The securities are recorded at fair value based on readily available quoted market prices in active markets. Investments in long-term marketable debt securities are classified within Level 2. The securities are recorded at fair value based on observable inputs for quoted prices for identical or similar assets in markets that are not active. Long-term marketable securities are located within other assets on the consolidated balance sheets. • Contingent consideration — Contingent consideration is classified within Level 3. Contingent consideration relates to asset acquisitions and business combinations. The Company recorded the estimate of the fair value of the contingent consideration based on its evaluation of the probability of the achievement of the contractual conditions that would result in the payment of the contingent consideration. Contingent consideration was estimated using the fair value of the milestones to be paid if the contingency is met multiplied by management’s estimate of the probability of success at a discounted rate of 12% at December 31, 2022. The significant input in the Level 3 measurement that is not supported by market activity is the Company’s probability assessment of the achievement of the milestones. The value of the liability is subsequently remeasured to fair value at each reporting date, and the change in estimated fair value is recorded as a component of operating expenses until the milestones are paid, expire or are no longer achievable. Increases or decreases in the estimation of the probability percentage result in a directionally similar impact to the fair value measurement of the contingent consideration liability. The carrying amount of the contingent consideration liability represents its fair value. • Common stock warrant liability — Common stock warrant liability is classified within Level 3. The Company utilizes intrinsic value to estimate the fair value of the warrants. The intrinsic value is computed as the difference between the fair value of the Company’s common stock on the valuation date and the exercise price of the warrants. Increases (decreases) in the Company's stock price discussed above result in a directionally similar impact to the fair value of the common stock warrant liability. Prior to fiscal year 2022, the Company utilized a binomial lattice pricing model (the “Monte Carlo Simulation Model”), which involves a market condition simulation to estimate the fair value of the warrants. The application of the Monte Carlo Simulation Model requires the use of a number of complex assumptions, including the Company’s stock price, expected life of the warrants, stock price volatility determined from the Company’s historical stock prices, and risk-free rates based on the implied yield currently available in the U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of the warrants. The change in valuation method does not have material financial impact. Common Stock Warrant Liability Valuation Assumptions: December 31, 2022 2021 Private Placement Common Stock Warrant Liability Stock Price $ 11.41 $ 45.48 Exercise Price $ 1.12 $ 1.12 Remaining term (in years) 0.28 1.28 Volatility N/A 66.00 % Risk-free interest rate N/A 0.49 % Warrant liabilities exercised during 2021 were remeasured at the exercise date. Their fair value approximates their intrinsic value, which was recorded to additional paid in capital in the consolidated statements of stockholders’ equity. There were no warrant liabilities exercised during 2022. The Company’s liabilities classified as Level 3 were valued based on unobservable inputs and management’s judgment due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of the financial instruments. |
Cash and Marketable Securities
Cash and Marketable Securities | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Marketable Securities | CASH AND MARKETABLE SECURITIES Cash, Cash Equivalents and Restricted Cash A reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the amount reported within the consolidated statements of cash flows is shown in the table below (in thousands): December 31, 2022 December 31, 2021 December 31, 2020 Cash and cash equivalents $ 89,921 $ 348,485 $ 134,669 Restricted cash 522 211 270 Total cash, cash equivalents, and restricted cash at the end of the period $ 90,443 $ 348,696 $ 134,939 Marketable Securities All short-term marketable securities were considered held-to-maturity at December 31, 2022. At December 31, 2022, some of the Company’s short-term marketable securities were in an unrealized loss position. The Company determined that it had the positive intent and ability to hold until maturity all short-term marketable securities that have been in a continuous loss position, thus there was no recognition of any other-than-temporary impairment at December 31, 2022. All short-term marketable securities with unrealized losses as of the balance sheet date have been in a loss position for less than twelve months. Contractual maturities of the short-term marketable securities were within one year or less at December 31, 2022. The long-term marketable equity securities were recorded in the consolidated balance sheets at fair market value with changes in the fair value recognized in earnings at December 31, 2022. The long-term marketable debt securities were considered available-for-sale. The contractual maturity of the long-term marketable debt securities are less than three years. During 2022, the Company wrote off $0.5 million of long-term marketable debt securities. The amortized cost, gross unrealized holding losses, and fair value of the Company’s marketable securities by major security type at each balance sheet date are summarized in the table below (in thousands): December 31, 2022 Amortized Cost Unrealized Holding Gains (Losses) Fair Value Short-term marketable securities: U.S. agency securities $ 79,347 $ 452 $ 79,799 Corporate debt securities 123,821 (220) 123,601 Total short-term marketable securities 203,168 232 203,400 Long-term marketable securities: Corporate equity securities 5,000 (2,924) 2,076 Total long-term marketable securities 5,000 (2,924) 2,076 Total $ 208,168 $ (2,692) $ 205,476 December 31, 2021 Amortized Cost Unrealized Holding Losses Fair Value Long-term marketable securities: Corporate equity securities $ 5,000 $ (1,743) $ 3,257 Corporate debt securities 500 — 500 Total long-term marketable securities $ 5,500 $ (1,743) $ 3,757 Contractual maturities of the marketable securities at each balance sheet date are as follows (in thousands): December 31, 2022 Within one year $ 203,168 After one year through five years — Total $ 203,168 |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS The Transplant Pharmacy In December 2021, the Company acquired TTP, a transplant focused pharmacy located in Mississippi. The Company acquired TTP with a combination of cash consideration paid upfront and contingent consideration with a fair value of $1.3 million. TTP provides individualized transplant pharmacy services for patients at multiple transplant centers located throughout the U.S. The Company accounted for the transaction as a business combination using the acquisition method of accounting. Acquisition-related costs of $0.3 million were expensed as incurred, and classified as part of general and administrative expenses in the consolidated statements of operations. Goodwill of $5.5 million arising from the acquisition primarily consists of additional growth opportunities within the pharmacy sector. The integration of TTP into the Company’s portfolio is expected to continue to increase the transplant ecosystem for patients and make medication more accessible. The Company estimated net deferred tax liabilities of approximately $0.6 million arising from temporary differences related to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for income tax purposes. All of the goodwill has been assigned to the Company’s existing operating segment. The following table summarizes the fair value of the intangible asset acquired as of the acquisition date ($ in thousands): Estimated Fair Value Estimated Useful Life (Years) Trademark $ 2,080 10 The trademark acquired consists primarily of the TTP brand and markings. The fair value of the trademark was determined using the relief-from-royalty method under the income approach. This method considers the value of the asset to be the value of the royalty payments from which the Company is relieved due to its ownership of the asset. The royalty rate of 2% was used to estimate the fair value of the trademark. A discount rate of 13.5% was utilized in estimating the fair value of the trademark. The pro forma impact of the TTP acquisition is not material, and the results of operations of the acquisition have been included in the Company's consolidated statements of operations from the respective acquisition date. MedActionPlan In November 2021, the Company acquired MedActionPlan, a New Jersey-based provider of medication safety, medication adherence and patient education. The Company acquired MedActionPlan with a combination of cash consideration paid upfront and contingent consideration with a fair value of $3.5 million. MedActionPlan is a leader in patient medication management for transplant patients and beyond. The Company accounted for the transaction as a business combination using the acquisition method of accounting. Acquisition-related costs of $0.6 million associated with the acquisition were expensed as incurred, and classified as part of general and administrative expenses in the consolidated statement of operations. Goodwill of $4.9 million arising from the acquisition primarily consists of synergies from integrating the MedActionPlan technology with the current testing and digital solutions offered by the Company. The integration of MedActionPlan into centers with the Company's other software platforms will continue to increase the standard of care for transplant patient safety, increase efficiency and facilitate medication compliance. None of the goodwill is expected to be deductible for income tax purposes. All of the goodwill has been assigned to the Company’s existing operating segment. The following table summarizes the fair values of the intangible assets acquired as of the acquisition date ($ in thousands): Estimated Fair Value Estimated Useful Lives (Years) Customer relationships $ 2,590 10 Developed technology 1,090 10 Trademarks 80 5 Total $ 3,760 Customer relationships acquired by the Company represent the fair value of future projected revenue that is expected to be derived from sales of MedActionPlan’s products to existing customers. The customer relationships’ fair value has been estimated utilizing a multi-period excess earnings method under the income approach, which reflects the present value of the projected cash flows that are expected to be generated by the customer relationships, less charges representing the contribution of other assets to those cash flows that use projected cash flows with and without the intangible asset in place. The economic useful life was determined based on the distribution of the present value of the cash flows attributable to the intangible asset. The acquired developed technology represents the fair value of MedActionPlan’s proprietary software. The trademark acquired consists primarily of the MedActionPlan brand and markings. The fair value of both the developed technology and the trademark were determined using the relief-from-royalty method under the income approach. This method considers the value of the asset to be the value of the royalty payments from which the Company is relieved due to its ownership of the asset. The royalty rates of 15% and 1% were used to estimate the fair value of the developed technology and the trademark, respectively. A discount rate of 40.0% was utilized in estimating the fair value of these three intangible assets. The pro forma impact of the MedActionPlan acquisition is not material, and the results of operations of the acquisition have been included in the Company's consolidated statements of operations from the respective acquisition date. TransChart LLC In January 2021, the Company acquired TransChart for cash. TransChart provides EMR software to hospitals throughout the U.S. to care for patients who have or may need an organ transplant. As a result of the acquisition, the Company recognized goodwill of $2.2 million and intangible assets of $2.0 million. The pro forma impact of the TransChart acquisition is not material, and the results of operations of the acquisition have been included in the Company's consolidated statements of operations from the respective acquisition date. Combined Consideration Paid The following table summarizes the consideration paid for TransChart, TTP and MedActionPlan, and the provisional amounts of the assets acquired and liabilities assumed recognized at their estimated fair value at the acquisition date (in thousands): Total Consideration Cash $ 17,166 Total consideration $ 17,166 Recognized amounts of identifiable assets acquired and liabilities assumed Current assets $ 3,444 Fixed assets 23 Identifiable intangible assets 7,860 Other assets 2 Current liabilities (3,915) Noncurrent liabilities (2,883) Total identifiable net assets acquired 4,531 Goodwill 12,635 Total consideration $ 17,166 The allocation of the purchase price to assets acquired and liabilities assumed was based on the Company’s best estimate of the fair value of such assets and liabilities as of the acquisition date. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired. Goodwill is tested annually for impairment at the reporting unit level during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. There were no indicators of impairment in the year ended December 31, 2022. The following table presents details of the Company’s goodwill as of December 31, 2022 and 2021 (in thousands): 2022 2021 Balance as of January 1, $ 36,983 $ 23,857 Goodwill acquired 540 13,126 Balance as of December 31, $ 37,523 $ 36,983 On December 1, 2022, the Company performed a qualitative assessment of its reporting unit taking into consideration past, current and projected future earnings, recent trends and market conditions, and its market capitalization. Based on this analysis, the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount. As such, it was not necessary to perform the quantitative goodwill impairment assessment at this time. As of December 31, 2022, no impairment of goodwill has been identified. Intangible Assets The following table presents details of the Company’s intangible assets as of December 31, 2022 ($ in thousands): December 31, 2022 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Weighted Average Remaining Useful Life (In Years) Intangible assets with finite lives: Acquired and developed technology $ 35,747 $ (15,138) $ (2,369) $ 18,240 7.5 Customer relationships 21,898 (7,459) (2,104) 12,335 9.0 Commercialization rights 11,579 (3,233) — 8,346 6.6 Trademarks and tradenames 4,540 (1,345) (315) 2,880 8.5 Total intangible assets with finite lives 73,764 (27,175) (4,788) 41,801 Acquired in-process technology 1,250 — — 1,250 Total intangible assets $ 75,014 $ (27,175) $ (4,788) $ 43,051 The following table presents details of the Company’s intangible assets as of December 31, 2021 ($ in thousands): December 31, 2021 Gross Accumulated Amortization Foreign Currency Translation Net Carrying Amount Weighted Intangible assets with finite lives: Acquired and developed technology $ 35,874 $ (12,088) $ (1,513) $ 22,273 8.1 Customer relationships 21,898 (6,024) (1,210) 14,664 9.9 Commercialization rights 10,579 (2,030) — 8,549 7.6 Trademarks and tradenames 4,540 (988) (155) 3,397 9.5 Other 250 (188) — 62 0.2 Total intangible assets with finite lives 73,141 (21,318) (2,878) 48,945 Acquired in-process technology 1,250 — — 1,250 Total intangible assets $ 74,391 $ (21,318) $ (2,878) $ 50,195 Acquisition of intangible assets In June 2021, the Company acquired commercialization rights in an exclusive partnership for comprehensive data analytics in relation to NGS-based metagenomics testing for infectious diseases. During the year ended December 31, 2022, the Company incurred additional costs related to this partnership of $1.0 million. These are included within commercialization rights as of December 31, 2022. In June 2021, the Company acquired the Transplant Hero patient application. The patient application is included in Acquired and developed technology as of December 31, 2022. In the fourth quarter of 2021, acquisition of intangible assets increased $13.4 million primarily from business combinations. These acquisitions included $4.7 million of Acquired and developed technology, $2.5 million of Commercialization rights, $3.7 million of Customer relationships, $2.2 million of Trademarks and tradenames and $0.3 million of Other intangible assets. Amortization of Intangible Assets Intangible assets are carried at cost less accumulated amortization. Amortization expenses are recorded to cost of testing services, cost of product, cost of patient and digital solutions, and sales and marketing expenses in the consolidated statements of operations. The following table summarizes the Company's amortization expense of intangible assets (in thousands): Year Ended December 31, 2022 2021 2020 Cost of testing services $ 1,316 $ 1,316 $ 1,316 Cost of product 1,716 1,905 1,665 Cost of patient and digital solutions 945 684 345 Sales and marketing 2,252 1,891 1,472 Total $ 6,229 $ 5,796 $ 4,798 The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of December 31, 2022 (in thousands): Years Ending December 31, Cost of Testing Services Cost of Product Cost of Patient and Digital Solutions Sales and Marketing Total 2023 $ 1,316 $ 1,675 $ 945 $ 2,211 $ 6,147 2024 1,316 1,675 709 2,211 5,911 2025 1,316 1,675 540 2,211 5,742 2026 1,316 743 540 2,209 4,808 2027 1,316 743 540 2,195 4,794 Thereafter 2,825 3,294 1,180 7,100 14,399 Total future amortization expense $ 9,405 $ 9,805 $ 4,454 $ 18,137 $ 41,801 |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | BALANCE SHEET COMPONENTS Inventory Inventory consisted of the following (in thousands): December 31, 2022 2021 Finished goods $ 2,962 $ 3,911 Work in progress 4,306 2,828 Raw materials 11,964 10,447 Total inventory $ 19,232 $ 17,186 Property and Equipment, Net Property and equipment consisted of the following (in thousands): December 31, 2022 2021 Leasehold improvements $ 17,389 $ 8,466 Machinery and equipment 16,294 12,091 Internally developed software 10,893 3,746 Construction in progress 7,639 10,925 Computer and office equipment 5,570 5,454 Furniture and fixtures 2,168 943 Property and equipment 59,953 41,625 Less: Accumulated depreciation and amortization (24,424) (19,581) Property and equipment, net $ 35,529 $ 22,044 Depreciation expense was $5.2 million, $2.7 million and $1.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. There were no assets purchased under finance leases during 2022. Accumulated depreciation was $0.6 million and $0.5 million at December 31, 2022 and 2021, respectively. Related amortization expense, included in depreciation and amortization expense, was $0.1 million for each of the three years ended December 31, 2022, 2021 and 2020. Accrued and Other Liabilities Accrued and other liabilities consisted of the following (in thousands): December 31, 2022 2021 Clinical studies $ 14,816 $ 10,653 Professional fees 6,115 5,780 Short-term lease liability 5,591 3,958 Deferred revenue 5,342 4,208 Accrued royalty 4,633 1,664 Laboratory processing fees and materials 2,189 1,664 Deferred payments for intangible assets 2,062 2,000 Capital expenditures 1,316 2,612 Contingent consideration 1,025 2,114 License and other collaboration fees 1,000 — Accrued shipping expenses 489 668 Other accrued expenses 4,553 2,601 Total accrued and other liabilities $ 49,131 $ 37,922 CMS Accelerated and Advance Payment Program for Medicare Providers On March 27, 2020, the U.S. government enacted the CARES Act. Pursuant to the CARES Act, CMS expanded its Accelerated and Advance Payment Program in order to increase cash flow to providers of services and suppliers impacted by the COVID-19 pandemic. CMS was authorized to provide accelerated or advance payments during the period of the public health emergency to any Medicare provider who submitted a request to the appropriate Medicare Administrative Contractor and met the required qualifications. During April 2020, the Company received an advance payment from CMS of approximately $20.5 million and recorded the payment as Deferred revenue - CMS advance payment on the Company's consolidated balance sheet. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases The Company leases its operating and office facilities for various terms under long-term, non-cancelable operating lease agreements in Brisbane, California; Columbus, Ohio; West Chester, Pennsylvania; Flowood, Mississippi; Gaithersburg, Maryland; Omaha, Nebraska; Fremantle, Australia; and Stockholm, Sweden. The Company's facility leases expire at various dates through 2033. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. As of December 31, 2022, the carrying value of the ROU asset was $34.7 million. The related current and non-current liabilities as of December 31, 2022 were $5.6 million and $33.4 million, respectively. The current and non-current lease liabilities are included in accrued and other current liabilities The following table summarizes the lease cost for the years ended December 31, (in thousands): 2022 2021 2020 Operating lease cost $ 6,716 $ 5,134 $ 4,441 Finance lease cost — 53 205 Total lease cost $ 6,716 $ 5,187 $ 4,646 Finance lease cost included interest from the lease liability and amortization of the ROU asset. Other information: Weighted-average remaining lease term - Operating leases (in years) 6.26 Weighted-average discount rate - Operating leases (%) 7.1 % In February and June 2022, the Company entered into various lease agreements to lease office buildings in California, Nebraska, and Australia with lease terms ranging from 2 to 10.5 years. Certain leases have options to renew the lease terms ranging from 5 to 10 years. In June 2022, the Company modified the termination date of the lease agreement for its headquarters in South San Francisco, California from December 31, 2022 to July 15, 2022. As a result, the Company remeasured its lease liability using the current incremental borrowing rate and made an adjustment by reducing the ROU asset and lease liability by $0.5 million. Lease liabilities for the lease agreements made in February and June 2022 are recognized at the present value of the fixed lease payments using the current incremental borrowing rate at the lease commencement date. ROU assets are recognized based on the initial present value of the fixed lease payments. As of December 31, 2022, the ROU assets and lease liabilities for lease agreements which commenced in July 2022 aggregated to $14.3 million and $15.3 million, respectively. As of December 31, 2022, the ROU assets and lease liabilities for lease agreements which commenced in August 2022, amounted to $5.8 million and $6.0 million, respectively. Supplemental cash flow information related to leases for the years ended December 31, are as follows (in thousands) : 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 3,665 $ 2,580 $ 934 Operating cash flows used for finance leases — 63 199 Total $ 3,665 $ 2,643 $ 1,133 Maturities of operating lease liabilities as of December 31, 2022, are as follows (in thousands): Years ending December 31, Operating Leases 2023 $ 7,807 2024 7,903 2025 7,651 2026 7,019 2027 7,166 Thereafter 10,605 Total lease payments 48,151 Less imputed interest 9,154 Present value of future minimum lease payments 38,997 Less operating lease liability, current portion 5,591 Operating lease liability, long-term portion $ 33,406 Royalty Commitments The Board of Trustees of the Leland Stanford Junior University (“Stanford”) In June 2014, the Company entered into a license agreement with Stanford (the “Stanford License”), which granted the Company an exclusive license to a patent relating to the diagnosis of rejection in organ transplant recipients using dd-cfDNA. Under the terms of the Stanford License, the Company is required to pay an annual license maintenance fee, six milestone payments and royalties in the low single digits of net sales of products incorporating the licensed technology. Illumina On May 4, 2018, the Company entered into the License Agreement with Illumina (the “Illumina Agreement”). The Illumina Agreement requires the Company to pay royalties in the mid-single to low-double digits on sales of products covered by the Illumina Agreement. Cibiltech Commitments Pursuant to that certain license and commercialization agreement that the Company entered into with Cibiltech SAS (“Cibiltech”) effective April 30, 2019, the Company will share an agreed-upon percentage of revenue with Cibiltech, if and when revenues are generated from iBox. Tax Commitments As of December 31, 2022, the Company had gross unrecognized tax benefits of $5.4 million, which include penalties and interest of $0.2 million. Approximately $0.2 million has been recorded as a noncurrent liability. At this time, the Company is unable to make a reasonably reliable estimate of the timing of payments in individual years in connection with these tax liabilities. Other Commitments Pursuant to the Illumina Agreement, the Company has agreed to minimum purchase commitments of finished products and raw materials from Illumina through 2023. Litigation and Indemnification Obligations In response to the Company's false advertising suit filed against Natera Inc. (“Natera”), on April 10, 2019, Natera filed a counterclaim against the Company on February 18, 2020, in the U.S. District Court for the District of Delaware (the “Court”) alleging the Company made false and misleading claims about the performance capabilities of AlloSure. The suit seeks injunctive relief and unspecified monetary relief. On September 30, 2020, Natera requested leave of Court to amend its counterclaims to include additional allegations regarding purportedly false claims the Company made with respect to AlloSure, and the Court granted Natera’s request. The trial commenced on March 7, 2022 and concluded on March 14, 2022, with the jury awarding the Company $44.9 million in damages, comprised of $21.2 million in compensatory damages and $23.7 million in punitive damages. Post-trial motion practice remains pending. The Company will not record the award until cash is received or the matter is otherwise resolved. On July 19, 2022, the United States Court of Appeals for the Federal Circuit affirmed the Court’s judgment dismissing the Company’s patent infringement suit against Natera. In addition, in response to the Company's patent infringement suit filed against Natera on March 26, 2019, Natera filed suit against the Company on January 13, 2020, in the Court alleging, among other things, that AlloSure infringes Natera’s U.S. Patent 10,526,658. This case was consolidated with the Company’s patent infringement suit on February 4, 2020. On March 25, 2020, Natera filed an amendment to the suit alleging, among other things, that AlloSure also infringes Natera’s U.S. Patent 10,597,724. The suit seeks a judgment that the Company has infringed Natera’s patents, an order preliminarily and permanently enjoining the Company from any further infringement of such patents and unspecified damages. On May 13, 2022, Natera filed two new complaints alleging that AlloSure infringes Natera’s U.S. Patents 10,655,180 and 11,111,544. These two cases were consolidated with the patent infringement case on June 15, 2022. On May 17, 2022, Natera agreed to dismiss the case alleging infringement of Natera’s U.S. Patent 10,526,658. On July 6, 2022, the Company moved to dismiss the rest of Natera’s claims. On September 6, 2022, the Company withdrew its motion to dismiss. The Company intends to defend both of these matters vigorously, and believes that the Company has good and substantial defenses to the claims alleged in the suits, but there is no guarantee that the Company will prevail. The Company has not recorded any liabilities for these suits. United States Department of Justice and United States Securities and Exchange Commission Investigations As previously disclosed, in 2021, the Company received a civil investigative demand (“CID”), from the United States Department of Justice (“DOJ”), requesting that the Company produce certain documents in connection with a False Claims Act investigation being conducted by the DOJ regarding certain business practices related to the Company's kidney testing and phlebotomy services, and a subpoena from the United States Securities and Exchange Commission (“SEC”) in relation to an investigation by the SEC in respect of matters similar to those identified in the CID, as well as certain of the Company’s accounting and public reporting practices. The Company also received an information request from a state regulatory agency. The state regulatory agency recently advised the Company that it has completed its review of the Company’s business practices and determined that no further information or action is required. In late 2022, the Company received a request for information from a separate state regulatory agency concerning specimen collection by a vendor in the state. The Company may receive additional requests for information from the DOJ, SEC, or other regulatory and governmental agencies regarding similar or related subject matters. The Company does not believe that the CID, the SEC subpoena or the state regulatory agency information request raise any issues regarding the safety or efficacy of any of the Company's products or services and are cooperating fully with the investigations and the request for information. Although the Company remains committed to compliance with all applicable laws and regulations, it cannot predict the outcome of the DOJ or SEC investigations, the state regulatory agency information request, or any other requests or investigations that may arise in the future regarding these or other subject matters. From time to time, the Company may become involved in litigation and other legal actions. The Company estimates the range of liability related to any pending litigation where the amount and range of loss can be estimated. The Company records its best estimate of a loss when the loss is considered probable. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the consolidated financial statements indicates that it is probable that a liability had been incurred at the date of the consolidated financial statements, and (ii) the range of loss can be reasonably estimated. Olymbios Matter On April 15, 2022, a complaint was filed by Michael Olymbios against the Company in the Superior Court of the State of California for the County of San Mateo (the “San Mateo County Court”). The complaint alleges that the Company failed to pay certain fees and costs required to continue an arbitration proceeding against Dr. Olymbios, and that the Company has defamed Dr. Olymbios. Dr. Olymbios also seeks to void restrictive covenants previously agreed to by him in favor of the Company and to recover damages purportedly incurred by Dr. Olymbios. The Company filed a motion to compel arbitration and dismiss the case. On April 25, 2022, the San Mateo County Court granted the Company’s ex parte application to stay the case and advance the hearing date to June 10, 2022 for the motion to compel arbitration and dismiss. At the June 10, 2022 hearing, the San Mateo County Court found that the decision should be made by the arbitrator, and stayed the case. On July 19, 2022, Olymbios filed a motion to withdraw from arbitration before JAMS, which was denied on August 18, 2022. The arbitration hearing is currently set for June 26, 2023. The Company intends to defend itself vigorously. The Company believes it has good and substantial defenses to the claims alleged in the suit, but there is no guarantee that the Company will prevail if the case continues. The Company has not recorded any liabilities for this suit. Securities Class Action On May 23, 2022, Plumbers & Pipefitters Local Union #295 Pension Fund filed a federal securities class action in the U.S. District Court for the Northern District of California against the Company, Reginald Seeto, its President, Chief Executive Officer and member of the Company’s Board of Directors, Ankur Dhingra, its former Chief Financial Officer, Marcel Konrad, its former interim Chief Financial Officer and former Senior Vice President of Finance & Accounting, and Peter Maag, its former President, former Chief Executive Officer, former Chairman of the Board and current member of the Company’s Board of Directors. The action alleges that the Company and the individual defendants made materially false and/or misleading statements and/or omissions and that such statements violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder. The action also alleges that the individual defendants are liable pursuant to Section 20(a) of the Exchange Act as controlling persons of the Company. The suit seeks to recover damages caused by the alleged violations of federal securities laws, along with the plaintiffs’ costs incurred in the lawsuit, including their reasonable attorneys’ and experts’ witness fees and other costs. On August 25, 2022, the court appointed an investor group led by the Oklahoma Police Pension and Retirement System as lead plaintiffs and appointed Saxena White P.A. and Robbins Geller Rudman & Dowd LLP as lead counsels. Plaintiffs filed an amended complaints on November 28, 2022. On January 27, 2023, defendants moved to dismiss all claims and to strike certain allegations in the amended complaint. Plaintiffs’ opposition to the motion to dismiss and motion to strike is due on March 13, 2023, and defendants' reply is due on April 13, 2023. The Company intends to defend itself vigorously, and believes that the Company has good and substantial defenses to the claims alleged in the suit, but there is no guarantee that the Company will prevail. The Company has not recorded any liabilities for this suit. Derivative Action On September 21, 2022, Jeffrey Edelman brought a stockholder derivative action complaint in the U.S. District Court for the Northern District of California against the Company as nominal defendant and Reginald Seeto, its President, Chief Executive Officer and member of the Company’s Board of Directors, Ankur Dhingra, its former Chief Financial Officer, Peter Maag, its former President, former Chief Executive Officer, former Chairman of the Board and current member of the Company’s Board of Directors, and other current and former members of the Company’s Board of Directors (the “ Edelman Derivative Action ” ). The plaintiff alleges that the individual defendants breached their fiduciary duties as directors and/or officers of the Company and engaged in insider trading, waste of corporate assets, unjust enrichment and violations of Sections 14(a) and 20(a) of the Exchange Act. The action alleges that the individual defendants are liable pursuant to Section 20(a) of the Exchange Act as controlling persons of the Company. The suit seeks a declaration that the individual defendants breached their fiduciary duties to the Company, violated Sections 14(a) and 20(a) of the Exchange Act and were unjustly enriched, and also seeks to recover damages sustained by the Company as a result of the alleged violations, along with the plaintiff’s costs incurred in the lawsuit, including reasonable attorneys’ and experts’ fees, costs and expenses. On December 8, 2022, the court stayed the Edelman Derivative Action until twenty (20) days after the earlier of the following events: (a) the securities class action is dismissed in its entirety with prejudice; (b) the motion to dismiss in the securities class action is denied; (c) a joint request by plaintiff and defendants to lift the stay; (d) notification that a related derivative action that has been filed is not stayed or is no longer stayed; or (e) notification that there has been a settlement reached in the securities class action or any related derivative action. The Company intends to defend itself vigorously, and believes that the Company has good and substantial defenses to the claims alleged in the suit, but there is no guarantee that the Company will prevail. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Stock Repurchase Program On December 3, 2022, the Company's Board of Directors approved a Stock Repurchase Program (the "Repurchase Program"), whereby the Company may purchase up to $50 million in shares of its common stock over a period of up to two years, commencing on December 8, 2022. The Repurchase Program may be carried out at the discretion of a committee of the Board of Directors through open market purchases, one or more Rule 10b5-1 trading plans, block trades and in privately negotiated transactions. In 2022, the Company purchased an aggregate of 50,051 shares of its common stock under the Repurchase Program for an aggregate purchase price of $0.6 million. As of December 31, 2022, $49.4 million remained available for future share repurchase under the Repurchase Program. See also Note 16. These shares were retired upon repurchase. The Company's policy related to repurchase of its common stock is to charge the excess of cost over par value to accumulated deficit. January 2021 Underwritten Public Offering of Common Stock On January 25, 2021, the Company sold 1,923,077 shares of its common stock through an underwritten public offering at a public offering price of $91.00 per share. The net proceeds to the Company from the offering were approximately $164.0 million, after deducting underwriting discounts and commissions and offering expenses. On February 11, 2021, the Company sold 288,461 shares of its common stock pursuant to the full exercise of the overallotment option granted to the underwriters in connection with the January 2021 offering. The net proceeds to the Company from the full exercise of the underwriters' overallotment option were approximately $24.7 million. The Company did not issue preferred stock during the years ended December 31, 2022, 2021 and 2020. |
401(K) Plan
401(K) Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
401(K) Plan | 401(K) PLANThe Company sponsors a 401(k) |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | WARRANTS The Company issues common stock warrants in connection with debt or equity financings to lenders, placement agents and investors. Issued warrants are considered standalone financial instruments and the terms of each warrant are analyzed for equity or liability classification in accordance with U.S. GAAP. Warrants that are classified as liabilities usually have various features that would require net-cash settlement by the Company. Warrants that are not liabilities, derivatives and/or meet the exception criteria are classified as equity. Warrants liabilities are remeasured at fair value at each period end with changes in fair value recorded in the consolidated statements of operations until expired or exercised. Warrants that are classified as equity are valued at their relative fair value on the date of issuance, recorded in additional paid in capital and not remeasured. During the year ended December 31, 2022, no warrants to purchase shares of common stock were exercised. During the year ended December 31, 2021, warrants to purchase approximately 3,000 shares of common stock were exercised for cash proceeds of $4 thousand. As of December 31, 2022, outstanding warrants to purchase common stock were: Classified as Original Term Exercise Price Number of Shares Underlying Warrants Original issue date: April 2016 Liability 7 years $ 1.12 3,132 3,132 |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Incentive Plans | STOCK INCENTIVE PLANS 2014 Equity Incentive Plan The Company grants stock based awards under 2014 Equity Incentive Plan (the “2014 Plan”) that allows for issuance of stock options, restricted stock units (“RSUs”) and other stock awards to the Company’s employees, directors, and consultants. Stock options granted under the 2014 Plan may be exercised when vested and generally expire ten years from the date of the grant or three months from the date of termination of employment. Vesting periods vary based on awards granted, however, certain stock-based awards may vest immediately or may accelerate based on performance-driven measures. Stock option awards generally vest over four years with first year annual cliff vesting. The RSUs generally vest annually over four years in equal increments. There were 1,297,408 shares of common stock reserved for future issuance under the 2014 Plan as of December 31, 2022. 2016 Inducement Plan On April 21, 2016, the Company adopted the 2016 Inducement Equity Incentive Plan (the “2016 Plan”), pursuant to which the Company may grant stock awards of up to a total of 155,500 shares of common stock to new employees of the Company. The 2016 Plan was adopted to accommodate a reserve of additional shares of common stock for issuance to new employees hired by the Company from Allenex AB. The terms in the 2016 Plan are substantially similar to the 2014 Plan. There were 62,752 shares of common stock reserved for future issuance under the 2016 Plan as of December 31, 2022. The 2016 Plan allows RSUs to be granted in addition to stock options. The RSUs vest annually over four years in equal increments. The Company began granting RSUs pursuant to the 2016 Plan starting June 2016. 2019 Inducement Equity Incentive Plan The Company grants stock based awards under 2019 Inducement Equity Incentive Plan (the “2019 Plan”) that allows for issuance of stock options, RSUs and other stock awards to new employees of the Company. Stock options granted under the 2019 Plan may be exercised when vested and generally expire ten years from the date of the grant or three months from the date of termination of employment. Vesting periods vary based on awards granted, however, certain stock-based awards may vest immediately or may accelerate based on performance-driven measures. Stock option awards generally vest over four years with first year annual cliff vesting. The RSUs generally vest annually over four years in equal increments. The terms in the 2019 Plan are substantially similar to the 2014 Plan. There were 130,302 shares of common stock reserved for future issuance under the 2019 Plan as of December 31, 2022. Stock Options and RSUs The following table summarizes option and RSUs activity under the Company’s 2014 Plan, 2016 Plan and 2019 Plan, and related information: Shares Available for Grant Stock Options Outstanding Weighted- Average Exercise Price Number of RSU Shares Weighted- Average Grant Date Fair Value Balance—December 31, 2021 2,066,529 1,863,633 $ 29.33 2,047,657 $ 50.21 Additional options authorized 2,116,934 — — — — Common stock awards for services (12,764) — — — — RSUs granted (2,397,369) — — 2,397,369 27.79 RSUs vested — — — (643,892) 42.59 Options granted (1,864,465) 1,864,465 28.35 — — Options exercised — (142,579) 17.07 — — Repurchases of common stock under employee incentive plans 211,265 — — — — RSUs forfeited 706,738 — — (706,738) 43.80 Options forfeited 554,427 (554,427) 34.12 — — Options expired 109,167 (109,167) 33.96 — — Balance—December 31, 2022 1,490,462 2,921,925 $ 28.13 3,094,396 $ 37.39 The total intrinsic value of options exercised was $1.6 million, $42.9 million and $19.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. The total fair value of RSUs vested during 2022 was $20.0 million. As of December 31, 2022, the total intrinsic value of outstanding RSUs was approximately $37.1 million and there were $74.7 million of unrecognized compensation costs related to RSUs, which are expected to be recognized over a weighted-average period of 2.55 years. Options outstanding that have vested and are expected to vest at December 31, 2022 are as follows: Number of Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Vested 1,186 $ 25.39 5.72 $ 1,558 Expected to Vest 1,592 30.37 8.94 — Total 2,778 $ 1,558 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock at December 31, 2022 for stock options that were in-the-money. The weighted-average grant-date fair value of options to purchase common stock granted for the years ended December 31, 2022, 2021 and 2020 using the Black-Scholes Model was $19.51, $52.65 and $18.97, respectively. The total fair value of options that vested during 2022 was $10.6 million. As of December 31, 2022, there were approximately $27.7 million of unrecognized compensation costs related to stock options, which are expected to be recognized over a weighted-average period of 2.97 years. 2014 Employee Stock Purchase Plan The Company has an Employee Stock Purchase Plan (the “ESPP”), under which employees can purchase shares of its common stock based on a percentage of their compensation, but not greater than 15% of their earnings; provided, however, an eligible employee’s right to purchase shares of the Company’s common stock may not accrue at a rate which exceeds $25,000 of the fair market value of such shares for each calendar year in which such rights are outstanding. The ESPP has consecutive offering periods of approximately six months in length. The purchase price per share must be equal to the lower of 85% of the fair value of the common stock on the first day of the offering period or on the exercise date. During the offering period in 2022 that ended on June 30, 2022, 67,570 shares were purchased for aggregate proceeds of $1.2 million from the issuance of shares, which occurred on July 1, 2022. During the offering period in 2022 that ended on December 31, 2022, 47,025 shares were purchased for aggregate proceeds of $0.5 million from the issuance of shares, which occurred on January 2, 2023. The Company issued 93,422 shares and 45,464 shares of common stock during the years ended December 31, 2022 and December 31, 2021, respectively, pursuant to the ESPP. The Company received proceeds of $3.0 million and $2.1 million from the purchases of shares during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company had 640,847 shares available for issuance under the ESPP. Board of Directors Stock Awards Granted for Services For the years ended December 31, 2022, 2021 and 2020, the Company paid a portion of its directors’ compensation through the award of fully vested common shares. The stock awards are classified as equity, and compensation expense was recognized upon the issuance of the shares at the grant date price per share, which is the fair value. As of December 31, 2022, there were a total of 289,480 shares issued to the Company’s directors, for a total fair value of $2.3 million. Stock-based compensation expense associated with the awards was $0.4 million, $0.3 million and $0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, which was included in general and administrative expense in the consolidated statements of operations. Valuation Assumptions The estimated fair values of employee stock options and ESPP shares were estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: Year Ended December 31, 2022 2021 2020 Employee stock options Expected term (in years) 5.96 5.94 5.98 Expected volatility 77.62 % 77.70 % 75.56 % Risk-free interest rate 2.74 % 0.80 % 0.69 % Expected dividend yield — % — % — % Employee stock purchase plan Expected term (in years) 0.5 0.5 0.5 Expected volatility 67.79% – 77.88% 53.10% – 67.79% 62.56% – 93.17% Risk-free interest rate 2.51% – 4.76% 0.09% – 0.19% 0.17% – 1.57% Expected dividend yield — % — % — % Risk-free Interest Rate: The Company based the risk-free interest rate over the expected term of the award based on the constant maturity rate of U.S. Treasury securities with similar maturities as of the date of grant. Volatility : The Company used an average historical stock price volatility of its own stock. Expected Term: The expected term represents the period for which the Company’s stock-based compensation awards are expected to be outstanding and is based on analyzing the vesting and contractual terms of the awards and the holders’ historical exercise patterns and termination behavior. Expected Dividends : The Company has not paid and does not anticipate paying any dividends in the near future. Stock-Based Compensation Expense The following table summarizes stock-based compensation expense relating to employee and nonemployee stock-based awards for the years ended December 31, 2022, 2021 and 2020, included in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of testing services $ 1,529 $ 2,358 $ 1,493 Cost of product 1,120 579 391 Cost of patient and digital solutions 1,331 728 449 Research and development 7,391 7,126 4,676 Sales and marketing 14,403 10,887 5,795 General and administrative 20,779 14,403 10,597 Total $ 46,553 $ 36,081 $ 23,401 No tax benefit was recognized related to stock-based compensation expense since the Company has never reported taxable income and has established a full valuation allowance to offset all of the potential tax benefits associated with its deferred tax assets. In addition, no amounts of stock-based compensation costs were capitalized for the periods presented. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Loss before income taxes for the years ended December 31, 2022, 2021 and 2020 is summarized as follows (in thousands): As of December 31, 2022 2021 2020 United States $ (73,089) $ (27,921) $ (14,233) Foreign (3,145) (4,167) (5,517) Total loss before income taxes $ (76,234) $ (32,088) $ (19,750) The components of the provision for (benefit from) income taxes are summarized as follows (in thousands): As of December 31, 2022 2021 2020 Current Federal $ 145 $ 89 $ (58) State 328 2 1 Foreign 184 (139) 160 Total current income tax expense (benefit) 657 (48) 103 Deferred Federal (130) (409) 91 State 75 (127) (52) Foreign (223) (842) (1,178) Total deferred income tax benefit (278) (1,378) (1,139) Income tax expense (benefit) $ 379 $ (1,426) $ (1,036) The Company's actual provision for tax differed from the amounts computed by applying the U.S. federal income tax rates of 21% in each of the years ended 2022, 2021 and 2020, to loss before income taxes as a result of the following: Year Ended December 31, 2022 2021 2020 Federal tax statutory rate 21.0 % 21.0 % 21.0 % Stock-based compensation (2.8) % 38.8 % 13.5 % Change in valuation allowance (16.9) % 86.4 % (34.4) % Foreign rate differential (0.2) % 0.7 % 1.8 % Warrant revaluation — % — % (1.7) % Interest expense — % — % (0.3) % Non-deductible executive compensation (2.1) % (23.4) % (6.8) % Research credits 1.8 % 6.9 % 3.9 % Changes in net operating loss carryforwards, including expirations (0.5) % (125.1) % 6.9 % Other (0.8) % (0.9) % 1.2 % Effective income tax rate (0.5) % 4.4 % 5.2 % Deferred income tax assets and liabilities consist of the following (in thousands): As of December 31, 2022 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 26,658 $ 30,234 Tax credit carryforwards 9,138 7,185 Accruals 2,971 6,054 Property and equipment — 1,043 Lease liability 9,250 4,639 Section 174 capitalized costs 20,602 — Stock-based compensation 7,798 7,401 Other 959 587 Gross deferred tax assets 77,376 57,143 Valuation allowance (59,499) (45,635) Total deferred tax assets 17,877 11,508 Deferred tax liabilities: Purchased intangibles (6,615) (7,439) Operating leases right-of-use assets (8,189) (3,828) Property and equipment (2,548) — Other (497) (656) Total deferred tax liabilities (17,849) (11,923) Net deferred tax assets (liabilities) $ 28 $ (415) The Company assesses the realizability of its net deferred tax assets by evaluating all available evidence, both positive and negative, including (i) cumulative results of operations in recent years, (ii) sources of recent losses, (iii) estimates of future taxable income and (iv) the length of net operating loss carryforward periods. The Company believes that based on the history of its U.S. losses and other factors, the weight of available evidence indicates that it is more likely than not that it will not be able to realize its U.S. net deferred tax assets. The Company has also placed a valuation allowance on the net deferred tax assets of its Australian operations. Accordingly, the U.S. and Australia net deferred tax assets have been offset by a full valuation allowance. The valuation allowance increased by $13.9 million and decreased by $27.2 million during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company had domestic federal net operating loss carryforwards of $90.5 million, domestic state net operating loss carryforwards of $61.9 million, and foreign net operating loss carryforwards of $13.6 million that can reduce future taxable income. The domestic federal and state net operating loss carryforwards will begin to expire in 2033 and 2030, respectively. The foreign net operating loss carryforwards can be carried forward indefinitely. As of December 31, 2022, the Company had credit carryforwards of approximately $6.5 million and $10.2 million available to reduce future taxable income, if any, for domestic federal and California state income tax purposes, respectively. The domestic federal credit carryforwards will begin to expire in 2033. California credits have no expiration date. The Company has recorded a valuation allowance against its deferred tax assets at December 31, 2022 and 2021 because the Company's management believes that it is more likely than not that these assets will not be fully realized. The decrease in the valuation allowance of approximately $27.2 million in the year ended December 31, 2021 primarily relates to the loss of net operating loss carryforwards and research and development (“R&D”) credits due to Section 382 of the Internal Revenue Code and similar provisions under state law. Section 382 of the Internal Revenue Code and similar provisions under state law limit the utilization of U.S. and state net operating loss carryforwards following certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%. Based on the Company's analysis under Section 382 as of December 31, 2022, the Company believes that there are no additional ownership changes that would result in further adjustments to the $158.4 million of its federal net operating loss (“NOL”) carryforwards and $50.5 million of its state NOL carryforwards. $3.9 million of its R&D credit carryforwards were determined to be limited by Section 382 and similar provisions under state law as of December 31, 2021, and these amounts were written off in the year ended December 31, 2021. The remaining unused carryforwards and credits remain available for future periods. Due to the Company's full valuation allowance, the write off of net operating loss carryforwards and R&D credits did not have any impact to the statements of operations and comprehensive loss. A reconciliation of the Company’s unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance at the beginning of the year $ 4,156 $ 4,416 $ 3,650 Additions based on tax positions related to the current year 1,255 805 824 Additions based on tax positions related to prior years 25 130 — Decreases based on tax positions related to prior years — (1,195) (58) Balance at the end of the year $ 5,436 $ 4,156 $ 4,416 None of the $5.4 million of net unrecognized tax benefit as of December 31, 2022, if recognized, would impact the Company's effective tax rate. During the year ended December 31, 2022, given the Company's valuation allowance, the uncertain tax benefits would not have impacted the effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2022 and December 31, 2021, the Company had in each year $0.2 million of cumulative interest and penalties related to unrecognized tax benefits. The Company does not anticipate a significant change in the unrecognized tax benefits over the next twelve months. The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. Due to net operating loss and credit carryovers, the domestic federal and state income tax returns are subject to tax authority examination from inception. In the foreign jurisdictions where the Company files income tax returns, the statutes of limitations with respect to these jurisdictions vary from jurisdiction to jurisdiction and range from 3 to 6 years. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | SEGMENT REPORTING Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the Company's Chief Operating Decision Maker (“CODM”), or decision making group, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its Chief Executive Officer as the CODM. In determining its reportable segments, the Company considered the markets and types of customers served and the products or services provided in those markets. The Company operates in a single reportable segment. Revenues by geographic regions are based upon the customers’ ship-to address for product revenue and the region of testing for testing services revenue. The following table summarizes reportable revenues by geographic regions (in thousands): Year Ended December 31, 2022 2021 2020 Testing services revenue United States $ 262,959 $ 258,412 $ 163,221 Rest of World 789 873 389 $ 263,748 $ 259,285 $ 163,610 Product revenue United States $ 16,409 $ 13,512 $ 9,219 Europe 9,081 9,740 7,475 Rest of World 3,761 3,580 2,608 $ 29,251 $ 26,832 $ 19,302 Patient and digital solutions revenue United States $ 28,175 $ 10,085 $ 9,063 Europe 468 82 87 Rest of World 151 113 132 $ 28,794 $ 10,280 $ 9,282 Total United States $ 307,543 $ 282,009 $ 181,503 Total Europe $ 9,549 $ 9,822 $ 7,562 Total Rest of World $ 4,701 $ 4,566 $ 3,129 Total $ 321,793 $ 296,397 $ 192,194 The following table summarizes long-lived assets, consisting of property and equipment, net, by geographic regions (in thousands): December 31, 2022 December 31, 2021 Long-lived assets: United States $ 35,020 $ 21,444 Europe 405 403 Rest of World 104 197 Total $ 35,529 $ 22,044 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Business Combination In January 2023, the Company acquired a software system company based in the U.S. The acquisition will be accounted for as a business combination. The purchase price will be allocated to the assets acquired and liabilities assumed based upon their estimated fair values. The purchase price allocation will be determined when additional information becomes available. Restructuring Plan In January 2023, the Company announced a restructuring plan that is intended to optimize costs and simplify its organizational and corporate structure. The restructuring plan includes the discontinuation of its operations in Fremantle, Australia, terminating its employees in that location and vacating its facilities there. The Company expects to complete the closure of its Australia location in June 2024. Derivative Action On February 7, 2023, Jaysen Stevenson brought a stockholder derivative action complaint in the U.S. District Court for the Northern District of California against the Company as nominal defendant and Reginald Seeto, Ankur Dhingra, Peter Maag, and other current and former members of the Company’s Board of Directors (the “Stevenson Derivative Action”). The claims and allegations in the Stevenson Derivative Action are substantially similar to those in the Edelman Derivative Action. The plaintiff alleges that the individual defendants breached their fiduciary duties as directors and/or officers of the Company and engaged in insider trading, waste of corporate assets, unjust enrichment and violations of Sections 14(a) and 20(a) of the Exchange Act. The suit seeks declaratory relief and to recover alleged damages sustained by the Company as a result of the alleged violations, along with the plaintiff’s costs incurred in the lawsuit, including reasonable attorneys’ and experts’ fees, costs and expenses. The Company intends to defend itself vigorously, and believes the Company has good and substantial defenses to the claims alleged in this suit, but there is no guarantee that the Company will prevail. Stock Repurchase Subsequent to December 31, 2022 and through filing of this Annual Report on Form 10-K, the Company repurchased 25,622 shares of its common stock, for an aggregate purchase price of $13.53 per share , under the Repurchase Program. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Liquidity and Capital Resources | Liquidity and Capital Resources The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $460.4 million at December 31, 2022. As of December 31, 2022, the Company had cash and cash equivalents and marketable securities of $293.1 million. CMS Accelerated and Advance Payment Program for Medicare Providers On March 27, 2020 the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Pursuant to the CARES Act, the Centers for Medicare & Medicaid Services (“CMS”) expanded its Accelerated and Advance Payment Program in order to increase cash flow to providers of services and suppliers impacted by the COVID-19 pandemic. CMS is authorized to provide accelerated or advance payments during the period of the public health emergency to any Medicare provider who submitted a request to the appropriate Medicare Administrative Contractor and met the required qualifications. During April 2020, the Company received an advance payment from CMS of approximately $20.5 million, and recorded the payment as Deferred revenue - CMS advance payment on the Company's consolidated balance sheet. During December 2020, the Company reassessed the Deferred revenue - CMS advance payment and repaid the entire amount in January 2021. Refer to Note 8, Balance Sheet Components, for further explanation. January 2021 Underwritten Public Offering of Common Stock On January 25, 2021, the Company sold 1,923,077 shares of its common stock through an underwritten public offering at a public offering price of $91.00 per share. The net proceeds to the Company from the offering were approximately $164.0 million, after deducting underwriting discounts and commissions and offering expenses. On February 11, 2021, the Company sold 288,461 shares of its common stock pursuant to the full exercise of the overallotment option granted to the underwriters in connection with the January 2021 offering. The net proceeds to the Company from the full exercise of the underwriters' overallotment option were approximately $24.7 million. |
Basis of Presentation | Basis of PresentationThe accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its subsidiaries. Intercompany transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in the consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to transaction price estimates used for testing revenue; standalone fair value of patient and digital solutions revenue performance obligations; accrued expenses for clinical studies; inventory valuation; the fair value of issued common stock warrants and embedded derivatives; the fair value of assets and liabilities acquired in a business combination or an assets acquisition (including identifiable intangible assets acquired); the fair value of contingent consideration recorded in connection with a business combination or an asset acquisition; the grant date |
Concentrations of Credit Risk and Other Risks and Uncertainties | Concentrations of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. The Company’s policy is to invest its cash and cash equivalents in money market funds, obligations of U.S. government agencies and government-sponsored entities, commercial paper, corporate debt securities and various bank deposit accounts. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company is exposed to credit risk in the event of default by the financial institutions to the extent of amounts recorded on the balance sheets that may be in excess of insured limits. The Company is also subject to credit risk from its accounts receivable, which are derived from revenue earned from AlloSure Kidney, AlloSure Heart and AlloMap Heart tests provided for patients located in the U.S. and Canada, and billed to various third-party payers, from sales of products to distributors, strategic partners and transplant laboratories in Europe, Asia, the Middle East, Africa, the U.S., Latin America and other geographic regions, from sales of patient and digital solutions software. The Company has not experienced any significant credit losses and does not require collateral on receivables. For the years ended December 31, 2022, 2021 and 2020, approximately 53%, 59% and 57%, respectively, of total revenue was billed to Medicare. No other payers represented more than 10% of total revenue for the years ended December 31, 2022, 2021 and 2020. As of December 31, 2022 and 2021, approximately 27% and 27%, respectively, of accounts receivable was due from Medicare. No other payer represented more than 10% of accounts receivable at either December 31, 2022 or 2021. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. |
Restricted Cash | Restricted Cash As a condition of the lease agreements for certain facilities the Company must maintain letters of credit and certain minimum collateral requirements. The cash used to support these arrangements of $0.5 million is classified as long-term restricted cash on the accompanying consolidated balance sheets. |
Marketable Securities | Marketable Securities The Company considers all highly liquid investments in securities with a maturity of greater than three months at the time of purchase to be marketable securities. As of December 31, 2022, the Company’s short-term marketable securities consisted of corporate debt securities with maturities of greater than three months but less than twelve months at the time of purchase, which were classified as current assets on the consolidated balance sheet . The Company classifies its short-term marketable securities as held-to-maturity at the time of purchase and reevaluates such designation at each balance sheet date. The Company has the positive intent and ability to hold these marketable securities to maturity. Short-term marketable securities are carried at amortized cost and are adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income, net on the consolidated statements of operations. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on short-term marketable securities are included in interest income, net. The cost of securities sold will be determined using specific identification. The Company considers investments in securities with remaining maturities of over one year as long-term investments. As of December 31, 2022, the Company's long-term marketable securities consisted of corporate equity securities. The long-term marketable securities are classified as other assets on the consolidated balance sheet. The Company classifies its long-term marketable debt securities as available-for-sale and reevaluates such designation at each balance sheet date. Unrealized gains and losses from the reevaluation of the long-term marketable debt securities, if any, are included in other comprehensive gain (loss) in the consolidated statement of comprehensive income (loss). Realized gains and losses and declines in value judged to be other-than-temporary, if any, on long-term marketable securities are included in interest income, net. |
Inventory | Inventory Inventory is finished goods, work in progress, and raw materials and consists of reagent plates, laboratory supplies, reagents and finished goods kits. Inventories are used in connection with tests performed, kits produced and prescription drugs, and may also be used for research and product development efforts. Laboratory supplies subsequently designated for research and product development use are expensed. Obsolete or damaged inventories are written off. Certain inventories are stated at the lower of purchased cost, determined on an average cost basis, or net realizable value. Inventories are stated at the lower of actual purchased cost, determined on an average cost basis, on a first-in, first-out basis, or at net realizable value. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful life is generally three The Company capitalizes certain costs incurred for software developed or obtained for internal use, including hosting arrangements. These costs include software licenses and consulting services, as well as employee payroll and payroll-related costs. Capitalized internal-use software costs are usually amortized over a period of three |
Business Combinations | Business Combinations The Company determines and allocates the purchase price of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values as of the business combination date, including separately identifiable intangible assets, which are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, royalty rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. In those circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under Accounting Standard Codification (“ASC”), Topic 480, Distinguishing Liabilities from Equity , the Company recognizes a liability equal to the fair value of the contingent payments that the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records changes in the fair value as a component of operating expenses. In circumstances where the contingent consideration is classified as equity, the Company recognizes it at fair value at the acquisition date. Contingent consideration classified as equity is not subsequently remeasured. Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition. |
Acquired Intangible Assets | Acquired Intangible Assets Amortizable intangible assets include customer relationships, developed technology, commercialization rights, trademarks and in-process technology assets acquired as part of a business combination or asset acquisition. Intangible assets subject to amortization are amortized over their estimated useful lives. Acquired in-process technology assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. If and when development is complete, which generally occurs if and when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. |
Impairment of Goodwill, Intangible Assets and Long-lived Assets | Impairment of Goodwill, Intangible Assets and Long-lived Assets Goodwill Goodwill recorded in a business combination is not subject to amortization. Instead, it is tested for impairment on an annual basis and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. The Company’s annual impairment test date is December 1 st . A qualitative assessment is initially made to determine whether it is necessary to perform a quantitative assessment. A qualitative assessment includes, among others, consideration of: (i) past, current and projected future earnings; (ii) recent trends and market conditions; and (iii) valuation metrics involving similar companies that are publicly-traded and acquisitions of similar companies, if available. If this qualitative assessment indicates that it is more likely than not that an impairment exists, or if the Company decides to bypass this option, it proceeds to the quantitative assessment. The quantitative assessment consists of a comparison between the estimated fair value of the Company’s reporting unit and its respective carrying amount including goodwill. Where the carrying value of the reporting unit exceeds its estimated fair value, the Company will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. When necessary, to determine the reporting unit’s fair value under the quantitative approach, the Company uses a combination of income and market approaches, such as estimated discounted future cash flows of that reporting unit, multiples of earnings or revenues, and analysis of recent sales or offerings of comparable entities. The Company also considers its market capitalization on the date of the analysis to ensure the reasonableness of the reporting unit’s fair value. In connection with the Company’s annual goodwill assessment on December 1, 2022, the Company performed a qualitative assessment taking into consideration past, current and projected future earnings, recent trends and market conditions; and the Company's market capitalization. Based on this analysis, the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount. As such, it was not necessary to perform the quantitative goodwill impairment assessment at that time. As of December 31, 2022, no impairment of goodwill has been identified. Intangible assets not subject to amortization The Company evaluates the carrying value of intangible assets not subject to amortization, related to acquired in-process technology assets, which are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. Accordingly, amortization of the acquired in-process technology assets will not occur until the products reach commercialization. During the period the assets are considered indefinite-lived, they are tested for impairment on an annual basis, as well as between annual tests if the Company becomes aware of any events occurring or changes in circumstances that would indicate that the fair value of the acquired in-process technology assets are less than their carrying amounts. An impairment loss would be recorded when the fair value of an acquired in-process technology asset is less than its carrying value. If and when development is complete, which generally occurs when the products are made commercially available, the associated acquired in-process technology asset will be deemed finite-lived and will then be amortized based on its estimated useful life. As of December 31, 2022, no impairment of acquired in-process technology assets has been identified. Intangible assets and long-lived assets subject to amortization The Company evaluates its finite-lived intangible assets and its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company then compares the carrying amounts of the assets with the future net undiscounted cash flows expected to be generated by such asset. If an impairment exists, the Company measures the impairment based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. The Company has not identified any material impairment losses to date. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received from selling an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and it takes into consideration the assumptions that market participants would use when pricing the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement of an asset or liability requires management to make judgments and to consider specific characteristics of that asset or liability. The carrying amounts of certain financial instruments of the Company, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their short maturities. The carrying amount of the contingent consideration liability also represents its fair value. |
Leases | Leases The Company adopted ASC Topic 842, Leases (“ASC 842”) and determines if an arrangement is or contains a lease at contract inception. A right-of-use (“ROU”) asset, representing the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the consolidated balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company also has lease arrangements with lease and non-lease components. The Company elected the practical expedient not to separate non-lease components from lease components for the Company's facility leases. The Company also elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for leases with an initial term of 12 months or less. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. As of December 31, 2022, the Company’s leases had remaining terms of 0.92 years to 10.09 years, some of which include options to extend the lease term. |
Revenue | Revenue The Company recognizes revenue from testing services, product sales, and patient and digital solutions revenue in the amount that reflects the consideration that it expects to be entitled in exchange for goods or services as it transfers control to its customers. Revenue is recorded considering a five-step revenue recognition model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation. Testing Services Revenue AlloSure Kidney, AlloMap Heart, AlloSure Heart and AlloSure Lung patient tests are ordered by healthcare providers. The Company receives a test requisition form with payer information along with a collected patient blood sample. The Company considers the patient to be its customer and the test requisition form to be the contract. Testing services are performed in the Company’s laboratory. Testing services represent one performance obligation in a contract and are performed when results of the test are provided to the healthcare provider, at a point in time. The healthcare providers that order the tests and on whose behalf the Company provides testing services are generally not responsible for the payment of these services. The first and second revenue recognition criteria are satisfied when the Company receives a test requisition form with payer information from the healthcare provider. Generally, the Company bills third-party payers upon delivery of an AlloSure Kidney, AlloMap Heart, AlloSure Heart or AlloSure Lung test result to the healthcare provider. Amounts received may vary amongst payers based on coverage practices and policies of the payer. The Company has used the portfolio approach under ASC Topic 606, Revenue from Contracts with Customers , to identify financial classes of payers. Revenue recognized for Medicare and other contracted payers is based on the agreed current reimbursement rate per test, adjusted for historical collection trends where applicable. The Company estimates revenue for non-contracted payers and self-payers using transaction prices determined for each financial class of payers using history of reimbursements. This includes analysis of an average reimbursement per test and a percentage of tests reimbursed. This estimate requires significant judgment. The Company monitors revenue estimates at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Changes in transaction price estimates are updated quarterly based on actual cash collected or changes made to contracted rates. Product Revenue Product revenue is recognized from the sale of products to end-users, distributors and strategic partners when all revenue recognition criteria are satisfied. The Company generally has a contract or a purchase order from a customer with the specified required terms of order, including the number of products ordered. Transaction prices are determinable and products are delivered and risk of loss passed to the customer upon either shipping or delivery, as per the terms of the agreement. Patient and Digital Solutions Revenue Patient and digital solutions revenue is mainly derived from a combination of SaaS and perpetual software license agreements entered into with various transplant centers, which are the Company's customers for this class of revenue. The main performance obligations in connection with the Company's SaaS and perpetual software license agreement are the following: (i) implementation services and delivery of the perpetual software license are considered a single performance obligation, and (ii) post contract support. The Company allocates the transaction price to each performance obligation based on relative stand-alone selling prices of each distinct performance obligation. Digital revenue in connection with perpetual software license agreements is recognized over time based on the Company’s satisfaction of each distinct performance obligation in each agreement. Perpetual software license agreements typically require advance payments from customers upon the achievement of certain milestones. The Company records deferred revenue in relation to these agreements when cash payments are received, or invoices are issued in advance of the Company’s performance, and generally recognizes revenue over the contractual term, as performance obligations are fulfilled. In addition, the Company derives patient and digital solutions revenue from software subscriptions and medication sales. The Company generally bills software subscription fees in advance. Revenue from software subscriptions is deferred and recognized ratably over the subscription term. The medication sales revenue is recognized based on the negotiated contract price with the governmental, commercial and non-commercial payers with any applicable patient co-pay. The Company recognizes revenue from medication sales when prescriptions are delivered. Cost of Testing Services Cost of testing services reflects the aggregate costs incurred in delivering the Company’s testing services. The components of cost of testing services are materials and service costs, direct labor costs, stock-based compensation, equipment and infrastructure expenses associated with testing samples, shipping, logistics and specimen processing charges to collect and transport samples, and allocated overhead including rent, information technology, equipment depreciation, utilities and royalties. Royalties for licensed technology, calculated as a percentage of testing services revenues, are recorded as license fees in cost of testing services at the time the testing services revenues are recognized. Cost of Product Cost of product reflects the aggregate costs incurred in delivering the Company’s products to customers. The components of cost of product are materials costs, manufacturing and kit assembly costs, direct labor costs, equipment and infrastructure expenses associated with preparing kitted products for shipment, shipping, and allocated overhead including rent, information technology, equipment depreciation and utilities. Cost of product also includes amortization of acquired developed technology and adjustments to inventory values, including write-downs of impaired, slow moving or obsolete inventory. Cost of Patient and Digital Solutions Cost of patient and digital solutions primarily consists of personnel-related costs associated with developing, installing and maintaining software, depreciation of servers and equipment, amortization of acquired intangible assets, support of the functionality of the software's platforms, including stock-based compensation expenses, cost of prescription drugs and allocated costs of facilities and information technology. |
Research and Development Expenses | Research and Development Expenses Research and development expenses, including clinical operations, represent costs incurred to develop diagnostic products and services, high quality evidence to support use of the Company’s tests, as well as continued efforts related to improving the Company’s existing products and patient and digital solutions service lines. These expenses include payroll and related expenses, consulting expenses, laboratory supplies, clinical studies and certain allocated expenses as well as amounts incurred under certain collaborative agreements. Research and development costs are expensed as incurred. The Company records accruals for estimated study costs comprised of work performed by contract research organizations under contract terms. |
Stock-based Compensation | Stock-based Compensation The Company uses the Black-Scholes Model, which requires the use of estimates such as stock price volatility and expected option lives, to value employee stock options. The Company estimates the expected option lives using historical data, estimates volatility using its own historical stock prices, estimates risk-free rates using the implied yield currently available in the U.S. Treasury zero-coupon issues with a remaining term equal to the expected option lives, and estimates dividend yield using the Company’s expectations and historical data. The fair value of each restricted stock unit is calculated based upon the closing price of the Company’s common stock on the date of the grant. The Company uses the straight-line attribution method for recognizing compensation expense. Compensation expense is recognized on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on the Company’s historical experience. Compensation expense for stock options issued to nonemployees is calculated using the Black-Scholes Model and is recorded over the service performance period using the straight-line attribution method. Options subject to vesting are required to be periodically remeasured over their service performance period, which is generally the same as the vesting period. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. The Company’s assessment of an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit may change as new information becomes available. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for each entity, including the Swedish Krona, Australian dollar and the Euro. The revenue and expenses of such subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting cumulative translation adjustments are reported in other comprehensive loss. Foreign currency translation gains and losses on revenue and expenses are recognized in the consolidated statements of operations. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net loss and other losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net income or loss. For the Company, such items consist of foreign currency losses on the translation of foreign assets and liabilities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance , which contains amendments that require annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model. The disclosures include (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. The amendments set forth in this ASU are effective for all entities for annual periods beginning after December 15, 2021. Early application of the amendments in this ASU is permitted. The amendments in this ASU should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company adopted the standard prospectively on January 1, 2022. The adoption of this new standard had no impact on the Company's consolidated financial statements and disclosures. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. The amendments set forth in this ASU are effective for fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted. The amendments in this ASU should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company adopted the standard prospectively on January 1, 2022. The adoption of this new standard had no impact on the Company's consolidated financial statements and disclosures. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) , which contains amendments that clarify and reduce diversity in an issuer's accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The amendments set forth in this ASU are effective for all entities for annual periods beginning after December 15, 2021. Early application of the amendments in this ASU is permitted for all entities. The amendments in this ASU should be applied prospectively. The Company adopted the standard prospectively on January 1, 2022. The adoption of this new standard had no impact on the Company's consolidated financial statements and disclosures. In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, which contains amendments that improve the consistency of the ASC by including all disclosure guidance in the appropriate Disclosure Section (Section 50). The FASB provided transition guidance for all the amendments in this ASU. The amendments in Sections B and C (Section A has been removed) of this ASU are effective for annual periods beginning after December 15, 2020 for public business entities. Early application of the amendments in this ASU is permitted for public business entities for any annual or interim period for which financial statements have not been issued. The amendments in this ASU should be applied retrospectively. The Company adopted the standard on January 1, 2021. The adoption of the new standard did not have an impact on the Company's consolidated financial statements and disclosures. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Net Loss Per Share | The following tables set forth the computation of the Company’s basic and diluted net loss per share (in thousands, except shares and per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net loss used to compute basic net loss per share $ (76,613) $ (30,662) $ (18,714) Net loss used to compute diluted net loss per share $ (76,613) $ (30,662) $ (18,714) Denominator: Weighted-average shares used to compute basic net loss per share 53,321,625 52,241,076 46,481,772 Weighted-average shares used to compute diluted net loss per share 53,321,625 52,241,076 46,481,772 Net loss per share: Basic $ (1.44) $ (0.59) $ (0.40) Diluted $ (1.44) $ (0.59) $ (0.40) |
Summary of Potentially Dilutive Securities Excluded from Diluted Net Loss Per Share | The following potentially dilutive securities have been excluded from diluted net loss per share because their effect would be antidilutive: Year Ended December 31, 2022 2021 2020 Shares of common stock subject to outstanding options 2,921,925 1,863,633 2,670,398 Shares of common stock subject to outstanding common stock warrants 3,132 3,132 6,264 Restricted stock units 3,092,467 2,047,657 1,878,866 Total common stock equivalents 6,017,524 3,914,422 4,555,528 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial assets and liabilities, measured at fair value on a recurring basis, as of December 31, 2022 and 2021 (in thousands): December 31, 2022 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Cash equivalents: Money market funds $ 66,594 $ — $ — $ 66,594 Long-term marketable securities: Corporate equity securities 2,076 — — 2,076 Total $ 68,670 $ — $ — $ 68,670 Liabilities Short-term liabilities: Contingent consideration $ — $ — $ 1,025 $ 1,025 Long-term liabilities: Contingent consideration — — 2,418 2,418 Common stock warrant liability — — 32 32 Total $ — $ — $ 3,475 $ 3,475 December 31, 2021 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Cash equivalents: Money market funds $ 335,107 $ — $ — $ 335,107 Marketable securities: Corporate equity securities 3,257 — — 3,257 Corporate debt securities — 500 — 500 Total $ 338,364 $ 500 $ — $ 338,864 Liabilities Short-term liabilities: Contingent consideration $ — $ — $ 2,114 $ 2,114 Long-term liabilities: Contingent consideration — — 3,227 3,227 Common stock warrant liability — — 139 139 Total $ — $ — $ 5,480 $ 5,480 |
Summary of Issuances, Changes in Fair Value and Reclassifications of Level 3 Financial Instruments | The following table presents the issuances, exercises, changes in fair value and reclassifications of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands): Common Stock Warrant Liability and Contingent Consideration (Level 3) Balance at December 31, 2020 $ 447 Exercise of warrants (202) Change in estimated fair value of common stock warrant liability (106) Change in estimated fair value of contingent consideration 5,341 Balance at December 31, 2021 5,480 Change in estimated fair value of common stock warrant liability (107) Additions to contingent consideration 727 Payment related to contingent consideration (2,625) Balance at December 31, 2022 $ 3,475 |
Summary of Common Stock Warrant and Derivative Liability Valuation Assumptions | Common Stock Warrant Liability Valuation Assumptions: December 31, 2022 2021 Private Placement Common Stock Warrant Liability Stock Price $ 11.41 $ 45.48 Exercise Price $ 1.12 $ 1.12 Remaining term (in years) 0.28 1.28 Volatility N/A 66.00 % Risk-free interest rate N/A 0.49 % |
Cash and Marketable Securities
Cash and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Summary of Cash and Cash Equivalents | A reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the amount reported within the consolidated statements of cash flows is shown in the table below (in thousands): December 31, 2022 December 31, 2021 December 31, 2020 Cash and cash equivalents $ 89,921 $ 348,485 $ 134,669 Restricted cash 522 211 270 Total cash, cash equivalents, and restricted cash at the end of the period $ 90,443 $ 348,696 $ 134,939 |
Summary of Marketable Securities | The amortized cost, gross unrealized holding losses, and fair value of the Company’s marketable securities by major security type at each balance sheet date are summarized in the table below (in thousands): December 31, 2022 Amortized Cost Unrealized Holding Gains (Losses) Fair Value Short-term marketable securities: U.S. agency securities $ 79,347 $ 452 $ 79,799 Corporate debt securities 123,821 (220) 123,601 Total short-term marketable securities 203,168 232 203,400 Long-term marketable securities: Corporate equity securities 5,000 (2,924) 2,076 Total long-term marketable securities 5,000 (2,924) 2,076 Total $ 208,168 $ (2,692) $ 205,476 December 31, 2021 Amortized Cost Unrealized Holding Losses Fair Value Long-term marketable securities: Corporate equity securities $ 5,000 $ (1,743) $ 3,257 Corporate debt securities 500 — 500 Total long-term marketable securities $ 5,500 $ (1,743) $ 3,757 Contractual maturities of the marketable securities at each balance sheet date are as follows (in thousands): December 31, 2022 Within one year $ 203,168 After one year through five years — Total $ 203,168 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Identified Intangible Assets Acquired at Acquisition Date | The following table summarizes the fair value of the intangible asset acquired as of the acquisition date ($ in thousands): Estimated Fair Value Estimated Useful Life (Years) Trademark $ 2,080 10 The following table summarizes the fair values of the intangible assets acquired as of the acquisition date ($ in thousands): Estimated Fair Value Estimated Useful Lives (Years) Customer relationships $ 2,590 10 Developed technology 1,090 10 Trademarks 80 5 Total $ 3,760 |
Summary of Fair Values of Assets Acquired and Liabilities Assumed as of Acquisition Date | The following table summarizes the consideration paid for TransChart, TTP and MedActionPlan, and the provisional amounts of the assets acquired and liabilities assumed recognized at their estimated fair value at the acquisition date (in thousands): Total Consideration Cash $ 17,166 Total consideration $ 17,166 Recognized amounts of identifiable assets acquired and liabilities assumed Current assets $ 3,444 Fixed assets 23 Identifiable intangible assets 7,860 Other assets 2 Current liabilities (3,915) Noncurrent liabilities (2,883) Total identifiable net assets acquired 4,531 Goodwill 12,635 Total consideration $ 17,166 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill | The following table presents details of the Company’s goodwill as of December 31, 2022 and 2021 (in thousands): 2022 2021 Balance as of January 1, $ 36,983 $ 23,857 Goodwill acquired 540 13,126 Balance as of December 31, $ 37,523 $ 36,983 |
Summary of Intangibles | The following table presents details of the Company’s intangible assets as of December 31, 2022 ($ in thousands): December 31, 2022 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Weighted Average Remaining Useful Life (In Years) Intangible assets with finite lives: Acquired and developed technology $ 35,747 $ (15,138) $ (2,369) $ 18,240 7.5 Customer relationships 21,898 (7,459) (2,104) 12,335 9.0 Commercialization rights 11,579 (3,233) — 8,346 6.6 Trademarks and tradenames 4,540 (1,345) (315) 2,880 8.5 Total intangible assets with finite lives 73,764 (27,175) (4,788) 41,801 Acquired in-process technology 1,250 — — 1,250 Total intangible assets $ 75,014 $ (27,175) $ (4,788) $ 43,051 The following table presents details of the Company’s intangible assets as of December 31, 2021 ($ in thousands): December 31, 2021 Gross Accumulated Amortization Foreign Currency Translation Net Carrying Amount Weighted Intangible assets with finite lives: Acquired and developed technology $ 35,874 $ (12,088) $ (1,513) $ 22,273 8.1 Customer relationships 21,898 (6,024) (1,210) 14,664 9.9 Commercialization rights 10,579 (2,030) — 8,549 7.6 Trademarks and tradenames 4,540 (988) (155) 3,397 9.5 Other 250 (188) — 62 0.2 Total intangible assets with finite lives 73,141 (21,318) (2,878) 48,945 Acquired in-process technology 1,250 — — 1,250 Total intangible assets $ 74,391 $ (21,318) $ (2,878) $ 50,195 |
Summary of Finite-Lived Intangible Assets Amortization Expense | The following table summarizes the Company's amortization expense of intangible assets (in thousands): Year Ended December 31, 2022 2021 2020 Cost of testing services $ 1,316 $ 1,316 $ 1,316 Cost of product 1,716 1,905 1,665 Cost of patient and digital solutions 945 684 345 Sales and marketing 2,252 1,891 1,472 Total $ 6,229 $ 5,796 $ 4,798 |
Summary of Estimated Future Amortization Expense of Intangible Assets | The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of December 31, 2022 (in thousands): Years Ending December 31, Cost of Testing Services Cost of Product Cost of Patient and Digital Solutions Sales and Marketing Total 2023 $ 1,316 $ 1,675 $ 945 $ 2,211 $ 6,147 2024 1,316 1,675 709 2,211 5,911 2025 1,316 1,675 540 2,211 5,742 2026 1,316 743 540 2,209 4,808 2027 1,316 743 540 2,195 4,794 Thereafter 2,825 3,294 1,180 7,100 14,399 Total future amortization expense $ 9,405 $ 9,805 $ 4,454 $ 18,137 $ 41,801 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Inventory | Inventory consisted of the following (in thousands): December 31, 2022 2021 Finished goods $ 2,962 $ 3,911 Work in progress 4,306 2,828 Raw materials 11,964 10,447 Total inventory $ 19,232 $ 17,186 |
Summary of Components of Property and Equipment | Property and equipment consisted of the following (in thousands): December 31, 2022 2021 Leasehold improvements $ 17,389 $ 8,466 Machinery and equipment 16,294 12,091 Internally developed software 10,893 3,746 Construction in progress 7,639 10,925 Computer and office equipment 5,570 5,454 Furniture and fixtures 2,168 943 Property and equipment 59,953 41,625 Less: Accumulated depreciation and amortization (24,424) (19,581) Property and equipment, net $ 35,529 $ 22,044 |
Summary of Components of Accrued and Other Liabilities | Accrued and other liabilities consisted of the following (in thousands): December 31, 2022 2021 Clinical studies $ 14,816 $ 10,653 Professional fees 6,115 5,780 Short-term lease liability 5,591 3,958 Deferred revenue 5,342 4,208 Accrued royalty 4,633 1,664 Laboratory processing fees and materials 2,189 1,664 Deferred payments for intangible assets 2,062 2,000 Capital expenditures 1,316 2,612 Contingent consideration 1,025 2,114 License and other collaboration fees 1,000 — Accrued shipping expenses 489 668 Other accrued expenses 4,553 2,601 Total accrued and other liabilities $ 49,131 $ 37,922 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Lease Cost | The following table summarizes the lease cost for the years ended December 31, (in thousands): 2022 2021 2020 Operating lease cost $ 6,716 $ 5,134 $ 4,441 Finance lease cost — 53 205 Total lease cost $ 6,716 $ 5,187 $ 4,646 Finance lease cost included interest from the lease liability and amortization of the ROU asset. Other information: Weighted-average remaining lease term - Operating leases (in years) 6.26 Weighted-average discount rate - Operating leases (%) 7.1 % Supplemental cash flow information related to leases for the years ended December 31, are as follows (in thousands) : 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 3,665 $ 2,580 $ 934 Operating cash flows used for finance leases — 63 199 Total $ 3,665 $ 2,643 $ 1,133 |
Summary of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of December 31, 2022, are as follows (in thousands): Years ending December 31, Operating Leases 2023 $ 7,807 2024 7,903 2025 7,651 2026 7,019 2027 7,166 Thereafter 10,605 Total lease payments 48,151 Less imputed interest 9,154 Present value of future minimum lease payments 38,997 Less operating lease liability, current portion 5,591 Operating lease liability, long-term portion $ 33,406 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Summary of Components of Warrants Outstanding | As of December 31, 2022, outstanding warrants to purchase common stock were: Classified as Original Term Exercise Price Number of Shares Underlying Warrants Original issue date: April 2016 Liability 7 years $ 1.12 3,132 3,132 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Options, RSUs Activity under 2014 Equity Incentive Plan and 2016 Inducement Plan and Related Information | The following table summarizes option and RSUs activity under the Company’s 2014 Plan, 2016 Plan and 2019 Plan, and related information: Shares Available for Grant Stock Options Outstanding Weighted- Average Exercise Price Number of RSU Shares Weighted- Average Grant Date Fair Value Balance—December 31, 2021 2,066,529 1,863,633 $ 29.33 2,047,657 $ 50.21 Additional options authorized 2,116,934 — — — — Common stock awards for services (12,764) — — — — RSUs granted (2,397,369) — — 2,397,369 27.79 RSUs vested — — — (643,892) 42.59 Options granted (1,864,465) 1,864,465 28.35 — — Options exercised — (142,579) 17.07 — — Repurchases of common stock under employee incentive plans 211,265 — — — — RSUs forfeited 706,738 — — (706,738) 43.80 Options forfeited 554,427 (554,427) 34.12 — — Options expired 109,167 (109,167) 33.96 — — Balance—December 31, 2022 1,490,462 2,921,925 $ 28.13 3,094,396 $ 37.39 |
Summary of Options Outstanding and Exercisable Vested or Expected to Vest | Options outstanding that have vested and are expected to vest at December 31, 2022 are as follows: Number of Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Vested 1,186 $ 25.39 5.72 $ 1,558 Expected to Vest 1,592 30.37 8.94 — Total 2,778 $ 1,558 |
Summary of Weighted-Average Assumptions Used to Estimate Fair Value of Share-Based Awards | The estimated fair values of employee stock options and ESPP shares were estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: Year Ended December 31, 2022 2021 2020 Employee stock options Expected term (in years) 5.96 5.94 5.98 Expected volatility 77.62 % 77.70 % 75.56 % Risk-free interest rate 2.74 % 0.80 % 0.69 % Expected dividend yield — % — % — % Employee stock purchase plan Expected term (in years) 0.5 0.5 0.5 Expected volatility 67.79% – 77.88% 53.10% – 67.79% 62.56% – 93.17% Risk-free interest rate 2.51% – 4.76% 0.09% – 0.19% 0.17% – 1.57% Expected dividend yield — % — % — % |
Summary of Expense Relating to Employee and Nonemployee Stock-Based Payment Awards from Stock Options and RSUs | The following table summarizes stock-based compensation expense relating to employee and nonemployee stock-based awards for the years ended December 31, 2022, 2021 and 2020, included in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of testing services $ 1,529 $ 2,358 $ 1,493 Cost of product 1,120 579 391 Cost of patient and digital solutions 1,331 728 449 Research and development 7,391 7,126 4,676 Sales and marketing 14,403 10,887 5,795 General and administrative 20,779 14,403 10,597 Total $ 46,553 $ 36,081 $ 23,401 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Loss Before Income Taxes | Loss before income taxes for the years ended December 31, 2022, 2021 and 2020 is summarized as follows (in thousands): As of December 31, 2022 2021 2020 United States $ (73,089) $ (27,921) $ (14,233) Foreign (3,145) (4,167) (5,517) Total loss before income taxes $ (76,234) $ (32,088) $ (19,750) |
Summary of Components of Provision for (Benefit from) Income Taxes | The components of the provision for (benefit from) income taxes are summarized as follows (in thousands): As of December 31, 2022 2021 2020 Current Federal $ 145 $ 89 $ (58) State 328 2 1 Foreign 184 (139) 160 Total current income tax expense (benefit) 657 (48) 103 Deferred Federal (130) (409) 91 State 75 (127) (52) Foreign (223) (842) (1,178) Total deferred income tax benefit (278) (1,378) (1,139) Income tax expense (benefit) $ 379 $ (1,426) $ (1,036) |
Summary of Provision for Tax Differed from Amounts Computed by Applying the U.S. Federal Income Tax Rate to Loss Before Income | The Company's actual provision for tax differed from the amounts computed by applying the U.S. federal income tax rates of 21% in each of the years ended 2022, 2021 and 2020, to loss before income taxes as a result of the following: Year Ended December 31, 2022 2021 2020 Federal tax statutory rate 21.0 % 21.0 % 21.0 % Stock-based compensation (2.8) % 38.8 % 13.5 % Change in valuation allowance (16.9) % 86.4 % (34.4) % Foreign rate differential (0.2) % 0.7 % 1.8 % Warrant revaluation — % — % (1.7) % Interest expense — % — % (0.3) % Non-deductible executive compensation (2.1) % (23.4) % (6.8) % Research credits 1.8 % 6.9 % 3.9 % Changes in net operating loss carryforwards, including expirations (0.5) % (125.1) % 6.9 % Other (0.8) % (0.9) % 1.2 % Effective income tax rate (0.5) % 4.4 % 5.2 % |
Summary of Deferred Income Tax Assets and Liabilities | Deferred income tax assets and liabilities consist of the following (in thousands): As of December 31, 2022 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 26,658 $ 30,234 Tax credit carryforwards 9,138 7,185 Accruals 2,971 6,054 Property and equipment — 1,043 Lease liability 9,250 4,639 Section 174 capitalized costs 20,602 — Stock-based compensation 7,798 7,401 Other 959 587 Gross deferred tax assets 77,376 57,143 Valuation allowance (59,499) (45,635) Total deferred tax assets 17,877 11,508 Deferred tax liabilities: Purchased intangibles (6,615) (7,439) Operating leases right-of-use assets (8,189) (3,828) Property and equipment (2,548) — Other (497) (656) Total deferred tax liabilities (17,849) (11,923) Net deferred tax assets (liabilities) $ 28 $ (415) |
Summary of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the Company’s unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance at the beginning of the year $ 4,156 $ 4,416 $ 3,650 Additions based on tax positions related to the current year 1,255 805 824 Additions based on tax positions related to prior years 25 130 — Decreases based on tax positions related to prior years — (1,195) (58) Balance at the end of the year $ 5,436 $ 4,156 $ 4,416 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Reportable Revenues by Geographic Regions | Revenues by geographic regions are based upon the customers’ ship-to address for product revenue and the region of testing for testing services revenue. The following table summarizes reportable revenues by geographic regions (in thousands): Year Ended December 31, 2022 2021 2020 Testing services revenue United States $ 262,959 $ 258,412 $ 163,221 Rest of World 789 873 389 $ 263,748 $ 259,285 $ 163,610 Product revenue United States $ 16,409 $ 13,512 $ 9,219 Europe 9,081 9,740 7,475 Rest of World 3,761 3,580 2,608 $ 29,251 $ 26,832 $ 19,302 Patient and digital solutions revenue United States $ 28,175 $ 10,085 $ 9,063 Europe 468 82 87 Rest of World 151 113 132 $ 28,794 $ 10,280 $ 9,282 Total United States $ 307,543 $ 282,009 $ 181,503 Total Europe $ 9,549 $ 9,822 $ 7,562 Total Rest of World $ 4,701 $ 4,566 $ 3,129 Total $ 321,793 $ 296,397 $ 192,194 |
Summary of Long-Lived Assets Consisting of Property and Equipment, Net by Geographic Regions | The following table summarizes long-lived assets, consisting of property and equipment, net, by geographic regions (in thousands): December 31, 2022 December 31, 2021 Long-lived assets: United States $ 35,020 $ 21,444 Europe 405 403 Rest of World 104 197 Total $ 35,529 $ 22,044 |
Organization and Description _2
Organization and Description of Business (Details) | 1 Months Ended | 12 Months Ended | |||||||
Feb. 11, 2021 USD ($) shares | Jan. 25, 2021 USD ($) $ / shares shares | Jun. 15, 2020 shares | May 30, 2021 USD ($) | Apr. 30, 2020 USD ($) | Dec. 31, 2022 USD ($) unique_solution | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jan. 31, 2018 patient | |
Schedule of Capitalization, Equity [Line Items] | |||||||||
Number of renal transplant patients | patient | 1,700 | ||||||||
Accumulated deficit | $ (460,444,000) | $ (383,189,000) | |||||||
Cash and cash equivalents and marketable securities | 293,100,000 | ||||||||
Cash and cash equivalents | $ 89,921,000 | $ 348,485,000 | $ 134,669,000 | ||||||
Proceeds from advance payment | $ 20,500,000 | ||||||||
Public Offering | |||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||
Number of shares issued in transaction (in shares) | shares | 1,923,077 | 4,492,187 | |||||||
Common stock offer (in dollars per share) | $ / shares | $ 91 | ||||||||
Consideration received on transaction | $ 164,000,000 | ||||||||
Over-allotments | |||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||
Number of shares issued in transaction (in shares) | shares | 288,461 | ||||||||
Consideration received on transaction | $ 24,700,000 | ||||||||
XynManagement, Inc. | |||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||
Number of unique solutions | unique_solution | 2 | ||||||||
Miromatrix, Inc. | |||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||
Payments to acquire minority interest | $ 5,000,000 | ||||||||
Medicare | AlloSure Kidney | |||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||
Reimbursement rate | $ 2,841 | ||||||||
Medicare | AlloMap Heart | |||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||
Reimbursement rate | 3,240 | ||||||||
Medicare | AlloSure Heart | |||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||
Reimbursement rate | $ 2,753 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary Of Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 522,000 | $ 211,000 | |
Goodwill impairment | 0 | ||
Impairment of intangible assets | $ 0 | ||
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Remaining operating and finance lease term | 11 months 1 day | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Remaining operating and finance lease term | 10 years 1 month 2 days | ||
Machinery, Computer and Office Equipment | Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of assets | 3 years | ||
Machinery, Computer and Office Equipment | Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of assets | 5 years | ||
Furniture and fixtures | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of assets | 7 years | ||
Internally developed software | Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of assets | 3 years | ||
Internally developed software | Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of assets | 7 years | ||
Medicare | Services Revenue | Customer Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 53% | 59% | 57% |
Medicare | Accounts Receivable | Credit Concentration Risk | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 27% | 27% |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss used to compute basic net loss per share | $ (76,613) | $ (30,662) | $ (18,714) |
Net loss used to compute diluted net loss per share | $ (76,613) | $ (30,662) | $ (18,714) |
Denominator: | |||
Weighted-average shares used to compute basic net loss per share (in shares) | 53,321,625 | 52,241,076 | 46,481,772 |
Weighted-average shares used to compute diluted net loss per share (in shares) | 53,321,625 | 52,241,076 | 46,481,772 |
Net loss per share: | |||
Basic (in dollars per share) | $ (1.44) | $ (0.59) | $ (0.40) |
Diluted (in dollars per share) | $ (1.44) | $ (0.59) | $ (0.40) |
Net Loss Per Share - Summary _2
Net Loss Per Share - Summary of Potentially Dilutive Securities Excluded from Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential dilutive securities excluded from diluted net loss per share attributable to common stockholders (in shares) | 6,017,524 | 3,914,422 | 4,555,528 |
Shares of common stock subject to outstanding options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential dilutive securities excluded from diluted net loss per share attributable to common stockholders (in shares) | 2,921,925 | 1,863,633 | 2,670,398 |
Shares of common stock subject to outstanding common stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential dilutive securities excluded from diluted net loss per share attributable to common stockholders (in shares) | 3,132 | 3,132 | 6,264 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential dilutive securities excluded from diluted net loss per share attributable to common stockholders (in shares) | 3,092,467 | 2,047,657 | 1,878,866 |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Details) - shares | 1 Months Ended | |||
Feb. 11, 2021 | Jan. 25, 2021 | Jun. 15, 2020 | Apr. 30, 2020 | |
Sales Agreement | ||||
Schedule of Net Income (Loss) Per Share [Line Items] | ||||
Number of shares issued in transaction (in shares) | 1,000,000 | |||
Public Offering | ||||
Schedule of Net Income (Loss) Per Share [Line Items] | ||||
Number of shares issued in transaction (in shares) | 1,923,077 | 4,492,187 | ||
Over-allotments | ||||
Schedule of Net Income (Loss) Per Share [Line Items] | ||||
Number of shares issued in transaction (in shares) | 288,461 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Short-term liabilities: | ||
Contingent consideration | $ 1,025 | $ 2,114 |
Corporate debt securities | ||
Assets | ||
Corporate debt securities | 500 | |
Recurring | ||
Assets | ||
Money market funds | 66,594 | 335,107 |
Total | 68,670 | 338,864 |
Short-term liabilities: | ||
Contingent consideration | 1,025 | 2,114 |
Long-term liabilities: | ||
Contingent consideration | 2,418 | 3,227 |
Common stock warrant liability | 32 | 139 |
Total | 3,475 | 5,480 |
Recurring | Corporate equity securities | ||
Assets | ||
Corporate equity securities | 2,076 | 3,257 |
Recurring | Corporate debt securities | ||
Assets | ||
Corporate debt securities | 500 | |
Fair Value Measured Using - (Level 1) | Recurring | ||
Assets | ||
Money market funds | 66,594 | 335,107 |
Total | 68,670 | 338,364 |
Short-term liabilities: | ||
Contingent consideration | 0 | 0 |
Long-term liabilities: | ||
Contingent consideration | 0 | 0 |
Common stock warrant liability | 0 | 0 |
Total | 0 | 0 |
Fair Value Measured Using - (Level 1) | Recurring | Corporate equity securities | ||
Assets | ||
Corporate equity securities | 2,076 | 3,257 |
Fair Value Measured Using - (Level 1) | Recurring | Corporate debt securities | ||
Assets | ||
Corporate debt securities | 0 | |
Fair Value Measured Using - (Level 2) | Recurring | ||
Assets | ||
Money market funds | 0 | 0 |
Total | 0 | 500 |
Short-term liabilities: | ||
Contingent consideration | 0 | 0 |
Long-term liabilities: | ||
Contingent consideration | 0 | 0 |
Common stock warrant liability | 0 | 0 |
Total | 0 | 0 |
Fair Value Measured Using - (Level 2) | Recurring | Corporate equity securities | ||
Assets | ||
Corporate equity securities | 0 | 0 |
Fair Value Measured Using - (Level 2) | Recurring | Corporate debt securities | ||
Assets | ||
Corporate debt securities | 500 | |
Fair Value Measured Using - (Level 3) | Recurring | ||
Assets | ||
Money market funds | 0 | 0 |
Total | 0 | 0 |
Short-term liabilities: | ||
Contingent consideration | 1,025 | 2,114 |
Long-term liabilities: | ||
Contingent consideration | 2,418 | 3,227 |
Common stock warrant liability | 32 | 139 |
Total | 3,475 | 5,480 |
Fair Value Measured Using - (Level 3) | Recurring | Corporate equity securities | ||
Assets | ||
Corporate equity securities | $ 0 | 0 |
Fair Value Measured Using - (Level 3) | Recurring | Corporate debt securities | ||
Assets | ||
Corporate debt securities | $ 0 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Issuances, Changes in Fair Value and Classifications of Level 3 Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 5,480 | $ 447 |
Exercise of warrants | (202) | |
Ending balance | 3,475 | 5,480 |
Common Stock Warrant Liability | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Change in estimated fair value of common stock warrant liability and contingent consideration | (107) | (106) |
Contingent Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Change in estimated fair value of common stock warrant liability and contingent consideration | $ 5,341 | |
Additions to contingent consideration | 727 | |
Payment related to contingent consideration | $ (2,625) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 investment | |
Fair Value Disclosures [Abstract] | |
Number of investments | 1 |
Contingent consideration, measurement input, discount rate | 0.12 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Common Stock Warrant and Derivative Liability Valuation Assumptions (Details) - Private Placement Common Stock Warrant Liability | 12 Months Ended | |
Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Stock Price (in dollars per share) | $ 11.41 | $ 45.48 |
Exercise Price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Exercise Price (in dollars per share) | $ 1.12 | $ 1.12 |
Remaining Term (in Years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Remaining term (in years) | 3 months 10 days | 1 year 3 months 10 days |
Volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.6600 | |
Risk-Free Interest Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.0049 |
Cash and Marketable Securitie_2
Cash and Marketable Securities - Summary of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 89,921 | $ 348,485 | $ 134,669 | |
Restricted cash | 522 | 211 | 270 | |
Total cash, cash equivalents, and restricted cash at the end of the period | $ 90,443 | $ 348,696 | $ 134,939 | $ 38,479 |
Cash and Marketable Securitie_3
Cash and Marketable Securities - Summary of Marketable Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Short-term marketable securities | ||
Debt securities, amortized cost | $ 203,168 | |
Amortized Cost | 203,168 | |
Unrealized Holding Gains (Losses) | 232 | |
Fair Value | 203,400 | |
Long-term marketable securities | ||
Amortized Cost | 5,000 | $ 5,500 |
Unrealized Holding Gains (Losses) | (2,924) | (1,743) |
Fair Value | 2,076 | 3,757 |
Amortized Cost | 208,168 | |
Unrealized Holding Gains (Losses) | (2,692) | |
Fair Value | 205,476 | |
U.S. agency securities | ||
Short-term marketable securities | ||
Debt securities, amortized cost | 79,347 | |
Debt securities, unrealized gain | 452 | |
Debt securities, fair value | 79,799 | |
Corporate debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Marketable debt securities written off | 500 | |
Short-term marketable securities | ||
Debt securities, amortized cost | 123,821 | |
Debt securities, unrealized loss | (220) | |
Debt securities, fair value | 123,601 | |
Long-term marketable securities | ||
Debt securities, amortized cost | 500 | |
Debt securities, unrealized holding gains (losses) | 0 | |
Fair value | 500 | |
Corporate equity securities | ||
Long-term marketable securities | ||
Equity securities, amortized cost | 5,000 | 5,000 |
Equity securities, unrealized holding gains (losses) | (2,924) | (1,743) |
Equity securities, fair value | $ 2,076 | $ 3,257 |
Cash and Marketable Securitie_4
Cash and Marketable Securities - Summary of Maturity (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Cash and Cash Equivalents [Abstract] | |
Within one year | $ 203,168 |
After one year through five years | 0 |
Debt securities, amortized cost | $ 203,168 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) | 1 Months Ended | ||||
Dec. 31, 2021 USD ($) | Nov. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) | Jan. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 36,983,000 | $ 37,523,000 | $ 23,857,000 | ||
Transplant Pharmacy | |||||
Business Acquisition [Line Items] | |||||
Total consideration | 1,300,000 | ||||
Goodwill | 5,500,000 | ||||
Business combination, deferred tax liabilities | 600,000 | ||||
Goodwill expected to be deductible for income tax purposes | $ 0 | ||||
Transplant Pharmacy | Trademarks | |||||
Business Acquisition [Line Items] | |||||
Intangible asset, measurement input, royalty rate | 0.02 | ||||
Intangible asset, measurement input, discount rate | 0.135 | ||||
Transplant Pharmacy | General and administrative | |||||
Business Acquisition [Line Items] | |||||
Acquisition related costs | $ 300,000 | ||||
MedActionPlan | |||||
Business Acquisition [Line Items] | |||||
Total consideration | $ 3,500,000 | ||||
Goodwill | 4,900,000 | ||||
Goodwill expected to be deductible for income tax purposes | $ 0 | ||||
Intangible asset, measurement input, discount rate | 0.400 | ||||
MedActionPlan | Developed technology | |||||
Business Acquisition [Line Items] | |||||
Intangible asset, measurement input, royalty rate | 0.15 | ||||
MedActionPlan | Trademarks | |||||
Business Acquisition [Line Items] | |||||
Intangible asset, measurement input, royalty rate | 0.01 | ||||
MedActionPlan | General and administrative | |||||
Business Acquisition [Line Items] | |||||
Acquisition related costs | $ 600,000 | ||||
TransChart LLC | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 2,200,000 | ||||
Intangible assets | $ 2,000,000 |
Business Combinations - Summary
Business Combinations - Summary of Identified Intangible Assets Acquired at Acquisition Date (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Nov. 30, 2021 | Dec. 31, 2021 | |
MedActionPlan | ||
Business Acquisition [Line Items] | ||
Estimated Fair Value | $ 3,760 | |
Trademarks | Transplant Pharmacy | ||
Business Acquisition [Line Items] | ||
Estimated Fair Value | $ 2,080 | |
Weighted Average Remaining Useful Life (In Years) | 10 years | |
Trademarks | MedActionPlan | ||
Business Acquisition [Line Items] | ||
Estimated Fair Value | $ 80 | |
Weighted Average Remaining Useful Life (In Years) | 5 years | |
Customer relationships | MedActionPlan | ||
Business Acquisition [Line Items] | ||
Estimated Fair Value | $ 2,590 | |
Weighted Average Remaining Useful Life (In Years) | 10 years | |
Developed technology | MedActionPlan | ||
Business Acquisition [Line Items] | ||
Estimated Fair Value | $ 1,090 | |
Weighted Average Remaining Useful Life (In Years) | 10 years |
Business Combinations - Summa_2
Business Combinations - Summary of Consideration Paid and Provisional Amounts of Assets Acquired and Liabilities Assumed Recognized at Their Estimated Fair Value (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Jan. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 37,523 | $ 36,983 | $ 23,857 | |
TransChart, TTP, and MedActionPlan | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 17,166 | |||
Total consideration | 17,166 | |||
Current assets | 3,444 | |||
Fixed assets | 23 | |||
Identifiable intangible assets | 7,860 | |||
Other assets | 2 | |||
Current liabilities | (3,915) | |||
Noncurrent liabilities | (2,883) | |||
Total identifiable net assets acquired | 4,531 | |||
Goodwill | 12,635 | |||
Total consideration | $ 17,166 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 36,983 | $ 23,857 |
Goodwill acquired | 540 | 13,126 |
Ending balance | $ 37,523 | $ 36,983 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2022 | |
Goodwill And Intangible Assets [Line Items] | ||
Assets acquired | $ 13,400,000 | |
Goodwill impairment | $ 0 | |
Acquired and developed technology | ||
Goodwill And Intangible Assets [Line Items] | ||
Assets acquired | 4,700,000 | |
Commercialization rights | ||
Goodwill And Intangible Assets [Line Items] | ||
Assets acquired | 2,500,000 | $ 1,000,000 |
Customer relationships | ||
Goodwill And Intangible Assets [Line Items] | ||
Assets acquired | 3,700,000 | |
Trademarks and tradenames | ||
Goodwill And Intangible Assets [Line Items] | ||
Assets acquired | 2,200,000 | |
Other | ||
Goodwill And Intangible Assets [Line Items] | ||
Assets acquired | $ 300,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible assets with finite lives | ||
Gross Carrying Amount | $ 73,764 | $ 73,141 |
Accumulated Amortization | (27,175) | (21,318) |
Foreign Currency Translation | (4,788) | (2,878) |
Total future amortization expense | 41,801 | 48,945 |
Intangible Assets, Net (Excluding Goodwill) | ||
Total intangible assets, gross carrying amount | 75,014 | 74,391 |
Total intangible assets, net | 43,051 | 50,195 |
Acquired in-process technology | ||
Intangible assets with indefinite lives | ||
Net carrying amount | 1,250 | 1,250 |
Acquired and developed technology | ||
Intangible assets with finite lives | ||
Gross Carrying Amount | 35,747 | 35,874 |
Accumulated Amortization | (15,138) | (12,088) |
Foreign Currency Translation | (2,369) | (1,513) |
Total future amortization expense | $ 18,240 | $ 22,273 |
Weighted Average Remaining Useful Life (In Years) | 7 years 6 months | 8 years 1 month 6 days |
Customer relationships | ||
Intangible assets with finite lives | ||
Gross Carrying Amount | $ 21,898 | $ 21,898 |
Accumulated Amortization | (7,459) | (6,024) |
Foreign Currency Translation | (2,104) | (1,210) |
Total future amortization expense | $ 12,335 | $ 14,664 |
Weighted Average Remaining Useful Life (In Years) | 9 years | 9 years 10 months 24 days |
Commercialization rights | ||
Intangible assets with finite lives | ||
Gross Carrying Amount | $ 11,579 | $ 10,579 |
Accumulated Amortization | (3,233) | (2,030) |
Foreign Currency Translation | 0 | 0 |
Total future amortization expense | $ 8,346 | $ 8,549 |
Weighted Average Remaining Useful Life (In Years) | 6 years 7 months 6 days | 7 years 7 months 6 days |
Trademarks and tradenames | ||
Intangible assets with finite lives | ||
Gross Carrying Amount | $ 4,540 | $ 4,540 |
Accumulated Amortization | (1,345) | (988) |
Foreign Currency Translation | (315) | (155) |
Total future amortization expense | $ 2,880 | $ 3,397 |
Weighted Average Remaining Useful Life (In Years) | 8 years 6 months | 9 years 6 months |
Other | ||
Intangible assets with finite lives | ||
Gross Carrying Amount | $ 250 | |
Accumulated Amortization | (188) | |
Foreign Currency Translation | 0 | |
Total future amortization expense | $ 62 | |
Weighted Average Remaining Useful Life (In Years) | 2 months 12 days |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Summary of Finite-Lived Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | $ 6,229 | $ 5,796 | $ 4,798 |
Cost of testing services | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | 1,316 | 1,316 | 1,316 |
Cost of product | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | 1,716 | 1,905 | 1,665 |
Cost of patient and digital solutions | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | 945 | 684 | 345 |
Sales and marketing | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | $ 2,252 | $ 1,891 | $ 1,472 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Summary of Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | $ 6,147 | |
2024 | 5,911 | |
2025 | 5,742 | |
2026 | 4,808 | |
2027 | 4,794 | |
Thereafter | 14,399 | |
Total future amortization expense | 41,801 | $ 48,945 |
Cost of Testing Services | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | 1,316 | |
2024 | 1,316 | |
2025 | 1,316 | |
2026 | 1,316 | |
2027 | 1,316 | |
Thereafter | 2,825 | |
Total future amortization expense | 9,405 | |
Cost of Product | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | 1,675 | |
2024 | 1,675 | |
2025 | 1,675 | |
2026 | 743 | |
2027 | 743 | |
Thereafter | 3,294 | |
Total future amortization expense | 9,805 | |
Cost of Patient and Digital Solutions | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | 945 | |
2024 | 709 | |
2025 | 540 | |
2026 | 540 | |
2027 | 540 | |
Thereafter | 1,180 | |
Total future amortization expense | 4,454 | |
Sales and Marketing | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | 2,211 | |
2024 | 2,211 | |
2025 | 2,211 | |
2026 | 2,209 | |
2027 | 2,195 | |
Thereafter | 7,100 | |
Total future amortization expense | $ 18,137 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 2,962 | $ 3,911 |
Work in progress | 4,306 | 2,828 |
Raw materials | 11,964 | 10,447 |
Total inventory | $ 19,232 | $ 17,186 |
Balance Sheet Components - Su_2
Balance Sheet Components - Summary of Components of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 59,953 | $ 41,625 |
Less: Accumulated depreciation and amortization | (24,424) | (19,581) |
Property and equipment, net | 35,529 | 22,044 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 17,389 | 8,466 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 16,294 | 12,091 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 10,893 | 3,746 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 7,639 | 10,925 |
Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 5,570 | 5,454 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,168 | $ 943 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Depreciation expense | $ 5,200,000 | $ 2,700,000 | $ 1,900,000 | |
Finance lease, ROU asset | 0 | |||
Accumulated depreciation finance lease assets | 600,000 | 500,000 | ||
Amortization expense, included in depreciation and amortization expense | $ 100,000 | $ 100,000 | $ 100,000 | |
Proceeds from advance payment | $ 20,500,000 |
Balance Sheet Components - Su_3
Balance Sheet Components - Summary of Components of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Clinical studies | $ 14,816 | $ 10,653 |
Professional fees | 6,115 | 5,780 |
Short-term lease liability | 5,591 | 3,958 |
Deferred revenue | 5,342 | 4,208 |
Accrued royalty | 4,633 | 1,664 |
Laboratory processing fees and materials | 2,189 | 1,664 |
Deferred payments for intangible assets | 2,062 | 2,000 |
Capital expenditures | 1,316 | 2,612 |
Contingent consideration | 1,025 | 2,114 |
License and other collaboration fees | 1,000 | 0 |
Accrued shipping expenses | 489 | 668 |
Other accrued expenses | 4,553 | 2,601 |
Total accrued and other liabilities | $ 49,131 | $ 37,922 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 1 Months Ended | ||||||||
May 13, 2022 complaint | Mar. 14, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2014 milestone_payment | Dec. 31, 2022 USD ($) | Feb. 28, 2022 | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | |
Loss Contingencies [Line Items] | |||||||||
Operating lease, right-of-use asset | $ 34,689 | $ 17,993 | |||||||
Short-term lease liability | 5,591 | 3,958 | |||||||
Operating lease liability, less current portion | $ 33,406 | $ 17,394 | |||||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued and other liabilities | Accrued and other liabilities | |||||||
Operating lease, extension period | 8 years 2 months | ||||||||
Decrease in right-of-use asset and lease liability | $ 500 | ||||||||
Present value of future minimum lease payments | $ 38,997 | ||||||||
Number of milestone payments | milestone_payment | 6 | ||||||||
Unrecognized tax benefits | 5,436 | $ 4,156 | $ 4,416 | $ 3,650 | |||||
Cumulative or accrued interest and penalties related to unrecognized tax benefits | 200 | ||||||||
CAREDX, INC. vs Natera Inc. | |||||||||
Loss Contingencies [Line Items] | |||||||||
Litigation settlement | $ 44,900 | ||||||||
Number of claims filed | complaint | 2 | ||||||||
CAREDX, INC. vs Natera Inc. | Compensatory Damages | |||||||||
Loss Contingencies [Line Items] | |||||||||
Litigation settlement | 21,200 | ||||||||
CAREDX, INC. vs Natera Inc. | Punitive Damages | |||||||||
Loss Contingencies [Line Items] | |||||||||
Litigation settlement | $ 23,700 | ||||||||
Leases, Commenced In July 2022 | |||||||||
Loss Contingencies [Line Items] | |||||||||
Operating lease, right-of-use asset | 14,300 | ||||||||
Present value of future minimum lease payments | 15,300 | ||||||||
Leases, Commenced In August 2022 | |||||||||
Loss Contingencies [Line Items] | |||||||||
Operating lease, right-of-use asset | 5,800 | ||||||||
Present value of future minimum lease payments | 6,000 | ||||||||
Minimum | |||||||||
Loss Contingencies [Line Items] | |||||||||
Lessee, operating lease, term of contract | 2 years | 2 years | |||||||
Operating lease, extension period | 5 years | 5 years | |||||||
Maximum | |||||||||
Loss Contingencies [Line Items] | |||||||||
Lessee, operating lease, term of contract | 10 years 6 months | 10 years 6 months | |||||||
Operating lease, extension period | 10 years | 10 years | |||||||
Noncurrent Liabilities | |||||||||
Loss Contingencies [Line Items] | |||||||||
Unrecognized tax benefits | $ 200 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease cost | $ 6,716 | $ 5,134 | $ 4,441 |
Finance lease cost | 0 | 53 | 205 |
Total lease cost | $ 6,716 | $ 5,187 | $ 4,646 |
Weighted-average remaining lease term - Operating leases (in years) | 6 years 3 months 3 days | ||
Weighted-average discount rate - Operating leases (%) | 7.10% |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Noncash Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash flows used for operating leases | $ 3,665 | $ 2,580 | $ 934 |
Operating cash flows used for finance leases | 0 | 63 | 199 |
Total | $ 3,665 | $ 2,643 | $ 1,133 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 7,807 | |
2024 | 7,903 | |
2025 | 7,651 | |
2026 | 7,019 | |
2027 | 7,166 | |
Thereafter | 10,605 | |
Total lease payments | 48,151 | |
Less imputed interest | 9,154 | |
Present value of future minimum lease payments | 38,997 | |
Less operating lease liability, current portion | 5,591 | $ 3,958 |
Operating lease liability, long-term portion | $ 33,406 | $ 17,394 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||
Dec. 03, 2022 | Feb. 11, 2021 | Jan. 25, 2021 | Jun. 15, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 50 | ||||||
Stock repurchase program, period in force | 2 years | ||||||
Number of common stock purchased (in shares) | 50,051 | ||||||
Stock repurchased value | $ 0.6 | ||||||
Stock repurchase program, remaining authorized repurchase amount | $ 49.4 | ||||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | ||||
Public Offering | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued in transaction (in shares) | 1,923,077 | 4,492,187 | |||||
Common stock offer (in dollars per share) | $ 91 | ||||||
Consideration received on transaction | $ 164 | ||||||
Over-allotments | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued in transaction (in shares) | 288,461 | ||||||
Consideration received on transaction | $ 24.7 |
401(K) Plan (Details)
401(K) Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Defined benefit plan, type | Postemployment Retirement Benefits [Member] | ||
Expense incurred related to plan | $ 1.8 | $ 1.4 | $ 0.7 |
Warrants - Additional Informati
Warrants - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |||
Number of warrants exercised (in shares) | 0 | ||
Warrants exercised (in shares) | 3,000 | ||
Proceeds from exercise of warrants | $ 0 | $ 4 | $ 352 |
Warrants - Summary of Component
Warrants - Summary of Components of Warrants Outstanding (Details) - Common Stock | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 3,132 |
April 2016 | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 1.12 |
Warrants outstanding (in shares) | 3,132 |
April 2016 | Remaining Term (in Years) | |
Class of Warrant or Right [Line Items] | |
Original Term (in years) | 7 years |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 21, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total intrinsic value of options exercised | $ 1,600,000 | $ 42,900,000 | $ 19,200,000 | |||
Total unrecognized compensation costs related to stock options and RSUs | $ 27,700,000 | $ 27,700,000 | ||||
Stock options and RSUs expected weighted average period | 2 years 11 months 19 days | |||||
Weighted average fair value of options to purchase common stock granted (in dollars per share) | $ 19.51 | $ 52.65 | $ 18.97 | |||
Total fair value of options vested during period | $ 10,600,000 | |||||
Shares available for issuance (in shares) | 1,490,462 | 1,490,462 | 2,066,529 | |||
Stock-based compensation expense | $ 46,553,000 | $ 36,081,000 | $ 23,401,000 | |||
Share-based compensation expense, tax benefit recognized | 0 | |||||
Share-based compensation costs, capitalized | 0 | |||||
General and administrative | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 20,779,000 | 14,403,000 | 10,597,000 | |||
Non Employee Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued (in shares) | 289,480 | |||||
Fair value of shares issued | $ 2,300,000 | |||||
Non Employee Director | General and administrative | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 400,000 | $ 300,000 | $ 300,000 | |||
2019 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum number of common stock shares that might be granted (in shares) | 130,302 | 130,302 | ||||
2014 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for future issuance of common stock (in shares) | 1,297,408 | 1,297,408 | ||||
2016 Inducement Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for future issuance of common stock (in shares) | 62,752 | 62,752 | ||||
Maximum number of common stock shares that might be granted (in shares) | 155,500 | |||||
2014 Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum portion of earning an employee may contribute to the ESPP Plan | 15% | 15% | ||||
Maximum value of shares which an employee can purchase per calendar year | $ 25,000 | |||||
Offering period for employee stock purchases | 6 months | |||||
Applicable exercise date an offering period shall be equal to percentage of the lower of fair market value of common stock | 85% | |||||
Shares issued under ESPP (in shares) | 47,025 | 67,570 | ||||
Aggregate proceeds from the issuance of shares | $ 500,000 | $ 1,200,000 | ||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued under ESPP (in shares) | 93,422 | 45,464 | ||||
Aggregate proceeds from the issuance of shares | $ 3,000,000 | $ 2,100,000 | ||||
Shares available for issuance (in shares) | 640,847 | 640,847 | ||||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total fair value of RSUs vested during the period | $ 20,000,000 | |||||
Intrinsic value of RSUs | $ 37,100,000 | 37,100,000 | ||||
Total unrecognized compensation costs related to stock options and RSUs | $ 74,700,000 | $ 74,700,000 | ||||
Stock options and RSUs expected weighted average period | 2 years 6 months 18 days | |||||
Restricted stock units | 2019 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expiration period | 10 years | |||||
Termination of employment | 3 months | |||||
Vesting period | 4 years | |||||
Stock Options | 2019 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Options, RSUs Activity under 2014 Equity Incentive Plan and 2016 Inducement Plan and Related Information (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Shares Available for Grant | |
Beginning balance (in shares) | 2,066,529 |
Additional options authorized (in shares) | 2,116,934 |
Common stock awards for services (in shares) | (12,764) |
RSUs granted (in shares) | (2,397,369) |
Options granted (in shares) | (1,864,465) |
Repurchases of common stock under employee incentive plans (in shares) | 211,265 |
RSUs forfeited (in shares) | 706,738 |
Options forfeited (in shares) | 554,427 |
Options expired (in shares) | 109,167 |
Ending balance (in shares) | 1,490,462 |
RSUs granted (in shares) | 2,397,369 |
RSUs forfeited (in shares) | (706,738) |
Stock Options Outstanding | |
Beginning balance (in shares) | 1,863,633 |
Options granted (in shares) | 1,864,465 |
Options exercised (in shares) | (142,579) |
Options forfeited (in shares) | (554,427) |
Options expired (in shares) | (109,167) |
Ending balance (in shares) | 2,921,925 |
Weighted average exercise price, beginning balance (in dollars per share) | $ / shares | $ 29.33 |
Options granted, weighted average exercise price (in dollars per share) | $ / shares | 28.35 |
Options exercised, weighted average exercise price (in dollars per share) | $ / shares | 17.07 |
Options forfeited, weighted-average exercise price (in dollars per share) | $ / shares | 34.12 |
Options expired, weighted-average exercise price (in dollars per share) | $ / shares | 33.96 |
Weighted average exercise price, ending balance (in dollars per share) | $ / shares | $ 28.13 |
Restricted stock units | |
Shares Available for Grant | |
RSUs granted (in shares) | (2,397,369) |
RSUs forfeited (in shares) | 706,738 |
RSUs, beginning balance (in shares) | 2,047,657 |
RSUs granted (in shares) | 2,397,369 |
RSUs vested (in shares) | (643,892) |
RSUs forfeited (in shares) | (706,738) |
RSUs, ending balance (in shares) | 3,094,396 |
Stock Options Outstanding | |
Outstanding, beginning balance, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 50.21 |
RSUs granted, weighted-average grant date fair value (in dollars per share) | $ / shares | 27.79 |
RSUs vested, weighted-average grant date fair value (in dollars per share) | $ / shares | 42.59 |
RSUs forfeited, weighted-average grant date fair value (in dollars per share) | $ / shares | 43.80 |
Outstanding, ending balance, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 37.39 |
Stock Incentive Plans - Summa_2
Stock Incentive Plans - Summary of Options Outstanding Vested and Expected to Vest (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Vested (in shares) | shares | 1,186 |
Expected to vest (in shares) | shares | 1,592 |
Total (in shares) | shares | 2,778 |
Vested (in dollars per share) | $ / shares | $ 25.39 |
Expected to vest (in dollars per share) | $ / shares | $ 30.37 |
Vested, weighted average remaining life | 5 years 8 months 19 days |
Expected to vest, weighted average remaining contractual life | 8 years 11 months 8 days |
Vested, aggregate intrinsic value | $ | $ 1,558 |
Expected to vest, aggregate intrinsic value | $ | 0 |
Aggregate Intrinsic Value, Total | $ | $ 1,558 |
Stock Incentive Plans - Summa_3
Stock Incentive Plans - Summary of Weighted-Average Assumptions Used to Estimated Fair Value of Share-Based Awards (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Expected dividend yield | 0% | 0% | 0% |
Risk-free interest rate, minimum | 2.51% | 0.09% | 0.17% |
Risk-free interest rate, maximum | 4.76% | 0.19% | 1.57% |
Employee Stock Purchase Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 67.79% | 53.10% | 62.56% |
Employee Stock Purchase Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 77.88% | 67.79% | 93.17% |
Shares of common stock subject to outstanding options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years 11 months 15 days | 5 years 11 months 8 days | 5 years 11 months 23 days |
Expected volatility | 77.62% | 77.70% | 75.56% |
Risk-free interest rate | 2.74% | 0.80% | 0.69% |
Expected dividend yield | 0% | 0% | 0% |
Stock Incentive Plans - Summa_4
Stock Incentive Plans - Summary of Expense Relating to Employee and Nonemployee Stock-Based Payment Awards from Stock Options and RSUs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 46,553 | $ 36,081 | $ 23,401 |
Cost of Testing Services | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,529 | 2,358 | 1,493 |
Cost of Product | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,120 | 579 | 391 |
Cost of Patient and Digital Solutions | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,331 | 728 | 449 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 7,391 | 7,126 | 4,676 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 14,403 | 10,887 | 5,795 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 20,779 | $ 14,403 | $ 10,597 |
Income Taxes - Summary of Loss
Income Taxes - Summary of Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (73,089) | $ (27,921) | $ (14,233) |
Foreign | (3,145) | (4,167) | (5,517) |
Loss before income taxes | $ (76,234) | $ (32,088) | $ (19,750) |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Provision for (Benefit from) Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current | |||
Federal | $ 145 | $ 89 | $ (58) |
State | 328 | 2 | 1 |
Foreign | 184 | (139) | 160 |
Total current income tax expense (benefit) | 657 | (48) | 103 |
Deferred | |||
Federal | (130) | (409) | 91 |
State | 75 | (127) | (52) |
Foreign | (223) | (842) | (1,178) |
Total deferred income tax benefit | (278) | (1,378) | (1,139) |
Income tax expense (benefit) | $ 379 | $ (1,426) | $ (1,036) |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for Tax Differed from Amounts Computed by Applying U.S. Federal Income Tax Rate to Loss Before Income (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Depreciation and Amortization, Percent [Abstract] | |||
Federal tax statutory rate | 21% | 21% | 21% |
Stock-based compensation | (2.80%) | 38.80% | 13.50% |
Change in valuation allowance | (16.90%) | 86.40% | (34.40%) |
Foreign rate differential | (0.20%) | 0.70% | 1.80% |
Warrant revaluation | 0% | 0% | (1.70%) |
Interest expense | 0% | 0% | (0.30%) |
Non-deductible executive compensation | (2.10%) | (23.40%) | (6.80%) |
Research credits | 1.80% | 6.90% | 3.90% |
Changes in net operating loss carryforwards, including expirations | (0.50%) | (125.10%) | 6.90% |
Other | (0.80%) | (0.90%) | 1.20% |
Effective income tax rate | (0.50%) | 4.40% | 5.20% |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Income Tax Assets and Liabilities (Details) XUA in Thousands, $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 XUA |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 26,658 | $ 30,234 | |
Tax credit carryforwards | 9,138 | 7,185 | |
Accruals | 2,971 | 6,054 | |
Property and equipment | 0 | 1,043 | |
Lease liability | 9,250 | 4,639 | |
Section 174 capitalized costs | 20,602 | 0 | |
Stock-based compensation | 7,798 | 7,401 | |
Other | 959 | 587 | |
Gross deferred tax assets | 77,376 | 57,143 | |
Valuation allowance | (59,499) | (45,635) | |
Total deferred tax assets | 17,877 | 11,508 | |
Deferred tax liabilities: | |||
Purchased intangibles | (6,615) | (7,439) | |
Operating leases right-of-use assets | (8,189) | (3,828) | |
Property and equipment | (2,548) | 0 | |
Other | (497) | (656) | |
Total deferred tax liabilities | (17,849) | $ (11,923) | |
Net deferred tax assets (liabilities) | $ 28 | ||
Net deferred tax assets (liabilities) | XUA | XUA (415) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes Disclosure [Line Items] | ||||
Increase (decrease) in valuation allowance | $ 13,900,000 | $ (27,200,000) | ||
Net operating loss carryforwards | 3,900,000 | |||
Net unrecognized tax benefit would impact the effective tax rate | 0 | |||
Net unrecognized tax benefit | 5,436,000 | 4,156,000 | $ 4,416,000 | $ 3,650,000 |
Cumulative or accrued interest and penalties related to unrecognized tax benefits | 200,000 | |||
Domestic Federal | ||||
Income Taxes Disclosure [Line Items] | ||||
Net operating loss carryforwards | 90,500,000 | |||
Tax credit carryforwards | 6,500,000 | |||
Net operating loss carryforwards | 158,400,000 | |||
Domestic State | ||||
Income Taxes Disclosure [Line Items] | ||||
Net operating loss carryforwards | 61,900,000 | |||
Net operating loss carryforwards | $ 50,500,000 | |||
Domestic State | California | ||||
Income Taxes Disclosure [Line Items] | ||||
Tax credit carryforwards | 10,200,000 | |||
Foreign | ||||
Income Taxes Disclosure [Line Items] | ||||
Net operating loss carryforwards | $ 13,600,000 | |||
Statutes of limitation for income tax returns start year | 3 years | |||
Statutes of limitation for income tax returns end year | 6 years |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at the beginning of the year | $ 4,156 | $ 4,416 | $ 3,650 |
Additions based on tax positions related to the current year | 1,255 | 805 | 824 |
Additions based on tax positions related to prior years | 25 | 130 | 0 |
Decreases based on tax positions related to prior years | 0 | (1,195) | (58) |
Balance at the end of the year | $ 5,436 | $ 4,156 | $ 4,416 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Segment Reporting - Summary of
Segment Reporting - Summary of Reportable Revenues by Geographic Regions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 321,793 | $ 296,397 | $ 192,194 |
United States | |||
Segment Reporting Information [Line Items] | |||
Revenues | 307,543 | 282,009 | 181,503 |
Europe | |||
Segment Reporting Information [Line Items] | |||
Revenues | 9,549 | 9,822 | 7,562 |
Rest of World | |||
Segment Reporting Information [Line Items] | |||
Revenues | 4,701 | 4,566 | 3,129 |
Testing services revenue | |||
Segment Reporting Information [Line Items] | |||
Revenues | 263,748 | 259,285 | 163,610 |
Testing services revenue | United States | |||
Segment Reporting Information [Line Items] | |||
Revenues | 262,959 | 258,412 | 163,221 |
Testing services revenue | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Revenues | 789 | 873 | 389 |
Product revenue | |||
Segment Reporting Information [Line Items] | |||
Revenues | 29,251 | 26,832 | 19,302 |
Product revenue | United States | |||
Segment Reporting Information [Line Items] | |||
Revenues | 16,409 | 13,512 | 9,219 |
Product revenue | Europe | |||
Segment Reporting Information [Line Items] | |||
Revenues | 9,081 | 9,740 | 7,475 |
Product revenue | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Revenues | 3,761 | 3,580 | 2,608 |
Patient and digital solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues | 28,794 | 10,280 | 9,282 |
Patient and digital solutions | United States | |||
Segment Reporting Information [Line Items] | |||
Revenues | 28,175 | 10,085 | 9,063 |
Patient and digital solutions | Europe | |||
Segment Reporting Information [Line Items] | |||
Revenues | 468 | 82 | 87 |
Patient and digital solutions | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 151 | $ 113 | $ 132 |
Segment Reporting - Summary o_2
Segment Reporting - Summary of Long-Lived Assets Consisting of Property and Equipment, Net by Geographic Regions (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 35,529 | $ 22,044 |
United States | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | 35,020 | 21,444 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | 405 | 403 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 104 | $ 197 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | 2 Months Ended | 12 Months Ended |
Feb. 27, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||
Number of common stock purchased (in shares) | 50,051 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of common stock purchased (in shares) | 25,622 | |
Stock repurchased value per share (in usd per share) | $ 13.53 |