Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 04, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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, 4th Floor | |
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 $0.001 per share | |
Trading Symbol | CDNA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,168,848 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001217234 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 87,786 | $ 89,921 |
Marketable securities | 194,887 | 203,168 |
Accounts receivable | 51,625 | 66,312 |
Inventory | 18,840 | 19,232 |
Prepaid and other current assets | 7,676 | 9,216 |
Total current assets | 360,814 | 387,849 |
Property and equipment, net | 36,084 | 35,529 |
Operating leases right-of-use assets | 32,118 | 34,689 |
Intangible assets, net | 43,529 | 43,051 |
Goodwill | 39,655 | 37,523 |
Restricted cash | 584 | 522 |
Other assets | 2,036 | 3,828 |
Total assets | 514,820 | 542,991 |
Current liabilities: | ||
Accounts payable | 9,880 | 9,942 |
Accrued compensation | 14,441 | 16,902 |
Accrued and other liabilities | 50,175 | 49,131 |
Total current liabilities | 74,496 | 75,975 |
Deferred tax liability | 51 | 0 |
Common stock warrant liability | 0 | 32 |
Deferred payments for intangible assets | 4,224 | 2,418 |
Operating lease liability, less current portion | 30,589 | 33,406 |
Other liabilities | 247 | 249 |
Total liabilities | 109,607 | 112,080 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock: $0.001 par value; 10,000,000 shares authorized at June 30, 2023 and December 31, 2022; no shares issued and outstanding at June 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock: $0.001 par value; 100,000,000 shares authorized at June 30, 2023 and December 31, 2022; 54,013,601 shares issued and outstanding at June 30, 2023; 53,583,301 shares issued and 53,533,250 shares outstanding at December 31, 2022 | 52 | 52 |
Additional paid-in capital | 923,514 | 898,806 |
Accumulated other comprehensive loss | (8,450) | (7,503) |
Accumulated deficit | (509,903) | (460,444) |
Total stockholders’ equity | 405,213 | 430,911 |
Total liabilities and stockholders’ equity | $ 514,820 | $ 542,991 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd 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 usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 54,013,601 | 53,583,301 |
Common stock, shares outstanding (in shares) | 54,013,601 | 53,533,250 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 70,301,000 | $ 80,634,000 | $ 147,563,000 | $ 160,050,000 |
Operating expenses: | ||||
Research and development | 20,233,000 | 22,632,000 | 44,590,000 | 44,512,000 |
Sales and marketing | 21,630,000 | 26,950,000 | 44,861,000 | 50,098,000 |
General and administrative | 29,327,000 | 25,232,000 | 57,359,000 | 51,791,000 |
Restructuring costs | 848,000 | 0 | 848,000 | 0 |
Total operating expenses | 97,925,000 | 102,353,000 | 199,511,000 | 200,822,000 |
Loss from operations | (27,624,000) | (21,719,000) | (51,948,000) | (40,772,000) |
Other income (expense): | ||||
Interest income, net | 2,871,000 | 478,000 | 5,537,000 | 667,000 |
Change in estimated fair value of common stock warrant liability | 3,000 | 48,000 | 10,000 | 75,000 |
Other expense, net | (271,000) | (553,000) | (2,245,000) | (1,376,000) |
Total other income (expense) | 2,603,000 | (27,000) | 3,302,000 | (634,000) |
Loss before income taxes | (25,021,000) | (21,746,000) | (48,646,000) | (41,406,000) |
Income tax benefit (expense) | 68,000 | 49,000 | (56,000) | 61,000 |
Net loss | $ (24,953,000) | $ (21,697,000) | $ (48,702,000) | $ (41,345,000) |
Net loss per share | ||||
Basic (in dollars per share) | $ (0.46) | $ (0.41) | $ (0.91) | $ (0.78) |
Diluted (in dollars per share) | $ (0.46) | $ (0.41) | $ (0.91) | $ (0.78) |
Weighted-average shares used to compute net loss per share: | ||||
Basic (in shares) | 53,846,260 | 53,249,545 | 53,745,299 | 53,133,149 |
Diluted (in shares) | 53,846,260 | 53,249,545 | 53,745,299 | 53,133,149 |
Testing services revenue | ||||
Revenue: | ||||
Total revenue | $ 53,414,000 | $ 67,135,000 | $ 115,198,000 | $ 133,579,000 |
Operating expenses: | ||||
Cost of testing services, product, digital, and other | 15,324,000 | 18,230,000 | 30,620,000 | 35,858,000 |
Product revenue | ||||
Revenue: | ||||
Total revenue | 7,876,000 | 6,714,000 | 14,737,000 | 13,502,000 |
Operating expenses: | ||||
Cost of testing services, product, digital, and other | 3,926,000 | 3,887,000 | 7,992,000 | 8,286,000 |
Patient and digital solutions revenue | ||||
Revenue: | ||||
Total revenue | 9,011,000 | 6,785,000 | 17,628,000 | 12,969,000 |
Operating expenses: | ||||
Cost of testing services, product, digital, and other | $ 6,637,000 | $ 5,422,000 | $ 13,241,000 | $ 10,277,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (24,953) | $ (21,697) | $ (48,702) | $ (41,345) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments, net of tax | (1,011) | (2,092) | (947) | (2,512) |
Net comprehensive loss | $ (25,964) | $ (23,789) | $ (49,649) | $ (43,857) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 52,923,360 | ||||
Beginning 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) | 25,852 | ||||
Issuance of common stock under employee stock purchase plan | 999 | 999 | |||
RSU settlements, net of shares withheld (in shares) | 64,819 | ||||
RSU settlements, net of shares withheld | (1,482) | (1,482) | |||
Issuance of common stock for services (in shares) | 1,249 | ||||
Issuance of common stock for services | 58 | 58 | |||
Issuance of common stock for cash upon exercise of stock options (in shares) | 69,993 | ||||
Issuance of common stock for cash upon exercise of stock options | 1,598 | 1,598 | |||
Employee stock-based compensation expense | 10,563 | 10,563 | |||
Foreign currency translation adjustment | (420) | (420) | |||
Net loss | (19,648) | (19,648) | |||
Ending balance (in shares) at Mar. 31, 2022 | 53,085,273 | ||||
Ending balance at Mar. 31, 2022 | 457,544 | $ 52 | 865,419 | (5,090) | (402,837) |
Beginning balance (in shares) at Dec. 31, 2021 | 52,923,360 | ||||
Beginning balance at Dec. 31, 2021 | 465,876 | $ 52 | 853,683 | (4,670) | (383,189) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation adjustment | (2,512) | ||||
Net loss | (41,345) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 53,323,712 | ||||
Ending balance at Jun. 30, 2022 | 443,549 | $ 52 | 875,213 | (7,182) | (424,534) |
Beginning balance (in shares) at Dec. 31, 2021 | 52,923,360 | ||||
Beginning balance at Dec. 31, 2021 | 465,876 | $ 52 | 853,683 | (4,670) | (383,189) |
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) |
Beginning balance (in shares) at Mar. 31, 2022 | 53,085,273 | ||||
Beginning balance at Mar. 31, 2022 | 457,544 | $ 52 | 865,419 | (5,090) | (402,837) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
RSU settlements, net of shares withheld (in shares) | 216,950 | ||||
RSU settlements, net of shares withheld | (3,211) | (3,211) | |||
Issuance of common stock for services (in shares) | 2,156 | ||||
Issuance of common stock for services | 79 | 79 | |||
Issuance of common stock for cash upon exercise of stock options (in shares) | 19,333 | ||||
Issuance of common stock for cash upon exercise of stock options | 413 | 413 | |||
Employee stock-based compensation expense | 12,513 | 12,513 | |||
Foreign currency translation adjustment | (2,092) | (2,092) | |||
Net loss | (21,697) | (21,697) | |||
Ending balance (in shares) at Jun. 30, 2022 | 53,323,712 | ||||
Ending balance at Jun. 30, 2022 | 443,549 | $ 52 | 875,213 | (7,182) | (424,534) |
Beginning balance (in shares) at Dec. 31, 2022 | 53,533,250 | ||||
Beginning balance at Dec. 31, 2022 | 430,911 | $ 52 | 898,806 | (7,503) | (460,444) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under employee stock purchase plan (in shares) | 47,025 | ||||
Issuance of common stock under employee stock purchase plan | 456 | 456 | |||
Repurchase and retirement of common stock (in shares) | (59,472) | ||||
Repurchase and retirement of common stock | (690) | (690) | |||
RSU settlements, net of shares withheld (in shares) | 123,910 | ||||
RSU settlements, net of shares withheld | (785) | (785) | |||
Issuance of common stock for services (in shares) | 7,649 | ||||
Issuance of common stock for services | 93 | 93 | |||
Issuance of common stock for cash upon exercise of stock options (in shares) | 820 | ||||
Issuance of common stock for cash upon exercise of stock options | 2 | 2 | |||
Employee stock-based compensation expense | 13,719 | 13,719 | |||
Foreign currency translation adjustment | 64 | 64 | |||
Net loss | (23,749) | (23,749) | |||
Ending balance (in shares) at Mar. 31, 2023 | 53,653,182 | ||||
Ending balance at Mar. 31, 2023 | 420,021 | $ 52 | 912,291 | (7,439) | (484,883) |
Beginning balance (in shares) at Dec. 31, 2022 | 53,533,250 | ||||
Beginning balance at Dec. 31, 2022 | $ 430,911 | $ 52 | 898,806 | (7,503) | (460,444) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for cash upon exercise of stock options (in shares) | 3,750 | ||||
Foreign currency translation adjustment | $ (947) | ||||
Net loss | (48,702) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 54,013,601 | ||||
Ending balance at Jun. 30, 2023 | 405,213 | $ 52 | 923,514 | (8,450) | (509,903) |
Beginning balance (in shares) at Mar. 31, 2023 | 53,653,182 | ||||
Beginning balance at Mar. 31, 2023 | 420,021 | $ 52 | 912,291 | (7,439) | (484,883) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Repurchase and retirement of common stock (in shares) | (12,000) | ||||
Repurchase and retirement of common stock | (67) | (67) | |||
RSU settlements, net of shares withheld (in shares) | 362,710 | ||||
RSU settlements, net of shares withheld | (1,508) | (1,508) | |||
Issuance of common stock for services (in shares) | 3,647 | ||||
Issuance of common stock for services | 36 | 36 | |||
Issuance of common stock for cash upon exercise of stock options (in shares) | 2,930 | ||||
Issuance of common stock for cash upon exercise of stock options | 6 | 6 | |||
Issuance of common stock for cash upon exercise of warrants (in shares) | 3,132 | ||||
Issuance of common stock for cash upon exercise of warrants | 26 | 26 | |||
Employee stock-based compensation expense | 12,663 | 12,663 | |||
Foreign currency translation adjustment | (1,011) | (1,011) | |||
Net loss | (24,953) | (24,953) | |||
Ending balance (in shares) at Jun. 30, 2023 | 54,013,601 | ||||
Ending balance at Jun. 30, 2023 | $ 405,213 | $ 52 | $ 923,514 | $ (8,450) | $ (509,903) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating activities: | ||
Net loss | $ (48,702) | $ (41,345) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock-based compensation | 26,454 | 23,227 |
Depreciation and amortization | 7,093 | 5,363 |
Asset impairments and write-downs | 1,000 | 0 |
Amortization of right-of-use assets | 2,652 | 1,822 |
Unrealized loss on long-term marketable equity securities | 852 | 486 |
Revaluation of contingent consideration to estimated fair value | 488 | 564 |
Amortization of premium on short-term marketable securities, net | (2,091) | 540 |
Revaluation of common stock warrant liability to estimated fair value | (10) | (75) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 15,225 | (10,562) |
Inventory | 12 | (2,506) |
Prepaid and other assets | 2,101 | (514) |
Operating leases liabilities, net | (2,677) | (1,962) |
Accounts payable | 14 | 4,486 |
Accrued compensation | (2,528) | (12,290) |
Accrued and other liabilities | 289 | 7,579 |
Change in deferred taxes | 0 | (158) |
Net cash provided by (used in) operating activities | 172 | (25,345) |
Investing activities: | ||
Acquisition of business, net of cash acquired | (4,562) | (102) |
Acquisition of intangible assets | 0 | (2,100) |
Purchases of short-term marketable securities | (135,271) | (182,913) |
Maturities of short-term marketable securities | 145,643 | 42,984 |
Purchase of corporate equity securities | (100) | 0 |
Additions of capital expenditures | (5,133) | (13,111) |
Net cash provided by (used in) investing activities | 577 | (155,242) |
Financing activities: | ||
Proceeds from issuance of common stock under employee stock purchase plan | 456 | 999 |
Taxes paid related to net share settlement of restricted stock units | (2,164) | (3,892) |
Proceeds from exercise of warrants | 4 | 0 |
Proceeds from exercise of stock options | 7 | 2,011 |
Payment of contingent consideration | (250) | (250) |
Repurchase and retirement of common stock | (757) | 0 |
Net cash used in financing activities | (2,704) | (1,132) |
Effect of exchange rate changes on cash and cash equivalents | (118) | 59 |
Net decrease in cash, cash equivalents and restricted cash | (2,073) | (181,660) |
Cash, cash equivalents, and restricted cash at beginning of period | 90,443 | 348,696 |
Cash, cash equivalents, and restricted cash at end of period | $ 88,370 | $ 167,036 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2023 | |
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. 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 and HLA Data Systems, LLC (“HLA Data Systems”) in January 2023. Testing Services AlloSure Kidney has been a covered service for Medicare beneficiaries since October 2017 through a Local Coverage Determination (“LCD”) first issued by Palmetto MolDX (“MolDX”), which was formed to identify and establish coverage and reimbursement for molecular diagnostics tests, and then adopted by Noridian Healthcare Solutions, the Company’s Medicare Administrative Contractor (“Noridian”). The Medicare reimbursement rate for AlloSure Kidney is currently $2,841. AlloMap Heart has been a covered service for Medicare beneficiaries since January 2006. The Medicare reimbursement rate for AlloMap Heart is currently $3,240. In October 2020, the Company received a final MolDX Medicare coverage decision for AlloSure Heart. Noridian issued a parallel coverage policy granting coverage for AlloSure Heart when used in conjunction with AlloMap Heart, which became effective in December 2020. The Medicare reimbursement rate for AlloSure Heart is currently $2,753. Effective May 9, 2023, AlloSure Lung is covered for Medicare beneficiaries through the MolDX LCD L38568. The Medicare reimbursement rate for AlloSure Lung is $2,753. Effective April 1, 2023, HeartCare, a multimodality testing service that includes both AlloMap Heart and AlloSure Heart, in a given patient encounter, for heart transplant surveillance is covered, subject to certain limitations, for Medicare beneficiaries through the MolDX LCD L38568. The Medicare reimbursement rate for HeartCare is $5,993 . On March 2, 2023 , MolDX issued a new billing article, with an effective date of March 31, 2023, related to the LCD entitled Molecular Testing for Solid Organ Allograft Rejection (the “Billing Article”). Prior to the Billing Article’s effective date, MolDX informed the affected parties, including CareDx, that enforcement of the revised billing practices outlined in the Billing Article would not be implemented until June 30, 2023. MolDX informed CareDx that its automatic adjudication process would remain in place until June 30, 2023, though claims submitted prior to that date must comply with the applicable LCDs. On May 4, 2023, MolDX issued a revised new billing article with an effective date of March 31, 2023 (the “Revised Billing Article” and together with the Billing Article, the “Billing Articles”). The Revised Billing Article impacts Medicare coverage for AlloSure Kidney, AlloSure Heart and AlloMap Heart and requires certain companies, including CareDx, to implement new processes to address the requirements related to Medicare claim submissions. MolDX has stated that it views the Billing Article as clarifying existing coverage, especially as it relates to when tests are covered in the for-cause and surveillance contexts. MolDX has acknowledged, however, that the Billing Article is a change as it relates to billing more than one test during a single patient encounter. Noridian has not yet adopted the new Billing Articles. Although the Company believes the Billing Articles are inconsistent with the LCDs, Noridian’s and MolDX’s responses to public comments explaining the intended scope of various LCDs, and medical necessity, the Company determined to pause its Medicare reimbursement submissions for AlloSure Kidney commencing on March 7, 2023 to allow the Company further time to evaluate the implications of the Billing Article and update its billing processes for AlloSure Kidney tests by educating clinicians and working with centers to update CareDx’s test order forms to capture the new information required under the Billing Article. Accordingly, the Company did not submit claims for approximately 3,200 AlloSure Kidney tests for Medicare reimbursement for the period from March 7, 2023 through March 31, 2023 and did not recognize revenue on these claims in the first quarter of 2023 aggregating to approximately $8.9 million (the “Impacted March Tests”). On May 18, 2023, the Company submitted a letter to Noridian explaining, among other things, (i) the Company’s belief that the Billing Articles impose new restrictions on Medicare coverage for the CareDx tests from those contained in the existing LCDs, (ii) that the Company planned to submit claims for reimbursement for the Impacted March Tests for which the Company has not obtained additional information from the ordering physicians to be able to specifically determine whether these tests meet the new coverage restrictions contained in the Billing Articles, and (iii) that AlloSure Kidney orders with a date of service on or after March 31, 2023 for other indications outside the parameters of the Revised Billing Article, or where the reason for testing is not specified by the ordering physician, will either not be billed pending the receipt of additional information regarding whether the orders meet the coverage restrictions contained in the Revised Billing Article or submitted with a test description that is intended to identify those tests as falling outside the parameters of the Revised Billing Article. Following the submission of this letter to Noridian on May 18, 2023, the Company submitted claims for reimbursement for the Impacted March Tests for which the Company subsequently received payment from Noridian and recognized revenue totaling approximately $7.8 million in the second quarter of 2023. The Company has certain unbilled AlloSure Kidney claims with a service date after March 31, 2023, where the reason for testing is not specified by the ordering physician. The Company is in the process of supplementation for these tests. If these AlloSure Kidney tests are within the parameters of the Revised Billing Article, the Company will bill and would expect to recognize revenue in the quarter that the supplementation is completed. CareDx continued the Medicare reimbursement submissions for AlloMap Heart or AlloSure Heart following the issuance of the Billing Articles. In addition, CareDx informed Noridian on May 18, 2023 that until Noridian adopts the Revised Billing Article, CareDx will continue to submit AlloSure Heart tests for reimbursement only when used in conjunction with AlloMap Heart according to requirements of the Billing Article currently effective at Noridian. The Company also informed Noridian on May 18, 2023 that (i) until June 30, 2023, it plans to submit claims for reimbursement for AlloMap Heart and AlloSure Heart tests for which the Company has not obtained additional information from the ordering physicians to be able to specifically determine whether these tests meet the new coverage restrictions contained in the Billing Articles, and (ii) AlloSure Heart and AlloMap Heart orders placed on or after June 30, 2023 for other indications outside the surveillance and for-cause parameters of the Revised Billing Article, or where the reason for testing is not specified by the ordering physician, will either not be billed pending the receipt of additional information regarding whether the orders meet the coverage restrictions contained in the Revised Billing Article or submitted with a test description that is intended to identify those tests as falling outside the parameters of the Revised Billing Article. 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 also received positive coverage decisions for reimbursement from many of the largest U.S. private payers. In May 2021 and March 2023, the Company purchased a minority investment of common stock in the biotechnology company Miromatrix Medical, Inc. (“Miromatrix”), for an aggregate amount of $5.1 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 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 TxAccess, 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 eve nts . Also in June 2021, the Company entered into a strategic agreement with OrganX, which was amended in April 2022, 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. In January 2023, the Company acquired HLA Data Systems, a Texas-based company that provides software and interoperability solutions for the histocompatibility and immunogenetics community. HLA Data Systems is a leader in the laboratory information management industry for human leukocyte antigen laboratories. 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 $509.9 million at June 30, 2023. As of June 30, 2023, the Company had cash, cash equivalents and marketable securities of $282.7 million and no debt outstanding. Shelf Registration Statement On May 10, 2023, the Company filed a universal shelf registration statement (File No. 333-271814) (the “Registration Statement”), whereby the Company can sell from time to time shares of its common stock, preferred stock, debt securities, warrants, units or rights comprised of any combination of these securities, for the Company’s own account in one or more offerings under the Registration Statement. The terms of any offering under the Registration Statement will be established at the time of such offering and will be described in a prospectus supplement to the Registration Statement filed with the Securities and Exchange Commission prior to the completion of any such offering. 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 of shares of its common stock over a period of up to two years, |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies and estimates used in preparation of the unaudited condensed consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the "SEC") on February 27, 2023. Material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 are reflected below. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and follow the requirements of the SEC for interim reporting. As permitted under those rules, certain notes and other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The condensed consolidated balance sheet as of December 31, 2022 has been derived from audited consolidated financial statements as of that date but does not include all of the financial information required by U.S. GAAP for complete financial statements. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Use of Estimates The preparation of unaudited condensed 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 unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to transaction price estimates used for testing services 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 For the three months ended June 30, 2023 and 2022, approximately 44% and 54%, respectively, of total revenue was derived from Medicare. For the six months ended June 30, 2023 and 2022, approximately 43% and 54%, respectively, of total revenue was derived from Medicare. As of June 30, 2023 and December 31, 2022, approximately 33% and 27%, respectively, of accounts receivable was due from Medicare. No other payer or customer represented more than 10% of accounts receivable at either June 30, 2023 or December 31, 2022. 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 June 30, 2023, 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 condensed 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 i n interest income (expense), net on the condensed 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 (expense), 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 June 30, 2023, the Company's long-term marketable securities consisted of corporate equity securities and corporate debt securities. These long-term marketable securities are classified as other assets on the condensed 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 condensed 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 condensed consolidated statements of operations. Leases The Company adopted Accounting Standard Codification (“ASC”) Topic 842, Leases 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 condensed 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 June 30, 2023, the Company’s leases had remaining terms of 0.42 years to 9.60 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 Accounting Standards Codification ("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. On March 2, 2023, MolDX issued a new Billing Article, with an effective date of March 31, 2023. The Billing Article impacts Medicare coverage for AlloSure Kidney, AlloSure Heart and AlloMap and requires the Company to implement new processes to address requirements related to Medicare claim submissions. ASC 606-10-25-1 requires the Company to assess whether it is probable that it will collect substantially all of the consideration to which it will be entitled when determining if a contract with a customer exists. Based upon the Company’s review of the Billing Article, it was determined to pause Medicare reimbursement submissions for AlloSure Kidney commencing on March 7, 2023 that created uncertainty around the collection of the claims. Accordingly, the Company did not recognize revenue for approximately 3,200 AlloSure Kidney tests aggregating to $8.9 million for the three months ended March 31, 2023. On May 18, 2023, the Company submitted a letter to Noridian explaining, among other things, (i) the Company’s belief that the Billing Articles impose new restrictions on Medicare coverage for the CareDx tests from those contained in the existing LCDs, (ii) that the Company planned to submit claims for reimbursement for the Impacted March Tests for which the Company has not obtained additional information from the ordering physicians to be able to specifically determine whether these tests meet the new coverage restrictions contained in the Billing Articles, and (iii) that AlloSure Kidney orders with a date of service on or after March 31, 2023 for other indications outside the parameters of the Revised Billing Article, or where the reason for testing is not specified by the ordering physician, will either not be billed pending the receipt of additional information regarding whether the orders meet the coverage restrictions contained in the Revised Billing Article or submitted with a test description that is intended to identify those tests as falling outside the parameters of the Revised Billing Article. Following the submission of this letter to Noridian, on May 18, 2023, the Company submitted claims for reimbursement for the Impacted March Tests, for which the Company subsequently received payment from Noridian and recognized revenue totaling approximately $7.8 million in the second quarter of 2023. The Company has certain unbilled AlloSure Kidney claims with a service date after March 31, 2023, where the reason for testing is not specified by the ordering physician. The Company is in the process of supplementation for these tests. If these AlloSure Kidney tests are within the parameters of the Revised Billing Article, the Company will bill and would expect to recognize revenue in the quarter that the supplementation is completed. The Company continues its Medicare reimbursement submissions for AlloMap Heart or AlloSure Heart following the issuance of the Billing Articles. In addition, the Company informed Noridian on May 18, 2023 that until Noridian adopts the Revised Billing Article, the Company will continue to submit AlloSure Heart tests for reimbursement only when used in conjunction with AlloMap Heart. 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 the risk of loss is 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 software as a service ("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 agreements are the following: (i) implementation services and delivery of the perpetual software license, which 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. Recent Accounting Pronouncements There were no recently adopted accounting standards which would have a material effect on the Company's condensed consolidated financial statements and accompanying disclosures, and no recently issued accounting standards that are expected to have a material impact on the Company's condensed consolidated financial statements and accompanying disclosures. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2023 | |
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. 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): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net loss used to compute basic and diluted net loss per share $ (24,953) $ (21,697) $ (48,702) $ (41,345) Denominator: Weighted-average shares used to compute basic and diluted net loss per share 53,846,260 53,249,545 53,745,299 53,133,149 Net loss per share: Basic and diluted $ (0.46) $ (0.41) $ (0.91) $ (0.78) The following potentially dilutive securities have been excluded from diluted net loss per share as of June 30, 2023 and 2022 because their effect would be antidilutive: Three and Six Months Ended June 30, 2023 2022 Shares of common stock subject to outstanding options 3,383,661 2,497,986 Shares of common stock subject to outstanding common stock warrants — 3,132 Restricted stock units 5,190,029 2,591,882 Total common stock equivalents 8,573,690 5,093,000 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
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 tables set forth the Company’s financial assets and liabilities, measured at fair value on a recurring basis, as of June 30, 2023 and December 31, 2022 (in thousands): June 30, 2023 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Cash equivalents: Money market funds $ 59,446 $ — $ — $ 59,446 Long-term marketable securities: Corporate equity securities 1,325 — — 1,325 Total $ 60,771 $ — $ — $ 60,771 Liabilities Short-term liabilities: Contingent consideration $ — $ — $ 928 $ 928 Long-term liabilities: Contingent consideration — — 4,224 4,224 Total $ — $ — $ 5,152 $ 5,152 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 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): (Level 3) Common Stock Warrant Liability and Contingent Consideration Balance as of December 31, 2022 $ 3,475 Exercise of warrants (22) Change in estimated fair value of common stock warrant liability (10) Change in estimated fair value of contingent consideration 488 Addition of estimated fair value of contingent consideration 1,471 Payments related to contingent consideration (250) Balance as of June 30, 2023 $ 5,152 During March 2023, the Company wrote off $1.0 million of its investment in convertible preferred shares from a private company which was carried at cost. This private company's operations are in the process of being liquidated. The fair value of this investment was based on Level 3 inputs. 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 June 30, 2023 and December 31, 2022, money market funds were included as cash and cash equivalents in the condensed consolidated balance sheets. • 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 condensed 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 based on management’s estimate of the probability of success and projected revenues for revenue-based considerations at discounted rates ranging from 7% to 12% at June 30, 2023 and at 12% 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 income or expense within operating expenses in the consolidated statements of operations 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 |
Cash and Marketable Securities
Cash and Marketable Securities | 6 Months Ended |
Jun. 30, 2023 | |
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 condensed consolidated balance sheets to the amount reported within the condensed consolidated statements of cash flows is shown in the table below (in thousands): June 30, 2023 June 30, 2022 Cash and cash equivalents $ 87,786 $ 166,832 Restricted cash 584 204 Total cash, cash equivalents, and restricted cash at the end of the period $ 88,370 $ 167,036 Marketable Securities All short-term marketable securities were considered held-to-maturity at June 30, 2023. At June 30, 2023, 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 as of June 30, 2023. 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. The long-term marketable equity securities were recorded at fair market value with changes in the fair value recognized in earnings at June 30, 2023 and December 31, 2022. The long-term marketable debt securities were considered available-for-sale at June 30, 2023 and December 31, 2022. The contractual maturities of the long-term marketable debt securities are less than three years. The amortized cost, gross unrealized holding gains (losses), and fair value of the Company’s marketable securities by major security type at each balance sheet date are summarized in the tables below (in thousands): June 30, 2023 Amortized Cost Unrealized Holding Gains (Losses) Fair Value Short-term marketable securities: U.S. agency securities $ 101,666 $ 1,672 $ 103,338 Corporate debt securities 93,221 354 93,575 Total short-term marketable securities 194,887 2,026 196,913 Long-term marketable securities: Corporate equity securities 5,100 (3,775) 1,325 Total long-term marketable securities 5,100 (3,775) 1,325 Total $ 199,987 $ (1,749) $ 198,238 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 Contractual maturities of the marketable securities at each balance sheet date are as follows (in thousands): June 30, 2023 December 31, 2022 Within one year $ 194,887 $ 203,168 After one year through five years — — Total $ 194,887 $ 203,168 |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS HLA Data Systems In January 2023, the Company acquired HLA Data Systems, a Texas-based company that provides software and interoperability solutions for the histocompatibility and immunogenetics community. The Company acquired HLA Data Systems with a combination of cash consideration paid upfront and contingent consideration with a fair value of $1.3 million. The Company accounted for the transaction as a business combination using the acquisition method of accounting. Acquisition-related costs of $0.4 million associated with the acquisition were expensed as incurred, and classified as part of general and administrative expenses in the condensed consolidated statement of operations. Goodwill of $2.1 million arising from the acquisition primarily consists of synergies from integrating HLA Data Systems' technology with the current testing and digital solutions offered by the Company. The acquisition of HLA Data Systems will provide a robust and comprehensive Laboratory Information Management System and support the laboratory workflows. None of the goodwill is expected to be deductible for income tax purposes. All of the goodwill has been assigned to the Company’s existing operating segment. The following table summarizes the fair values of the intangible assets acquired as of the acquisition date ($ in thousands): Estimated Fair Value Estimated Useful Lives (Years) Customer relationships $ 3,010 13 Developed technology 770 11 Trademarks 320 17 Total $ 4,100 Customer relationships acquired by the Company represent the fair value of future projected revenue that is expected to be derived from sales of HLA Data Systems’ 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 HLA Data Systems' proprietary software. The trademark acquired consists primarily of the HLA Data Systems 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 10% and 2% were used to estimate the fair value of the developed technology and the trademark, respectively. A discount rate of 24% was utilized in estimating the fair value of these three intangible assets. The pro forma impact of the HLA Data Systems acquisition is not material, and the results of operations of the acquisition have been included in the Company's condensed consolidated statements of operations from the respective acquisition date. Consideration Paid The following table summarizes the consideration paid for HLA Data Systems and the amounts of the assets acquired and liabilities assumed recognized at their estimated fair value at the acquisition date (in thousands): Total Consideration Cash $ 4,562 Total consideration $ 4,562 Recognized amounts of identifiable assets acquired and liabilities assumed Current assets $ 1,162 Identifiable intangible assets 4,100 Current liabilities (786) Other current liabilities (699) Contingent considerations (1,300) Other liabilities (7) Total identifiable net assets acquired 2,470 Goodwill 2,092 Total consideration $ 4,562 The preliminary allocation of the purchase price to assets acquired and liabilities assumed was based on the fair value of such assets and liabilities as of the acquisition date. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
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 upon the occurrence of certain events or substantive changes in circumstances. There were no indicators of impairment in the three and six months ended June 30, 2023. The balance of the Company's goodwill was $39.7 million as of June 30, 2023 and $37.5 million as of December 31, 2022. Intangible Assets The following table presents details of the Company’s intangible assets as of June 30, 2023 ($ in thousands): June 30, 2023 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Weighted Average Remaining Useful Life Intangible assets with finite lives: Acquired and developed technology $ 36,517 $ (16,728) $ (2,546) $ 17,243 7.3 Customer relationships 24,908 (8,253) (2,316) 14,339 9.3 Commercialization rights 11,579 (3,865) — 7,714 6.1 Trademarks and tradenames 4,860 (1,524) (353) 2,983 9.0 Total intangible assets with finite lives 77,864 (30,370) (5,215) 42,279 Acquired in-process technology 1,250 — — 1,250 Total intangible assets $ 79,114 $ (30,370) $ (5,215) $ 43,529 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 Carrying Amount Weighted Average Remaining Useful Life 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 Acquisition of Intangible Assets In January 2023, the Company acquired the intangible assets of HLA Data Systems. The intangible assets are included in Acquired and developed technology, Customer relationships and Trademarks and tradenames as of June 30, 2023. 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 condensed consolidated statements of operations. The following table summarizes the Company's amortization expense of intangible assets (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of testing services $ 329 $ 329 $ 658 $ 658 Cost of product 416 437 834 890 Cost of patient and digital solutions 255 236 503 472 Sales & marketing 606 543 1,201 1,148 Total $ 1,606 $ 1,545 $ 3,196 $ 3,168 The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of June 30, 2023 (in thousands): Years Ending December 31, Cost of Testing Services Cost of Product Cost of Patient and Digital Solutions Sales and Marketing Total Remainder of 2023 $ 658 $ 813 $ 507 $ 1,220 $ 3,198 2024 1,316 1,626 779 2,429 6,150 2025 1,316 1,626 610 2,429 5,981 2026 1,316 733 610 2,426 5,085 2027 1,316 733 610 2,413 5,072 Thereafter 2,825 3,263 1,605 9,100 16,793 Total future amortization expense $ 8,747 $ 8,794 $ 4,721 $ 20,017 $ 42,279 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | BALANCE SHEET COMPONENTS Inventory Inventory consisted of the following (in thousands): June 30, 2023 December 31, 2022 Finished goods $ 3,661 $ 2,962 Work in progress 5,494 4,306 Raw materials 9,685 11,964 Total inventory $ 18,840 $ 19,232 Accrued and Other Liabilities Accrued and other liabilities consisted of the following (in thousands): June 30, 2023 December 31, 2022 Clinical studies $ 13,797 $ 14,816 Professional fees 10,858 6,115 Deferred revenue 6,058 5,342 Short-term lease liability 5,809 5,591 Deferred payments for intangible assets 2,650 2,062 Accrued royalty 2,380 4,633 Laboratory processing fees and materials 2,084 2,189 License and other collaboration fees 1,000 1,000 Contingent consideration 928 1,025 Capital expenditures 420 1,316 Accrued shipping expenses 329 489 Other accrued expenses 3,862 4,553 Total accrued and other liabilities $ 50,175 $ 49,131 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
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; 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 June 30, 2023, the carrying value of the ROU asset was $32.1 million. The related current and non-current liabilities as of June 30, 2023 were $5.8 million and $30.6 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 three and six months ended June 30, 2023 and 2022 (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Operating lease cost $ 1,972 $ 1,372 $ 3,955 $ 2,785 Total lease cost $ 1,972 $ 1,372 $ 3,955 $ 2,785 June 30, 2023 December 31, 2022 Other information: Weighted-average remaining lease term (in years) 5.84 6.26 Weighted-average discount rate (%) 7.1 % 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 respective lease terms ranging from 5 to 10 years. In June 2022, the Company modified the termination date of the lease agreement for its former 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. The following table summarizes the ROU assets and lease liabilities for certain lease agreements which commenced in July 2022 (in thousands): June 30, 2023 December 31, 2022 ROU assets $ 13,227 $ 14,321 Lease liabilities 14,241 15,302 The following table summarizes the ROU assets and lease liabilities for certain lease agreements which commenced in August 2022 (in thousands): June 30, 2023 December 31, 2022 ROU assets $ 5,582 $ 5,814 Lease liabilities 5,836 6,005 Maturities of operating lease liabilities as of June 30, 2023 are as follows (in thousands): Years Ending December 31, Operating Leases Remainder of 2023 $ 3,821 2024 7,960 2025 7,709 2026 7,019 2027 7,166 Thereafter 10,604 Total lease payments 44,279 Less imputed interest 7,881 Present value of future minimum lease payments 36,398 Less operating lease liability, current portion 5,809 Operating lease liability, long-term portion $ 30,589 The following table summarizes the supplemental cash flow information related to leases for the three and six months ended June 30, 2023 and 2022 (in thousands): Three Months Ended Six Months Ended June 30, 2023 2022 2023 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 1,366 $ 952 $ 2,699 $ 1,924 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. In March 2023. the Stanford License agreement was amended, which reduces the maximum royalty rate to a lower rate at which the Company may be liable to Stanford effective from April 2022. As a result, the Company reversed the excess liability in March 2023. Illumina On May 4, 2018, the Company entered into a license agreement with Illumina, Inc. (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. See also Note 16. Other Commitments Pursuant to the Illumina Agreement, the Company has agreed to minimum purchase commitments of finished products and raw materials from Illumina, Inc. 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 finding that Natera violated the Lanham Act by falsely advertising the scientific performance of its Prospera transplant test and awarding the Company $44.9 million in damages, comprised of $21.2 million in compensatory damages and $23.7 million in punitive damages. In July 2023, the Court upheld and reaffirmed the March 2022 jury verdict but did not uphold the monetary damages awarded by the jury, which the Company intends to appeal. In August 2023, the Court issued an injunction prohibiting Natera from making the claims the jury found to be false advertising. 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 May 2023, the Company submitted a petition of certiorari to the U.S. Supreme Court for consideration of the patent infringement suit. In addition, 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. Discovery is ongoing. 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. This state regulatory agency 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 and additional inquiries in 2023 regarding licensure issues in that 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 requests 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, any state regulatory agency information requests, 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 condensed consolidated financial statements indicates that it is probable that a liability had been incurred at the date of the condensed 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, Dr. Olymbios filed a motion to withdraw from arbitration before Judicial Arbitration and Mediation Services, Inc., which was denied on August 18, 2022. The matter is currently proceeding in arbitration. The Company intends to vigorously pursue its arbitration proceeding against Dr. Olymbios and to vigorously defend itself against Dr. Olymbios’ claims. The Company believes it has good and substantial support for it claims and good and substantial defenses to the claims alleged in the suit by Dr. Olymbios, 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 complaint on November 28, 2022. On January 27, 2023, defendants moved to dismiss all claims and to strike certain allegations in the amended complaint. On May 24, 2023, the court granted the Company’s motion to strike and motion to dismiss, dismissing all claims against defendants with leave to amend. On June 28, 2023, plaintiffs filed a second amended complaint against the Company, Reginald Seeto, Ankur Dhingra, and Peter Maag. Under a briefing schedule ordered by the court on June 12, 2023, defendants’ motion to dismiss and motion to strike the second amended complaint was filed on July 26, 2023, plaintiffs’ opposition is due August 23, 2023 and defendants’ reply is due September 13, 2023. The court has scheduled oral argument for October 31, 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 Actions 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 Drs. Seeto and Maag and Mr. Dhingra, 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. 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 Drs. Seeto and Maag and Mr. Dhingra 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. On March 9, 2023, the court consolidated the Edelman Derivative Action and the Stevenson Derivative Action and stayed both actions pursuant to the terms of the stay order in the Edelman Derivative Action. The consolidated derivative action remains stayed. The Company intends to defend itself vigorously, and believes that the Company has good and substantial defenses to the claims alleged in the suits, but there are no guarantees that the Company will prevail. Insurance Matter In December 2022, the Company filed a lawsuit against its Directors and Officers liability insurance carriers in San Mateo County Superior Court. The Company seeks a declaration that costs and fees incurred by the Company in responding to governmental investigatory requests are covered under its policies. The Company also asserts breach of contract against its primary insurer Great American Insurance Company for denying the claim. The policies provide up to $15 million in coverage limits. The Company intends to vigorously pursue its claims. The Company believes it has good and substantial support for its claims, but there is no guarantee that the Company will prevail in these claims. |
401(K) Plan
401(K) Plan | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
401(K) Plan | 401(K) PLANThe Company sponsors a 401(k) |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2023 | |
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 condensed 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. In the three and six months ended June 30, 2023, warrants to purchase approximately 3,000 shares of common stock were exercised for cash proceeds of $4,000. In the three and six months ended June 30, 2022, no warrants to purchase shares of common stock were exercised. As of June 30, 2023, no warrants to purchase common stock were outstanding. |
Stock Incentive Plans
Stock Incentive Plans | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Incentive Plans | STOCK INCENTIVE PLANS Stock Options and Restricted Stock Units (“RSU”) The following table summarizes option and RSU activity under the Company’s 2014 Equity Incentive Plan, 2016 Inducement Equity Incentive Plan, and 2019 Inducement Equity Incentive Plan, and related information: Shares Stock Weighted- Number of Weighted- Balance—December 31, 2022 1,490,462 2,921,925 $ 28.13 3,094,396 $ 37.39 Additional shares authorized 2,141,330 — — — — Common stock awards for services (11,296) — — — — RSUs granted (3,302,174) — — 3,302,174 11.17 RSUs vested — — — (714,320) 35.92 Options granted (680,788) 680,788 12.60 — — Options exercised — (3,750) 1.98 — — Repurchase of common stock under employee incentive plans 233,356 — — — — RSUs forfeited 491,831 — — (491,831) 28.09 Options forfeited 118,886 (118,886) 32.21 — — Options expired 96,416 (96,416) 33.70 — — Balance—June 30, 2023 578,023 3,383,661 $ 24.57 5,190,419 $ 21.71 The total intrinsic value of options exercised was $19,000 and $31,000 for the three and six months ended June 30, 2023, respectively. The total intrinsic value of options exercised was $0.3 million and $1.3 million for the three and six months ended June 30, 2022, respectively. As of June 30, 2023, the total intrinsic value of outstanding RSUs was approximately $45.3 million and there were $72.9 million of unrecognized compensation costs related to RSUs, which are expected to be recognized over a weighted-average period of 2.71 years. Options outstanding that have vested and are expected to vest at June 30, 2023 are as follows: Number of Shares Issued Weighted-Average Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Vested 1,757 $ 24.34 6.77 $ 854 Expected to vest 1,323 26.16 8.94 — Total 3,080 $ 854 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 June 30, 2023 for stock options that were in-the-money. The total fair value of options that vested during the three and six months ended June 30, 2023 was $8.2 million and $12.4 million, respectively. As of June 30, 2023, there were approximately $23.2 million of unrecognized compensation costs related to stock options, which are expected to be recognized over a weighted-average period of 2.86 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 respective 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 2023 that ended on June 30, 2023, 143,817 shares were purchased pursuant to the ESPP for aggregate proceeds of $1.0 million from the issuance of such shares, which occurred on July 6, 2023. During the offering period in 2022 that ended on December 31, 2022, 47,025 shares were purchased pursuant to the ESPP for aggregate proceeds of $0.5 million from the issuance of such shares, which occurred on January 2, 2023. 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: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Employee stock options Expected term (in years) 5.0 5.9 5.6 5.9 Expected volatility 76.63% 76.94% 77.86% 76.94% Risk-free interest rate 3.99% 2.88% 3.67% 2.41% Expected dividend yield —% —% —% —% Employee stock purchase plan Expected term (in years) 0.5 0.5 0.5 0.5 Expected volatility 93.38% 67.79% 93.38% 67.79% Risk-free interest rate 5.47% 2.51% 5.47% 2.51% 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 non-employee stock-based awards for the three and six months ended June 30, 2023 and 2022, included in the condensed consolidated statements of operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of testing services $ 492 $ 566 $ 971 $ 585 Cost of product 274 402 634 530 Cost of patient and digital solutions 367 391 769 583 Research and development 1,704 2,323 3,666 4,513 Sales and marketing 2,779 3,907 6,516 7,030 General and administrative 7,084 5,004 13,898 9,986 Total $ 12,700 $ 12,593 $ 26,454 $ 23,227 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 expense were capitalized for the periods presented. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company’s effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses and other permanent differences between income before income taxes and taxable income. For the three and six months ended June 30, 2023, the Company recorded an income tax benefit of $68,000 and an income tax expense of $56,000, respectively. For the three and six months ended June 30, 2022, the Company recorded an income tax benefit of $49,000 and $61,000, respectively. The income tax benefit of $68,000 and the income tax expense of $56,000 for the three and six months ended June 30, 2023 is primarily attributable to the U.S. current tax expense and the decrease of deferred tax assets on income generated in Australia. 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. consolidated net deferred tax assets. The Company has also placed a valuation allowance on the net deferred tax assets of its Sweden operations. Accordingly, the U.S. and Sweden net deferred tax assets have been offset by a full valuation allowance. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2023 | |
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): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Testing services revenue United States $ 53,269 $ 66,905 $ 114,916 $ 133,128 Rest of World 145 230 282 451 $ 53,414 $ 67,135 $ 115,198 $ 133,579 Product revenue United States $ 4,320 $ 3,577 $ 8,047 $ 7,190 Europe 2,532 2,383 4,993 4,625 Rest of World 1,024 754 1,697 1,687 $ 7,876 $ 6,714 $ 14,737 $ 13,502 Patient and digital solutions revenue United States $ 8,889 $ 6,525 $ 17,395 $ 12,678 Europe 121 210 205 220 Rest of World 1 50 28 71 $ 9,011 $ 6,785 $ 17,628 $ 12,969 Total United States $ 66,478 $ 77,007 $ 140,358 $ 152,996 Total Europe $ 2,653 $ 2,593 $ 5,198 $ 4,845 Total Rest of World $ 1,170 $ 1,034 $ 2,007 $ 2,209 Total $ 70,301 $ 80,634 $ 147,563 $ 160,050 The following table summarizes long-lived assets, consisting of property and equipment, net, by geographic regions (in thousands): June 30, 2023 December 31, 2022 Long-lived assets: United States $ 35,515 $ 35,020 Europe 489 405 Rest of World 80 104 Total $ 36,084 $ 35,529 |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING 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 the Company's operations in Fremantle, Australia, terminating its employees in that location and vacating its facilities there. The Company incurred immaterial restructuring charges for each of the three and six months ended June 30, 2023. The Company expects to complete the closure of its Australia location in June 2024. In May 2023, the Company announced a reduction of its U.S. workforce to simplify and streamline its organization and strengthen the overall effectiveness of its operations. The restructuring charges are primarily related to employee severance pay and related costs. As a result of this plan, the Company incurred $0.8 million in restructuring charges for the three months ended June 30, 2023 . |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Settlement of Obligation with Cibiltech In July 2023, the Company entered into a settlement agreement (the “Settlement Agreement”), pursuant to which the Company agreed to pay a certain amount of its obligation owed to Cibiltech. A judicial court in Paris, France, granted the liquidation of Cibiltech, which filed for bankruptcy. In the Settlement Agreement, Cibiltech irrevocably waived and relinquished any and all claims, demands, grievances, proceeding, actions or other requests, whether judicial, administrative, arbitral or otherwise, against the Company. The outstanding obligation of the Company with Cibiltech as of June 30, 2023 was waived and relinquished, except for the amount that the Company agreed to per the Settlement Agreement. Securities Holders’ Agreement In July 2023, the Company entered into a Securities Holders’ Agreement (the “Agreement”) with a private entity based in France. The private entity was established to continue Cibiltech’s activity, which consists of designing, developing, publishing, promoting, distributing, and marketing of software related to predictive solutions, to monitoring and/or to remote monitoring in the field of human organ allotrasplantation, allografting, and chronic organ diseases. The private entity retained all assets of Cibiltech, including its licenses. Pursuant to the Agreement, the Company agreed to invest a certain amount in the private entity in order to continue the commercialization of the iBox technology. Business Combination In July 2023, the Company acquired MediGO, Inc. (“MediGO”), an organ transplant supply chain and logistics company. MediGO provides access to donated organs by digitally transforming donation and transplantation workflows to increase organ utilization. Its comprehensive software platform optimizes complex logistics from referral to recovery and during the critical movement of organs and teams, gives organ procurement organizations and transplant centers the ability to unify decentralized stockholders, coordinate resources and make vital decisions with the goal of increasing organ utilization and improving equity and access to transplantation. 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. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||||
Net loss | $ (24,953) | $ (23,749) | $ (21,697) | $ (19,648) | $ (48,702) | $ (41,345) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
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 $509.9 million at June 30, 2023. As of June 30, 2023, the Company had cash, cash equivalents and marketable securities of $282.7 million and no debt outstanding. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and follow the requirements of the SEC for interim reporting. As permitted under those rules, certain notes and other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The condensed consolidated balance sheet as of December 31, 2022 has been derived from audited consolidated financial statements as of that date but does not include all of the financial information required by U.S. GAAP for complete financial statements. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed 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 unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to transaction price estimates used for testing services 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 | Concentrations of Credit Risk and Other Risks and Uncertainties For the three months ended June 30, 2023 and 2022, approximately 44% and 54%, respectively, of total revenue was derived from Medicare. For the six months ended June 30, 2023 and 2022, approximately 43% and 54%, respectively, of total revenue was derived from Medicare. As of June 30, 2023 and December 31, 2022, approximately 33% and 27%, respectively, of accounts receivable was due from Medicare. No other payer or customer represented more than 10% of accounts receivable at either June 30, 2023 or December 31, 2022. |
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 June 30, 2023, 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 condensed 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 i n interest income (expense), net on the condensed 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 (expense), 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 June 30, 2023, the Company's long-term marketable securities consisted of corporate equity securities and corporate debt securities. These long-term marketable securities are classified as other assets on the condensed consolidated balance sheet . |
Leases | Leases The Company adopted Accounting Standard Codification (“ASC”) Topic 842, Leases 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 condensed 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. |
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 Accounting Standards Codification ("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. On March 2, 2023, MolDX issued a new Billing Article, with an effective date of March 31, 2023. The Billing Article impacts Medicare coverage for AlloSure Kidney, AlloSure Heart and AlloMap and requires the Company to implement new processes to address requirements related to Medicare claim submissions. ASC 606-10-25-1 requires the Company to assess whether it is probable that it will collect substantially all of the consideration to which it will be entitled when determining if a contract with a customer exists. Based upon the Company’s review of the Billing Article, it was determined to pause Medicare reimbursement submissions for AlloSure Kidney commencing on March 7, 2023 that created uncertainty around the collection of the claims. Accordingly, the Company did not recognize revenue for approximately 3,200 AlloSure Kidney tests aggregating to $8.9 million for the three months ended March 31, 2023. On May 18, 2023, the Company submitted a letter to Noridian explaining, among other things, (i) the Company’s belief that the Billing Articles impose new restrictions on Medicare coverage for the CareDx tests from those contained in the existing LCDs, (ii) that the Company planned to submit claims for reimbursement for the Impacted March Tests for which the Company has not obtained additional information from the ordering physicians to be able to specifically determine whether these tests meet the new coverage restrictions contained in the Billing Articles, and (iii) that AlloSure Kidney orders with a date of service on or after March 31, 2023 for other indications outside the parameters of the Revised Billing Article, or where the reason for testing is not specified by the ordering physician, will either not be billed pending the receipt of additional information regarding whether the orders meet the coverage restrictions contained in the Revised Billing Article or submitted with a test description that is intended to identify those tests as falling outside the parameters of the Revised Billing Article. Following the submission of this letter to Noridian, on May 18, 2023, the Company submitted claims for reimbursement for the Impacted March Tests, for which the Company subsequently received payment from Noridian and recognized revenue totaling approximately $7.8 million in the second quarter of 2023. The Company has certain unbilled AlloSure Kidney claims with a service date after March 31, 2023, where the reason for testing is not specified by the ordering physician. The Company is in the process of supplementation for these tests. If these AlloSure Kidney tests are within the parameters of the Revised Billing Article, the Company will bill and would expect to recognize revenue in the quarter that the supplementation is completed. The Company continues its Medicare reimbursement submissions for AlloMap Heart or AlloSure Heart following the issuance of the Billing Articles. In addition, the Company informed Noridian on May 18, 2023 that until Noridian adopts the Revised Billing Article, the Company will continue to submit AlloSure Heart tests for reimbursement only when used in conjunction with AlloMap Heart. 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 the risk of loss is 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 software as a service ("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 agreements are the following: (i) implementation services and delivery of the perpetual software license, which 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There were no recently adopted accounting standards which would have a material effect on the Company's condensed consolidated financial statements and accompanying disclosures, and no recently issued accounting standards that are expected to have a material impact on the Company's condensed consolidated financial statements and accompanying disclosures. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net loss used to compute basic and diluted net loss per share $ (24,953) $ (21,697) $ (48,702) $ (41,345) Denominator: Weighted-average shares used to compute basic and diluted net loss per share 53,846,260 53,249,545 53,745,299 53,133,149 Net loss per share: Basic and diluted $ (0.46) $ (0.41) $ (0.91) $ (0.78) |
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 as of June 30, 2023 and 2022 because their effect would be antidilutive: Three and Six Months Ended June 30, 2023 2022 Shares of common stock subject to outstanding options 3,383,661 2,497,986 Shares of common stock subject to outstanding common stock warrants — 3,132 Restricted stock units 5,190,029 2,591,882 Total common stock equivalents 8,573,690 5,093,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The following tables set forth the Company’s financial assets and liabilities, measured at fair value on a recurring basis, as of June 30, 2023 and December 31, 2022 (in thousands): June 30, 2023 Fair Value Measured Using (Level 1) (Level 2) (Level 3) Total Balance Assets Cash equivalents: Money market funds $ 59,446 $ — $ — $ 59,446 Long-term marketable securities: Corporate equity securities 1,325 — — 1,325 Total $ 60,771 $ — $ — $ 60,771 Liabilities Short-term liabilities: Contingent consideration $ — $ — $ 928 $ 928 Long-term liabilities: Contingent consideration — — 4,224 4,224 Total $ — $ — $ 5,152 $ 5,152 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 |
Summary of Issuances, Exercises, 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): (Level 3) Common Stock Warrant Liability and Contingent Consideration Balance as of December 31, 2022 $ 3,475 Exercise of warrants (22) Change in estimated fair value of common stock warrant liability (10) Change in estimated fair value of contingent consideration 488 Addition of estimated fair value of contingent consideration 1,471 Payments related to contingent consideration (250) Balance as of June 30, 2023 $ 5,152 |
Cash and Marketable Securities
Cash and Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | A reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the amount reported within the condensed consolidated statements of cash flows is shown in the table below (in thousands): June 30, 2023 June 30, 2022 Cash and cash equivalents $ 87,786 $ 166,832 Restricted cash 584 204 Total cash, cash equivalents, and restricted cash at the end of the period $ 88,370 $ 167,036 |
Schedule of Marketable Securities | The amortized cost, gross unrealized holding gains (losses), and fair value of the Company’s marketable securities by major security type at each balance sheet date are summarized in the tables below (in thousands): June 30, 2023 Amortized Cost Unrealized Holding Gains (Losses) Fair Value Short-term marketable securities: U.S. agency securities $ 101,666 $ 1,672 $ 103,338 Corporate debt securities 93,221 354 93,575 Total short-term marketable securities 194,887 2,026 196,913 Long-term marketable securities: Corporate equity securities 5,100 (3,775) 1,325 Total long-term marketable securities 5,100 (3,775) 1,325 Total $ 199,987 $ (1,749) $ 198,238 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 Contractual maturities of the marketable securities at each balance sheet date are as follows (in thousands): June 30, 2023 December 31, 2022 Within one year $ 194,887 $ 203,168 After one year through five years — — Total $ 194,887 $ 203,168 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Identified Intangible Assets Acquired at Acquisition Date | 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 $ 3,010 13 Developed technology 770 11 Trademarks 320 17 Total $ 4,100 |
Summary of Fair Values of Assets Acquired and Liabilities Assumed as of Acquisition Date | The following table summarizes the consideration paid for HLA Data Systems and the amounts of the assets acquired and liabilities assumed recognized at their estimated fair value at the acquisition date (in thousands): Total Consideration Cash $ 4,562 Total consideration $ 4,562 Recognized amounts of identifiable assets acquired and liabilities assumed Current assets $ 1,162 Identifiable intangible assets 4,100 Current liabilities (786) Other current liabilities (699) Contingent considerations (1,300) Other liabilities (7) Total identifiable net assets acquired 2,470 Goodwill 2,092 Total consideration $ 4,562 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | The following table presents details of the Company’s intangible assets as of June 30, 2023 ($ in thousands): June 30, 2023 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount Weighted Average Remaining Useful Life Intangible assets with finite lives: Acquired and developed technology $ 36,517 $ (16,728) $ (2,546) $ 17,243 7.3 Customer relationships 24,908 (8,253) (2,316) 14,339 9.3 Commercialization rights 11,579 (3,865) — 7,714 6.1 Trademarks and tradenames 4,860 (1,524) (353) 2,983 9.0 Total intangible assets with finite lives 77,864 (30,370) (5,215) 42,279 Acquired in-process technology 1,250 — — 1,250 Total intangible assets $ 79,114 $ (30,370) $ (5,215) $ 43,529 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 Carrying Amount Weighted Average Remaining Useful Life 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 |
Summary of Finite-Lived Intangible Assets Amortization Expense | The following table summarizes the Company's amortization expense of intangible assets (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of testing services $ 329 $ 329 $ 658 $ 658 Cost of product 416 437 834 890 Cost of patient and digital solutions 255 236 503 472 Sales & marketing 606 543 1,201 1,148 Total $ 1,606 $ 1,545 $ 3,196 $ 3,168 |
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 June 30, 2023 (in thousands): Years Ending December 31, Cost of Testing Services Cost of Product Cost of Patient and Digital Solutions Sales and Marketing Total Remainder of 2023 $ 658 $ 813 $ 507 $ 1,220 $ 3,198 2024 1,316 1,626 779 2,429 6,150 2025 1,316 1,626 610 2,429 5,981 2026 1,316 733 610 2,426 5,085 2027 1,316 733 610 2,413 5,072 Thereafter 2,825 3,263 1,605 9,100 16,793 Total future amortization expense $ 8,747 $ 8,794 $ 4,721 $ 20,017 $ 42,279 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Inventory | Inventory consisted of the following (in thousands): June 30, 2023 December 31, 2022 Finished goods $ 3,661 $ 2,962 Work in progress 5,494 4,306 Raw materials 9,685 11,964 Total inventory $ 18,840 $ 19,232 |
Components of Accrued and Other Liabilities | Accrued and other liabilities consisted of the following (in thousands): June 30, 2023 December 31, 2022 Clinical studies $ 13,797 $ 14,816 Professional fees 10,858 6,115 Deferred revenue 6,058 5,342 Short-term lease liability 5,809 5,591 Deferred payments for intangible assets 2,650 2,062 Accrued royalty 2,380 4,633 Laboratory processing fees and materials 2,084 2,189 License and other collaboration fees 1,000 1,000 Contingent consideration 928 1,025 Capital expenditures 420 1,316 Accrued shipping expenses 329 489 Other accrued expenses 3,862 4,553 Total accrued and other liabilities $ 50,175 $ 49,131 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Lease Cost | The following table summarizes the lease cost for the three and six months ended June 30, 2023 and 2022 (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Operating lease cost $ 1,972 $ 1,372 $ 3,955 $ 2,785 Total lease cost $ 1,972 $ 1,372 $ 3,955 $ 2,785 June 30, 2023 December 31, 2022 Other information: Weighted-average remaining lease term (in years) 5.84 6.26 Weighted-average discount rate (%) 7.1 % 7.1 % The following table summarizes the supplemental cash flow information related to leases for the three and six months ended June 30, 2023 and 2022 (in thousands): Three Months Ended Six Months Ended June 30, 2023 2022 2023 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 1,366 $ 952 $ 2,699 $ 1,924 |
ROU Assets and Lease Liabilities for Lease Agreements | The following table summarizes the ROU assets and lease liabilities for certain lease agreements which commenced in July 2022 (in thousands): June 30, 2023 December 31, 2022 ROU assets $ 13,227 $ 14,321 Lease liabilities 14,241 15,302 The following table summarizes the ROU assets and lease liabilities for certain lease agreements which commenced in August 2022 (in thousands): June 30, 2023 December 31, 2022 ROU assets $ 5,582 $ 5,814 Lease liabilities 5,836 6,005 |
Summary of Future Minimum Lease Commitments under Operating and Finance Leases | Maturities of operating lease liabilities as of June 30, 2023 are as follows (in thousands): Years Ending December 31, Operating Leases Remainder of 2023 $ 3,821 2024 7,960 2025 7,709 2026 7,019 2027 7,166 Thereafter 10,604 Total lease payments 44,279 Less imputed interest 7,881 Present value of future minimum lease payments 36,398 Less operating lease liability, current portion 5,809 Operating lease liability, long-term portion $ 30,589 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 RSU activity under the Company’s 2014 Equity Incentive Plan, 2016 Inducement Equity Incentive Plan, and 2019 Inducement Equity Incentive Plan, and related information: Shares Stock Weighted- Number of Weighted- Balance—December 31, 2022 1,490,462 2,921,925 $ 28.13 3,094,396 $ 37.39 Additional shares authorized 2,141,330 — — — — Common stock awards for services (11,296) — — — — RSUs granted (3,302,174) — — 3,302,174 11.17 RSUs vested — — — (714,320) 35.92 Options granted (680,788) 680,788 12.60 — — Options exercised — (3,750) 1.98 — — Repurchase of common stock under employee incentive plans 233,356 — — — — RSUs forfeited 491,831 — — (491,831) 28.09 Options forfeited 118,886 (118,886) 32.21 — — Options expired 96,416 (96,416) 33.70 — — Balance—June 30, 2023 578,023 3,383,661 $ 24.57 5,190,419 $ 21.71 |
Summary of Options Outstanding and Exercisable Vested or Expected to Vest | Options outstanding that have vested and are expected to vest at June 30, 2023 are as follows: Number of Shares Issued Weighted-Average Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Vested 1,757 $ 24.34 6.77 $ 854 Expected to vest 1,323 26.16 8.94 — Total 3,080 $ 854 |
Summary of Weighted-Average Assumptions Used to Estimate Fair Values 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: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Employee stock options Expected term (in years) 5.0 5.9 5.6 5.9 Expected volatility 76.63% 76.94% 77.86% 76.94% Risk-free interest rate 3.99% 2.88% 3.67% 2.41% Expected dividend yield —% —% —% —% Employee stock purchase plan Expected term (in years) 0.5 0.5 0.5 0.5 Expected volatility 93.38% 67.79% 93.38% 67.79% Risk-free interest rate 5.47% 2.51% 5.47% 2.51% 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 non-employee stock-based awards for the three and six months ended June 30, 2023 and 2022, included in the condensed consolidated statements of operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of testing services $ 492 $ 566 $ 971 $ 585 Cost of product 274 402 634 530 Cost of patient and digital solutions 367 391 769 583 Research and development 1,704 2,323 3,666 4,513 Sales and marketing 2,779 3,907 6,516 7,030 General and administrative 7,084 5,004 13,898 9,986 Total $ 12,700 $ 12,593 $ 26,454 $ 23,227 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Reportable Revenues by Geographic Regions | The following table summarizes reportable revenues by geographic regions (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Testing services revenue United States $ 53,269 $ 66,905 $ 114,916 $ 133,128 Rest of World 145 230 282 451 $ 53,414 $ 67,135 $ 115,198 $ 133,579 Product revenue United States $ 4,320 $ 3,577 $ 8,047 $ 7,190 Europe 2,532 2,383 4,993 4,625 Rest of World 1,024 754 1,697 1,687 $ 7,876 $ 6,714 $ 14,737 $ 13,502 Patient and digital solutions revenue United States $ 8,889 $ 6,525 $ 17,395 $ 12,678 Europe 121 210 205 220 Rest of World 1 50 28 71 $ 9,011 $ 6,785 $ 17,628 $ 12,969 Total United States $ 66,478 $ 77,007 $ 140,358 $ 152,996 Total Europe $ 2,653 $ 2,593 $ 5,198 $ 4,845 Total Rest of World $ 1,170 $ 1,034 $ 2,007 $ 2,209 Total $ 70,301 $ 80,634 $ 147,563 $ 160,050 |
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): June 30, 2023 December 31, 2022 Long-lived assets: United States $ 35,515 $ 35,020 Europe 489 405 Rest of World 80 104 Total $ 36,084 $ 35,529 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) | 3 Months Ended | 6 Months Ended | 23 Months Ended | ||||||||
May 09, 2023 USD ($) | Apr. 01, 2023 USD ($) | Dec. 08, 2022 | Jun. 30, 2023 USD ($) unique_solution shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) unique_solution shares | Jun. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) claim | Dec. 31, 2022 USD ($) | Dec. 03, 2022 USD ($) | Jan. 31, 2018 patient | |
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Reimbursement claims | unique_solution | 3,200 | 3,200 | |||||||||
Received repayment recognized revenue | $ 70,301,000 | $ 80,634,000 | $ 147,563,000 | $ 160,050,000 | |||||||
Number of renal transplant patients (more than) | patient | 1,700 | ||||||||||
Accumulated deficit | 509,903,000 | 509,903,000 | $ 460,444,000 | ||||||||
Cash, cash equivalents, and short-term investments | $ 282,700,000 | $ 282,700,000 | |||||||||
Stock repurchase program, authorized amount | $ 50,000,000 | ||||||||||
Stock repurchase program, period in force | 2 years | ||||||||||
Number of common stock purchased (in shares) | shares | 12,000 | 71,472 | |||||||||
Stock repurchased value | $ 100,000 | $ 800,000 | |||||||||
Stock repurchase program, remaining authorized repurchase amount | 48,600,000 | $ 48,600,000 | |||||||||
Miromatrix, Inc. | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Payments to acquire minority interest | $ 5,100,000 | ||||||||||
XynManagement, Inc. | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Number of unique solutions | unique_solution | 2 | ||||||||||
AlloSure Kidney | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Reimbursement rate | $ 2,841 | ||||||||||
AlloMap Heart | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Reimbursement rate | 3,240 | ||||||||||
AlloSure Heart | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Reimbursement rate | $ 2,753 | ||||||||||
AlloSure lung Testing Services | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Reimbursement rate | $ 2,753 | ||||||||||
Revenue not yet recognized | $ 8,900,000 | ||||||||||
HeartCare | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Reimbursement rate | $ 5,993 | ||||||||||
Medicare | AlloSure Kidney | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Reimbursement claims | claim | 3,200 | ||||||||||
Noridian | AlloSure Kidney | |||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||
Received repayment recognized revenue | $ 7,800,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Medicare | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 44% | 54% | 43% | 54% | |
Accounts Receivable | Credit Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 33% | 27% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Leases (Details) | 6 Months Ended |
Jun. 30, 2023 | |
Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Remaining lease terms | 5 months 1 day |
Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Remaining lease terms | 9 years 7 months 6 days |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenue (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) unique_solution | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) unique_solution | Jun. 30, 2022 USD ($) | |
Revenue from External Customer [Line Items] | ||||
Reimbursement claims | unique_solution | 3,200 | 3,200 | ||
Total revenue | $ | $ 70,301 | $ 80,634 | $ 147,563 | $ 160,050 |
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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||
Net loss used to compute basic net loss per share | $ (24,953) | $ (21,697) | $ (48,702) | $ (41,345) |
Net loss used to compute diluted net loss per share | $ (24,953) | $ (21,697) | $ (48,702) | $ (41,345) |
Denominator: | ||||
Weighted-average shares used to compute basic net loss per share (in shares) | 53,846,260 | 53,249,545 | 53,745,299 | 53,133,149 |
Weighted-average shares used to compute diluted net loss per share (in shares) | 53,846,260 | 53,249,545 | 53,745,299 | 53,133,149 |
Net loss per share: | ||||
Basic (in dollars per share) | $ (0.46) | $ (0.41) | $ (0.91) | $ (0.78) |
Diluted (in dollars per share) | $ (0.46) | $ (0.41) | $ (0.91) | $ (0.78) |
Net Loss Per Share - Summary _2
Net Loss Per Share - Summary of Potentially Dilutive Securities Excluded from Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
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) | 8,573,690 | 5,093,000 | 8,573,690 | 5,093,000 |
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) | 3,383,661 | 2,497,986 | 3,383,661 | 2,497,986 |
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) | 0 | 3,132 | 0 | 3,132 |
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) | 5,190,029 | 2,591,882 | 5,190,029 | 2,591,882 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Short-term liabilities: | ||
Contingent consideration | $ 928 | $ 1,025 |
Recurring | ||
Assets | ||
Total | 60,771 | 68,670 |
Short-term liabilities: | ||
Contingent consideration | 928 | 1,025 |
Long-term liabilities: | ||
Contingent consideration | 4,224 | 2,418 |
Common stock warrant liability | 32 | |
Total | 5,152 | 3,475 |
Recurring | Money market funds | ||
Assets | ||
Cash equivalents | 59,446 | 66,594 |
Recurring | Corporate equity securities | ||
Assets | ||
Corporate equity securities | 1,325 | 2,076 |
Fair Value Measured Using - (Level 1) | Recurring | ||
Assets | ||
Total | 60,771 | 68,670 |
Short-term liabilities: | ||
Contingent consideration | 0 | 0 |
Long-term liabilities: | ||
Contingent consideration | 0 | 0 |
Common stock warrant liability | 0 | |
Total | 0 | 0 |
Fair Value Measured Using - (Level 1) | Recurring | Money market funds | ||
Assets | ||
Cash equivalents | 59,446 | 66,594 |
Fair Value Measured Using - (Level 1) | Recurring | Corporate equity securities | ||
Assets | ||
Corporate equity securities | 1,325 | 2,076 |
Fair Value Measured Using - (Level 2) | Recurring | ||
Assets | ||
Total | 0 | 0 |
Short-term liabilities: | ||
Contingent consideration | 0 | 0 |
Long-term liabilities: | ||
Contingent consideration | 0 | 0 |
Common stock warrant liability | 0 | |
Total | 0 | 0 |
Fair Value Measured Using - (Level 2) | Recurring | Money market funds | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value Measured Using - (Level 2) | Recurring | Corporate equity securities | ||
Assets | ||
Corporate equity securities | 0 | 0 |
Fair Value Measured Using - (Level 3) | Recurring | ||
Assets | ||
Total | 0 | 0 |
Short-term liabilities: | ||
Contingent consideration | 928 | 1,025 |
Long-term liabilities: | ||
Contingent consideration | 4,224 | 2,418 |
Common stock warrant liability | 32 | |
Total | 5,152 | 3,475 |
Fair Value Measured Using - (Level 3) | Recurring | Money market funds | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value Measured Using - (Level 3) | Recurring | Corporate equity securities | ||
Assets | ||
Corporate equity securities | $ 0 | $ 0 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Issuances, Exercises, Changes in Fair Value and Reclassifications of Level 3 Financial Instruments (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Common Stock Warrant Liability and Contingent Consideration | |
Beginning balance | $ 3,475 |
Exercise of warrants | (22) |
Ending balance | 5,152 |
Common Stock Warrant Liability | |
Common Stock Warrant Liability and Contingent Consideration | |
Change in estimated fair value of common stock warrant liability and contingent consideration | (10) |
Contingent Consideration | |
Common Stock Warrant Liability and Contingent Consideration | |
Change in estimated fair value of common stock warrant liability and contingent consideration | 488 |
Addition of estimated fair value of contingent consideration | 1,471 |
Payments related to contingent consideration | $ (250) |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2023 USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Write-off of investments in convertible preferred shares | $ 1 | ||
Contingent consideration, measurement input, discount rate | 0.12 | ||
Minimum | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration, measurement input, discount rate | 0.07 | ||
Maximum | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration, measurement input, discount rate | 0.12 |
Cash and Marketable Securitie_2
Cash and Marketable Securities - Reconciliation of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 87,786 | $ 89,921 | $ 166,832 | |
Restricted cash | 584 | 522 | 204 | |
Total cash, cash equivalents, and restricted cash at the end of the period | $ 88,370 | $ 90,443 | $ 167,036 | $ 348,696 |
Cash and Marketable Securitie_3
Cash and Marketable Securities - Components of Marketable Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Short-term marketable securities | ||
Amortized Cost | $ 194,887 | $ 203,168 |
Unrealized Holding Gains (Losses) | 2,026 | 232 |
Fair Value | 196,913 | 203,400 |
Long-term marketable securities | ||
Amortized Cost | 5,100 | 5,000 |
Unrealized Holding Gains (Losses) | (3,775) | (2,924) |
Fair Value | 1,325 | 2,076 |
Amortized Cost | 199,987 | 208,168 |
Unrealized Holding Gains (Losses) | (1,749) | (2,692) |
Fair Value | 198,238 | 205,476 |
U.S. agency securities | ||
Short-term marketable securities | ||
Debt securities, amortized cost | 101,666 | 79,347 |
Unrealized holding gain | 1,672 | 452 |
Debt securities, fair value | 103,338 | 79,799 |
Corporate debt securities | ||
Short-term marketable securities | ||
Debt securities, amortized cost | 93,221 | 123,821 |
Unrealized holding gain | 354 | |
Unrealized holding loss | (220) | |
Debt securities, fair value | 93,575 | 123,601 |
Corporate equity securities | ||
Long-term marketable securities | ||
Equity securities, amortized cost | 5,100 | 5,000 |
Equity securities, unrealized holding gains (losses) | (3,775) | (2,924) |
Corporate equity securities | $ 1,325 | $ 2,076 |
Cash and Marketable Securitie_4
Cash and Marketable Securities - Schedule of Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Abstract] | ||
Within one year | $ 194,887 | $ 203,168 |
After one year through five years | 0 | 0 |
Amortized Cost | $ 194,887 | $ 203,168 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands | 1 Months Ended | ||
Jan. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |||
Goodwill | $ 39,655 | $ 37,523 | |
HLA Data Systems | |||
Business Acquisition [Line Items] | |||
Fair value of contingent consideration | $ 1,300 | ||
Acquisition related costs | 400 | ||
Goodwill | 2,092 | ||
Goodwill expected to be deductible for income tax purposes | $ 0 | ||
Intangible asset, measurement input, discount rate | 0.24 | ||
HLA Data Systems | Developed technology | |||
Business Acquisition [Line Items] | |||
Intangible asset, measurement input, royalty rate | 0.10 | ||
HLA Data Systems | Trademarks | |||
Business Acquisition [Line Items] | |||
Intangible asset, measurement input, royalty rate | 0.02 |
Business Combinations - Summary
Business Combinations - Summary of Identified Intangible Assets Acquired at Acquisition Date (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jan. 31, 2023 | Dec. 31, 2022 |
HLA Data Systems | |||
Business Acquisition [Line Items] | |||
Estimated Fair Value | $ 4,100 | ||
Customer relationships | |||
Business Acquisition [Line Items] | |||
Estimated Useful Lives (Years) | 9 years 3 months 18 days | 9 years | |
Customer relationships | HLA Data Systems | |||
Business Acquisition [Line Items] | |||
Estimated Fair Value | $ 3,010 | ||
Estimated Useful Lives (Years) | 13 years | ||
Developed technology | HLA Data Systems | |||
Business Acquisition [Line Items] | |||
Estimated Fair Value | $ 770 | ||
Estimated Useful Lives (Years) | 11 years | ||
Trademarks | HLA Data Systems | |||
Business Acquisition [Line Items] | |||
Estimated Fair Value | $ 320 | ||
Estimated Useful Lives (Years) | 17 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, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 39,655 | $ 37,523 | |
HLA Data Systems | |||
Business Acquisition [Line Items] | |||
Cash | $ 4,562 | ||
Total consideration | 4,562 | ||
Current assets | 1,162 | ||
Identifiable intangible assets | 4,100 | ||
Current liabilities | (786) | ||
Other current liabilities | (699) | ||
Contingent considerations | (1,300) | ||
Other liabilities | (7) | ||
Total identifiable net assets acquired | 2,470 | ||
Goodwill | 2,092 | ||
Total consideration | $ 4,562 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 39,655 | $ 37,523 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 77,864 | $ 73,764 |
Accumulated Amortization | (30,370) | (27,175) |
Foreign Currency Translation | (5,215) | (4,788) |
Total future amortization expense | 42,279 | 41,801 |
Intangible Assets, Net (Excluding Goodwill) | ||
Total intangible assets - gross carrying amount | 79,114 | 75,014 |
Total intangible assets, net | 43,529 | 43,051 |
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 | 36,517 | 35,747 |
Accumulated Amortization | (16,728) | (15,138) |
Foreign Currency Translation | (2,546) | (2,369) |
Total future amortization expense | $ 17,243 | $ 18,240 |
Weighted Average Remaining Useful Life (In Years) | 7 years 3 months 18 days | 7 years 6 months |
Customer relationships | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 24,908 | $ 21,898 |
Accumulated Amortization | (8,253) | (7,459) |
Foreign Currency Translation | (2,316) | (2,104) |
Total future amortization expense | $ 14,339 | $ 12,335 |
Weighted Average Remaining Useful Life (In Years) | 9 years 3 months 18 days | 9 years |
Commercialization rights | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 11,579 | $ 11,579 |
Accumulated Amortization | (3,865) | (3,233) |
Foreign Currency Translation | 0 | 0 |
Total future amortization expense | $ 7,714 | $ 8,346 |
Weighted Average Remaining Useful Life (In Years) | 6 years 1 month 6 days | 6 years 7 months 6 days |
Trademarks and tradenames | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 4,860 | $ 4,540 |
Accumulated Amortization | (1,524) | (1,345) |
Foreign Currency Translation | (353) | (315) |
Total future amortization expense | $ 2,983 | $ 2,880 |
Weighted Average Remaining Useful Life (In Years) | 9 years | 8 years 6 months |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Finite-Lived Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | $ 1,606 | $ 1,545 | $ 3,196 | $ 3,168 |
Cost of Testing Services | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | 329 | 329 | 658 | 658 |
Cost of Product | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | 416 | 437 | 834 | 890 |
Cost of Patient and Digital Solutions | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | 255 | 236 | 503 | 472 |
Sales & marketing | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | $ 606 | $ 543 | $ 1,201 | $ 1,148 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Summary of Estimated Future Amortization Expense of Intangible Assets with Finite Lives (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2023 | $ 3,198 | |
2024 | 6,150 | |
2025 | 5,981 | |
2026 | 5,085 | |
2027 | 5,072 | |
Thereafter | 16,793 | |
Total future amortization expense | 42,279 | $ 41,801 |
Cost of Testing Services | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2023 | 658 | |
2024 | 1,316 | |
2025 | 1,316 | |
2026 | 1,316 | |
2027 | 1,316 | |
Thereafter | 2,825 | |
Total future amortization expense | 8,747 | |
Cost of Product | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2023 | 813 | |
2024 | 1,626 | |
2025 | 1,626 | |
2026 | 733 | |
2027 | 733 | |
Thereafter | 3,263 | |
Total future amortization expense | 8,794 | |
Cost of Patient and Digital Solutions | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2023 | 507 | |
2024 | 779 | |
2025 | 610 | |
2026 | 610 | |
2027 | 610 | |
Thereafter | 1,605 | |
Total future amortization expense | 4,721 | |
Sales and Marketing | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2023 | 1,220 | |
2024 | 2,429 | |
2025 | 2,429 | |
2026 | 2,426 | |
2027 | 2,413 | |
Thereafter | 9,100 | |
Total future amortization expense | $ 20,017 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 3,661 | $ 2,962 |
Work in progress | 5,494 | 4,306 |
Raw materials | 9,685 | 11,964 |
Total inventory | $ 18,840 | $ 19,232 |
Balance Sheet Components - Comp
Balance Sheet Components - Components of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Clinical studies | $ 13,797 | $ 14,816 |
Professional fees | 10,858 | 6,115 |
Deferred revenue | 6,058 | 5,342 |
Short-term lease liability | 5,809 | 5,591 |
Deferred payments for intangible assets | 2,650 | 2,062 |
Accrued royalty | 2,380 | 4,633 |
Laboratory processing fees and materials | 2,084 | 2,189 |
License and other collaboration fees | 1,000 | 1,000 |
Contingent consideration | 928 | 1,025 |
Capital expenditures | 420 | 1,316 |
Accrued shipping expenses | 329 | 489 |
Other accrued expenses | 3,862 | 4,553 |
Accrued and other liabilities | $ 50,175 | $ 49,131 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 1 Months Ended | ||||||
May 13, 2022 complaint | Mar. 14, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2014 milestone_payment | Jun. 30, 2023 USD ($) | Feb. 28, 2022 | |
Loss Contingencies [Line Items] | |||||||
Operating leases right-of-use assets | $ 34,689 | $ 32,118 | |||||
Short-term lease liability | 5,591 | 5,809 | |||||
Operating lease liability, less current portion | 33,406 | $ 30,589 | |||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued and other liabilities | ||||||
Decrease in ROU asset | $ 500 | ||||||
Operating lease, impairment loss | $ 500 | ||||||
Number of milestone payments | milestone_payment | 6 | ||||||
Insurance matter | $ 15,000 | ||||||
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 | |||||
CAREDX, INC. vs Natera Inc. | |||||||
Loss Contingencies [Line Items] | |||||||
Damages awarded | $ 44,900 | ||||||
Number of claims field | complaint | 2 | ||||||
CAREDX, INC. vs Natera Inc. | Compensatory Damages | |||||||
Loss Contingencies [Line Items] | |||||||
Damages awarded | 21,200 | ||||||
CAREDX, INC. vs Natera Inc. | Punitive Damages | |||||||
Loss Contingencies [Line Items] | |||||||
Damages awarded | $ 23,700 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 1,972 | $ 1,372 | $ 3,955 | $ 2,785 |
Total lease cost | $ 1,972 | $ 1,372 | $ 3,955 | $ 2,785 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Other Information Related to Lease (Details) | Jun. 30, 2023 | Dec. 31, 2022 |
Other information: | ||
Weighted-average remaining lease term (in years) | 5 years 10 months 2 days | 6 years 3 months 3 days |
Weighted-average discount rate (%) | 7.10% | 7.10% |
Commitments and Contingencies_4
Commitments and Contingencies - Summarizes ROU Assets and Lease Liabilities for Lease Agreements (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Loss Contingencies [Line Items] | ||
ROU assets | $ 32,118 | $ 34,689 |
Present value of future minimum lease payments | 36,398 | |
Leases, Commenced In July 2022 | ||
Loss Contingencies [Line Items] | ||
ROU assets | 13,227 | 14,321 |
Present value of future minimum lease payments | 14,241 | 15,302 |
Leases, Commenced In August 2022 | ||
Loss Contingencies [Line Items] | ||
ROU assets | 5,582 | 5,814 |
Present value of future minimum lease payments | $ 5,836 | $ 6,005 |
Commitments and Contingencies_5
Commitments and Contingencies - Future Minimum Lease Commitments under Operating and Finance Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Remainder of 2023 | $ 3,821 | |
2024 | 7,960 | |
2025 | 7,709 | |
2026 | 7,019 | |
2027 | 7,166 | |
Thereafter | 10,604 | |
Total lease payments | 44,279 | |
Less imputed interest | 7,881 | |
Present value of future minimum lease payments | 36,398 | |
Less operating lease liability, current portion | 5,809 | $ 5,591 |
Operating lease liability, long-term portion | $ 30,589 | $ 33,406 |
Commitments and Contingencies_6
Commitments and Contingencies - Summarizes the Noncash Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating cash flows used for operating leases | $ 1,366 | $ 952 | $ 2,699 | $ 1,924 |
401(K) Plan - Additional Inform
401(K) Plan - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Retirement Benefits [Abstract] | ||||
Defined benefit plan, type | Postemployment Retirement Benefits [Member] | |||
Expense incurred related to plan | $ 0.5 | $ 0.5 | $ 1.2 | $ 1.2 |
Warrants - Additional Informati
Warrants - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | ||||
Warrants exercised (in shares) | 3,000 | 3,000 | ||
Proceeds from exercise of warrants | $ 4 | $ 4 | $ 0 | |
Number of warrants exercised (in shares) | 0 | 0 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Option, Unvested RSU Activity under 2014 Equity Incentive Plan and 2016 Inducement Equity Incentive Plan and Related Information (Detail) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Shares Available for Grant | |
Shares available for grant beginning balance (in shares) | 1,490,462 |
Additional options authorized (in shares) | 2,141,330 |
Common stock awards for services (in shares) | (11,296) |
RSUs granted (in shares) | (3,302,174) |
Options granted (in shares) | (680,788) |
Repurchase of common stock under employee incentive plans (in shares) | 233,356 |
RSUs forfeited (in shares) | 491,831 |
Options forfeited (in shares) | 118,886 |
Options expired (in shares) | 96,416 |
Shares available for grant ending balance (in shares) | 578,023 |
Stock Options Outstanding | |
Stock options outstanding beginning balance (in shares) | 2,921,925 |
Stock options granted (in shares) | 680,788 |
Stock options exercised (in shares) | (3,750) |
Stock options forfeited (in shares) | (118,886) |
Stock options expired (in shares) | (96,416) |
Stock options outstanding ending balance (in shares) | 3,383,661 |
Weighted- Average Exercise Price | |
Weighted average exercise price beginning balance (in dollars per share) | $ / shares | $ 28.13 |
Weighted average exercise price - options granted (in dollars per share) | $ / shares | 12.60 |
Weighted average exercise price - options exercised (in dollars per share) | $ / shares | 1.98 |
Weighted average exercise price - options forfeited (in dollars per share) | $ / shares | 32.21 |
Weighted average exercise price - options expired (in dollars per share) | $ / shares | 33.70 |
Weighted average exercise price ending balance (in dollars per share) | $ / shares | $ 24.57 |
Number of RSU Shares | |
RSUs granted (in shares) | 3,302,174 |
RSUs forfeited (in shares) | (491,831) |
Restricted Stock Units | |
Shares Available for Grant | |
RSUs granted (in shares) | (3,302,174) |
RSUs forfeited (in shares) | 491,831 |
Number of RSU Shares | |
Number of RSU shares beginning balance (in shares) | 3,094,396 |
RSUs granted (in shares) | 3,302,174 |
RSUs vested (in shares) | (714,320) |
RSUs forfeited (in shares) | (491,831) |
Number of RSU shares ending balance (in shares) | 5,190,419 |
Weighted- Average Grant Date Fair Value | |
Weighted average grant date fair value beginning balance (in dollars per share) | $ / shares | $ 37.39 |
Weighted average grant date fair value - RSUs granted (in dollars per share) | $ / shares | 11.17 |
Weighted average grant date fair value - RSUs vested (in dollars per share) | $ / shares | 35.92 |
Weighted average grant date fair value - RSUs forfeited (in dollars per share) | $ / shares | 28.09 |
Weighted average grant date fair value ending balance (in dollars per share) | $ / shares | $ 21.71 |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jul. 06, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total intrinsic value of options exercised | $ 19,000 | $ 300,000 | $ 31,000 | $ 1,300,000 | ||
Total fair value of options vested during period | 12,400,000 | |||||
Share-based compensation expense tax benefit recognized | 0 | |||||
Share-based compensation expense capitalized | $ 0 | |||||
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 | |||||
Aggregate proceeds from the issuance of shares | $ 500,000 | |||||
2014 Employee Stock Purchase Plan | Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued under ESPP (in shares) | 143,817 | |||||
Aggregate proceeds from the issuance of shares | $ 1,000,000 | |||||
Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Intrinsic value of RSUs | $ 45,300,000 | $ 45,300,000 | ||||
Total unrecognized compensation costs related to stock options and RSUs | 72,900,000 | $ 72,900,000 | ||||
Stock options and RSUs expected weighted average period | 2 years 8 months 15 days | |||||
Employee Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized compensation costs related to stock options and RSUs | 23,200,000 | $ 23,200,000 | ||||
Stock options and RSUs expected weighted average period | 2 years 10 months 9 days | |||||
Total fair value of options vested during period | $ 8,200,000 |
Stock Incentive Plans - Summa_2
Stock Incentive Plans - Summary of Options Outstanding Vested and Expected to Vest (Detail) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Vested (in shares) | shares | 1,757 |
Expected to vest (in shares) | shares | 1,323 |
Total (in shares) | shares | 3,080 |
Vested (in dollars per share) | $ / shares | $ 24.34 |
Expected to vest (in dollars per share) | $ / shares | $ 26.16 |
Vested, weighted-average remaining contractual life (years) | 6 years 9 months 7 days |
Expected to vest, weighted-average remaining contractual life (years) | 8 years 11 months 8 days |
Vested, aggregate intrinsic value | $ | $ 854 |
Expected to vest, aggregate intrinsic value | $ | 0 |
Total, aggregate intrinsic value | $ | $ 854 |
Stock Incentive Plans - Summa_3
Stock Incentive Plans - Summary of Weighted-Average Assumptions Used to Estimated Fair Values of Share-Based Awards (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
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 | 6 months |
Expected volatility | 93.38% | 67.79% | 93.38% | 67.79% |
Risk-free interest rate | 5.47% | 2.51% | 5.47% | 2.51% |
Expected dividend yield | 0% | 0% | 0% | 0% |
Employee stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 5 years | 5 years 10 months 24 days | 5 years 7 months 6 days | 5 years 10 months 24 days |
Expected volatility | 76.63% | 76.94% | 77.86% | 76.94% |
Risk-free interest rate | 3.99% | 2.88% | 3.67% | 2.41% |
Expected dividend yield | 0% | 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 (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation expense | $ 12,700 | $ 12,593 | $ 26,454 | $ 23,227 |
Cost of testing services | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation expense | 492 | 566 | 971 | 585 |
Cost of product | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation expense | 274 | 402 | 634 | 530 |
Cost of patient and digital solutions | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation expense | 367 | 391 | 769 | 583 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation expense | 1,704 | 2,323 | 3,666 | 4,513 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation expense | 2,779 | 3,907 | 6,516 | 7,030 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation expense | $ 7,084 | $ 5,004 | $ 13,898 | $ 9,986 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ (68,000) | $ (49,000) | $ 56,000 | $ (61,000) |
Segment Reporting - Summary of
Segment Reporting - Summary of Reportable Revenues by Geographic Regions (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 70,301 | $ 80,634 | $ 147,563 | $ 160,050 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 66,478 | 77,007 | 140,358 | 152,996 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 2,653 | 2,593 | 5,198 | 4,845 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 1,170 | 1,034 | 2,007 | 2,209 |
Testing services revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 53,414 | 67,135 | 115,198 | 133,579 |
Testing services revenue | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 53,269 | 66,905 | 114,916 | 133,128 |
Testing services revenue | Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 145 | 230 | 282 | 451 |
Product revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 7,876 | 6,714 | 14,737 | 13,502 |
Product revenue | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 4,320 | 3,577 | 8,047 | 7,190 |
Product revenue | Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 2,532 | 2,383 | 4,993 | 4,625 |
Product revenue | Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 1,024 | 754 | 1,697 | 1,687 |
Patient and digital solutions revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 9,011 | 6,785 | 17,628 | 12,969 |
Patient and digital solutions revenue | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 8,889 | 6,525 | 17,395 | 12,678 |
Patient and digital solutions revenue | Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 121 | 210 | 205 | 220 |
Patient and digital solutions revenue | Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 1 | $ 50 | $ 28 | $ 71 |
Segment Reporting - Summary o_2
Segment Reporting - Summary of Long-Lived Assets Consisting of Property and Equipment, Net by Geographic Regions (Detail) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 36,084 | $ 35,529 |
United States | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | 35,515 | 35,020 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | 489 | 405 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 80 | $ 104 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | ||||
Restructuring costs | $ 848 | $ 0 | $ 848 | $ 0 |