Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34899 | |
Entity Registrant Name | Pacific Biosciences of California, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 16-1590339 | |
Entity Address, Address Line One | 1305 O’Brien Drive | |
Entity Address, City or Town | Menlo Park | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94025 | |
City Area Code | 650 | |
Local Phone Number | 521-8000 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | PACB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 267,443,887 | |
Entity Central Index Key | 0001299130 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 385,648 | $ 325,089 |
Investments | 382,141 | 447,229 |
Accounts receivable, net | 30,486 | 18,786 |
Inventory, net | 68,256 | 50,381 |
Prepaid expenses and other current assets | 15,466 | 10,289 |
Short-term restricted cash | 300 | 300 |
Total current assets | 882,297 | 852,074 |
Property and equipment, net | 40,340 | 41,580 |
Operating lease right-of-use assets, net | 34,610 | 39,763 |
Long-term restricted cash | 2,422 | 2,922 |
Intangible assets, net | 461,838 | 410,245 |
Goodwill | 463,843 | 409,974 |
Other long-term assets | 13,004 | 10,528 |
Total assets | 1,898,354 | 1,767,086 |
Current liabilities | ||
Accounts payable | 16,106 | 12,028 |
Accrued expenses | 34,660 | 32,596 |
Deferred revenue, current | 22,372 | 30,498 |
Operating lease liabilities, current | 9,460 | 8,886 |
Other liabilities, current | 5,170 | 7,233 |
Contingent consideration liability, current | 96,193 | 172,094 |
Total current liabilities | 183,961 | 263,335 |
Deferred revenue, non-current | 5,053 | 1,794 |
Contingent consideration liability, non-current | 18,450 | 0 |
Operating lease liabilities, non-current | 34,100 | 41,070 |
Convertible senior notes, net, non-current | 891,996 | 896,683 |
Other liabilities, non-current | 1,051 | 1,300 |
Total liabilities | 1,134,611 | 1,204,182 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Authorized 50,000 shares; No shares issued or outstanding | 0 | 0 |
Authorized 1,000,000 shares; issued and outstanding 258,374 and 226,505 shares at September 30, 2023 and December 31, 2022, respectively | 258 | 227 |
Additional paid-in capital | 2,522,382 | 2,099,782 |
Accumulated other comprehensive loss | (1,840) | (4,765) |
Accumulated deficit | (1,757,057) | (1,532,340) |
Total stockholders’ equity | 763,743 | 562,904 |
Total liabilities and stockholders’ equity | $ 1,898,354 | $ 1,767,086 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in share) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 258,374,000 | 226,505,000 |
Common stock, shares outstanding (in shares) | 258,374,000 | 226,505,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 55,691 | $ 32,311 | $ 142,164 | $ 100,951 |
Cost of Revenue: | ||||
Total cost of revenue | 37,789 | 18,764 | 98,955 | 57,056 |
Gross profit | 17,902 | 13,547 | 43,209 | 43,895 |
Operating Expense: | ||||
Research and development | 47,514 | 47,092 | 142,626 | 150,377 |
Sales, general and administrative | 43,431 | 36,795 | 123,822 | 115,851 |
Merger-related expenses | 8,979 | 0 | 8,979 | 0 |
Amortization of acquired intangible assets | 741 | 0 | 741 | 0 |
Change in fair value of contingent consideration | (271) | 4,280 | 13,960 | (2,221) |
Total operating expense | 100,394 | 88,167 | 290,128 | 264,007 |
Operating loss | (82,492) | (74,620) | (246,919) | (220,112) |
Loss on extinguishment of debt | 0 | 0 | (2,033) | 0 |
Interest expense | (3,588) | (3,664) | (10,772) | (11,042) |
Other income, net | 8,505 | 1,313 | 24,301 | 1,290 |
Loss before benefit from income taxes | (77,575) | (76,971) | (235,423) | (229,864) |
Benefit from income taxes | (10,706) | 0 | (10,706) | 0 |
Net loss | (66,869) | (76,971) | (224,717) | (229,864) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on investments | 846 | (803) | 2,925 | (5,173) |
Comprehensive loss | $ (66,023) | $ (77,774) | $ (221,792) | $ (235,037) |
Net loss per share: | ||||
Basic (in dollars per share) | $ (0.26) | $ (0.34) | $ (0.90) | $ (1.03) |
Diluted (in dollars per share) | $ (0.26) | $ (0.34) | $ (0.90) | $ (1.03) |
Weighted average shares outstanding used in calculating net loss per share: | ||||
Basic (in shares) | 255,001 | 225,123 | 249,082 | 223,981 |
Diluted (in shares) | 255,001 | 225,123 | 249,082 | 223,981 |
Product revenue | ||||
Revenue: | ||||
Total revenue | $ 51,562 | $ 27,509 | $ 129,871 | $ 85,928 |
Cost of Revenue: | ||||
Cost of revenue | 33,735 | 15,752 | 87,697 | 46,437 |
Service and other revenue | ||||
Revenue: | ||||
Total revenue | 4,129 | 4,802 | 12,293 | 15,023 |
Cost of Revenue: | ||||
Cost of revenue | $ 4,054 | $ 3,012 | $ 11,258 | $ 10,619 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 220,978 | ||||
Beginning balance at Dec. 31, 2021 | $ 790,987 | $ 221 | $ 2,009,945 | $ (1,087) | $ (1,218,092) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (229,864) | (229,864) | |||
Other comprehensive income (loss) | (5,173) | (5,173) | |||
Issuance of common stock in conjunction with equity plans (in shares) | 4,938 | ||||
Issuance of common stock in conjunction with equity plans | 9,983 | $ 5 | 9,978 | ||
Share-based compensation expense | 60,658 | 60,658 | |||
Ending balance (in shares) at Sep. 30, 2022 | 225,916 | ||||
Ending balance at Sep. 30, 2022 | 626,591 | $ 226 | 2,080,581 | (6,260) | (1,447,956) |
Beginning balance (in shares) at Jun. 30, 2022 | 224,756 | ||||
Beginning balance at Jun. 30, 2022 | 681,886 | $ 225 | 2,058,103 | (5,457) | (1,370,985) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (76,971) | (76,971) | |||
Other comprehensive income (loss) | (803) | (803) | |||
Issuance of common stock in conjunction with equity plans (in shares) | 1,160 | ||||
Issuance of common stock in conjunction with equity plans | 3,543 | $ 1 | 3,542 | ||
Share-based compensation expense | 18,936 | 18,936 | |||
Ending balance (in shares) at Sep. 30, 2022 | 225,916 | ||||
Ending balance at Sep. 30, 2022 | $ 626,591 | $ 226 | 2,080,581 | (6,260) | (1,447,956) |
Beginning balance (in shares) at Dec. 31, 2022 | 226,505 | 226,505 | |||
Beginning balance at Dec. 31, 2022 | $ 562,904 | $ 227 | 2,099,782 | (4,765) | (1,532,340) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (224,717) | (224,717) | |||
Other comprehensive income (loss) | 2,925 | 2,925 | |||
Shares issuable following milestone achievement | 84,761 | 84,761 | |||
Issuance of common stock in acquisition of Apton (in shares) | 6,121 | ||||
Issuance of common stock in acquisition of Apton | 76,642 | $ 6 | 76,636 | ||
Issuance of common stock in connection with liquidity event bonus plan (in shares) | 169 | ||||
Issuance of common stock in connection with liquidity event bonus plan | 2,111 | 2,111 | |||
Issuance of common stock from Underwritten Public Equity Offering, net of issuance costs (in shares) | 20,125 | ||||
Issuance of common stock from Underwritten Public Equity Offering, net of issuance costs | 189,200 | $ 20 | 189,180 | ||
Issuance of common stock in conjunction with equity plans (in shares) | 5,454 | ||||
Issuance of common stock in conjunction with equity plans | 14,383 | $ 5 | 14,378 | ||
Share-based compensation expense | $ 55,534 | 55,534 | |||
Ending balance (in shares) at Sep. 30, 2023 | 258,374 | 258,374 | |||
Ending balance at Sep. 30, 2023 | $ 763,743 | $ 258 | 2,522,382 | (1,840) | (1,757,057) |
Beginning balance (in shares) at Jun. 30, 2023 | 250,473 | ||||
Beginning balance at Jun. 30, 2023 | 641,999 | $ 250 | 2,334,623 | (2,686) | (1,690,188) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (66,869) | (66,869) | |||
Other comprehensive income (loss) | 846 | 846 | |||
Shares issuable following milestone achievement | 84,761 | 84,761 | |||
Issuance of common stock in acquisition of Apton (in shares) | 6,121 | ||||
Issuance of common stock in acquisition of Apton | 76,642 | $ 6 | 76,636 | ||
Issuance of common stock in connection with liquidity event bonus plan (in shares) | 169 | ||||
Issuance of common stock in connection with liquidity event bonus plan | 2,111 | 2,111 | |||
Issuance of common stock in conjunction with equity plans (in shares) | 1,611 | ||||
Issuance of common stock in conjunction with equity plans | 4,562 | $ 2 | 4,560 | ||
Share-based compensation expense | $ 19,691 | 19,691 | |||
Ending balance (in shares) at Sep. 30, 2023 | 258,374 | 258,374 | |||
Ending balance at Sep. 30, 2023 | $ 763,743 | $ 258 | $ 2,522,382 | $ (1,840) | $ (1,757,057) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (224,717) | $ (229,864) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 8,487 | 6,937 |
Amortization of intangible assets | 1,408 | 685 |
Amortization of right-of-use assets | 4,940 | 5,152 |
Share-based compensation expense | 55,534 | 60,658 |
Merger-related compensation expense | 3,395 | 0 |
Accretion of discount and amortization of premium on marketable securities, net | (10,088) | 1,069 |
Change in the estimated fair value of contingent consideration | 13,960 | (2,221) |
Loss on extinguishment of debt | 2,033 | 0 |
Inventory provision | 4,691 | 2,667 |
Deferred income taxes | (10,706) | 0 |
Other | 667 | 562 |
Changes in assets and liabilities | ||
Accounts receivable, net | (11,700) | 1,485 |
Inventory | (22,849) | (23,367) |
Prepaid expenses and other assets | (7,287) | (5,685) |
Accounts payable | 1,706 | 1,511 |
Accrued expenses | 2,055 | (11,054) |
Deferred revenue | (4,867) | (3,575) |
Operating lease liabilities | (6,396) | (5,905) |
Contingent consideration liability | (732) | 0 |
Other liabilities | (1,147) | (1,700) |
Net cash used in operating activities | (201,613) | (202,645) |
Cash flows from investing activities | ||
Purchase of property and equipment | (6,819) | (11,846) |
Cash paid for purchase of Apton, net of cash acquired | (102) | 0 |
Purchases of investments | (553,748) | (307,899) |
Sales of investments | 595 | 0 |
Maturities of investments | 631,253 | 355,425 |
Net cash provided by investing activities | 71,179 | 35,680 |
Cash flows from financing activities | ||
Proceeds from issuance of common stock under equity offerings, net of issuance costs | 189,200 | 0 |
Proceeds from issuance of common stock from equity plans | 14,383 | 9,983 |
Payment of debt issuance costs | (7,325) | 0 |
Payment of contingent consideration | (4,368) | 0 |
Notes payable principal payoff | (1,397) | (1,180) |
Net cash provided by financing activities | 190,493 | 8,803 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 60,059 | (158,162) |
Cash, cash equivalents, and restricted cash at beginning of period | 328,311 | 465,817 |
Cash, cash equivalents, and restricted cash at end of period | 388,370 | 307,655 |
Cash and cash equivalents at end of period | 385,648 | 304,433 |
Restricted cash at end of period | 2,722 | 3,222 |
Cash, cash equivalents, and restricted cash at end of period | $ 388,370 | $ 307,655 |
ORGANIZATION AND SIGNIFICANT AC
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES We are a life science technology company that is designing, developing, and manufacturing advanced sequencing solutions that enable scientists and clinical researchers to improve their understanding of the genome and ultimately, resolve genetically complex problems. Our products and technology under development stem from two highly differentiated core technologies focused on accuracy, quality, and completeness, which include our existing HiFi long-read sequencing technology and our emerging short-read Sequencing by Binding (SBB TM ) technology. Our products address solutions across a broad set of applications including human genomics, plant and animal sciences, infectious disease and microbiology, oncology, and other emerging applications. Our focus is on providing our customers with advanced sequencing solutions with higher throughput and improved workflows that we believe will enable dramatic advancements in routine healthcare. Our customers include academic and governmental research institutions, commercial testing and service laboratories, genome centers, public health labs, hospitals and clinical research institutes, contract research organizations ("CROs"), pharmaceutical companies, and agricultural companies. References in this report to “PacBio,” “we,” “us,” the “Company,” and “our” refer to Pacific Biosciences of California, Inc. and its consolidated subsidiaries. Basis of Presentation and Consolidation Our unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or U.S. GAAP, as set forth in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC. The unaudited condensed consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries. Certain information and footnote disclosures typically included in our audited financial statements have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements have been prepared on a consistent basis with the December 31, 2022 audited consolidated financial statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state our financial position, results of operations, comprehensive loss, and cash flows for the period, but are not necessarily indicative of the results to be expected for the entire year or any future periods. All intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform to current period presentation. The financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements. On an ongoing basis, we evaluate our significant estimates including, but not limited to, the valuation of inventory, the determination of stand-alone selling prices for revenue recognition, the fair value of contingent consideration, the valuation of acquired intangible assets, the fair value of certain equity awards, the useful lives assigned to long-lived assets, the computation of provisions for income taxes, the borrowing rate used in calculating the operating lease right-of-use assets and operating lease liabilities, the probability associated with variable payments under partnership development agreements, and the valuations related to our convertible senior notes. While the extent of the potential impact of the current macroeconomic conditions on our business is highly uncertain, we considered information available related to assumptions and estimates used to determine the results reported and asset valuations as of September 30, 2023. Actual results could differ materially from these estimates. Cash, Cash Equivalents, Restricted Cash and Investments We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash equivalents may be comprised of money market funds, certificates of deposit, commercial paper, corporate bonds and notes, and government agencies’ securities. We classify our investments in debt securities as available-for sale and report the investments at fair value in current assets. We evaluate our available-for-sale investments in unrealized loss positions and assess whether the unrealized loss is credit-related. Unrealized gains and losses that are not credit-related are recognized in accumulated other comprehensive loss in stockholders’ equity. Realized gains and losses, expected credit losses, as well as interest income, on available-for-sale securities are also reported in other income (expense), net. The cost used in the determination of gains and losses of securities sold is based on the specific identification method. The cost of marketable securities is adjusted for the amortization of premiums and discounts to expected maturity. Premium and discount amortization is recorded in other income (expense), net. Our investment portfolio at any point in time contains investments in cash deposits, money market funds, commercial paper, corporate debt securities and U.S. government and agency securities with high credit ratings. We have established guidelines regarding diversification and maturities of investments with the objectives of maintaining safety and liquidity, while maximizing yield. Restricted cash includes cash that is not readily available for use in the Company’s operating activities. Restricted cash is primarily comprised of cash pledged under letters of credit. Concentration and Other Risks For the three and nine months ended September 30, 2023, no customer exceeded 10% of total revenue during each of the respective periods. For the three and nine months ended September 30, 2022, one customer accounted for approximately 13% and 11% of total revenue during the period. As of September 30, 2023, 45% of our accounts receivable were from domestic customers, compared to 57% as of December 31, 2022. As of September 30, 2023, no customer represented 10% or greater of our accounts receivable, while one customer represented approximately 10% of our net accounts receivable as of December 31, 2022. Recent Accounting Pronouncements Recently Adopted Accounting Standards In October 2021, the FASB issued Accounting Standards Update ("ASU") No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU provides specific guidance on how to recognize contract assets and contract liabilities related to revenue contracts with customers acquired in a business combination. This amendment improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. We adopted this ASU on January 1, 2023. The adoption of this guidance did not have a material effect on our consolidated financial statements. Significant Accounting Policies There have been no changes to our significant accounting policies as disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS Apton Biosystems On August 2, 2023, we acquired Apton Biosystems, Inc. (“Apton”), a California-based genomics company focused on developing a high throughput short-read sequencer using highly differentiated optics and image processing, paired with novel clustering and chemistry (the “Apton acquisition”). In connection with the Apton acquisition, all outstanding equity securities of Apton were cancelled in exchange for s hares of our common stock with a fair value of $76.6 million , cash of $0.2 million , and contingent consideration with a preliminary estimated fair value of $18.5 million . Excluded from consideration transferred was $1.3 million attributable to accelerated share-based compensation expense. The fair value of the 6,121,571 common shares issued was determined based on the closing market price of our common stock on the acquisition date. In connection with the Apton acquisition, contingent consideration of $25.0 million, which we may elect to pay in cash, shares of our common stock or a combination of cash and shares of our common stock, is due upon the achievement of a milestone, defined as the achievement of $50.0 million in revenue associated with Apton's technology, provided that the milestone event occurs prior to the 5-year anniversary of the closing date of the acquisition. At this time, the number of shares, if any, to be issued in connection with the achievement of the specified milestone is not known and will be calculated based on the daily volume-weighted average price of our common stock for the twenty trading days ending on and including the fifth trading day immediately prior to the occurrence of the specified milestone. Upon achievement of the milestone, we may pay cash in lieu of our common stock to ensure that the issuance of our common stock does not exceed 19.9% of our outstanding shares of common stock then outstanding. The contingent consideration is accounted for as a liability at fair value, with changes during each reporting period recognized in our Consolidated Statements of Operations and Comprehensive Loss. The fair value of the contingent consideration liability is calculated, with the assistance from a third-party valuation firm, using a Monte Carlo Simulation to estimate the volatility and systematic relative risk of revenues subject to sales milestone payments and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate. We allocated the consideration transferred to the identifiable assets acquired and liabilities assumed based on preliminary estimates of their respective fair values at the date of the completion of the Apton acquisition, and such allocation is subject to adjustment for up to one year after the close of the acquisition as additional information is obtained. The major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred, based on the preliminary estimated fair values were as follows (in thousands): Cash and cash equivalents $ 97 In-process research and development 53,000 Goodwill 53,869 Other assets, current 153 Deferred income tax liability (10,920) Liabilities assumed (2,191) Total consideration transferred $ 94,008 The purchase price allocation is preliminary, primarily due to the pending finalization of the valuation analysis and review of various tax attributes. We continue to collect information regarding certain estimates and assumptions, including potential liabilities and contingencies. We will record adjustments to the fair value of the assets acquired, liabilities assumed and goodwill within the twelve months measurement period, if necessary. We incurred costs related to the Apton acquisition of approximately $9.0 million during the nine months ended September 30, 2023, which are included in merger-related expenses on the Condensed Consolidated Statement of Operations and Comprehensive Loss. Merger-related expenses include $2.8 million relating to a liquidity event bonus plan that was treated as a separate transaction and included the issuance of 168,621 shares of common stock that were issued with a fair value of $2.1 million based on the closing market price of our common stock on the acquisition date. As a result, the total shares issued in connection with the Apton acquisition were 6.3 million shares of common stock. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Fair Value of Financial Instruments Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy established under GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows: • Level 1: quoted prices in active markets for identical assets or liabilities; • Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities 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; and • 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. We consider an active market as one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, we view an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our non-performance risk, or that of our counterparty, is considered in determining the fair values of liabilities and assets, respectively. We classify our cash deposits and money market funds within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. We classify our investments as Level 2 instruments based on market pricing and other observable inputs. We did not classify any of our investments within Level 3 of the fair value hierarchy. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the entire fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The carrying amount of our accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other liabilities, current, approximate fair value due to their short maturities. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table sets forth the fair value of our financial assets and liabilities that were measured on a recurring basis (in thousands): September 30, 2023 December 31, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 196,621 $ 189,027 $ — $ 385,648 $ 137,636 $ 187,453 $ — $ 325,089 Investments: Commercial paper — 16,771 — 16,771 — 127,302 — 127,302 Corporate debt securities — 75,853 — 75,853 — 49,491 — 49,491 U.S. government & agency securities — 289,517 — 289,517 — 270,436 — 270,436 Total investments — 382,141 — 382,141 — 447,229 — 447,229 Short-term restricted cash 300 — — 300 300 — — 300 Long-term restricted cash 2,422 — — 2,422 2,922 — — 2,922 Total assets measured at fair value $ 199,343 $ 571,168 $ — $ 770,511 $ 140,858 $ 634,682 $ — $ 775,540 Liabilities Contingent consideration $ — $ — $ 18,450 $ 18,450 $ — $ — $ 172,094 $ 172,094 Total liabilities measured at fair value $ — $ — $ 18,450 $ 18,450 $ — $ — $ 172,094 $ 172,094 We classify contingent consideration, which was incurred in connection with the acquisition of Apton, within Level 3, as factors used to develop the estimate of fair value include unobservable inputs that are not supported by market activity and are significant to the fair value. Estimates and assumptions used in the Monte Carlo simulation include risk-adjusted forecasted revenues for products and services leveraging Apton's technology and an estimated credit spread. On September 20, 2023, we achieved the commercial milestone in connection with the acquisition of Omniome. Consequently, former Omniome securityholders were entitled to receive as milestone consideration, among other things, an aggregate of approximately $100.9 million in cash and approximately 9.0 million shares of our common stock, representing $95.9 million divided by the volume-weighted average of the trading prices of our common stock for the twenty two Following the achievement of the commercial milestone, $5.1 million of the contingent consideration was paid during the three and nine months ended September 30, 2023. Additionally, as the shares payable pursuant to the commercial milestone became fixed, and the contingency was resolved, the value attributable to the shares to be issued of $84.8 million was reclassified to additional paid-in capital on the Condensed Consolidated Balance Sheets. Such shares were issued to the former Omniome securityholders and the remainder of the cash payment was in October 2023. The remaining liability balance attributable to the achievement of the commercial milestone in September 2023 of $96.2 million is included in contingent consideration liability, current, in the Condensed Consolidated Balance Sheets as of September 30, 2023. As a result of the achievement of the milestone, the contingent consideration liability incurred in connection with the acquisition of Omniome was no longer considered a Level 3 liability at September 30, 2023. There were no other transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis for the nine months ended September 30, 2023, and our valuation techniques did not change compared to the prior year. Changes in the estimated fair value of the contingent consideration liability for the nine months ended September 30, 2023 were as follows (in thousands): Level 3 Beginning balance as of December 31, 2022 $ 172,094 Additions 18,450 Change in estimated fair value 13,960 Achievement of milestone $ (186,054) Ending balance as of September 30, 2023 $ 18,450 Changes to the fair value are recorded as change in fair value of contingent consideration in the Condensed Consolidated Statement of Operations and Comprehensive Loss. The following tables summarize our cash, cash equivalents and investments (in thousands): As of September 30, 2023 Amortized Gross Gross Fair Cash and cash equivalents 385,619 29 — 385,648 Investments: Commercial paper 16,771 — — 16,771 Corporate debt securities 76,161 3 (311) 75,853 U.S. government & agency securities 291,078 7 (1,568) 289,517 Total investments 384,010 10 (1,879) 382,141 Total cash, cash equivalents and investments $ 769,629 $ 39 $ (1,879) $ 767,789 Short-term restricted cash $ 300 $ — $ — $ 300 Long-term restricted cash $ 2,422 $ — $ — $ 2,422 As of December 31, 2022 Amortized Gross Gross Fair Cash and cash equivalents 325,144 6 (61) 325,089 Investments: Commercial paper 127,626 9 (333) 127,302 Corporate debt securities 49,998 — (507) 49,491 U.S. government & agency securities 274,315 1 (3,880) 270,436 Total investments 451,939 10 (4,720) 447,229 Total cash, cash equivalents and investments $ 777,083 $ 16 $ (4,781) $ 772,318 Short-term restricted cash $ 300 $ — $ — $ 300 Long-term restricted cash $ 2,922 $ — $ — $ 2,922 The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of September 30, 2023 (in thousands): Fair Value Due in one year or less $ 498,366 Due after one year through five years 72,802 Total $ 571,168 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties. Investment income included in other income, net on the Condensed Consolidated Statement of Operations and Comprehensive Loss was $9.2 million and $25.0 million for the three and nine months ended September 30, 2023, respectively, and $2.8 million and $4.3 million for the three and nine months ended September 30, 2022, respectively. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Components [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS Inventory, net Our inventory, net, consisted of the following components (in thousands): September 30, December 31, Purchased materials $ 23,333 $ 24,139 Work in process 27,883 14,062 Finished goods 17,040 12,180 Inventory, net $ 68,256 $ 50,381 Intangible Assets and Goodwill Intangible assets include acquired in-process research and development ("IPR&D") of $53.0 million as a result of the Apton acquisition in August 2023. The IPR&D will remain on our Consolidated Balance Sheet as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development activities. During the development period following the acquisition, IPR&D will not be amortized, but instead will be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Upon completion of the development, we will begin to amortize the asset over the life of the product or record an impairment charge if the asset is determined to be impaired. In addition to IPR&D, definite-lived intangible assets included the following (in thousands, except years): As of September 30, 2023 As of December 31, 2022 Estimated Gross Accumulated Net Gross Accumulated Net Developed technology 15 $ 411,179 $ (2,341) $ 408,838 $ 11,179 $ (1,039) $ 10,140 Customer relationships 2 360 (360) — 360 (255) 105 Total $ 411,539 $ (2,701) $ 408,838 $ 11,539 $ (1,294) $ 10,245 The developed technology as of September 30, 2023 includes the completed IPR&D from the Omniome acquisition that was completed in September 2023. The estimated future amortization expense of intangible assets with definite lives is as follows (in thousands): Remainder of 2023 $ 6,854 2024 27,412 2025 27,412 2026 27,412 2027 27,412 2028 and thereafter 292,337 Total $ 408,838 Amortization of intangible assets is included within our cost of revenue if the costs and expenses related to the intangible assets are attributable to revenue generating activities. Amortization expense for intangible assets that are not directly related to sales generating activities are amortized to operating expenses. The definite-lived intangible assets are amortized using the straight-line method over their estimated useful lives. We review definite-lived intangible assets for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. We had goodwill of $463.8 million as of September 30, 2023, which preliminarily increased by $53.9 million, due to the Apton acquisition, of which $10.9 million relates to a deferred income tax liability, as compared to $410.0 million as of December 31, 2022. Goodwill is reviewed for impairment at least annually during the second quarter, or more frequently if an event occurs indicating the potential for impairment. We performed our annual assessment for goodwill impairment in the second quarter of 2023, noting no impairment. Deferred Revenue As of September 30, 2023, we had a total of $27.5 million of deferred revenue, $22.4 million of which was recorded as deferred revenue, current, and primarily relates to future performance obligations under the Amended and Restated Agreement with Invitae Corporation ("Invitae") and deferred service contract revenues. The deferred revenue, non-current balance of $5.1 million primarily relates to future performance obligations under the Amended and Restated Agreement with Invitae and deferred service contract revenues and is scheduled to be recognized in the next 5 years. The deferred revenue, non-current balance includes $3.0 million that was reclassified from deferred revenue, current to deferred revenue, non-current following receipt of a non-cancellable order from Invitae during the nine months ended September 30, 2023 for partial utilization of the available credits, which is expected to be recognized in revenue after 12 months from September 30, 2023. Revenue recorded in the three and nine months ended September 30, 2023 includes $3.7 million and $11.7 million, respectively, that was included in deferred revenue as of December 31, 2022, of which $2.1 million and $4.2 million was included in product revenue recognized from the partial utilization of available credits by Invitae during the three and nine months ended September 30, 2023, respectively. Refer to Note 3 – Invitae Collaboration , in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2022 for more information . Product Warranties We generally provide a one-year warranty on instruments. In addition, we provide a limited warranty on consumables. At the time revenue is recognized, an accrual is established for estimated warranty costs based on historical experience as well as anticipated product performance. We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated costs to be incurred. Warranty expense is recorded as a component of cost of product revenue. There were no material changes in estimates for the periods presented below. Changes in the reserve for product warranties were as follows for the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Balance at beginning of period $ 2,862 $ 1,609 $ 1,651 $ 594 Additions charged to cost of product revenue 2,825 779 5,675 2,644 Repairs and replacements (1,722) (622) (3,361) (1,472) Balance at end of period $ 3,965 $ 1,766 $ 3,965 $ 1,766 Term loans In connection with the acquisition of Omniome, we acquired $1.3 million in short-term debt and $3.0 million in long-term debt relating to a term loan facility that Omniome obtained in April 2020. Borrowings on the term loan facility were used to fund Omniome’s purchases of equipment, which serves as collateral. Each term loan has a term of 43 months and bears a fixed interest rate of approximately 17% annually. The fee for the elective option to prepay all, but not less than all, of the borrowed amounts at any time after the 24 th month and before the 43 rd month after the commencement date, is 4% of the outstanding loan balance. Payments are made in equal monthly installments including principal and interest. As of September 30, 2023, the carrying value of term loans outstanding was $0.9 million, recorded as part of other liabilities, current on the Condensed Consolidated Balance Sheet. The interest expense was $0.1 million and $0.2 million for the three and nine months ended September 30, 2023, which was included as part of interest expense in the Condensed Consolidated Statement of Operations and Comprehensive Loss. The following table presents the future principal payments on the term loans (in thousands): Remainder of 2023 $ 444 2024 490 Total $ 934 |
CONVERTIBLE SENIOR NOTES
CONVERTIBLE SENIOR NOTES | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE SENIOR NOTES | CONVERTIBLE SENIOR NOTES 2030 Convertible Senior Notes In June 2023, we entered into a privately negotiated exchange agreement with a holder of our outstanding 1.50% Convertible Senior Notes due 2028 (the “2028 Notes”), pursuant to which we issued $441.0 million in aggregate principal amount of our 1.375% Convertible Senior Notes due 2030 (the “2030 Notes”) in exchange for $441.0 million principal amount of the 2028 Notes (the “Exchange Transaction”), pursuant to exemptions from registration under the Securities Act of 1933, as amended, and the rules and regulations thereunder. The 2030 Notes were issued on June 30, 2023. The 2030 Notes are governed by an indenture (the “2030 Indenture”) between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2030 Notes bear interest at a rate of 1.375% per annum. Interest on the 2030 Notes is payable semi-annually in arrears on June 15 and December 15, commencing on December 15, 2023. The 2030 Notes will mature on December 15, 2030, subject to earlier conversion, redemption or repurchase. The 2030 Notes are convertible at the option of the holder at any time until the second scheduled trading day prior to the maturity date, including in connection with a redemption by the Company. The 2030 Notes are convertible into shares of our common stock based on an initial conversion rate of 46.5116 shares of common stock per $1,000 principal amount of the 2030 Notes (which is equal to an initial conversion price of $21.50 per share of common stock), in each case subject to customary anti-dilution and other adjustments as a result of certain extraordinary transactions. Upon conversion of the 2030 Notes, we may elect to settle such conversion obligation in shares of our common stock, cash or a combination of shares of our common stock and cash. On or after June 20, 2028, the 2030 Notes will be redeemable by the Company in the event that the closing sale price of our common stock has been at least 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice at a redemption price of 100% of the principal amount of such 2030 Notes, plus accrued and unpaid interest up to, but excluding, the redemption date. Upon the occurrence of a Fundamental Change (as defined in the 2030 Indenture), the holders of the 2030 Notes may require that we repurchase all or part of the principal amount of the 2030 Notes at a purchase price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest up to, but excluding, the fundamental change repurchase date, and all unpaid interest from the fundamental change repurchase date thereon, but excluding, the maturity date. The 2030 Indenture includes customary “events of default,” which may result in the acceleration of the maturity of the 2030 Notes under the 2030 Indenture. The 2030 Indenture also includes customary covenants for convertible notes of this type. To the extent we elect, the sole remedy for an event of default relating to our failure to comply with certain of our reporting obligations shall, for the first 360 calendar days after the occurrence of such an event of default, consist exclusively of the right to receive additional interest on the 2030 Notes at a rate equal to (i) 0.25% per annum of the principal amount of the 2030 Notes outstanding for each day during the first 180 calendar days of the 360-day period after the occurrence of such an event of default during which such event of default is continuing (or, if earlier, the date on which such event of default is cured or waived) and (ii) 0.50% per annum of the principal amount of the 2030 Notes outstanding for each day from, and including, the 181st calendar day to, and including, the 360th calendar day after the occurrence of such an event of default during which such event of default is continuing (or, if earlier, the date on which such event of default is cured or waived as provided for in the 2030 Indenture). On the 361st day after such event of default (if the event of default relating to our failure to comply with its obligations is not cured or waived prior to such 361st day), the 2030 Notes shall be subject to acceleration as provided for in the 2030 Indenture. The 2030 Notes are accounted for in accordance with the authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. Under ASU 2020-06, the guidance requires that debt with an embedded conversion feature is accounted for in its entirety as a liability and no portion of the proceeds from the issuance of the convertible debt instrument is accounted for as attributable to the conversion feature unless the conversion feature is required to be accounted for separately as an embedded derivative or the conversion feature results in a substantial premium. The conversion feature of the 2030 Notes is not accounted for as an embedded derivative because it is considered to be indexed to our common stock, and the 2030 Notes were not issued at a substantial premium; therefore, the 2030 Notes are accounted for in their entirety as a liability. Because we may elect to settle any conversions entirely in shares, and because settlement in shares is the default settlement method, the liability is classified as non-current. The requirement to repurchase the 2030 Notes, including unpaid interest to the maturity date in the event of a Fundamental Change, is considered a put option for certain periods requiring bifurcation under ASC 815 – Derivatives and Hedging. However, given the low probability of such a Fundamental Change occurring during the applicable periods, the value of the embedded derivative is immaterial. The additional interest feature in the event of our failure to comply with certain reporting obligations is also considered an embedded derivative requiring bifurcation under ASC 815. However, due to the nature and terms of the reporting obligations, the value of the embedded derivative is immaterial. The Exchange Transaction was accounted for as an extinguishment driven by the change in fair value of the embedded conversion option. We recorded a loss on extinguishment of debt of approximately $2.0 million in connection with the Exchange Transaction during the nine months ended September 30, 2023, which represents the difference between the fair value and the principal amount of the 2030 Notes of the debt at the modification date, plus unamortized debt issuance costs of $1.5 million related to the respective portion of the 2028 Notes. We incurred issuance costs related to the 2030 Notes of approximately $7.3 million, which were recorded as debt issuance costs and are presented as a reduction to the 2030 Notes on our Consolidated Balance Sheets and are amortized to interest expense using the effective interest method over the term of the 2030 Notes, resulting in an effective interest rate of 1.6%. We also paid accrued but unpaid interest of $2.5 million on the 2028 Notes in connection with the Exchange Transaction on June 30, 2023. We did not receive any cash proceeds from the Exchange Transaction. In exchange for issuing the 2030 Notes pursuant to the Exchange Transaction, we received and cancelled the exchanged 2028 Notes. Following the closing of the Exchange Transaction, $459.0 million in aggregate principal amount of 2028 Notes remained outstanding with terms unchanged. The net carrying amount of the liability for the 2030 Notes is included as convertible senior notes, net, non-current in the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, December 31, Principal amount $ 441,000 $ — Unamortized debt premium 542 — Unamortized debt issuance costs (7,093) — Net carrying amount $ 434,449 $ — For the three and nine months ended September 30, 2023 and 2022, interest expense for the 2030 Notes was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Contractual interest expense $ 1,516 $ — $ 1,516 $ — Amortization of debt issuance costs 229 — 229 — Total interest expense $ 1,745 $ — $ 1,745 $ — As of September 30, 2023, the estimated fair value (Level 2) of the 2030 Notes was $356.6 million. The fair value of the 2030 Notes is estimated using a binomial lattice model that is primarily affected by the trading price of our common stock, market interest rates and volatility. 2028 Convertible Senior Notes On February 9, 2021, we entered into an investment agreement (the “Investment Agreement”) with SB Northstar LP (the “Purchaser”), a subsidiary of SoftBank Group Corp., relating to the issuance and sale to the Purchaser of $900.0 million in aggregate principal amount of the 2028 Notes. The 2028 Notes were issued on February 16, 2021. As discussed above, in June 2023 we completed an exchange of $441.0 million in aggregate principal amount of our 2028 Notes for $441.0 million aggregate principal amount of the 2030 Notes, leaving approximately $459.0 million in aggregate principal amount of 2028 Notes outstanding. The 2028 Notes are governed by an indenture (the “2028 Indenture”) between the Company and U.S. Bank National Association, as trustee. The 2028 Notes bear interest at a rate of 1.50% per annum. Interest on the 2028 Notes is payable semi-annually in arrears on February 15 and August 15 and commenced on August 15, 2021. The 2028 Notes will mature on February 15, 2028, subject to earlier conversion, redemption or repurchase. The 2028 Notes are convertible at the option of the holder at any time until the second scheduled trading day prior to the maturity date, including in connection with a redemption by the Company. The 2028 Notes are convertible into shares of our common stock based on an initial conversion rate of 22.9885 shares of common stock per $1,000 principal amount of the 2028 Notes (which is equal to an initial conversion price of $43.50 per share of common stock), in each case subject to customary anti-dilution and other adjustments as a result of certain extraordinary transactions. Upon conversion of the 2028 Notes, we may elect to settle such conversion obligation in shares of our common stock, cash or a combination of shares of our common stock and cash. On or after February 20, 2026, the 2028 Notes will be redeemable by the Company in the event that the closing sale price of our common stock has been at least 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the redemption notice at a redemption price of 100% of the principal amount of such 2028 Notes, plus accrued and unpaid interest up to, but excluding, the redemption date. Upon the occurrence of a Fundamental Change (as defined in the 2028 Indenture), the holders of the 2028 Notes may require that we repurchase all or part of the principal amount of the 2028 Notes at a purchase price of par plus unpaid interest up to, but excluding, the maturity date. The 2028 Indenture includes customary “events of default,” which may result in the acceleration of the maturity of the 2028 Notes under the 2028 Indenture. The 2028 Indenture also includes customary covenants for convertible notes of this type. To the extent we elect, the sole remedy for an event of default relating to our failure to comply with certain of our reporting obligations shall, for the first 360 calendar days after the occurrence of such an event of default, consist exclusively of the right to receive additional interest on the 2028 Notes at a rate equal to (i) 0.25% per annum of the principal amount of the 2028 Notes outstanding for each day during the first 180 calendar days of the 360-day period after the occurrence of such an event of default during which such event of default is continuing (or, if earlier, the date on which such event of default is cured or waived) and (ii) 0.50% per annum of the principal amount of the 2028 Notes outstanding for each day from, and including, the 181st calendar day to, and including, the 360th calendar day after the occurrence of such an event of default during which such event of default is continuing (or, if earlier, the date on which such event of default is cured or waived as provided for in the 2028 Indenture). On the 361st day after such event of default (if the event of default relating to our failure to comply with its obligations is not cured or waived prior to such 361st day), the 2028 Notes shall be subject to acceleration as provided for in the 2028 Indenture. The 2028 Notes are accounted for in accordance with the authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. Under ASU 2020-06, the guidance requires that debt with an embedded conversion feature is accounted for in its entirety as a liability and no portion of the proceeds from the issuance of the convertible debt instrument is accounted for as attributable to the conversion feature unless the conversion feature is required to be accounted for separately as an embedded derivative or the conversion feature results in a substantial premium. The conversion feature of the 2028 Notes is not accounted for as an embedded derivative because it is considered to be indexed to our common stock, and the 2028 Notes were not issued at a premium; therefore, the 2028 Notes are accounted for in their entirety as a liability. Because we may elect to settle any conversions entirely in shares, and because settlement in shares is the default settlement method, the liability is classified as non-current. The requirement to repurchase the 2028 Notes, including unpaid interest to the maturity date in the event of a Fundamental Change, is considered a put option for certain periods requiring bifurcation under ASC 815 – Derivatives and Hedging. However, given the low probability of such a Fundamental Change occurring during the applicable periods, the value of the embedded derivative is immaterial. The additional interest feature in the event of our failure to comply with certain reporting obligations is also considered an embedded derivative requiring bifurcation under ASC 815. However, due to the nature and terms of the reporting obligations, the value of the embedded derivative is immaterial. We incurred issuance costs related to the 2028 Notes of approximately $4.5 million, which were recorded as debt issuance costs and are presented as a reduction to the 2028 Notes on our Consolidated Balance Sheets and are amortized to interest expense using the effective interest method over the term of the 2028 Notes, resulting in an effective interest rate of 1.6%. The net carrying amount of the liability for the 2028 Notes is included as convertible senior notes, net, non-current in the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, December 31, Principal amount $ 459,000 $ 900,000 Unamortized debt issuance costs (1,453) (3,317) Net carrying amount $ 457,547 $ 896,683 For the three and nine months ended September 30, 2023 and 2022, interest expense for the 2028 Notes was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Contractual interest expense $ 1,721 $ 3,375 $ 8,415 $ 10,125 Amortization of debt issuance costs 80 154 392 462 Total interest expense $ 1,801 $ 3,529 $ 8,807 $ 10,587 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company has entered into various operating lease agreements, primarily relating to our corporate offices. See Note 8 – Commitments and Contingencies , subsection titled “Leases”, in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2022 for information regarding the Company’s maturity of lease liabilities under its lease agreements. Contingencies We may become involved in legal proceedings, claims and assessments from time to time in the ordinary course of business. We accrue liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We do not believe that the ultimate outcome of any such pending matters is probable or reasonably estimable, or that these matters will have a material adverse effect on our business; however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of litigation and settlement costs, diversion of management resources, and other factors. Please see subsection titled Legal Proceedings, in Part II, Item 1 of this Quarterly Report on Form 10-Q. Indemnification Pursuant to Delaware law and agreements entered into with each of our directors and officers, we may have obligations, under certain circumstances, to hold harmless and indemnify each of our directors and officers against losses suffered or incurred by the indemnified party in connection with their service to us, and judgements, fines, settlements and expenses related to claims arising against such directors and officers to the fullest extent permitted under Delaware law, our bylaws and our certificate of incorporation. We also enter and have entered into indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law. In addition, we may have obligations to hold harmless and indemnify third parties involved with our fundraising efforts and their respective affiliates, directors, officers, employees, agents or other representatives against any and all losses, claims, damages and liabilities related to claims arising against such parties pursuant to the terms of agreements entered into between such third parties and us in connection with such fundraising efforts. To the extent that any such indemnification obligations apply to the lawsuits described above, any associated expenses incurred are included within the related accrued litigation expense amounts. No additional liability associated with such indemnification obligations has been recorded as of September 30, 2023 and December 31, 2022. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Underwritten Public Equity Offering In January 2023, we entered into an underwriting agreement, relating to the public offering of 17.5 million shares of our common stock, $0.001 par value per share, at a price to the public of $10.00 per share. Under the terms of the underwriting agreement, we also granted the underwriters a 30-day option to purchase up to an additional 2.6 million shares of our common stock, which was subsequently exercised in full, and the offering, including the sale of shares of common stock subject to the underwriters' option, closed in January 2023. In total, we sold 20.1 million shares of our common stock. We paid a commission equal to 5.75% of the gross proceeds from the sale of shares of our common stock. The total net proceeds to us from the offering after deducting the underwriting discount were approximately $189.7 million, excluding approximately $0.5 million of offering expenses. Refer to Note 10 – Stockholders' Equity , in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2022 for more information on the Company's underwritten public equity offerings and private placement of common stock . Equity Plans As of September 30, 2023, the Company had share-based compensation awards outstanding under the 2020 Equity Incentive Plan (the “2020 Plan”), the 2020 Inducement Equity Incentive Plan (the “Inducement Plan”), the 2021 adopted Omniome Equity Incentive Plan of Pacific Biosciences of California, Inc. (the “Omniome Plan”) and the 2010 Employee Stock Purchase Plan, from which we issued equity awards and employee stock. As of September 30, 2023, we had 12.3 million shares remaining and available for future issuance under the 2020 Plan, Inducement Plan, and the Omniome Plan. Shares remaining and available for future issuance reflect shares that may become eligible to vest upon the achievement of maximum targets for certain equity awards. Refer to Note 10 – Stockholders' Equity , in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2022 for more information on the Company's equity plans . Stock Options Time-based Stock Options The following table summarizes stock option activity for time-based awards (shares in thousands): Number Weighted Outstanding at December 31, 2022 14,618 $ 10.60 Granted 332 12.11 Exercised (929) 4.70 Canceled (810) 18.05 Outstanding at September 30, 2023 13,211 $ 10.60 Performance-based Stock Options The following table summarizes stock option activity for performance-based awards (shares in thousands): Number Weighted Outstanding at December 31, 2022 258 $ 4.71 Granted — — Exercised (251) 4.71 Canceled (4) 4.71 Outstanding at September 30, 2023 3 $ 4.74 Restricted Stock Units (“RSU”) and Performance Stock Units ("PSU") We issue RSUs for which the respective shares vest when the requisite service period is achieved. We issue PSUs for which the number of shares issuable in the third year of the performance period based on performance relative to specified revenue targets and continued employment through the vesting period. Maximum achievement of the revenue goal under the PSUs will result in up to 200% of the target number of shares subject to the PSUs to become eligible to vest, while not meeting the minimum achievement of the revenue goal under the PSUs will result in no shares subject to the PSUs becoming eligible to vest. The following table summarizes the time-based RSUs and PSUs activity (shares in thousands): Restricted Stock Units (RSU) Performance Stock Units (PSU) Weighted average grant date RSU PSU Outstanding at December 31, 2022 8,535 — $ 15.16 $ — Granted 6,970 564 9.71 9.43 Vested (2,538) — 14.19 — Forfeited (1,008) (23) 14.73 9.43 Outstanding at September 30, 2023 11,959 541 $ 12.23 $ 9.43 Employee Stock Purchase Plan (“ESPP”) Shares issued under our ESPP wer e 1,735,058 and 1,878,168 during the nine months ended September 30, 2023 and 2022, respectively. In February 2023, an additional 4.0 million shares were reserved under the ESPP. As of September 30, 2023, 12.2 million shares of our common stock remain available for issuance under our ESPP. Share-Based Compensation The following table summarizes share-based compensation expense (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cost of revenue $ 1,125 $ 934 $ 4,251 $ 3,680 Research and development 6,182 7,519 18,310 24,232 Sales, general and administrative 12,384 10,483 32,973 32,746 Total share-based compensation expense $ 19,691 $ 18,936 $ 55,534 $ 60,658 Determining Fair Value We estimate the fair value of stock options granted using the Black-Scholes valuation method and a single option award approach. When determining the current share prices underlying the stock options for calculating the grant-date fair value, we reference the observable market prices of our stock. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair market value of RSUs and PSUs granted is the closing price of our shares on the date of grant and is generally recognized as compensation expense on a straight-line basis over the respective vesting period. For shares purchased under our ESPP, we estimate the grant-date fair value, and the resulting share-based compensation expense, using the Black-Scholes option-pricing model. We estimate forfeitures of stock options, RSUs and shares purchased under our ESPP which is utilized to determine the compensation expense to be recorded over the requisite service period. • Expected Term - The expected term used in the Black-Scholes valuation method represents the period that the stock options are expected to be outstanding and is determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock options and vesting schedules. • Expected Volatility - The expected volatility used in the Black-Scholes valuation method is derived from the implied volatility related to our share price over the expected term. • Expected Dividend - We have never paid dividends on our shares and, accordingly, the dividend yield percentage is zero for all periods. • Risk-Free Interest Rate - The risk-free interest rate used in the Black-Scholes valuation method is the implied yield currently available on U.S. Treasury constant maturities issued with a term equivalent to the expected terms. The fair value of employee stock options was estimated using the following assumptions: Nine Months Ended September 30, 2023 2022 Expected term in years 4.9 4.6 Expected volatility 78% 70% — 76% Risk-free interest rate 3.73% - 4.21% 0.41% — 3.66% Dividend yield — — Weighted average grant date fair value per share $7.89 $5.93 The fair value of shares to be issued under the ESPP was estimated using the following assumptions: Nine Months Ended September 30, 2023 2022 Expected term in years 0.5 — 2.0 0.5 — 2.0 Expected volatility 79% — 97% 70% — 97% Risk-free interest rate 4.87% — 5.47% 0.60% — 3.51% Dividend yield — — Weighted average grant date fair value per share $5.34 $4.28 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding and potential shares assuming the dilutive effect of the convertible senior notes, using the if-converted method, and outstanding equity awards using the treasury stock method. The following table presents the calculation of the basic and diluted net loss per share amounts presented in the Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator: Net loss $ (66,869) $ (76,971) $ (224,717) $ (229,864) Denominator: Basic Weighted average shares used in computing basic net loss 255,001 225,123 249,082 223,981 Basic net loss per share $ (0.26) $ (0.34) $ (0.90) $ (1.03) Diluted Weighted average shares used in computing diluted net loss per share 255,001 225,123 249,082 223,981 Diluted net loss per share $ (0.26) $ (0.34) $ (0.90) $ (1.03) The following shares issuable upon conversion of the convertible senior notes and outstanding equity awards were excluded from the computation of diluted net loss per share for the periods presented because the effect of including such shares would have been antidilutive (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Shares issuable upon conversion of convertible senior notes 31,063 20,690 31,063 20,690 Equity Awards 28,100 28,087 28,100 28,087 |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE A summary of our revenue by geographic location is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Americas $ 28,978 $ 16,743 $ 71,480 $ 57,547 Europe, Middle East and Africa 10,994 5,997 29,594 17,432 Asia-Pacific 15,719 9,571 41,090 25,972 Total $ 55,691 $ 32,311 $ 142,164 $ 100,951 A summary of our revenue by category is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Instrument revenue $ 34,694 $ 11,442 $ 85,317 $ 42,611 Consumable revenue 16,868 16,067 44,554 43,317 Product revenue 51,562 27,509 129,871 85,928 Service and other revenue 4,129 4,802 12,293 15,023 Total revenue $ 55,691 $ 32,311 $ 142,164 $ 100,951 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (66,869) | $ (76,971) | $ (224,717) | $ (229,864) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 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 |
ORGANIZATION AND SIGNIFICANT _2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Our unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or U.S. GAAP, as set forth in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC. The unaudited condensed consolidated financial statements include the accounts of Pacific Biosciences and our wholly owned subsidiaries. Certain information and footnote disclosures typically included in our audited financial statements have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements have been prepared on a consistent basis with the December 31, 2022 audited consolidated financial statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state our financial position, results of operations, comprehensive loss, and cash flows for the period, but are not necessarily indicative of the results to be expected for the entire year or any future periods. All intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform to current period presentation. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements. On an ongoing basis, we evaluate our significant estimates including, but not limited to, the valuation of inventory, the determination of stand-alone selling prices for revenue recognition, the fair value of contingent consideration, the valuation of acquired intangible assets, the fair value of certain equity awards, the useful lives assigned to long-lived assets, the computation of provisions for income taxes, the borrowing rate used in calculating the operating lease right-of-use assets and operating lease liabilities, the probability associated with variable payments under partnership development agreements, and the valuations related to our convertible senior notes. While the extent of the potential impact of the current macroeconomic conditions on our business is highly uncertain, we considered information available related to assumptions and estimates used to determine the results reported and asset valuations as of September 30, 2023. Actual results could differ materially from these estimates. |
Cash, Cash Equivalents | We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash equivalents may be comprised of money market funds, certificates of deposit, commercial paper, corporate bonds and notes, and government agencies’ securities. |
Investments | We classify our investments in debt securities as available-for sale and report the investments at fair value in current assets. We evaluate our available-for-sale investments in unrealized loss positions and assess whether the unrealized loss is credit-related. Unrealized gains and losses that are not credit-related are recognized in accumulated other comprehensive loss in stockholders’ equity. Realized gains and losses, expected credit losses, as well as interest income, on available-for-sale securities are also reported in other income (expense), net. The cost used in the determination of gains and losses of securities sold is based on the specific identification method. The cost of marketable securities is adjusted for the amortization of premiums and discounts to expected maturity. Premium and discount amortization is recorded in other income (expense), net. Our investment portfolio at any point in time contains investments in cash deposits, money market funds, commercial paper, corporate debt securities and U.S. government and agency securities with high credit ratings. We have established guidelines regarding diversification and maturities of investments with the objectives of maintaining safety and liquidity, while maximizing yield. |
Restricted Cash | Restricted cash includes cash that is not readily available for use in the Company’s operating activities. Restricted cash is primarily comprised of cash pledged under letters of credit. |
Recent Accounting Pronouncements | Recently Adopted Accounting Standards In October 2021, the FASB issued Accounting Standards Update ("ASU") No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU provides specific guidance on how to recognize contract assets and contract liabilities related to revenue contracts with customers acquired in a business combination. This amendment improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. We adopted this ASU on January 1, 2023. The adoption of this guidance did not have a material effect on our consolidated financial statements. |
Fair Value of Financial Instruments | We consider an active market as one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, we view an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our non-performance risk, or that of our counterparty, is considered in determining the fair values of liabilities and assets, respectively. We classify our cash deposits and money market funds within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. We classify our investments as Level 2 instruments based on market pricing and other observable inputs. We did not classify any of our investments within Level 3 of the fair value hierarchy. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the entire fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The carrying amount of our accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other liabilities, current, approximate fair value due to their short maturities. |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Combination | The major classes of assets and liabilities to which we have allocated the total fair value of the consideration transferred, based on the preliminary estimated fair values were as follows (in thousands): Cash and cash equivalents $ 97 In-process research and development 53,000 Goodwill 53,869 Other assets, current 153 Deferred income tax liability (10,920) Liabilities assumed (2,191) Total consideration transferred $ 94,008 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, All Other Investments [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table sets forth the fair value of our financial assets and liabilities that were measured on a recurring basis (in thousands): September 30, 2023 December 31, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 196,621 $ 189,027 $ — $ 385,648 $ 137,636 $ 187,453 $ — $ 325,089 Investments: Commercial paper — 16,771 — 16,771 — 127,302 — 127,302 Corporate debt securities — 75,853 — 75,853 — 49,491 — 49,491 U.S. government & agency securities — 289,517 — 289,517 — 270,436 — 270,436 Total investments — 382,141 — 382,141 — 447,229 — 447,229 Short-term restricted cash 300 — — 300 300 — — 300 Long-term restricted cash 2,422 — — 2,422 2,922 — — 2,922 Total assets measured at fair value $ 199,343 $ 571,168 $ — $ 770,511 $ 140,858 $ 634,682 $ — $ 775,540 Liabilities Contingent consideration $ — $ — $ 18,450 $ 18,450 $ — $ — $ 172,094 $ 172,094 Total liabilities measured at fair value $ — $ — $ 18,450 $ 18,450 $ — $ — $ 172,094 $ 172,094 |
Changes in the Estimated Fair Value of Contingent Consideration Liability | Changes in the estimated fair value of the contingent consideration liability for the nine months ended September 30, 2023 were as follows (in thousands): Level 3 Beginning balance as of December 31, 2022 $ 172,094 Additions 18,450 Change in estimated fair value 13,960 Achievement of milestone $ (186,054) Ending balance as of September 30, 2023 $ 18,450 |
Summary of Cash, Cash Equivalents and Investments | The following tables summarize our cash, cash equivalents and investments (in thousands): As of September 30, 2023 Amortized Gross Gross Fair Cash and cash equivalents 385,619 29 — 385,648 Investments: Commercial paper 16,771 — — 16,771 Corporate debt securities 76,161 3 (311) 75,853 U.S. government & agency securities 291,078 7 (1,568) 289,517 Total investments 384,010 10 (1,879) 382,141 Total cash, cash equivalents and investments $ 769,629 $ 39 $ (1,879) $ 767,789 Short-term restricted cash $ 300 $ — $ — $ 300 Long-term restricted cash $ 2,422 $ — $ — $ 2,422 As of December 31, 2022 Amortized Gross Gross Fair Cash and cash equivalents 325,144 6 (61) 325,089 Investments: Commercial paper 127,626 9 (333) 127,302 Corporate debt securities 49,998 — (507) 49,491 U.S. government & agency securities 274,315 1 (3,880) 270,436 Total investments 451,939 10 (4,720) 447,229 Total cash, cash equivalents and investments $ 777,083 $ 16 $ (4,781) $ 772,318 Short-term restricted cash $ 300 $ — $ — $ 300 Long-term restricted cash $ 2,922 $ — $ — $ 2,922 The following table summarizes the contractual maturities of our cash equivalents and available-for-sale investments, excluding money market funds, as of September 30, 2023 (in thousands): Fair Value Due in one year or less $ 498,366 Due after one year through five years 72,802 Total $ 571,168 |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Components [Abstract] | |
Components of Inventory | Our inventory, net, consisted of the following components (in thousands): September 30, December 31, Purchased materials $ 23,333 $ 24,139 Work in process 27,883 14,062 Finished goods 17,040 12,180 Inventory, net $ 68,256 $ 50,381 |
Schedule of Definite-lived Intangible Assets from Business Acquisitions | In addition to IPR&D, definite-lived intangible assets included the following (in thousands, except years): As of September 30, 2023 As of December 31, 2022 Estimated Gross Accumulated Net Gross Accumulated Net Developed technology 15 $ 411,179 $ (2,341) $ 408,838 $ 11,179 $ (1,039) $ 10,140 Customer relationships 2 360 (360) — 360 (255) 105 Total $ 411,539 $ (2,701) $ 408,838 $ 11,539 $ (1,294) $ 10,245 |
Estimated Future Amortization Expense of Acquisition-Related Intangible Assets with Definite Lives | The estimated future amortization expense of intangible assets with definite lives is as follows (in thousands): Remainder of 2023 $ 6,854 2024 27,412 2025 27,412 2026 27,412 2027 27,412 2028 and thereafter 292,337 Total $ 408,838 |
Changes in Reserve for Product Warranties | Changes in the reserve for product warranties were as follows for the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Balance at beginning of period $ 2,862 $ 1,609 $ 1,651 $ 594 Additions charged to cost of product revenue 2,825 779 5,675 2,644 Repairs and replacements (1,722) (622) (3,361) (1,472) Balance at end of period $ 3,965 $ 1,766 $ 3,965 $ 1,766 |
Future Principal Payments, Fiscal Year Maturity | The following table presents the future principal payments on the term loans (in thousands): Remainder of 2023 $ 444 2024 490 Total $ 934 |
CONVERTIBLE SENIOR NOTES (Table
CONVERTIBLE SENIOR NOTES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Net Carrying Amount | The net carrying amount of the liability for the 2030 Notes is included as convertible senior notes, net, non-current in the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, December 31, Principal amount $ 441,000 $ — Unamortized debt premium 542 — Unamortized debt issuance costs (7,093) — Net carrying amount $ 434,449 $ — The net carrying amount of the liability for the 2028 Notes is included as convertible senior notes, net, non-current in the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, December 31, Principal amount $ 459,000 $ 900,000 Unamortized debt issuance costs (1,453) (3,317) Net carrying amount $ 457,547 $ 896,683 |
Schedule of Interest Expense | For the three and nine months ended September 30, 2023 and 2022, interest expense for the 2030 Notes was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Contractual interest expense $ 1,516 $ — $ 1,516 $ — Amortization of debt issuance costs 229 — 229 — Total interest expense $ 1,745 $ — $ 1,745 $ — For the three and nine months ended September 30, 2023 and 2022, interest expense for the 2028 Notes was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Contractual interest expense $ 1,721 $ 3,375 $ 8,415 $ 10,125 Amortization of debt issuance costs 80 154 392 462 Total interest expense $ 1,801 $ 3,529 $ 8,807 $ 10,587 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following table summarizes stock option activity for time-based awards (shares in thousands): Number Weighted Outstanding at December 31, 2022 14,618 $ 10.60 Granted 332 12.11 Exercised (929) 4.70 Canceled (810) 18.05 Outstanding at September 30, 2023 13,211 $ 10.60 The following table summarizes stock option activity for performance-based awards (shares in thousands): Number Weighted Outstanding at December 31, 2022 258 $ 4.71 Granted — — Exercised (251) 4.71 Canceled (4) 4.71 Outstanding at September 30, 2023 3 $ 4.74 |
Summary of Time-Based RSUs Activity | The following table summarizes the time-based RSUs and PSUs activity (shares in thousands): Restricted Stock Units (RSU) Performance Stock Units (PSU) Weighted average grant date RSU PSU Outstanding at December 31, 2022 8,535 — $ 15.16 $ — Granted 6,970 564 9.71 9.43 Vested (2,538) — 14.19 — Forfeited (1,008) (23) 14.73 9.43 Outstanding at September 30, 2023 11,959 541 $ 12.23 $ 9.43 |
Schedule of Stock-Based Compensation Expense | The following table summarizes share-based compensation expense (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cost of revenue $ 1,125 $ 934 $ 4,251 $ 3,680 Research and development 6,182 7,519 18,310 24,232 Sales, general and administrative 12,384 10,483 32,973 32,746 Total share-based compensation expense $ 19,691 $ 18,936 $ 55,534 $ 60,658 |
Schedule of Fair Value of Employee Stock Options | The fair value of employee stock options was estimated using the following assumptions: Nine Months Ended September 30, 2023 2022 Expected term in years 4.9 4.6 Expected volatility 78% 70% — 76% Risk-free interest rate 3.73% - 4.21% 0.41% — 3.66% Dividend yield — — Weighted average grant date fair value per share $7.89 $5.93 |
Schedule of Fair Value of Employee Stock Purchase Plan | The fair value of shares to be issued under the ESPP was estimated using the following assumptions: Nine Months Ended September 30, 2023 2022 Expected term in years 0.5 — 2.0 0.5 — 2.0 Expected volatility 79% — 97% 70% — 97% Risk-free interest rate 4.87% — 5.47% 0.60% — 3.51% Dividend yield — — Weighted average grant date fair value per share $5.34 $4.28 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share | The following table presents the calculation of the basic and diluted net loss per share amounts presented in the Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator: Net loss $ (66,869) $ (76,971) $ (224,717) $ (229,864) Denominator: Basic Weighted average shares used in computing basic net loss 255,001 225,123 249,082 223,981 Basic net loss per share $ (0.26) $ (0.34) $ (0.90) $ (1.03) Diluted Weighted average shares used in computing diluted net loss per share 255,001 225,123 249,082 223,981 Diluted net loss per share $ (0.26) $ (0.34) $ (0.90) $ (1.03) |
Antidilutive Shares Excluded From Computation of Diluted Net Loss Per Share | The following shares issuable upon conversion of the convertible senior notes and outstanding equity awards were excluded from the computation of diluted net loss per share for the periods presented because the effect of including such shares would have been antidilutive (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Shares issuable upon conversion of convertible senior notes 31,063 20,690 31,063 20,690 Equity Awards 28,100 28,087 28,100 28,087 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Geographic Location | A summary of our revenue by geographic location is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Americas $ 28,978 $ 16,743 $ 71,480 $ 57,547 Europe, Middle East and Africa 10,994 5,997 29,594 17,432 Asia-Pacific 15,719 9,571 41,090 25,972 Total $ 55,691 $ 32,311 $ 142,164 $ 100,951 |
Summary of Revenue by Category | A summary of our revenue by category is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Instrument revenue $ 34,694 $ 11,442 $ 85,317 $ 42,611 Consumable revenue 16,868 16,067 44,554 43,317 Product revenue 51,562 27,509 129,871 85,928 Service and other revenue 4,129 4,802 12,293 15,023 Total revenue $ 55,691 $ 32,311 $ 142,164 $ 100,951 |
ORGANIZATION AND SIGNIFICANT _3
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Sales Revenue, Net | Customer One | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 13% | 11% | ||
Accounts Receivable | Domestic Customers | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 45% | 57% |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Aug. 02, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||||
Contingent consideration | $ 18,450 | $ 18,450 | $ 172,094 | |||
Merger-related expenses | 8,979 | $ 0 | 8,979 | $ 0 | ||
Issuance of common stock in connection with liquidity event bonus plan | $ 2,111 | $ 2,111 | ||||
Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Issuance of common stock in acquisition (in shares) | 6,121,000 | 6,121,000 | ||||
Issuance of common stock in connection with liquidity event bonus plan (in shares) | 169,000 | 169,000 | ||||
Apton | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued for payment | $ 76,600 | |||||
Cash payments | 200 | |||||
Contingent consideration | 18,500 | |||||
Stock-based compensation expense excluded from consideration transferred | $ 1,300 | |||||
Issuance of common stock in acquisition (in shares) | 6,121,571 | 6,300,000 | ||||
Milestone revenue | $ 50,000 | |||||
Anniversary | 5 years | |||||
Merger-related expenses | $ 9,000 | $ 9,000 | ||||
Merger-related expenses | 2,800 | |||||
Issuance of common stock in connection with liquidity event bonus plan | 2,100 | |||||
Increase in goodwill | $ 53,900 | |||||
In-process research and development | $ 53,000 | |||||
Apton | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of outstanding shares of common to be issued in merger | 19.90% | |||||
Apton | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Issuance of common stock in connection with liquidity event bonus plan (in shares) | 168,621 | |||||
Apton | Achievement of milestone | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration | $ 25,000 |
BUSINESS ACQUISITIONS - Schedul
BUSINESS ACQUISITIONS - Schedule of Business Acquisition (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Aug. 02, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 463,843 | $ 409,974 | |
Apton | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 97 | ||
In-process research and development | 53,000 | ||
Goodwill | 53,869 | ||
Other assets, current | 153 | ||
Deferred income tax liability | $ (10,900) | (10,920) | |
Liabilities assumed | (2,191) | ||
Total consideration transferred | $ 94,008 |
FINANCIAL INSTRUMENTS - Summary
FINANCIAL INSTRUMENTS - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 385,648 | $ 325,089 |
Short-term restricted cash | 300 | 300 |
Long-term restricted cash | 2,422 | 2,922 |
Total assets measured at fair value | 770,511 | 775,540 |
Liabilities | ||
Contingent consideration | 18,450 | 172,094 |
Total liabilities measured at fair value | 18,450 | 172,094 |
Investments: | ||
Assets | ||
Investments: | 382,141 | 447,229 |
Commercial paper | ||
Assets | ||
Investments: | 16,771 | 127,302 |
Corporate debt securities | ||
Assets | ||
Investments: | 75,853 | 49,491 |
U.S. government & agency securities | ||
Assets | ||
Investments: | 289,517 | 270,436 |
Level 1 | ||
Assets | ||
Cash and cash equivalents | 196,621 | 137,636 |
Short-term restricted cash | 300 | 300 |
Long-term restricted cash | 2,422 | 2,922 |
Total assets measured at fair value | 199,343 | 140,858 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 1 | Investments: | ||
Assets | ||
Investments: | 0 | 0 |
Level 1 | Commercial paper | ||
Assets | ||
Investments: | 0 | 0 |
Level 1 | Corporate debt securities | ||
Assets | ||
Investments: | 0 | 0 |
Level 1 | U.S. government & agency securities | ||
Assets | ||
Investments: | 0 | 0 |
Level 2 | ||
Assets | ||
Cash and cash equivalents | 189,027 | 187,453 |
Short-term restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total assets measured at fair value | 571,168 | 634,682 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 2 | Investments: | ||
Assets | ||
Investments: | 382,141 | 447,229 |
Level 2 | Commercial paper | ||
Assets | ||
Investments: | 16,771 | 127,302 |
Level 2 | Corporate debt securities | ||
Assets | ||
Investments: | 75,853 | 49,491 |
Level 2 | U.S. government & agency securities | ||
Assets | ||
Investments: | 289,517 | 270,436 |
Level 3 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Short-term restricted cash | 0 | 0 |
Long-term restricted cash | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities | ||
Contingent consideration | 18,450 | 172,094 |
Total liabilities measured at fair value | 18,450 | 172,094 |
Level 3 | Investments: | ||
Assets | ||
Investments: | 0 | 0 |
Level 3 | Commercial paper | ||
Assets | ||
Investments: | 0 | 0 |
Level 3 | Corporate debt securities | ||
Assets | ||
Investments: | 0 | 0 |
Level 3 | U.S. government & agency securities | ||
Assets | ||
Investments: | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Narrati
FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 20, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Financial Instruments [Line Items] | |||||||
Issuance of common stock in acquisition | $ 76,642 | $ 76,642 | |||||
Shares issuable following milestone achievement | 84,761 | 84,761 | |||||
Contingent consideration liability, current | $ 96,193 | 96,193 | 96,193 | $ 172,094 | |||
Investment income, net | 9,200 | $ 2,800 | 25,000 | $ 4,300 | |||
Additional Paid-in Capital | |||||||
Financial Instruments [Line Items] | |||||||
Issuance of common stock in acquisition | 76,636 | 76,636 | |||||
Shares issuable following milestone achievement | 84,761 | 84,761 | |||||
Omniome, Inc | |||||||
Financial Instruments [Line Items] | |||||||
Cash payments | $ 100,900 | ||||||
Issuance of common stock in acquisition (in shares) | 9 | ||||||
Issuance of common stock in acquisition | $ 95,900 | ||||||
Average trading period | 20 days | ||||||
Trading period prior to achievement of milestone | 2 days | ||||||
Milestone revenue | 5,100 | 5,100 | |||||
Contingent consideration liability, current | 96,200 | $ 96,200 | $ 96,200 | ||||
Omniome, Inc | Additional Paid-in Capital | |||||||
Financial Instruments [Line Items] | |||||||
Shares issuable following milestone achievement | $ 84,800 | ||||||
Omniome, Inc | Common Stock | |||||||
Financial Instruments [Line Items] | |||||||
Issuance of common stock in acquisition | $ 100,000 | ||||||
Omniome, Inc | Employee Stock Option | |||||||
Financial Instruments [Line Items] | |||||||
Issuance of common stock in acquisition | $ 4,100 |
FINANCIAL INSTRUMENTS - Changes
FINANCIAL INSTRUMENTS - Changes in Estimated Fair Value of Contingent Consideration (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 172,094 |
Additions | 18,450 |
Change in estimated fair value | 13,960 |
Achievement of milestone | (186,054) |
Ending balance | $ 18,450 |
FINANCIAL INSTRUMENTS - Summa_2
FINANCIAL INSTRUMENTS - Summary of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 769,629 | $ 777,083 |
Gross unrealized gains | 39 | 16 |
Gross unrealized losses | (1,879) | (4,781) |
Fair Value | 767,789 | 772,318 |
Short-term restricted cash | 300 | 300 |
Long-term restricted cash | 2,422 | 2,922 |
Cash and cash equivalents | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 385,619 | 325,144 |
Gross unrealized gains | 29 | 6 |
Gross unrealized losses | 0 | (61) |
Fair Value | 385,648 | 325,089 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 16,771 | 127,626 |
Gross unrealized gains | 0 | 9 |
Gross unrealized losses | 0 | (333) |
Fair Value | 16,771 | 127,302 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 76,161 | 49,998 |
Gross unrealized gains | 3 | 0 |
Gross unrealized losses | (311) | (507) |
Fair Value | 75,853 | 49,491 |
U.S. government & agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 291,078 | 274,315 |
Gross unrealized gains | 7 | 1 |
Gross unrealized losses | (1,568) | (3,880) |
Fair Value | 289,517 | 270,436 |
Investments: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 384,010 | 451,939 |
Gross unrealized gains | 10 | 10 |
Gross unrealized losses | (1,879) | (4,720) |
Fair Value | $ 382,141 | $ 447,229 |
FINANCIAL INSTRUMENTS - Summa_3
FINANCIAL INSTRUMENTS - Summary of Contractual Maturities of Cash Equivalents and Available-for-Sale Investments (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Investments, All Other Investments [Abstract] | |
Due in one year or less | $ 498,366 |
Due after one year through five years | 72,802 |
Total | $ 571,168 |
BALANCE SHEET COMPONENTS - Comp
BALANCE SHEET COMPONENTS - Components of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Components [Abstract] | ||
Purchased materials | $ 23,333 | $ 24,139 |
Work in process | 27,883 | 14,062 |
Finished goods | 17,040 | 12,180 |
Inventory, net | $ 68,256 | $ 50,381 |
BALANCE SHEET COMPONENTS - Narr
BALANCE SHEET COMPONENTS - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Aug. 02, 2023 | Dec. 31, 2022 | |
Balance Sheet Components [Line Items] | ||||||||
Goodwill | $ 463,843,000 | $ 463,843,000 | $ 409,974,000 | |||||
Goodwill, impairment loss | $ 0 | |||||||
Deferred revenue | 27,500,000 | 27,500,000 | ||||||
Deferred revenue, current | 22,372,000 | 22,372,000 | 30,498,000 | |||||
Deferred revenue, non-current | 5,053,000 | 5,053,000 | $ 1,794,000 | |||||
Revenue recognized | 3,700,000 | 11,700,000 | ||||||
Revenue recognized | 55,691,000 | $ 32,311,000 | $ 142,164,000 | $ 100,951,000 | ||||
Standard product warranty, period | 1 year | |||||||
Product revenue | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Revenue recognized | 51,562,000 | $ 27,509,000 | $ 129,871,000 | $ 85,928,000 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Remaining performance obligation | $ 5,100,000 | $ 5,100,000 | ||||||
Remaining performance obligation period | 5 years | 5 years | ||||||
Term Loans | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Short- and long-term debt | $ 900,000 | $ 900,000 | ||||||
Interest expense, debt | 100,000 | 200,000 | ||||||
Term Loans | Minimum | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Debt instrument, term loan, elective option | 24 months | |||||||
Term Loans | Maximum | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Debt instrument, term loan, elective option | 43 months | |||||||
Term Loans | Secured Debt | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Debt instrument, term | 43 months | |||||||
Debt instrument, stated interest rate | 17% | |||||||
Percentage of fee to prepay debt | 4% | |||||||
Omniome, Inc | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Short term debt acquired | $ 1,300,000 | |||||||
Long-term debt acquired | $ 3,000,000 | |||||||
Apton | ||||||||
Balance Sheet Components [Line Items] | ||||||||
In-process research and development | $ 53,000,000 | |||||||
Goodwill | $ 53,869,000 | |||||||
Increase in goodwill | 53,900,000 | |||||||
Invitae Corporation | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Deferred revenue, non-current | 3,000,000 | 3,000,000 | ||||||
Invitae Corporation | Product revenue | ||||||||
Balance Sheet Components [Line Items] | ||||||||
Revenue recognized | $ 2,100,000 | $ 4,200,000 |
BALANCE SHEET COMPONENTS - Defi
BALANCE SHEET COMPONENTS - Definite-lived Intangible Assets from Business Acquisitions (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 411,539 | $ 11,539 |
Accumulated Amortization | (2,701) | (1,294) |
Total | $ 408,838 | 10,245 |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 15 years | |
Gross Carrying Amount | $ 411,179 | 11,179 |
Accumulated Amortization | (2,341) | (1,039) |
Total | $ 408,838 | 10,140 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 2 years | |
Gross Carrying Amount | $ 360 | 360 |
Accumulated Amortization | (360) | (255) |
Total | $ 0 | $ 105 |
BALANCE SHEET COMPONENTS - Esti
BALANCE SHEET COMPONENTS - Estimated Future Amortization Expense of Acquisition-Related Intangible Assets with Definite Lives (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Components [Abstract] | ||
Remainder of 2023 | $ 6,854 | |
2024 | 27,412 | |
2025 | 27,412 | |
2026 | 27,412 | |
2027 | 27,412 | |
2028 and thereafter | 292,337 | |
Total | $ 408,838 | $ 10,245 |
BALANCE SHEET COMPONENTS - Chan
BALANCE SHEET COMPONENTS - Changes in Reserve for Product Warranties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||||
Balance at beginning of period | $ 2,862 | $ 1,609 | $ 1,651 | $ 594 |
Additions charged to cost of product revenue | 2,825 | 779 | 5,675 | 2,644 |
Repairs and replacements | (1,722) | (622) | (3,361) | (1,472) |
Balance at end of period | $ 3,965 | $ 1,766 | $ 3,965 | $ 1,766 |
BALANCE SHEET COMPONENTS - Futu
BALANCE SHEET COMPONENTS - Future Principal Payments (Details) - Term Loans $ in Thousands | Sep. 30, 2023 USD ($) |
Long-Term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of 2023 | $ 444 |
2024 | 490 |
Total | $ 934 |
CONVERTIBLE SENIOR NOTES (Narra
CONVERTIBLE SENIOR NOTES (Narrative) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2023 USD ($) $ / shares | Feb. 16, 2021 USD ($) $ / shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 2,033 | $ 0 | |||
2028 Convertible Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | 1,500 | 1,500 | |||||
Aggregate outstanding balance | 457,547 | 457,547 | $ 896,683 | ||||
Principal amount | 459,000 | 459,000 | 900,000 | ||||
2028 Convertible Senior Notes | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 1.50% | ||||||
Principal amount of notes | $ 900,000 | $ 441,000 | $ 441,000 | ||||
Debt instrument, convertible, conversion ratio | 0.0229885 | ||||||
Conversion price per share (in dollars per share) | $ / shares | $ 43.50 | ||||||
Debt redemption, percentage of conversion price | 150% | ||||||
Debt redemption, trading days | 20 days | ||||||
Debt redemption, consecutive trading days | 30 days | ||||||
Redemption price, percentage | 100% | ||||||
Debt instrument, debt default, calendar days | 360 days | ||||||
Debt instrument, interest in the event of default | 0.25% | ||||||
Additional interest in the event of default | 0.50% | ||||||
Debt issuance costs | $ 4,500 | ||||||
Debt instrument, effective interest rate | 1.60% | 1.60% | |||||
Aggregate outstanding balance | $ 459,000 | $ 459,000 | |||||
Fair value of convertible debt | 358,600 | 358,600 | |||||
Principal amount | 459,000 | 459,000 | |||||
2028 Convertible Senior Notes | Convertible Debt | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, debt default, calendar days | 181 days | ||||||
2028 Convertible Senior Notes | Convertible Debt | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, debt default, calendar days | 360 days | ||||||
2028 Convertible Senior Notes | Debt Conversion Terms One | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, debt default, calendar days | 180 days | ||||||
2028 Convertible Senior Notes | Debt Conversion Terms Two | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, debt default, calendar days | 361 days | ||||||
2030 Convertible Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | 7,300 | 7,300 | |||||
Aggregate outstanding balance | 434,449 | 434,449 | 0 | ||||
Principal amount | 441,000 | 441,000 | $ 0 | ||||
2030 Convertible Senior Notes | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 1.375% | ||||||
Principal amount of notes | $ 441,000 | $ 441,000 | $ 441,000 | ||||
Debt instrument, convertible, conversion ratio | 0.046512 | ||||||
Conversion price per share (in dollars per share) | $ / shares | $ 21.50 | ||||||
Debt redemption, percentage of conversion price | 150% | ||||||
Debt redemption, trading days | 20 days | ||||||
Debt redemption, consecutive trading days | 30 days | ||||||
Redemption price, percentage | 100% | ||||||
Debt instrument, debt default, calendar days | 360 days | ||||||
Debt instrument, interest in the event of default | 0.25% | ||||||
Additional interest in the event of default | 0.50% | ||||||
Debt instrument, effective interest rate | 1.60% | 1.60% | |||||
Fair value of convertible debt | $ 356,600 | $ 356,600 | |||||
2030 Convertible Senior Notes | Convertible Debt | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, debt default, calendar days | 181 days | ||||||
2030 Convertible Senior Notes | Convertible Debt | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, debt default, calendar days | 360 days | ||||||
2030 Convertible Senior Notes | Debt Conversion Terms One | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, debt default, calendar days | 180 days | ||||||
2030 Convertible Senior Notes | Debt Conversion Terms Two | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, debt default, calendar days | 361 days | ||||||
Exchange Transaction | |||||||
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | 2,000 | ||||||
Exchange Transaction | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of notes | $ 441,000 | ||||||
Paid accrued but unpaid interest | $ 2,500 |
CONVERTIBLE SENIOR NOTES (Sched
CONVERTIBLE SENIOR NOTES (Schedule of Net Carrying Amount) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
2030 Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 441,000 | $ 0 |
Unamortized debt premium | 542 | 0 |
Unamortized debt issuance costs | (7,093) | 0 |
Total | 434,449 | 0 |
2028 Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal amount | 459,000 | 900,000 |
Unamortized debt issuance costs | (1,453) | (3,317) |
Total | $ 457,547 | $ 896,683 |
CONVERTIBLE SENIOR NOTES (Sch_2
CONVERTIBLE SENIOR NOTES (Schedule of Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
2030 Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 1,516 | $ 0 | $ 1,516 | $ 0 |
Amortization of debt issuance costs | 229 | 0 | 229 | 0 |
Total interest expense | 1,745 | 0 | 1,745 | 0 |
2028 Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 1,721 | 3,375 | 8,415 | 10,125 |
Amortization of debt issuance costs | 80 | 154 | 392 | 462 |
Total interest expense | $ 1,801 | $ 3,529 | $ 8,807 | $ 10,587 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | ||||
Jan. 31, 2023 USD ($) $ / shares shares | Feb. 28, 2023 shares | Jan. 31, 2023 USD ($) $ / shares | Sep. 30, 2023 $ / shares shares | Sep. 30, 2022 shares | Dec. 31, 2022 $ / shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Public offering (in shares) | 17,500,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Offering share amount maximum (in dollars per share) | $ / shares | $ 10 | $ 10 | ||||
Public offering, option to purchase additional shares, period | 30 days | |||||
Public offering, option to purchase additional shares (in shares) | 2,600,000 | |||||
Percentage commission of gross proceeds on sale of common stock under at-the-market offering | 5.75% | |||||
Proceeds from issuance of stock | $ | $ 189.7 | |||||
Offering expenses | $ | $ 0.5 | |||||
Dividend yield | 0% | 0% | ||||
Time Based Restricted Stock Units PSU | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Amount eligible to vest upon achievement of goal | 2 | |||||
Shelf Offering | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Shares issued (in shares) | 20,100,000 | |||||
2020 Plan, Inducement Plan, And The Omniome Plan | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Common stock remain available for issuance (in shares) | 12,300,000 | |||||
ESPP | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Common stock remain available for issuance (in shares) | 12,200,000 | |||||
Shares issued (in shares) | 1,735,058 | 1,878,168 | ||||
Additional common stock reserved for issuance (in shares) | 4,000,000 | |||||
Dividend yield | 0% | 0% |
STOCKHOLDERS_ EQUITY - Summary
STOCKHOLDERS’ EQUITY - Summary of Time Based Options (Details) - Time-based stock option shares in Thousands | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Number of shares | |
Outstanding, beginning (in shares) | shares | 14,618 |
Granted (in shares) | shares | 332 |
Exercised (in shares) | shares | (929) |
Canceled (in shares) | shares | (810) |
Outstanding, ending (in shares) | shares | 13,211 |
Weighted average exercise price | |
Beginning, outstanding (in dollars per share) | $ / shares | $ 10.60 |
Granted (in dollars per share) | $ / shares | 12.11 |
Exercised (in dollars per share) | $ / shares | 4.70 |
Canceled (in dollars per share) | $ / shares | 18.05 |
Ending, outstanding (in dollars per share) | $ / shares | $ 10.60 |
STOCKHOLDERS_ EQUITY - Summar_2
STOCKHOLDERS’ EQUITY - Summary of Stock Option Activity (Details) - Performance Stock Units (PSU) shares in Thousands | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Number of shares | |
Outstanding, beginning (in shares) | shares | 258 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (251) |
Canceled (in shares) | shares | (4) |
Outstanding, ending (in shares) | shares | 3 |
Weighted average exercise price | |
Beginning, outstanding (in dollars per share) | $ / shares | $ 4.71 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 4.71 |
Canceled (in dollars per share) | $ / shares | 4.71 |
Ending, outstanding (in dollars per share) | $ / shares | $ 4.74 |
STOCKHOLDERS_ EQUITY - Summar_3
STOCKHOLDERS’ EQUITY - Summary of RSUs and PSUs Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Restricted Stock Units (RSU) | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Outstanding, beginning (in shares) | shares | 8,535 |
Granted (in shares) | shares | 6,970 |
Vested (in shares) | shares | (2,538) |
Forfeited (in shares) | shares | (1,008) |
Outstanding, ending (in shares) | shares | 11,959 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning, outstanding (in dollars per share) | $ / shares | $ 15.16 |
Weighted average grant date fair value per share (in dollars per share) | $ / shares | 9.71 |
Vested (in dollars per share) | $ / shares | 14.19 |
Forfeited (in dollars per share) | $ / shares | 14.73 |
Ending, outstanding (in dollars per share) | $ / shares | $ 12.23 |
Performance Stock Units (PSU) | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Outstanding, beginning (in shares) | shares | 0 |
Granted (in shares) | shares | 564 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (23) |
Outstanding, ending (in shares) | shares | 541 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning, outstanding (in dollars per share) | $ / shares | $ 0 |
Weighted average grant date fair value per share (in dollars per share) | $ / shares | 9.43 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 9.43 |
Ending, outstanding (in dollars per share) | $ / shares | $ 9.43 |
STOCKHOLDERS_ EQUITY - Schedule
STOCKHOLDERS’ EQUITY - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 19,691 | $ 18,936 | $ 55,534 | $ 60,658 |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 1,125 | 934 | 4,251 | 3,680 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 6,182 | 7,519 | 18,310 | 24,232 |
Sales, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 12,384 | $ 10,483 | $ 32,973 | $ 32,746 |
STOCKHOLDERS_ EQUITY - Schedu_2
STOCKHOLDERS’ EQUITY - Schedule of Fair Value of Employee Stock Options (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
Options to purchase common stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected term in years | 4 years 10 months 24 days | 4 years 7 months 6 days |
Expected volatility | 78% | |
Risk-free interest rate, minimum | 3.73% | 0.41% |
Risk-free interest rate, maximum | 4.21% | 3.66% |
Dividend yield | 0% | 0% |
Weighted average grant date fair value per share (in dollars per share) | $ 7.89 | $ 5.93 |
Options to purchase common stock | Minimum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 70% | |
Options to purchase common stock | Maximum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 76% |
STOCKHOLDERS_ EQUITY - Schedu_3
STOCKHOLDERS’ EQUITY - Schedule of Fair Value of Employee Stock Purchase Plan (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
ESPP | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 4.87% | 0.60% |
Risk-free interest rate, maximum | 5.47% | 3.51% |
Dividend yield | 0% | 0% |
Weighted average grant date fair value per share (in dollars per share) | $ 5.34 | $ 4.28 |
ESPP | Minimum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected term in years | 6 months | 6 months |
Expected volatility | 79% | 70% |
ESPP | Maximum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected term in years | 2 years | 2 years |
Expected volatility | 97% | 97% |
NET LOSS PER SHARE - Computatio
NET LOSS PER SHARE - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net loss | $ (66,869) | $ (76,971) | $ (224,717) | $ (229,864) |
Basic | ||||
Basic (in shares) | 255,001 | 225,123 | 249,082 | 223,981 |
Basic net loss per share (in dollars per share) | $ (0.26) | $ (0.34) | $ (0.90) | $ (1.03) |
Diluted | ||||
Diluted (in shares) | 255,001 | 225,123 | 249,082 | 223,981 |
Diluted net loss per share (in dollars per share) | $ (0.26) | $ (0.34) | $ (0.90) | $ (1.03) |
NET LOSS PER SHARE - Antidiluti
NET LOSS PER SHARE - Antidilutive Shares Excluded from Computation of Diluted Earnings per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Shares issuable upon conversion of convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from the computation of earnings per share (in shares) | 31,063 | 20,690 | 31,063 | 20,690 |
Equity Awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from the computation of earnings per share (in shares) | 28,100 | 28,087 | 28,100 | 28,087 |
REVENUE - Schedule of Revenue b
REVENUE - Schedule of Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 55,691 | $ 32,311 | $ 142,164 | $ 100,951 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 28,978 | 16,743 | 71,480 | 57,547 |
Europe, Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 10,994 | 5,997 | 29,594 | 17,432 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 15,719 | $ 9,571 | $ 41,090 | $ 25,972 |
REVENUE - Summary of Revenue by
REVENUE - Summary of Revenue by Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 55,691 | $ 32,311 | $ 142,164 | $ 100,951 |
Instrument revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 34,694 | 11,442 | 85,317 | 42,611 |
Consumable revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 16,868 | 16,067 | 44,554 | 43,317 |
Product revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 51,562 | 27,509 | 129,871 | 85,928 |
Service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 4,129 | $ 4,802 | $ 12,293 | $ 15,023 |