Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ADPT | |
Entity Registrant Name | ADAPTIVE BIOTECHNOLOGIES CORPORATION | |
Entity Central Index Key | 0001478320 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 124,287,992 | |
Entity Current Reporting Status | No | |
Entity Shell Company | false | |
Entity File Number | 001-38957 | |
Entity Tax Identification Number | 270907024 | |
Entity Address, Address Line One | 1551 Eastlake Avenue East | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Seattle | |
Entity Address, State or Province | Washington | |
Entity Address, Postal Zip Code | 98102 | |
City Area Code | (206) | |
Local Phone Number | 659-0067 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 48,458,000 | $ 55,030,000 |
Short-term marketable securities | 374,543,000 | 109,988,000 |
Accounts receivable, net | 7,252,000 | 4,807,000 |
Inventory | 8,004,000 | 7,838,000 |
Prepaid expenses and other current assets | 4,044,000 | 3,055,000 |
Total current assets | 442,301,000 | 180,718,000 |
Long-term assets | ||
Property and equipment, net | 22,298,000 | 19,125,000 |
Restricted cash and other assets | 5,040,000 | 247,000 |
Intangible assets, net | 12,784,000 | 13,626,000 |
Goodwill | 118,972,000 | 118,972,000 |
Total assets | 601,395,000 | 332,688,000 |
Current liabilities | ||
Accounts payable | 2,944,000 | 1,793,000 |
Accrued liabilities | 5,019,000 | 2,562,000 |
Accrued compensation and benefits | 4,429,000 | 4,641,000 |
Current portion of deferred rent | 1,276,000 | 1,109,000 |
Current deferred revenue | 61,194,000 | 12,695,000 |
Total current liabilities | 74,862,000 | 22,800,000 |
Long-term liabilities | ||
Convertible preferred stock warrant liability | 2,602,000 | 336,000 |
Deferred rent liability, less current portion | 5,455,000 | 6,102,000 |
Deferred revenue, less current portion | 240,919,000 | 704,000 |
Total liabilities | 323,838,000 | 29,942,000 |
Commitments and contingencies (Note 8) | ||
Convertible preferred stock: $0.0001 par value, 93,762,517 shares authorized at June 30, 2019 and December 31, 2018, respectively; 93,039,737 and 92,790,094 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively; aggregate liquidation preference of $574,374 and $572,866 at June 30, 2019 and December 31, 2018, respectively | 561,931,000 | 560,858,000 |
Shareholders’ deficit | ||
Common stock: $0.0001 par value, 131,000,000 shares authorized at June 30, 2019 and December 31, 2018, respectively; 13,725,381 and 12,841,536 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 1,000 | 1,000 |
Additional paid-in capital | 46,160,000 | 37,902,000 |
Accumulated other comprehensive gain (loss) | 382,000 | (107,000) |
Accumulated deficit | (330,917,000) | (295,908,000) |
Total shareholders’ deficit | (284,374,000) | (258,112,000) |
Total liabilities, convertible preferred stock and shareholders’ deficit | $ 601,395,000 | $ 332,688,000 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Convertible preferred stock par value | $ 0.0001 | $ 0.0001 |
Convertible preferred stock authorized | 93,762,517 | 93,762,517 |
Convertible preferred stock issued | 93,039,737 | 92,790,094 |
Convertible preferred stock outstanding | 93,039,737 | 92,790,094 |
Convertible preferred stock aggregate liquidation preference | $ 574,374 | $ 572,866 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock authorized | 131,000,000 | 131,000,000 |
Common stock issued | 13,725,381 | 12,841,536 |
Common stock outstanding | 13,725,381 | 12,841,536 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | ||||
Total revenue | $ 22,138 | $ 11,568 | $ 34,804 | $ 21,283 |
Operating expenses | ||||
Cost of revenue | 5,734 | 5,044 | 10,722 | 9,033 |
Research and development | 16,527 | 9,452 | 29,010 | 18,307 |
Sales and marketing | 8,897 | 5,329 | 16,714 | 10,376 |
General and administrative | 6,662 | 4,632 | 13,666 | 9,175 |
Amortization of intangible assets | 423 | 424 | 842 | 843 |
Total operating expenses | 38,243 | 24,881 | 70,954 | 47,734 |
Loss from operations | (16,105) | (13,313) | (36,150) | (26,451) |
Interest and other income, net | 446 | 820 | 2,105 | 1,567 |
Net loss | (15,659) | (12,493) | (34,045) | (24,884) |
Fair value adjustment to Series E-1 convertible preferred stock options | (710) | (2) | (964) | 2 |
Net loss attributable to common shareholders | $ (16,369) | $ (12,495) | $ (35,009) | $ (24,882) |
Net loss per share attributable to common shareholders, basic and diluted | $ (1.23) | $ (1.01) | $ (2.68) | $ (2.02) |
Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted | 13,279,324 | 12,385,888 | 13,074,692 | 12,334,227 |
Sequencing Revenue | ||||
Revenue | ||||
Total revenue | $ 11,865 | $ 8,281 | $ 17,948 | $ 14,061 |
Development Revenue | ||||
Revenue | ||||
Total revenue | $ 10,273 | $ 3,287 | $ 16,856 | $ 7,222 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Financial Position [Abstract] | ||||
Net loss | $ (15,659) | $ (12,493) | $ (34,045) | $ (24,884) |
Change in unrealized gain (loss) on investments | 290 | 43 | 489 | (74) |
Comprehensive loss | $ (15,369) | $ (12,450) | $ (33,556) | $ (24,958) |
Condensed Statements of Convert
Condensed Statements of Convertible Preferred Stock and Shareholders' Deficit - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive (loss) Income | Accumulated Deficit |
Beginning Balance at Dec. 31, 2017 | $ (224,616) | $ 1 | $ 24,972 | $ (166) | $ (249,423) | |
Beginning Balance, Shares at Dec. 31, 2017 | 12,208,731 | |||||
Convertible preferred stock, Beginning Balance at Dec. 31, 2017 | $ 561,333 | |||||
Convertible preferred stock, Beginning Balance, Shares at Dec. 31, 2017 | 92,656,029 | |||||
Adjustments to accumulated deficit for adoption of guidance on accounting for share-based payment transactions (unaudited) | 140 | (140) | ||||
Issuance of common stock for cash upon exercise of stock options (unaudited) | 823 | 823 | ||||
Issuance of common stock for cash upon exercise of stock options (unaudited), Shares | 338,113 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited) | $ 100 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited), Shares | 134,065 | |||||
Vested Series E-1 convertible preferred stock option forfeitures (unaudited) | 767 | 476 | 291 | |||
Vested Series E-1 convertible preferred stock option forfeitures (unaudited) | $ (767) | |||||
Series E-1 convertible preferred stock option share-based compensation (unaudited) | 3 | 3 | ||||
Adjustment to redemption value for vested Series E-1 convertible preferred stock options (unaudited) | (3) | (3) | ||||
Adjustment to redemption value for vested Series E-1 convertible preferred stock options (unaudited) | 3 | |||||
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) | 2 | 2 | ||||
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) | (2) | |||||
Common stock option share-based compensation (unaudited) | 5,547 | 5,547 | ||||
Other comprehensive income (unaudited) | (74) | (74) | ||||
Net loss | (24,884) | (24,884) | ||||
Convertible preferred stock, Ending Balance at Jun. 30, 2018 | $ 560,667 | |||||
Convertible preferred stock, Ending Balance, Shares at Jun. 30, 2018 | 92,790,094 | |||||
Ending Balance at Jun. 30, 2018 | (242,435) | $ 1 | 31,958 | (240) | (274,154) | |
Ending Balance, Shares at Jun. 30, 2018 | 12,546,844 | |||||
Beginning Balance at Mar. 31, 2018 | (233,612) | $ 1 | 28,620 | (283) | (261,950) | |
Beginning Balance, Shares at Mar. 31, 2018 | 12,301,844 | |||||
Convertible preferred stock, Beginning Balance at Mar. 31, 2018 | $ 561,396 | |||||
Convertible preferred stock, Beginning Balance, Shares at Mar. 31, 2018 | 92,745,734 | |||||
Issuance of common stock for cash upon exercise of stock options (unaudited) | 415 | 415 | ||||
Issuance of common stock for cash upon exercise of stock options (unaudited), Shares | 245,000 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited) | $ 35 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited), Shares | 44,360 | |||||
Vested Series E-1 convertible preferred stock option forfeitures (unaudited) | 767 | 476 | 291 | |||
Vested Series E-1 convertible preferred stock option forfeitures (unaudited) | $ (767) | |||||
Series E-1 convertible preferred stock option share-based compensation (unaudited) | 1 | 1 | ||||
Adjustment to redemption value for vested Series E-1 convertible preferred stock options (unaudited) | (1) | (1) | ||||
Adjustment to redemption value for vested Series E-1 convertible preferred stock options (unaudited) | 1 | |||||
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) | (2) | (2) | ||||
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) | 2 | |||||
Common stock option share-based compensation (unaudited) | 2,447 | 2,447 | ||||
Other comprehensive income (unaudited) | 43 | 43 | ||||
Net loss | (12,493) | (12,493) | ||||
Convertible preferred stock, Ending Balance at Jun. 30, 2018 | $ 560,667 | |||||
Convertible preferred stock, Ending Balance, Shares at Jun. 30, 2018 | 92,790,094 | |||||
Ending Balance at Jun. 30, 2018 | (242,435) | $ 1 | 31,958 | (240) | (274,154) | |
Ending Balance, Shares at Jun. 30, 2018 | 12,546,844 | |||||
Beginning Balance at Dec. 31, 2018 | (258,112) | $ 1 | 37,902 | (107) | (295,908) | |
Beginning Balance, Shares at Dec. 31, 2018 | 12,841,536 | |||||
Convertible preferred stock, Beginning Balance at Dec. 31, 2018 | $ 560,858 | $ 560,858 | ||||
Convertible preferred stock, Beginning Balance, Shares at Dec. 31, 2018 | 92,790,094 | 92,790,094 | ||||
Issuance of common stock for cash upon exercise of stock options (unaudited) | $ 1,880 | 1,880 | ||||
Issuance of common stock for cash upon exercise of stock options (unaudited), Shares | 883,845 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited) | $ 109 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited), Shares | 249,643 | |||||
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) | (964) | (964) | ||||
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) | $ 964 | |||||
Common stock option share-based compensation (unaudited) | 6,378 | 6,378 | ||||
Other comprehensive income (unaudited) | 489 | 489 | ||||
Net loss | (34,045) | (34,045) | ||||
Convertible preferred stock, Ending Balance at Jun. 30, 2019 | $ 561,931 | $ 561,931 | ||||
Convertible preferred stock, Ending Balance, Shares at Jun. 30, 2019 | 93,039,737 | 93,039,737 | ||||
Ending Balance at Jun. 30, 2019 | $ (284,374) | $ 1 | 46,160 | 382 | (330,917) | |
Ending Balance, Shares at Jun. 30, 2019 | 13,725,381 | |||||
Beginning Balance at Mar. 31, 2019 | (273,474) | $ 1 | 40,981 | 92 | (314,548) | |
Beginning Balance, Shares at Mar. 31, 2019 | 12,930,536 | |||||
Convertible preferred stock, Beginning Balance at Mar. 31, 2019 | $ 561,210 | |||||
Convertible preferred stock, Beginning Balance, Shares at Mar. 31, 2019 | 93,023,694 | |||||
Issuance of common stock for cash upon exercise of stock options (unaudited) | 1,847 | 1,847 | ||||
Issuance of common stock for cash upon exercise of stock options (unaudited), Shares | 794,845 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited) | $ 11 | |||||
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited), Shares | 16,043 | |||||
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) | (710) | (710) | ||||
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) | $ 710 | |||||
Common stock option share-based compensation (unaudited) | 3,332 | 3,332 | ||||
Other comprehensive income (unaudited) | 290 | 290 | ||||
Net loss | (15,659) | (15,659) | ||||
Convertible preferred stock, Ending Balance at Jun. 30, 2019 | $ 561,931 | $ 561,931 | ||||
Convertible preferred stock, Ending Balance, Shares at Jun. 30, 2019 | 93,039,737 | 93,039,737 | ||||
Ending Balance at Jun. 30, 2019 | $ (284,374) | $ 1 | $ 46,160 | $ 382 | $ (330,917) | |
Ending Balance, Shares at Jun. 30, 2019 | 13,725,381 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||
Net loss | $ (34,045) | $ (24,884) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation expense | 2,811 | 2,099 |
Share-based compensation expense | 6,378 | 5,550 |
Intangible assets amortization | 842 | 843 |
Investment amortization | (1,896) | (459) |
Gain on equipment disposals | (79) | (41) |
Fair value adjustment of convertible preferred stock warrant | 2,266 | |
Other | 1 | 3 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,445) | 1,165 |
Inventory | (166) | (2,921) |
Prepaid expenses and other current assets | (883) | (364) |
Accounts payable and accrued liabilities | 1,314 | (1,013) |
Deferred rent | (480) | (359) |
Deferred revenue | 288,714 | 5,425 |
Other | 1 | (207) |
Net cash provided by (used in) operating activities | 262,333 | (15,163) |
Investing activities | ||
Purchases of property and equipment | (5,354) | (1,614) |
Proceeds from sales of equipment | 19 | |
Purchases of marketable securities | (358,671) | (110,947) |
Proceeds from maturities of marketable securities | 96,500 | 80,516 |
Net cash used in investing activities | (267,525) | (32,026) |
Financing activities | ||
Proceeds from exercise of stock options | 1,989 | 923 |
Payment of deferred initial public offering costs | (3,360) | |
Other | (9) | (10) |
Net cash (used in) provided by financing activities | (1,380) | 913 |
Net decrease in cash, cash equivalents and restricted cash | (6,572) | (46,276) |
Cash, cash equivalents and restricted cash at beginning of year | 55,091 | 85,366 |
Cash, cash equivalents and restricted cash at end of period | 48,519 | 39,090 |
Noncash investing and financing activities | ||
Purchases of equipment included in accounts payable and accrued liabilities | 1,490 | $ 535 |
Deferred offering costs included in accounts payable and accrued expenses | $ 1,433 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization Adaptive Biotechnologies Corporation (“we,” “us” or “our”) is a commercial-stage company advancing the field of immune-driven medicine by harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease. We believe the adaptive immune system is nature’s most finely tuned diagnostic and therapeutic for most diseases, but the inability to decode it has prevented the medical community from fully leveraging its capabilities. Our immune medicine platform is the foundation for our expanding suite of products and services. The cornerstone of our immune medicine platform and core immunosequencing product, immunoSEQ, serves as our underlying research and development engine and generates revenue from academic and biopharmaceutical customers. Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the Food and Drug Administration (“FDA”) for the detection and monitoring of minimal residual disease (“MRD”) in patients with select blood cancers. We were incorporated in the State of Washington on September 8, 2009 under the name Adaptive TCR Corporation. On December 21, 2011, we changed our name to Adaptive Biotechnologies Corporation. We are headquartered in Seattle, Washington. Initial Public Offering Our registration statement on Form S-1 related to our initial public offering (“IPO”) was declared effective on June 26, 2019, and our common stock began trading on the Nasdaq Global Select Market on June 27, 2019. On July 1, 2019, we completed our IPO in which we issued and sold 17,250,000 shares of common stock, including shares issued upon the exercise in full of the underwriters’ over-allotment option, at a public offering price of $20.00. We received approximately $316.0 million in net proceeds, after deducting underwriting discounts and commission of approximately $24.2 million and offering expenses of approximately $4.8 million. Immediately prior to the completion of our IPO on July 1, 2019, 93,039,737 shares of convertible preferred stock then outstanding converted into an equivalent number of shares of common stock. On July 1, 2019, in connection with the closing of our IPO, our amended and restated articles of incorporation, as filed with the Secretary of State of the State of Washington, and our amended and restated bylaws became effective. Also on July 1, 2019, we adopted a new equity incentive plan (“2019 Plan”), establishing an initial reserve of 15,519,170 shares under the 2019 Plan. The condensed financial statements as of June 30, 2019, including share and per share amounts, do not give effect to our IPO as it closed subsequent to June 30, 2019. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. Estimates are used in several areas including, but not limited to, estimates of progress to date for certain performance obligations and the transaction price for certain contracts with customers, share-based compensation including the fair value of stock, and the provision for income taxes, including related reserves, and goodwill, among others. These estimates generally involve complex issues and require judgments, involve the analysis of historical results and prediction of future trends, can require extended periods of time to resolve and are subject to change from period to period. Actual results may differ materially from management’s estimates. Unaudited Interim Condensed Financial Statements In our opinion, the accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information. These unaudited condensed financial statements include all adjustments necessary to fairly state the financial position and the results of our operations and cash flows for interim periods in accordance with GAAP. Interim-period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying condensed financial statements should be read in conjunction with our audited financial statements and notes included in our prospectus dated June 26, 2019 filed with the Securities and Exchange Commission (“SEC”) on June 27, 2019 in connection with our IPO (“Prospectus”). Cash Cash and cash equivalents are stated at fair value. Cash equivalents include only securities having an original maturity of three months or less at the time of purchase. We limit our credit risk associated with cash and cash equivalents by placing our investments with banks that we believe are highly creditworthy and with highly rated money market funds. Cash and cash equivalents primarily consist of bank deposits and investments in money market funds, as well as highly liquid U.S. government debt and agency securities and commercial paper with original maturities of three months or less. Concentrations We are subject to a concentration of risk from a limited number of suppliers, or in some cases, single suppliers for some of our laboratory instruments and materials. This risk is managed by targeting a quantity of surplus stock. Cash, cash equivalents and marketable securities are financial instruments that potentially subject us to concentrations of credit risk. We invest in money market funds, U.S. government debt securities, U.S. government agency bonds, commercial paper and corporate bonds with high-quality accredited financial institutions. Significant customers are those which represent more than 10% of our total revenue or accounts receivable balance at each respective balance sheet date. Revenue from these customers reflects their purchase of our products and services and we do not believe their loss would have a material adverse effect on our business. For each significant customer, revenue as a percentage of total revenue and accounts receivable, net as a percentage of total accounts receivable, net were as follows: Revenue Accounts Receivable, Net Three Months Ended June 30, Six Months Ended June 30, June 30, December 31, 2019 2018 2019 2018 2019 2018 (unaudited) (unaudited) Customer A 12.7% 25.5% *% 26.4% 32.7% *% Customer B * 11.0 * * * 15.1 Customer C * * * * * 13.2 Genentech, Inc. 40.0 * 43.6 * * * * less than 10% Revenue We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers Overview Our revenue is generated from immunosequencing (“sequencing”) products and services (“sequencing revenue”) and from regulatory or development support services leveraging our immune medicine platform (“development revenue”). When revenue generating contracts have elements of both sequencing revenue and development revenue, we allocate revenue based on the nature of the performance obligation and the allocated transaction price. Sequencing Sequencing revenue reflects the amounts generated from providing sequencing services and testing through our immunoSEQ and clonoSEQ products and services to our research and clinical customers, respectively. For research customers, contracts typically include an amount billed in advance of services (“upfront”), and subsequent billings as sample results are delivered to the customer. Upfront amounts received are recorded as deferred revenue, which we recognize as revenue upon satisfaction of performance obligations. We have identified two typical performance obligations under the terms of our research service contracts: sequencing services and related data analysis. We recognize revenue for both identified performance obligations as sample results are delivered to the customer. For other research customers who choose to purchase a research use only kit, the kits are sold on a price per kit basis with amounts payable upon delivery of the kit. Payments received are recorded as deferred revenue. For these customers, we have identified one performance obligation: the delivery of sample results. We recognize revenue as the results are delivered to the customer based on a proportion of the estimated samples that can be reported on for each kit. For clinical customers, we derive revenues from providing our clonoSEQ test report to ordering physicians, and we bill and receive payments from commercial third-party payors and medical institutions. In these transactions, we have identified one performance obligation: the delivery of a clonoSEQ report. As payment from the respective payors may vary based on the various reimbursement rates and patient responsibilities, we consider the transaction price to be variable and record an estimate of the transaction price, subject to the constraint for variable consideration, as revenue at the time of delivery. The estimate of transaction price is based on historical reimbursement rates with the various payors, which are monitored in subsequent periods and adjusted as necessary based on actual collection experience. In January 2019, clonoSEQ received Medicare coverage aligned with the FDA label and National Comprehensive Cancer Network (“NCCN”) guidelines for longitudinal monitoring in multiple myeloma (“MM”) and B cell acute lymphoblastic leukemia (“ALL”). We bill Medicare for an episode of treatment when we deliver the first eligible test results. This billing contemplates all necessary tests required during a patient’s treatment cycle, which is currently estimated at approximately four tests per patient, including the initial sequence identification test. Revenue is recognized at the time the initial billable test result is delivered and is based upon cumulative tests delivered to date. For the three and six months ended June 30, 2019, we recognized $0.3 million and $0.8 million relating to the coverage policy, respectively; $0.1 million and $0.4 million of this revenue was related to tests delivered in periods prior to the three and six months ended June 30, 2019, respectively. Any unrecognized revenue from the initial billable test is recorded as deferred revenue, and is recognized as we deliver the remaining tests in a patient’s treatment cycle. Development We derive revenue by providing services through development agreements to biopharmaceutical customers who seek access to our immune medicine platform technologies. We generate revenues from the delivery of professional support activities pertaining to the use of our proprietary immunoSEQ and clonoSEQ services in the development of the respective customers’ initiatives. The transaction price for these contracts may consist of a combination of non-refundable upfront fees, separately priced sequencing fees, progress based milestones and regulatory milestones. The development agreements may include single or multiple performance obligations depending on the contract. For certain contracts, we may perform services to support the biopharmaceutical customers’ regulatory submission as part of their registrational trials. These services include regulatory support pertaining to our technology intended to be utilized as part of the submission, development of analytical plans for our sequencing data, participation on joint research committees and assistance in completing a regulatory submission. Generally, these services are not distinct within the context of the contract, and they are accounted for as a single performance obligation. When sequencing services are separately priced customer options, we assess if a material right exists and, if not, the customer option to purchase additional sequencing services is not considered part of the contract. Except for any non-refundable upfront fees, the other forms of compensation represent variable consideration. Variable consideration related to progress based and regulatory milestones is estimated using the most likely amount method where variable consideration is constrained until it is probable that a significant reversal of cumulative revenue recognized will not occur. Progress milestones such as the first sample result delivered or final patient enrollment in a customer trial are customer dependent and are included in the transaction price when the respective milestone is probable of occurring. Milestone payments that are not within our customers’ control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. Determining whether regulatory milestone payments are probable is an area that requires significant judgment. In making this assessment, we evaluate the scientific, clinical, regulatory and other risks that must be managed, as well as the level of effort and investment required to achieve the respective milestone. The primary method used to estimate standalone selling price for performance obligations is the adjusted market assessment approach. Using this approach, we evaluate the market in which we sell our services and estimate the price that a customer in that market would be willing to pay for our services. We recognize revenue using either an input or output measure of progress that faithfully depicts performance on a contract, depending on the contract. The measure used is dependent on the nature of the service to be provided in each contract. Selecting the measure of progress and estimating progress to date requires significant judgment. Deferred Offering Costs Deferred offering costs consist of fees and expenses incurred in connection with the anticipated sale of our common stock in the IPO, including the legal, accounting, printing and other IPO-related costs. Deferred offering costs of $4.8 million are capitalized and classified within restricted cash and other assets on the condensed balance sheet as of June 30, 2019. Net Loss We calculate our basic and diluted net loss per share attributable to common shareholders in conformity with the two-class method required for companies with participating securities. We consider our convertible preferred stock to be participating securities. In the event a dividend is declared or paid on common stock, holders of convertible preferred stock are entitled to a share of such dividend in proportion to the holders of common stock on an as-if converted basis. Under the two-class method, basic net loss per share attributable to common shareholders is calculated by dividing the net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Net loss attributable to common shareholders is determined by allocating undistributed earnings between common and preferred shareholders. The diluted net loss per share attributable to common shareholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period determined using the treasury stock method. The net loss attributable to common shareholders was not allocated to the convertible preferred stock under the two-class method as the convertible preferred stock does not have a contractual obligation to share in our losses. For purposes of this calculation, convertible preferred stock, stock options and warrants to purchase common stock or convertible preferred stock are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common shareholders as their effect is anti-dilutive. Recently Ad opted In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation—Stock Compensation In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other Simplifying the Test for Goodwill Impairment In June 2018, the FASB issued ASU 2018-07, C ompensation—Stock Compensation Improvements to Nonemployee Share-Based Payment Accounting New Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other: Internal-Use Software |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3. Revenue Translational Development On December 18, 2015, we entered into a translational development agreement with a biopharmaceutical customer for access to certain of our oncology immunosequencing research datasets, including full-time employee support, to accelerate the customer’s preclinical, nonclinical and clinical trial testing. Under the initial terms of the agreement we could be entitled to up to $40.0 million over a period of four years which does not include any separately negotiated research sequencing contracts. If the biopharmaceutical customer terminates the agreement prior to the end of the initial four-year research term for any reason other than a material uncured breach by us, then the biopharmaceutical partner has agreed to pay us $0.8 million. In May 2019, the agreement was subsequently amended to reduce the services provided, which in turn reduced the fourth year of eligible payments to $2.3 million. We identified one performance obligation under this agreement, as the services were determined to be highly interrelated. We determined that any separately negotiated sequencing contracts are not performance obligations under the contract, as the contract did not contain any material rights related to such sequencing contracts. For the identified performance obligation, we assessed the work to be performed over the duration of the contract and determined that it is a consistent level of support throughout the period, and therefore revenue has been recognized straight-line over the contract term. Revenue recognized from this translational development agreement, excluding separately negotiated research sequencing contracts, was $1.1 million and $2.5 million in the three months ended June 30, 2019 and 2018, respectively, and $1.1 million and $5.0 million in the six months ended June 30, 2019 and 2018, respectively. In 2017, we entered into an agreement with a customer to provide services to accelerate its research initiatives. We identified one performance obligation under the agreement, as the services were determined to be highly interrelated. We determined that any separately negotiated sequencing contracts are not performance obligations under the contract, as the contract did not contain any material rights related to such sequencing contracts. Revenue recognized from this agreement, excluding sequencing revenue, was $0.1 million and $0.2 million in the three months ended June 30, 2019 and 2018, respectively, and $0.2 million and $0.3 million in the six months ended June 30, 2019 and 2018, respectively. MRD Development In 2017 and 2018, we entered into agreements with biopharmaceutical customers to further develop and commercialize clonoSEQ and the biopharmaceutical customers’ therapeutics. Under each of the agreements, we received or will receive non-refundable upfront payments and could receive substantial additional payments upon reaching certain progress milestones or achievement of certain regulatory milestones pertaining to the customers’ therapeutic and our clonoSEQ test. Under the contracts, we identify performance obligations, which may include: (i) obligations to provide services supporting the customer’s regulatory submission activities as they relate to our clonoSEQ test; and (ii) sequencing services for customer-provided samples for their regulatory submissions. The transaction price allocated to the respective performance obligations is estimated using an adjusted market assessment approach for the regulatory support services and a standalone selling price for the estimated immunosequencing services. At contract inception we fully constrained any consideration related to the regulatory milestones, as the achievement of such milestones is subject to third-party regulatory approval and the customers’ own submission decision-making. We recognize revenue relating to the sequencing services over time using an output method based on the proportion of sample results delivered relative to the total amount of sample results expected to be delivered and when expected to be a faithful depiction of progress. We use the same method to recognize the regulatory support services. When an output method based on the proportion of sample results delivered is not expected to be a faithful depiction of progress, we utilize an input method based on estimates of effort completed using a cost-based model. We recognized $0.5 million and $0.6 million in development revenue related to these contracts in the three months ended June 30, 2019 and 2018, respectively, and $0.8 million and $1.9 million in the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019, in future periods we could receive up to an additional $115.0 million in milestone payments if certain regulatory approvals are obtained by our customers’ therapeutics in connection with MRD data generated from our clonoSEQ test. Genentech In December 2018, we entered into a worldwide collaboration and license agreement (“Genentech Agreement”) with Genentech, Inc. (“Genentech”) to leverage our capability to develop cellular therapies in oncology. Subsequent to receipt of regulatory approval in January 2019, we received a non-refundable upfront payment of $300.0 million in February 2019 and may be eligible to receive more than $1.8 billion over time, including payments of up to $75.0 million upon the achievement of specified regulatory milestones, up to $300.0 million upon the achievement of specified development milestones and up to $1,430.0 million upon the achievement of specified commercial milestones. In addition, we are separately able to receive tiered royalties at a rate ranging from the mid-single digits to the mid-teens on aggregate worldwide net sales of products arising from the strategic collaboration, subject to certain reductions, with aggregate minimum floors. Under the agreement, we are pursuing two product development pathways for novel T cell immunotherapies in which Genentech intends to use T cell receptors (“TCRs”) screened by our immune medicine platform to engineer and manufacture cellular medicines: • Shared Products. The shared products will use “off-the-shelf” TCRs identified against cancer antigens shared among patients (“Shared Products”). • Personalized Product. The personalized product will use patient-specific TCRs identified by real-time screening of TCRs against cancer antigens in each patient (“Personalized Product”). Under the terms of the agreement, we granted Genentech exclusive worldwide licenses to develop and commercialize TCR-based cellular therapies in the field of oncology, including licenses to existing shared antigen data packages. Additionally, Genentech has the right to determine which product candidates to further develop for commercialization purposes. We determined that this arrangement meets the criteria set forth in ASC Topic 808, Collaborative Arrangements In applying ASC 606, we identified the following performance obligations at the inception of the agreement: 1. License to utilize on an exclusive basis all TCR-specific platform intellectual property to develop and commercialize any licensed products in the field of oncology. 2. License to utilize all data and information within each shared antigen data package and any other know-how disclosed by us to Genentech in oncology. 3. License to utilize all private antigen TCR product data in connection with research and development activities in the field of use. 4. License to existing shared antigen data packages. 5. Research and development services for shared product development including expansion of shared antigen data packages. 6. Research and development services for private product development. 7. Obligations to participate on various joint research, development and project committees. We determined that none of the licenses, research and development services or obligations to participate on various committees were distinct within the context of the contract given such rights and activities were highly interrelated and there was substantial additional research and development to further develop the licenses. We considered factors such as the stage of development of the respective existing antigen data packages, the subsequent development that would be required to both identify and submit a potential target for investigational new drug acceptance under both product pathways and the variability in research and development pathways given Genentech’s control of product commercialization. Specifically, under the agreement, Genentech is not required to pursue development or commercialization activities pertaining to both product pathways and may choose to proceed with one or the other as opposed to both. Accordingly, we determined that all of the identified performance obligations were attributable to one general performance obligation, which is to further the development of our TCR-specific platform, including data packages, and continue to make our TCR identification process available to Genentech to pursue either product pathway. Separately, we have a responsibility to Genentech to enter into a supply and manufacturing agreement for patient specific TCRs as it pertains to any Personalized Product therapeutic. We determined this was an option right of Genentech should they pursue commercialization of a Personalized Product therapy. Because of the uncertainty as a result of the early stage of development, the novel approach of our collaboration with Genentech and our rights to future commercial milestones and royalty payments, we determined that this option right was not a material right that should be accounted for at inception. As such, we will account for the supply and manufacturing agreement when entered into between the parties. We determined the initial transaction price shall be made up of only the $300.0 million upfront, non-refundable payment as all potential regulatory and development milestone payments were probable of significant revenue reversal as their achievement was highly dependent on factors outside our control. As a result, these payments were fully constrained and were not included in the transaction price as of June 30, 2019. We excluded the commercial milestones and potential royalties from the transaction price as those items relate predominantly to the license rights granted to Genentech and will be assessed when and if such events occur. As there are potential substantive developments necessary, which Genentech may be able to direct, we determined that we would apply a proportional performance model to recognize revenue for our performance obligation. We measure proportional performance using an input method based on costs incurred relative to the total estimated costs of research and development efforts to pursue both the Shared Product and Personalized Product pathways. We currently expect to recognize the revenue over a period of approximately seven to eight years from the effective date. This estimate of the research and development period considers pursuit options of development activities supporting both the Shared Product and the Personalized Product, but may be reduced or increased based on the various activities as directed by the joint committees, decisions made by Genentech, regulatory feedback or other factors not currently known. We recognized revenue of approximately $8.5 million and $14.8 million for the three and six months ended June 30, 2019, respectively, related to the Genentech collaboration. Costs related to the Genentech collaboration are included in research and development expenses. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value The following table sets forth the fair value of financial assets and liabilities that were measured at fair value on a recurring basis (in thousands): June 30, 2019 Level 1 Level 2 Level 3 Total (unaudited) Financial assets Money market funds $ 35,695 $ — $ — $ 35,695 Commercial paper — 88,161 — 88,161 U.S. government debt and agency securities — 273,713 — 273,713 Corporate bonds — 22,661 — 22,661 Total financial assets $ 35,695 $ 384,535 $ — $ 420,230 Financial liabilities Convertible preferred stock warrant liability $ — $ — $ 2,602 $ 2,602 Total financial liabilities $ — $ — $ 2,602 $ 2,602 December 31, 2018 Level 1 Level 2 Level 3 Total Financial assets Money market funds $ 45,998 $ — $ — $ 45,998 Commercial paper — 16,887 — 16,887 U.S. government debt and agency securities — 85,623 — 85,623 Corporate bonds — 7,478 — 7,478 Total financial assets $ 45,998 $ 109,988 $ — $ 155,986 Financial liabilities Convertible preferred stock warrant liability $ — $ — $ 336 $ 336 Total financial liabilities $ — $ — $ 336 $ 336 Level 1 securities include highly liquid money market funds, which we measure the fair value based on quoted prices in active markets for identical assets or liabilities. Level 2 securities consist of U.S. government debt securities, U.S. government agency bonds, commercial paper and corporate bonds, and are valued based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. Of the Level 2 commercial paper and U.S. government debt and agency securities balances, $6.0 million and $4.0 million, respectively, is recorded as cash and cash equivalents. Level 3 liabilities that are measured at fair value on a recurring basis consist of a convertible preferred stock warrant liability. During the six months ended June 30, 2019, we recognized $2.3 million of expense related to the revaluation of the convertible preferred stock warrant liability in interest and other income, net. The fair value of the convertible preferred stock warrant liability is estimated using the Black-Scholes option-pricing model. Certain inputs were utilized in the option-pricing model as follows: June 30, 2019 December 31, 2018 (unaudited) Fair value estimate $ 48.30 $ 8.27 Expected term (in years) 1.81 2.31 Risk-free interest rate 1.8 % 2.5 % Expected volatility 61.1 % 55.3 % Expected dividend yield — — |
Investments
Investments | 6 Months Ended |
Jun. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 5. Investments Available-for-sale investments consisted of the following as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (unaudited) Short-term marketable securities Commercial paper $ 82,165 $ — $ — $ 82,165 U.S. government debt and agency securities 269,366 351 (1 ) 269,716 Corporate bonds 22,630 32 — 22,662 Total short-term marketable securities $ 374,161 $ 383 $ (1 ) $ 374,543 December 31, 2018 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Short-term marketable securities Commercial paper $ 16,887 $ — $ — $ 16,887 U.S. government debt and agency securities 85,722 — (99 ) 85,623 Corporate bonds 7,486 — (8 ) 7,478 Total short-term marketable securities $ 110,095 $ — $ (107 ) $ 109,988 The following table presents the gross unrealized holding losses and fair value for investments in an unrealized loss position, and the length of time that individual securities have been in a continuous loss position, as of June 30, 2019 (in thousands): Less Than 12 Months 12 Months Or Greater Fair Value Unrealized Loss Fair Value Unrealized Loss (unaudited) Short-term marketable securities U.S. government debt and agency securities $ — $ — $ 4,997 $ (1 ) Total short-term marketable securities $ — $ — $ 4,997 $ (1 ) We evaluated our securities for other-than-temporary impairment and considered the decline in market value for the securities to be primarily attributable to current economic and market conditions. It is not more likely than not that we will be required to sell the securities, and we do not intend to do so prior to the recovery of the amortized cost basis. Based on this analysis, these marketable securities were not considered to be other-than-temporarily impaired as of June 30, 2019. All the corporate debt, U.S. government and agency securities and commercial paper have an effective maturity date of less than one year. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill There have been no changes in the carrying amount of goodwill since its recognition in 2015. Intangible assets subject to amortization as of the dates presented consisted of the following (in thousands): June 30, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount (unaudited) Acquired developed technology $ 20,000 $ (7,462 ) $ 12,538 Purchased intellectual property 325 (79 ) 246 Balance at June 30, 2019 $ 20,325 $ (7,541 ) $ 12,784 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired developed technology $ 20,000 $ (6,636 ) $ 13,364 Purchased intellectual property 325 (63 ) 262 Balance at December 31, 2018 $ 20,325 $ (6,699 ) $ 13,626 The developed technology was acquired in connection with our acquisition of Sequenta, Inc. (“Sequenta”) in 2015. The remaining balance of the acquired technology and the purchased intellectual property is expected to be amortized over the next approximately 7.5 years. As of June 30, 2019, expected future amortization expense for intangible assets was as follows (in thousands) (unaudited): 2019 $ 856 2020 1,698 2021 1,698 2022 1,698 2023 1,698 Thereafter 5,136 Total future amortization expense $ 12,784 |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Deferred Revenue | 7. Deferred Revenue Deferred revenue by revenue classification was as follows (in thousands): June 30, 2019 December 31, 2018 (unaudited) Current deferred revenue Sequencing $ 14,616 $ 11,238 Development 46,578 1,457 Total current deferred revenue 61,194 12,695 Non-current deferred revenue Sequencing 493 516 Development 240,426 188 Total non-current deferred revenue 240,919 704 Total current and non-current deferred revenue $ 302,113 $ 13,399 Genentech deferred revenue represents $45.0 million and $240.2 million of the current and non-current development deferred revenue balances, respectively, at June 30, 2019. In general, the current amounts will be recognized as revenue within 12 months and the long-term amounts will be recognized as revenue over a period of approximately seven to eight years. This period of time represents an estimate of the research and development period to develop cellular therapies in oncology, which may be reduced or increased based on the various development activities. Changes in deferred revenue during the six months ended June 30, 2019 were as follows (in thousands): Deferred revenue balance at December 31, 2018 $ 13,399 Additions to deferred revenue during the period (unaudited) 308,055 Revenue recognized during the period (unaudited) (19,341 ) Deferred revenue balance at June 30, 2019 (unaudited) $ 302,113 As of June 30, 2019, $4.4 million was recognized that was included in the deferred revenue balance at December 31, 2018. As a result of cancelled customer sequencing contracts, we recognized $0.8 million of sequencing revenue during the six months ended June 30, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Operating Leases We have entered into various non-cancelable lease agreements for our office and laboratory spaces. In July 2011, we entered into a non-cancelable lease agreement with a minority shareholder for laboratory and office space in Seattle, Washington. The lease terms were subsequently amended multiple times, most recently in June 2016. The lease terminates in June 2023. The lease also requires us to pay additional amounts for operating and maintenance expenses. In October 2016, we entered into an agreement to sublease certain laboratory and office space in South San Francisco, California. The lease commenced in October 2016 and terminated in March 2019. The lease required us to pay additional amounts for operating and maintenance expenses. In April 2018, we entered into a lease agreement to lease additional space in South San Francisco, California. The lease term is through March 2026 and provides for one five-year option. We will be responsible for our share of allocable operating expenses, tax expenses and utilities cost during the duration of the lease term. In connection with the lease, the landlord funded agreed-upon improvements prior to the lease commencement date of December 12, 2018. The landlord was solely responsible for the $2.4 million cost of such improvements, which we recognized as a leasehold improvement asset that depreciates beginning from the commencement date to the initial lease term, and a corresponding leasehold incentive obligation, which is amortized over the life of the lease. As of June 30, 2019, future minimum lease payments, exclusive of operating and maintenance costs, were as follows (in thousands) (unaudited): 2019 $ 1,781 2020 3,819 2021 3,917 2022 4,017 2023 2,295 Thereafter 2,315 Total future minimum lease payments $ 18,144 Rent expenses, inclusive of operating and maintenance costs, were $1.1 million and $0.9 million for the three months ended June 30, 2019 and 2018, respectively, and $2.3 million and $1.8 million for the six months ended June 30, 2019 and 2018, respectively. Legal Proceedings We are subject to claims and assessments from time to time in the ordinary course of business. We will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. We are not currently party to any material legal proceedings. Indemnification Agreements In the ordinary course of business, we may provide indemnification of varying scope and terms to vendors, lessors, customers and other parties with respect to certain matters including, but not limited to, losses arising out of breach of our agreements with them or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with members of our Board of Directors and certain of our executive officers that will require us to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments that we could be required to make under these indemnification agreements is, in many cases, unlimited. We have not incurred any material costs as a result of such indemnifications and are not currently aware of any indemnification claims. |
Convertible Preferred Stock
Convertible Preferred Stock | 6 Months Ended |
Jun. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Stock | 9. Convertible Preferred Stock Convertible preferred stock at June 30, 2019 consisted of the following (in thousands, except share data) (unaudited): Shares Authorized Shares Issued and Outstanding Amount Liquidation Preference Series A 4,550,000 4,550,000 $ 12,405 $ 4,550 Series B 5,645,706 5,645,706 16,018 9,669 Series C 4,804,227 4,747,352 14,425 12,521 Series D 19,269,117 19,269,117 106,905 106,999 Series E 15,524,350 15,524,350 93,698 93,750 Series E-1 17,407,441 16,854,887 73,640 (1) 101,785 Series F 21,761,676 21,761,676 195,013 195,100 Series F-1 4,800,000 4,686,649 49,827 50,000 Total convertible preferred stock 93,762,517 93,039,737 $ 561,931 $ 574,374 (1) Includes vested Series E-1 convertible preferred stock options of $0.7 million which are not included in the shares issued and outstanding. |
Shareholders_ Deficit
Shareholders’ Deficit | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Shareholders’ Deficit | 10 . Shareholders’ Deficit Common We are authorized to issue 131,000,000 shares of common stock. Our common stock has a par value of $0.0001, no preferences or privileges and is not redeemable. Holders of our common stock are entitled to one vote for each share of common stock held. We have reserved shares of common stock for the following as of June 30, 2019 (unaudited): Shares to be issued upon conversion of all series of convertible preferred stock 93,039,737 Shares to be issued upon exercise of outstanding common stock options 17,681,436 Shares available for future stock option grants 3,155,968 Shares to be issued upon exercise of outstanding Series E-1 convertible preferred stock options 15,034 Shares to be issued upon conversion of Series C convertible preferred stock in connection with warrant exercise 56,875 Shares to be issued upon conversion of common stock warrants 55,032 Shares of common stock reserved for future issuance 114,004,082 Common In connection with two transactions in 2012 and 2013, we granted warrants to purchase up to 55,032 shares of common stock. The warrants are exercisable at any time for a period of ten years from the date of issuance at a weighted-average exercise price of $0.37, except in the case of a warrant to purchase 20,000 shares of common stock at an exercise price of $0.45 per share that would have expired if unexercised prior to the closing of our IPO. |
Equity Incentive Plans
Equity Incentive Plans | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Incentive Plans | 11. Equity Incentive Plans Adaptive We adopted an equity incentive plan in 2009 (“2009 Plan”) that provides for the issuance of incentive and nonqualified common stock options, and other share-based awards for employees, directors and consultants. Under the 2009 Plan, the option exercise price for incentive and nonqualified stock options may not be less than the fair market value of our common stock at the date of grant as determined by our Board of Directors. Options expire no later than ten years from the grant date, and vesting is established at the time of grant. As of June 30, 2019, we have 20,837,404 shares of common stock available for issuance under the 2009 Plan. A summary of our option activity during the six months ended June 30, 2019 is as follows: Shares Available for Grant Shares Subject to Outstanding Options Weighted- Average Exercise Price per Share Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 6,827,996 14,893,253 $ 4.59 $ 39,864 Options granted (unaudited) (3,890,331 ) 3,890,331 7.55 Forfeited or cancelled (unaudited) 218,303 (218,303 ) 6.19 Exercised (unaudited) — (883,845 ) 2.13 Outstanding at June 30, 2019 (unaudited) 3,155,968 17,681,436 5.35 759,479 Sequenta 2008 In connection with our acquisition of Sequenta in January 2015, we assumed Sequenta’s Equity Incentive Plan (“2008 Plan”), including all outstanding options and shares available for future issuance under the 2008 Plan, which are all exercisable for Series E-1 convertible preferred stock. A summary of our Series E-1 convertible preferred stock option activity during the six months ended June 30, 2019 is as follows: Convertible Preferred Shares Subject to Outstanding Options Weighted- Average Exercise Price per Share Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 264,677 $ 0.44 $ 1,826 Options granted (unaudited) — — Forfeited or cancelled (unaudited) — — Exercised (unaudited) (249,643 ) 0.44 Outstanding at June 30, 2019 (unaudited) 15,034 0.49 719 Fair Value of Options Granted The estimated fair value of options granted during the six months ended June 30, 2019 and 2018 was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions for our 2009 Plan: Adaptive 2009 Equity Incentive Plan Six Months Ended June 30, 2019 2018 (unaudited) Grant date fair value $ 8.55 $ 6.55 Expected term (in years) 6.06 6.16 Risk-free interest rate 2.4 % 2.7 % Expected volatility 67.9 % 69.2 % Expected dividend yield — — The determination of the fair value of stock options on the date of grant using a Black-Scholes option-pricing model is affected by the estimated fair value of our common stock, as well as assumptions regarding a number of variables that are complex, subjective and generally require significant judgment to determine. The valuation assumptions were determined as follows: Fair value of common stock— The grant date fair value of our common stock has been determined by our Board of Directors with input from management. The grant date fair value of the common stock was determined using valuation methodologies which utilize certain assumptions, including probability weighting of events, volatility, time to liquidation, a risk-free interest rate and an assumption for a discount for lack of marketability (Level 3 inputs). In determining the fair value of the common stock, the methodologies used to estimate the enterprise value were performed using methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. For valuations after the closing of our IPO, our board of directors plans to determine the fair value of each share of common stock based on the closing price of our common stock on the date of grant or other relevant determination date, as reported on The Nasdaq Global Select Market. Expected term —The expected life of options granted to employees is determined using the “simplified” method, as illustrated in ASC Topic 718, , as we do not have sufficient exercise history to determine a better estimate of expected term. Under this approach, the expected term is presumed to be the average of the weighted-average vesting term and the contractual term of the option. Risk-free interest rate —We utilize a risk-free interest rate in the option valuation model based on U.S. Treasury zero-coupon issues, with remaining terms similar to the expected term of the options. Expected volatility —As we do not have sufficient trading history for our common stock, the expected volatility is based on the historical volatility of our publicly traded industry peers utilizing a period of time consistent with our estimate of the expected term. Expected dividend yield —We do not anticipate paying any cash dividends in the foreseeable future and, therefore, use an expected dividend yield of zero in the option valuation model. Share-based compensation expense of $3.3 million and $2.4 million was recognized during the three months ended June 30, 2019 and 2018, respectively, and $6.4 million and $5.6 million was recognized during the six months ended June 30, 2019 and 2018, respectively. The compensation costs related to stock options are included in our unaudited condensed statements of operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (unaudited) Cost of revenue $ 113 $ 92 $ 243 $ 176 Research and development 978 652 1,895 1,468 Sales and marketing 943 592 1,849 1,549 General and administration 1,298 1,112 2,391 2,357 Total share-based compensation expense $ 3,332 $ 2,448 $ 6,378 $ 5,550 At June 30, 2019, unrecognized share-based compensation expense related to unvested stock options was $33.2 million, which is expected to be recognized over a remaining weighted-average period of 3.16 years. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Shareholders | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Shareholders | 12. Net Loss Shareholders Net Loss The following table sets forth the computation of the basic and diluted net loss per share attributable to common shareholders (in thousands, except shares and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (unaudited) Net loss $ (15,659 ) $ (12,493 ) $ (34,045 ) $ (24,884 ) Fair value adjustments to redemption value for Series E-1 convertible preferred stock options (710 ) (2 ) (964 ) 2 Net loss attributable to common shareholders, basic and diluted $ (16,369 ) $ (12,495 ) $ (35,009 ) $ (24,882 ) Weighted-average shares used in computing net loss per share 13,279,324 12,385,888 13,074,692 12,334,227 Net loss per share attributable to common shareholders, basic and diluted $ (1.23 ) $ (1.01 ) $ (2.68 ) $ (2.02 ) Since we were in a loss position for all periods presented, basic net loss per share attributable to common shareholders is the same as diluted net loss per share attributable to common shareholders, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. The following weighted-average common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common shareholders for the periods presented, as they had an anti-dilutive effect: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (unaudited) Convertible preferred stock (on as if converted basis) 93,028,311 92,768,158 92,973,101 92,751,261 2009 Plan stock options issued and outstanding 17,591,720 14,597,833 16,826,833 13,927,507 2008 Plan stock options issued and outstanding 26,460 364,625 81,670 403,591 Common stock warrants 55,032 55,032 55,032 55,032 Convertible preferred stock warrants 56,875 56,875 56,875 56,875 Total 110,758,398 107,842,523 109,993,511 107,194,266 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent On July 1, 2019, we completed our IPO. For details regarding this event, including the automatic conversion of all shares of our convertible preferred stock into common stock, our amended and restated articles of incorporation and bylaws and our 2019 Plan, please refer to Note 1 – Organization and Description of Business – Initial Public Offering. In August 2019, we entered into an operating lease to rent 100,000 square feet in a to-be-constructed building in Seattle, Washington. Shell construction is expected to be completed in 2020. The lease term commences on the date that the landlord delivers the premises to us for construction of certain tenant improvements. Rent obligations commence 10 months thereafter, and the lease term ends 142 months form the date rent commences, subject to our option to twice extend the lease for five years. The lease is cancellable under certain circumstances if the landlord fails to deliver the premises to us by May 1, 2021. We plan to occupy the new building in 2021, once interior construction is finished. The lease also requires us to pay additional amounts for operating and maintenance expenses. In connection with the new lease, we also entered into a letter of credit of $2.1 million with one of our existing financial institutions. Furthermore, in August 2019, we amended the lease for our current headquarters in Seattle, Washington to expand the size of the existing premises by approximately 8,400 square feet. Rent obligations of the expanded premises commence four months after the landlord delivers the premises to us for construction of certain tenant improvements, and the lease term for both the existing premises and the expanded premises ends 142 months after the commencement date of the new lease mentioned above, subject to our option to twice extend the lease for five years. If the new lease does not commence, the lease term for the existing premises and the expanded premises ends March 31, 2024. Expected future minimum payments for the leased spaces, exclusive of operating and maintenance costs and assuming attainment of our target commencement dates, are as follows (in thousands) (unaudited): 2019 $ 1,431 2020 3,053 2021 5,802 2022 9,706 2023 9,975 Thereafter 105,270 Total future minimum lease payments $ 135,237 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. Estimates are used in several areas including, but not limited to, estimates of progress to date for certain performance obligations and the transaction price for certain contracts with customers, share-based compensation including the fair value of stock, and the provision for income taxes, including related reserves, and goodwill, among others. These estimates generally involve complex issues and require judgments, involve the analysis of historical results and prediction of future trends, can require extended periods of time to resolve and are subject to change from period to period. Actual results may differ materially from management’s estimates. |
Unaudited Interim Condensed Financial Statements | Unaudited Interim Condensed Financial Statements In our opinion, the accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information. These unaudited condensed financial statements include all adjustments necessary to fairly state the financial position and the results of our operations and cash flows for interim periods in accordance with GAAP. Interim-period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying condensed financial statements should be read in conjunction with our audited financial statements and notes included in our prospectus dated June 26, 2019 filed with the Securities and Exchange Commission (“SEC”) on June 27, 2019 in connection with our IPO (“Prospectus”). |
Cash and Cash Equivalents | Cash Cash and cash equivalents are stated at fair value. Cash equivalents include only securities having an original maturity of three months or less at the time of purchase. We limit our credit risk associated with cash and cash equivalents by placing our investments with banks that we believe are highly creditworthy and with highly rated money market funds. Cash and cash equivalents primarily consist of bank deposits and investments in money market funds, as well as highly liquid U.S. government debt and agency securities and commercial paper with original maturities of three months or less. |
Concentrations of Risk | Concentrations We are subject to a concentration of risk from a limited number of suppliers, or in some cases, single suppliers for some of our laboratory instruments and materials. This risk is managed by targeting a quantity of surplus stock. Cash, cash equivalents and marketable securities are financial instruments that potentially subject us to concentrations of credit risk. We invest in money market funds, U.S. government debt securities, U.S. government agency bonds, commercial paper and corporate bonds with high-quality accredited financial institutions. Significant customers are those which represent more than 10% of our total revenue or accounts receivable balance at each respective balance sheet date. Revenue from these customers reflects their purchase of our products and services and we do not believe their loss would have a material adverse effect on our business. For each significant customer, revenue as a percentage of total revenue and accounts receivable, net as a percentage of total accounts receivable, net were as follows: Revenue Accounts Receivable, Net Three Months Ended June 30, Six Months Ended June 30, June 30, December 31, 2019 2018 2019 2018 2019 2018 (unaudited) (unaudited) Customer A 12.7% 25.5% *% 26.4% 32.7% *% Customer B * 11.0 * * * 15.1 Customer C * * * * * 13.2 Genentech, Inc. 40.0 * 43.6 * * * * less than 10% |
Revenue Recognition | Revenue We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers Overview Our revenue is generated from immunosequencing (“sequencing”) products and services (“sequencing revenue”) and from regulatory or development support services leveraging our immune medicine platform (“development revenue”). When revenue generating contracts have elements of both sequencing revenue and development revenue, we allocate revenue based on the nature of the performance obligation and the allocated transaction price. Sequencing Sequencing revenue reflects the amounts generated from providing sequencing services and testing through our immunoSEQ and clonoSEQ products and services to our research and clinical customers, respectively. For research customers, contracts typically include an amount billed in advance of services (“upfront”), and subsequent billings as sample results are delivered to the customer. Upfront amounts received are recorded as deferred revenue, which we recognize as revenue upon satisfaction of performance obligations. We have identified two typical performance obligations under the terms of our research service contracts: sequencing services and related data analysis. We recognize revenue for both identified performance obligations as sample results are delivered to the customer. For other research customers who choose to purchase a research use only kit, the kits are sold on a price per kit basis with amounts payable upon delivery of the kit. Payments received are recorded as deferred revenue. For these customers, we have identified one performance obligation: the delivery of sample results. We recognize revenue as the results are delivered to the customer based on a proportion of the estimated samples that can be reported on for each kit. For clinical customers, we derive revenues from providing our clonoSEQ test report to ordering physicians, and we bill and receive payments from commercial third-party payors and medical institutions. In these transactions, we have identified one performance obligation: the delivery of a clonoSEQ report. As payment from the respective payors may vary based on the various reimbursement rates and patient responsibilities, we consider the transaction price to be variable and record an estimate of the transaction price, subject to the constraint for variable consideration, as revenue at the time of delivery. The estimate of transaction price is based on historical reimbursement rates with the various payors, which are monitored in subsequent periods and adjusted as necessary based on actual collection experience. In January 2019, clonoSEQ received Medicare coverage aligned with the FDA label and National Comprehensive Cancer Network (“NCCN”) guidelines for longitudinal monitoring in multiple myeloma (“MM”) and B cell acute lymphoblastic leukemia (“ALL”). We bill Medicare for an episode of treatment when we deliver the first eligible test results. This billing contemplates all necessary tests required during a patient’s treatment cycle, which is currently estimated at approximately four tests per patient, including the initial sequence identification test. Revenue is recognized at the time the initial billable test result is delivered and is based upon cumulative tests delivered to date. For the three and six months ended June 30, 2019, we recognized $0.3 million and $0.8 million relating to the coverage policy, respectively; $0.1 million and $0.4 million of this revenue was related to tests delivered in periods prior to the three and six months ended June 30, 2019, respectively. Any unrecognized revenue from the initial billable test is recorded as deferred revenue, and is recognized as we deliver the remaining tests in a patient’s treatment cycle. Development We derive revenue by providing services through development agreements to biopharmaceutical customers who seek access to our immune medicine platform technologies. We generate revenues from the delivery of professional support activities pertaining to the use of our proprietary immunoSEQ and clonoSEQ services in the development of the respective customers’ initiatives. The transaction price for these contracts may consist of a combination of non-refundable upfront fees, separately priced sequencing fees, progress based milestones and regulatory milestones. The development agreements may include single or multiple performance obligations depending on the contract. For certain contracts, we may perform services to support the biopharmaceutical customers’ regulatory submission as part of their registrational trials. These services include regulatory support pertaining to our technology intended to be utilized as part of the submission, development of analytical plans for our sequencing data, participation on joint research committees and assistance in completing a regulatory submission. Generally, these services are not distinct within the context of the contract, and they are accounted for as a single performance obligation. When sequencing services are separately priced customer options, we assess if a material right exists and, if not, the customer option to purchase additional sequencing services is not considered part of the contract. Except for any non-refundable upfront fees, the other forms of compensation represent variable consideration. Variable consideration related to progress based and regulatory milestones is estimated using the most likely amount method where variable consideration is constrained until it is probable that a significant reversal of cumulative revenue recognized will not occur. Progress milestones such as the first sample result delivered or final patient enrollment in a customer trial are customer dependent and are included in the transaction price when the respective milestone is probable of occurring. Milestone payments that are not within our customers’ control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. Determining whether regulatory milestone payments are probable is an area that requires significant judgment. In making this assessment, we evaluate the scientific, clinical, regulatory and other risks that must be managed, as well as the level of effort and investment required to achieve the respective milestone. The primary method used to estimate standalone selling price for performance obligations is the adjusted market assessment approach. Using this approach, we evaluate the market in which we sell our services and estimate the price that a customer in that market would be willing to pay for our services. We recognize revenue using either an input or output measure of progress that faithfully depicts performance on a contract, depending on the contract. The measure used is dependent on the nature of the service to be provided in each contract. Selecting the measure of progress and estimating progress to date requires significant judgment. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist of fees and expenses incurred in connection with the anticipated sale of our common stock in the IPO, including the legal, accounting, printing and other IPO-related costs. Deferred offering costs of $4.8 million are capitalized and classified within restricted cash and other assets on the condensed balance sheet as of June 30, 2019. |
Net Loss Per Share Attributable to Common Shareholders | Net Loss We calculate our basic and diluted net loss per share attributable to common shareholders in conformity with the two-class method required for companies with participating securities. We consider our convertible preferred stock to be participating securities. In the event a dividend is declared or paid on common stock, holders of convertible preferred stock are entitled to a share of such dividend in proportion to the holders of common stock on an as-if converted basis. Under the two-class method, basic net loss per share attributable to common shareholders is calculated by dividing the net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Net loss attributable to common shareholders is determined by allocating undistributed earnings between common and preferred shareholders. The diluted net loss per share attributable to common shareholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period determined using the treasury stock method. The net loss attributable to common shareholders was not allocated to the convertible preferred stock under the two-class method as the convertible preferred stock does not have a contractual obligation to share in our losses. For purposes of this calculation, convertible preferred stock, stock options and warrants to purchase common stock or convertible preferred stock are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common shareholders as their effect is anti-dilutive. |
Recently Adopted Accounting Pronouncements | Recently Ad opted In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation—Stock Compensation In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other Simplifying the Test for Goodwill Impairment In June 2018, the FASB issued ASU 2018-07, C ompensation—Stock Compensation Improvements to Nonemployee Share-Based Payment Accounting |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other: Internal-Use Software |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Concentrations of Risk Percentage | For each significant customer, revenue as a percentage of total revenue and accounts receivable, net as a percentage of total accounts receivable, net were as follows: Revenue Accounts Receivable, Net Three Months Ended June 30, Six Months Ended June 30, June 30, December 31, 2019 2018 2019 2018 2019 2018 (unaudited) (unaudited) Customer A 12.7% 25.5% *% 26.4% 32.7% *% Customer B * 11.0 * * * 15.1 Customer C * * * * * 13.2 Genentech, Inc. 40.0 * 43.6 * * * * less than 10% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table sets forth the fair value of financial assets and liabilities that were measured at fair value on a recurring basis (in thousands): June 30, 2019 Level 1 Level 2 Level 3 Total (unaudited) Financial assets Money market funds $ 35,695 $ — $ — $ 35,695 Commercial paper — 88,161 — 88,161 U.S. government debt and agency securities — 273,713 — 273,713 Corporate bonds — 22,661 — 22,661 Total financial assets $ 35,695 $ 384,535 $ — $ 420,230 Financial liabilities Convertible preferred stock warrant liability $ — $ — $ 2,602 $ 2,602 Total financial liabilities $ — $ — $ 2,602 $ 2,602 December 31, 2018 Level 1 Level 2 Level 3 Total Financial assets Money market funds $ 45,998 $ — $ — $ 45,998 Commercial paper — 16,887 — 16,887 U.S. government debt and agency securities — 85,623 — 85,623 Corporate bonds — 7,478 — 7,478 Total financial assets $ 45,998 $ 109,988 $ — $ 155,986 Financial liabilities Convertible preferred stock warrant liability $ — $ — $ 336 $ 336 Total financial liabilities $ — $ — $ 336 $ 336 |
Summary of Fair Value of Convertible Preferred Stock Warrant Liability Estimated Using Black-Scholes Option Pricing Model | The fair value of the convertible preferred stock warrant liability is estimated using the Black-Scholes option-pricing model. Certain inputs were utilized in the option-pricing model as follows: June 30, 2019 December 31, 2018 (unaudited) Fair value estimate $ 48.30 $ 8.27 Expected term (in years) 1.81 2.31 Risk-free interest rate 1.8 % 2.5 % Expected volatility 61.1 % 55.3 % Expected dividend yield — — |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Available-for-sale Investments | Available-for-sale investments consisted of the following as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (unaudited) Short-term marketable securities Commercial paper $ 82,165 $ — $ — $ 82,165 U.S. government debt and agency securities 269,366 351 (1 ) 269,716 Corporate bonds 22,630 32 — 22,662 Total short-term marketable securities $ 374,161 $ 383 $ (1 ) $ 374,543 December 31, 2018 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Short-term marketable securities Commercial paper $ 16,887 $ — $ — $ 16,887 U.S. government debt and agency securities 85,722 — (99 ) 85,623 Corporate bonds 7,486 — (8 ) 7,478 Total short-term marketable securities $ 110,095 $ — $ (107 ) $ 109,988 |
Schedule of Gross Unrealized Holding Losses and Fair Value for Investments in Unrealized Loss Position | The following table presents the gross unrealized holding losses and fair value for investments in an unrealized loss position, and the length of time that individual securities have been in a continuous loss position, as of June 30, 2019 (in thousands): Less Than 12 Months 12 Months Or Greater Fair Value Unrealized Loss Fair Value Unrealized Loss (unaudited) Short-term marketable securities U.S. government debt and agency securities $ — $ — $ 4,997 $ (1 ) Total short-term marketable securities $ — $ — $ 4,997 $ (1 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets Subject to Amortization | Intangible assets subject to amortization as of the dates presented consisted of the following (in thousands): June 30, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount (unaudited) Acquired developed technology $ 20,000 $ (7,462 ) $ 12,538 Purchased intellectual property 325 (79 ) 246 Balance at June 30, 2019 $ 20,325 $ (7,541 ) $ 12,784 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired developed technology $ 20,000 $ (6,636 ) $ 13,364 Purchased intellectual property 325 (63 ) 262 Balance at December 31, 2018 $ 20,325 $ (6,699 ) $ 13,626 |
Schedule of Future Amortization Expense for Intangible Assets | As of June 30, 2019, expected future amortization expense for intangible assets was as follows (in thousands) (unaudited): 2019 $ 856 2020 1,698 2021 1,698 2022 1,698 2023 1,698 Thereafter 5,136 Total future amortization expense $ 12,784 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Deferred Revenue by Revenue Classification | Deferred revenue by revenue classification was as follows (in thousands): June 30, 2019 December 31, 2018 (unaudited) Current deferred revenue Sequencing $ 14,616 $ 11,238 Development 46,578 1,457 Total current deferred revenue 61,194 12,695 Non-current deferred revenue Sequencing 493 516 Development 240,426 188 Total non-current deferred revenue 240,919 704 Total current and non-current deferred revenue $ 302,113 $ 13,399 |
Changes in Deferred Revenue | Changes in deferred revenue during the six months ended June 30, 2019 were as follows (in thousands): Deferred revenue balance at December 31, 2018 $ 13,399 Additions to deferred revenue during the period (unaudited) 308,055 Revenue recognized during the period (unaudited) (19,341 ) Deferred revenue balance at June 30, 2019 (unaudited) $ 302,113 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | As of June 30, 2019, future minimum lease payments, exclusive of operating and maintenance costs, were as follows (in thousands) (unaudited): 2019 $ 1,781 2020 3,819 2021 3,917 2022 4,017 2023 2,295 Thereafter 2,315 Total future minimum lease payments $ 18,144 Expected future minimum payments for the leased spaces, exclusive of operating and maintenance costs and assuming attainment of our target commencement dates, are as follows (in thousands) (unaudited): 2019 $ 1,431 2020 3,053 2021 5,802 2022 9,706 2023 9,975 Thereafter 105,270 Total future minimum lease payments $ 135,237 |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Convertible Preferred Stock | Convertible preferred stock at June 30, 2019 consisted of the following (in thousands, except share data) (unaudited): Shares Authorized Shares Issued and Outstanding Amount Liquidation Preference Series A 4,550,000 4,550,000 $ 12,405 $ 4,550 Series B 5,645,706 5,645,706 16,018 9,669 Series C 4,804,227 4,747,352 14,425 12,521 Series D 19,269,117 19,269,117 106,905 106,999 Series E 15,524,350 15,524,350 93,698 93,750 Series E-1 17,407,441 16,854,887 73,640 (1) 101,785 Series F 21,761,676 21,761,676 195,013 195,100 Series F-1 4,800,000 4,686,649 49,827 50,000 Total convertible preferred stock 93,762,517 93,039,737 $ 561,931 $ 574,374 (1) Includes vested Series E-1 convertible preferred stock options of $0.7 million which are not included in the shares issued and outstanding. |
Shareholders_ Deficit (Tables)
Shareholders’ Deficit (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Summary of Reserved Shares of Common Stock | We have reserved shares of common stock for the following as of June 30, 2019 (unaudited): Shares to be issued upon conversion of all series of convertible preferred stock 93,039,737 Shares to be issued upon exercise of outstanding common stock options 17,681,436 Shares available for future stock option grants 3,155,968 Shares to be issued upon exercise of outstanding Series E-1 convertible preferred stock options 15,034 Shares to be issued upon conversion of Series C convertible preferred stock in connection with warrant exercise 56,875 Shares to be issued upon conversion of common stock warrants 55,032 Shares of common stock reserved for future issuance 114,004,082 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Estimated Fair Value of Options Granted | The estimated fair value of options granted during the six months ended June 30, 2019 and 2018 was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions for our 2009 Plan: Adaptive 2009 Equity Incentive Plan Six Months Ended June 30, 2019 2018 (unaudited) Grant date fair value $ 8.55 $ 6.55 Expected term (in years) 6.06 6.16 Risk-free interest rate 2.4 % 2.7 % Expected volatility 67.9 % 69.2 % Expected dividend yield — — |
Summary of Compensation Costs Related to Stock Options Included in Statements of Operations | The compensation costs related to stock options are included in our unaudited condensed statements of operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (unaudited) Cost of revenue $ 113 $ 92 $ 243 $ 176 Research and development 978 652 1,895 1,468 Sales and marketing 943 592 1,849 1,549 General and administration 1,298 1,112 2,391 2,357 Total share-based compensation expense $ 3,332 $ 2,448 $ 6,378 $ 5,550 |
2009 Equity Incentive Plan | |
Summary of Option Activity | A summary of our option activity during the six months ended June 30, 2019 is as follows: Shares Available for Grant Shares Subject to Outstanding Options Weighted- Average Exercise Price per Share Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 6,827,996 14,893,253 $ 4.59 $ 39,864 Options granted (unaudited) (3,890,331 ) 3,890,331 7.55 Forfeited or cancelled (unaudited) 218,303 (218,303 ) 6.19 Exercised (unaudited) — (883,845 ) 2.13 Outstanding at June 30, 2019 (unaudited) 3,155,968 17,681,436 5.35 759,479 |
Sequenta, Inc. 2008 Stock Plan | Series E-1 Convertible Preferred Stock | |
Summary of Option Activity | A summary of our Series E-1 convertible preferred stock option activity during the six months ended June 30, 2019 is as follows: Convertible Preferred Shares Subject to Outstanding Options Weighted- Average Exercise Price per Share Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 264,677 $ 0.44 $ 1,826 Options granted (unaudited) — — Forfeited or cancelled (unaudited) — — Exercised (unaudited) (249,643 ) 0.44 Outstanding at June 30, 2019 (unaudited) 15,034 0.49 719 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Shareholders (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computation of the Basic and Diluted Net Loss Per Share Attributable to Common Shareholders | The following table sets forth the computation of the basic and diluted net loss per share attributable to common shareholders (in thousands, except shares and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (unaudited) Net loss $ (15,659 ) $ (12,493 ) $ (34,045 ) $ (24,884 ) Fair value adjustments to redemption value for Series E-1 convertible preferred stock options (710 ) (2 ) (964 ) 2 Net loss attributable to common shareholders, basic and diluted $ (16,369 ) $ (12,495 ) $ (35,009 ) $ (24,882 ) Weighted-average shares used in computing net loss per share 13,279,324 12,385,888 13,074,692 12,334,227 Net loss per share attributable to common shareholders, basic and diluted $ (1.23 ) $ (1.01 ) $ (2.68 ) $ (2.02 ) |
Weighted-Average Common Stock Equivalents were Excluded From Calculation of Diluted Net Loss Per Share Attributable to Common Shareholders | The following weighted-average common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common shareholders for the periods presented, as they had an anti-dilutive effect: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (unaudited) Convertible preferred stock (on as if converted basis) 93,028,311 92,768,158 92,973,101 92,751,261 2009 Plan stock options issued and outstanding 17,591,720 14,597,833 16,826,833 13,927,507 2008 Plan stock options issued and outstanding 26,460 364,625 81,670 403,591 Common stock warrants 55,032 55,032 55,032 55,032 Convertible preferred stock warrants 56,875 56,875 56,875 56,875 Total 110,758,398 107,842,523 109,993,511 107,194,266 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | As of June 30, 2019, future minimum lease payments, exclusive of operating and maintenance costs, were as follows (in thousands) (unaudited): 2019 $ 1,781 2020 3,819 2021 3,917 2022 4,017 2023 2,295 Thereafter 2,315 Total future minimum lease payments $ 18,144 Expected future minimum payments for the leased spaces, exclusive of operating and maintenance costs and assuming attainment of our target commencement dates, are as follows (in thousands) (unaudited): 2019 $ 1,431 2020 3,053 2021 5,802 2022 9,706 2023 9,975 Thereafter 105,270 Total future minimum lease payments $ 135,237 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 01, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Subsidiary Or Equity Method Investee [Line Items] | |||||||
Convertible preferred stock outstanding | 93,039,737 | 92,790,094 | |||||
Initial share reserve | 114,004,082 | ||||||
Convertible Preferred Stock | |||||||
Subsidiary Or Equity Method Investee [Line Items] | |||||||
Convertible preferred stock outstanding | 93,039,737 | 93,023,694 | 92,790,094 | 92,790,094 | 92,745,734 | 92,656,029 | |
Initial share reserve | 93,039,737 | ||||||
Subsequent Event | 2019 Plan | |||||||
Subsidiary Or Equity Method Investee [Line Items] | |||||||
Initial share reserve | 15,519,170 | ||||||
Initial Public Offering | Subsequent Event | |||||||
Subsidiary Or Equity Method Investee [Line Items] | |||||||
Shares issued | 17,250,000 | ||||||
Public offering price | $ 20 | ||||||
Net proceeds | $ 316 | ||||||
Underwriting discounts, commissions and other costs | 24.2 | ||||||
Offering expenses | $ 4.8 |
Significant Accounting Polici_4
Significant Accounting Policies - Schedule of Concentrations of Risk Percentage (Details) - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Customer A | Revenue | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 12.70% | 25.50% | 26.40% | ||
Customer A | Accounts Receivable, Net | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 32.70% | ||||
Customer B | Revenue | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 11.00% | ||||
Customer B | Accounts Receivable, Net | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 15.10% | ||||
Customer C | Accounts Receivable, Net | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 13.20% | ||||
Genentech, Inc. | Revenue | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 40.00% | 43.60% |
Significant Accounting Polici_5
Significant Accounting Policies - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($)Performance_Obligation | |
Accounting Standards Update 2016-09 | ||
Significant Accounting Policies [Line Items] | ||
Cumulative impact to accumulated deficit | $ 0.1 | |
Restricted Cash and Other Assets | ||
Significant Accounting Policies [Line Items] | ||
Deferred offering costs | $ 4.8 | $ 4.8 |
Sequencing Revenue | ||
Significant Accounting Policies [Line Items] | ||
Number of revenue performance obligations | Performance_Obligation | 2 | |
Sequencing Revenue From Coverage Policy | ||
Significant Accounting Policies [Line Items] | ||
Revenue recognized | 0.3 | $ 0.8 |
Sequencing Revenue From Test Deliver | ||
Significant Accounting Policies [Line Items] | ||
Revenue recognized | $ 0.1 | $ 0.4 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | Jun. 30, 2019 | Dec. 18, 2015 | Feb. 28, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Disaggregation Of Revenue [Line Items] | |||||||
Revenue recognized | $ 4,400,000 | $ 19,341,000 | |||||
Revenue from collaboration agreement | $ 22,138,000 | $ 11,568,000 | 34,804,000 | $ 21,283,000 | |||
Translational Development Agreements | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Term of agreement | 4 years | ||||||
Agreement termination amount receivable | $ 800,000 | ||||||
Eligible payments receivable | 2,300,000 | ||||||
Revenue recognized excluding separately negotiated research sequencing contracts | 1,100,000 | 2,500,000 | 1,100,000 | 5,000,000 | |||
Revenue recognized excluding sequencing revenue | 100,000 | 200,000 | 200,000 | 300,000 | |||
Translational Development Agreements | Maximum | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Expected revenue through milestone payments | $ 40,000,000 | ||||||
MRD Development Agreements | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Revenue recognized | 500,000 | $ 600,000 | 800,000 | $ 1,900,000 | |||
MRD Development Agreements | Maximum | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Additional milestone payment receivable | 115,000,000 | 115,000,000 | 115,000,000 | ||||
Genentech Collaboration Agreement | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Non-refundable upfront payments received | $ 300,000,000 | 300,000,000 | |||||
Revenue from collaboration agreement | 8,500,000 | $ 14,800,000 | |||||
Genentech Collaboration Agreement | Maximum | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Revenue recognition expected period | 8 years | ||||||
Genentech Collaboration Agreement | Maximum | Regulatory Milestones | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Expected revenue through milestone payments | 75,000,000 | 75,000,000 | $ 75,000,000 | ||||
Genentech Collaboration Agreement | Maximum | Development Milestones | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Expected revenue through milestone payments | 300,000,000 | 300,000,000 | 300,000,000 | ||||
Genentech Collaboration Agreement | Maximum | Commercial Milestones | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Expected revenue through milestone payments | 1,430,000,000 | 1,430,000,000 | 1,430,000,000 | ||||
Genentech Collaboration Agreement | Minimum | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Expected revenue through milestone payments | $ 1,800,000 | $ 1,800,000 | $ 1,800,000 | ||||
Revenue recognition expected period | 7 years |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring basis - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Financial assets | ||
Total financial assets | $ 420,230 | $ 155,986 |
Financial liabilities | ||
Total financial liabilities | 2,602 | 336 |
Convertible Preferred Stock Warrant Liability | ||
Financial liabilities | ||
Total financial liabilities | 2,602 | 336 |
Level 1 | ||
Financial assets | ||
Total financial assets | 35,695 | 45,998 |
Level 2 | ||
Financial assets | ||
Total financial assets | 384,535 | 109,988 |
Level 3 | ||
Financial liabilities | ||
Total financial liabilities | 2,602 | 336 |
Level 3 | Convertible Preferred Stock Warrant Liability | ||
Financial liabilities | ||
Total financial liabilities | 2,602 | 336 |
Money Market Funds | ||
Financial assets | ||
Total financial assets | 35,695 | 45,998 |
Money Market Funds | Level 1 | ||
Financial assets | ||
Total financial assets | 35,695 | 45,998 |
Commercial Paper | ||
Financial assets | ||
Total financial assets | 88,161 | 16,887 |
Commercial Paper | Level 2 | ||
Financial assets | ||
Total financial assets | 88,161 | 16,887 |
U.S. Government Debt and Agency Securities | ||
Financial assets | ||
Total financial assets | 273,713 | 85,623 |
U.S. Government Debt and Agency Securities | Level 2 | ||
Financial assets | ||
Total financial assets | 273,713 | 85,623 |
Corporate Bonds | ||
Financial assets | ||
Total financial assets | 22,661 | 7,478 |
Corporate Bonds | Level 2 | ||
Financial assets | ||
Total financial assets | $ 22,661 | $ 7,478 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Convertible Preferred Stock Warrant Liability | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Other income, net | $ 2.3 |
Level 2 | Commercial Paper | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Cash and cash equivalents | 6 |
Level 2 | U.S. Government Debt and Agency Securities | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Cash and cash equivalents | $ 4 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Fair Value of Convertible Preferred Stock Warrant Liability Estimated Using Black-Scholes Option Pricing Model (Details) | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value liability valuation technique [Extensible List] | us-gaap:ValuationTechniqueOptionPricingModelMember | us-gaap:ValuationTechniqueOptionPricingModelMember |
Fair Value Estimate | Convertible Preferred Stock Warrant Liability | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value liability, measurement input | 48.30 | 8.27 |
Expected Term | Convertible Preferred Stock Warrant Liability | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Expected term (in years) | 1 year 9 months 21 days | 2 years 3 months 21 days |
Risk Free Interest Rate | Convertible Preferred Stock Warrant Liability | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value liability, measurement input | 0.018 | 0.025 |
Expected Volatility | Convertible Preferred Stock Warrant Liability | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value liability, measurement input | 0.611 | 0.553 |
Investments - Schedule of Avail
Investments - Schedule of Available-for-sale Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | $ 374,161 | $ 110,095 |
Unrealized Gain | 383 | |
Unrealized Loss | (1) | (107) |
Estimated Fair Value | 374,543 | 109,988 |
Commercial Paper | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 82,165 | 16,887 |
Estimated Fair Value | 82,165 | 16,887 |
U.S. Government Debt and Agency Securities | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 269,366 | 85,722 |
Unrealized Gain | 351 | |
Unrealized Loss | (1) | (99) |
Estimated Fair Value | 269,716 | 85,623 |
Corporate Bonds | ||
Schedule of Available-for-Sale Securities [Line Items] | ||
Amortized Cost | 22,630 | 7,486 |
Unrealized Gain | 32 | |
Unrealized Loss | (8) | |
Estimated Fair Value | $ 22,662 | $ 7,478 |
Investments - Schedule of Gross
Investments - Schedule of Gross Unrealized Holding Losses and Fair Value for Investments in Unrealized Loss Position (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Schedule of Available-for-Sale Securities [Line Items] | |
12 months or greater, Fair value | $ 4,997 |
12 months or greater, Unrealized loss | (1) |
U.S. Government Debt and Agency Securities | |
Schedule of Available-for-Sale Securities [Line Items] | |
12 months or greater, Fair value | 4,997 |
12 months or greater, Unrealized loss | $ (1) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Goodwill [Line Items] | |||
Goodwill | $ 118,972,000 | $ 118,972,000 | $ 0 |
Purchased Intellectual Property | |||
Goodwill [Line Items] | |||
Amortization period of intangible assets | 7 years 6 months |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 20,325 | $ 20,325 |
Accumulated Amortization | (7,541) | (6,699) |
Net Carrying Amount | 12,784 | 13,626 |
Acquired Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,000 | 20,000 |
Accumulated Amortization | (7,462) | (6,636) |
Net Carrying Amount | 12,538 | 13,364 |
Purchased Intellectual Property | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 325 | 325 |
Accumulated Amortization | (79) | (63) |
Net Carrying Amount | $ 246 | $ 262 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Future Amortization Expense for Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2019 | $ 856 | |
2020 | 1,698 | |
2021 | 1,698 | |
2022 | 1,698 | |
2023 | 1,698 | |
Thereafter | 5,136 | |
Net Carrying Amount | $ 12,784 | $ 13,626 |
Deferred Revenue - Schedule of
Deferred Revenue - Schedule of Deferred Revenue by Revenue Classification (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current deferred revenue | ||
Total current deferred revenue | $ 61,194 | $ 12,695 |
Non-current deferred revenue | ||
Total non-current deferred revenue | 240,919 | 704 |
Total current and non-current deferred revenue | 302,113 | 13,399 |
Sequencing Revenue | ||
Current deferred revenue | ||
Total current deferred revenue | 14,616 | 11,238 |
Non-current deferred revenue | ||
Total non-current deferred revenue | 493 | 516 |
Development Revenue | ||
Current deferred revenue | ||
Total current deferred revenue | 46,578 | 1,457 |
Non-current deferred revenue | ||
Total non-current deferred revenue | $ 240,426 | $ 188 |
Deferred Revenue - Additional I
Deferred Revenue - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Disaggregation Of Revenue [Line Items] | |||
Current deferred revenue | $ 61,194 | $ 61,194 | $ 12,695 |
Deferred revenue, less current portion | 240,919 | 240,919 | 704 |
Revenue recognized | 4,400 | 19,341 | |
Development Revenue | |||
Disaggregation Of Revenue [Line Items] | |||
Current deferred revenue | 46,578 | 46,578 | 1,457 |
Deferred revenue, less current portion | 240,426 | 240,426 | 188 |
Development Revenue | Genentech, Inc. | |||
Disaggregation Of Revenue [Line Items] | |||
Current deferred revenue | 45,000 | 45,000 | |
Deferred revenue, less current portion | 240,200 | 240,200 | |
Sequencing Revenue | |||
Disaggregation Of Revenue [Line Items] | |||
Current deferred revenue | 14,616 | 14,616 | 11,238 |
Deferred revenue, less current portion | $ 493 | 493 | $ 516 |
Revenue recognized | $ 800 |
Deferred Revenue - Additional_2
Deferred Revenue - Additional Information (Details1) - Genentech, Inc. - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-07-01 | Jun. 30, 2019 |
Minimum | |
Disaggregation Of Revenue [Line Items] | |
Deferred revenue, expected to be recognized | 12 months |
Maximum | |
Disaggregation Of Revenue [Line Items] | |
Deferred revenue, expected to be recognized | 8 years |
Deferred Revenue - Schedule o_2
Deferred Revenue - Schedule of Changes in Deferred Revenue (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2019 |
Revenue From Contract With Customer [Abstract] | ||
Deferred revenue balance at December 31, 2018 | $ 13,399 | |
Additions to deferred revenue during the period (unaudited) | 308,055 | |
Revenue recognized during the period (unaudited) | $ (4,400) | (19,341) |
Deferred revenue balance at June 30, 2019 (unaudited) | $ 302,113 | $ 302,113 |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | ||||
Lease term description | The lease term is through March 2026 and provides for one five-year option. | |||
Payments for tenant improvements | $ 2.4 | |||
Rent expenses | $ 1.1 | $ 0.9 | $ 2.3 | $ 1.8 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Operating Leases (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
2019 | $ 1,781 |
2020 | 3,819 |
2021 | 3,917 |
2022 | 4,017 |
2023 | 2,295 |
Thereafter | 2,315 |
Total future minimum lease payments | $ 18,144 |
Convertible Preferred Stock - S
Convertible Preferred Stock - Schedule of Convertible Preferred Stock (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 93,762,517 | 93,762,517 | |
Convertible preferred stock,Shares Issued and Outstanding | 93,039,737 | ||
Convertible preferred stock,Amount | $ 561,931 | $ 560,858 | |
Convertible preferred stock,Liquidation Preference | $ 574,374 | $ 572,866 | |
Series A | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 4,550,000 | ||
Convertible preferred stock,Shares Issued and Outstanding | 4,550,000 | ||
Convertible preferred stock,Amount | $ 12,405 | ||
Convertible preferred stock,Liquidation Preference | $ 4,550 | ||
Series B | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 5,645,706 | ||
Convertible preferred stock,Shares Issued and Outstanding | 5,645,706 | ||
Convertible preferred stock,Amount | $ 16,018 | ||
Convertible preferred stock,Liquidation Preference | $ 9,669 | ||
Series C | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 4,804,227 | ||
Convertible preferred stock,Shares Issued and Outstanding | 4,747,352 | ||
Convertible preferred stock,Amount | $ 14,425 | ||
Convertible preferred stock,Liquidation Preference | $ 12,521 | ||
Series D | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 19,269,117 | ||
Convertible preferred stock,Shares Issued and Outstanding | 19,269,117 | ||
Convertible preferred stock,Amount | $ 106,905 | ||
Convertible preferred stock,Liquidation Preference | $ 106,999 | ||
Series E | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 15,524,350 | ||
Convertible preferred stock,Shares Issued and Outstanding | 15,524,350 | ||
Convertible preferred stock,Amount | $ 93,698 | ||
Convertible preferred stock,Liquidation Preference | $ 93,750 | ||
Series E-1 | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 17,407,441 | ||
Convertible preferred stock,Shares Issued and Outstanding | 16,854,887 | ||
Convertible preferred stock,Amount | [1] | $ 73,640 | |
Convertible preferred stock,Liquidation Preference | $ 101,785 | ||
Series F | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 21,761,676 | ||
Convertible preferred stock,Shares Issued and Outstanding | 21,761,676 | ||
Convertible preferred stock,Amount | $ 195,013 | ||
Convertible preferred stock,Liquidation Preference | $ 195,100 | ||
Series F-1 | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock,Shares Authorized | 4,800,000 | ||
Convertible preferred stock,Shares Issued and Outstanding | 4,686,649 | ||
Convertible preferred stock,Amount | $ 49,827 | ||
Convertible preferred stock,Liquidation Preference | $ 50,000 | ||
[1] | Includes vested Series E-1 convertible preferred stock options of $0.7 million which are not included in the shares issued and outstanding. |
Convertible Preferred Stock -_2
Convertible Preferred Stock - Schedule of Convertible Preferred Stock (Parenthetical) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Series E-1 Convertible Preferred Stock | |
Temporary Equity [Line Items] | |
Convertible preferred stock options, vested | $ 0.7 |
Shareholders' Deficit - Additio
Shareholders' Deficit - Additional Information (Details) | 6 Months Ended | |
Jun. 30, 2019Vote$ / sharesshares | Dec. 31, 2018$ / sharesshares | |
Class Of Stock [Line Items] | ||
Common stock authorized | shares | 131,000,000 | 131,000,000 |
Common stock par value | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock voting rights description | Holders of our common stock are entitled to one vote for each share of common stock held | |
Number of vote for each share | Vote | 1 | |
Common Stock | ||
Class Of Stock [Line Items] | ||
Warrant to purchase common stock, shares | shares | 20,000 | |
Warrant exercisable term | 10 years | |
Weighted-average exercise price of warrants | $ / shares | $ 0.37 | |
Exercise price of warrants | $ / shares | $ 0.45 | |
Maximum | Common Stock | ||
Class Of Stock [Line Items] | ||
Warrant to purchase common stock, shares | shares | 55,032 |
Shareholders' Deficit - Summary
Shareholders' Deficit - Summary of Reserved Shares of Common Stock (Details) | Jun. 30, 2019shares |
Class Of Stock [Line Items] | |
Shares of common stock reserved for future issuance | 114,004,082 |
Exercise of Outstanding Common Stock Options | |
Class Of Stock [Line Items] | |
Shares of common stock reserved for future issuance | 17,681,436 |
Stock Option Grants | |
Class Of Stock [Line Items] | |
Shares of common stock reserved for future issuance | 3,155,968 |
Conversion of Common Stock Warrants | |
Class Of Stock [Line Items] | |
Shares of common stock reserved for future issuance | 55,032 |
Conversion of All Series of Convertible Preferred Stock | |
Class Of Stock [Line Items] | |
Shares of common stock reserved for future issuance | 93,039,737 |
Series E-1 Convertible Preferred Stock | |
Class Of Stock [Line Items] | |
Shares of common stock reserved for future issuance | 15,034 |
Conversion of Series C Convertible Preferred Stock in Connection with Warrant Exercise | |
Class Of Stock [Line Items] | |
Shares of common stock reserved for future issuance | 56,875 |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 3,332 | $ 2,448 | $ 6,378 | $ 5,550 |
Unrecognized share-based compensation expense related to unvested stock options | $ 33,200 | $ 33,200 | ||
Unrecognized share-based compensation expense related to unvested stock options, weighted-average period for recognition | 3 years 1 month 28 days | |||
Option Valuation Model | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected dividend yield | 0.00% | |||
2009 Equity Incentive Plan | Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares available for issuance | 20,837,404 | 20,837,404 | ||
2009 Equity Incentive Plan | Options | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Option expiration period | 10 years |
Equity Incentive Plans - Summar
Equity Incentive Plans - Summary of Option Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | |
2009 Equity Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares Available for Grant, Outstanding, Beginning Balance | 6,827,996 | |
Shares Available for Grant, Options granted (unaudited) | (3,890,331) | |
Shares Available for Grant, Forfeited or cancelled (unaudited) | 218,303 | |
Shares Available for Grant, Outstanding, Ending Balance (unaudited) | 3,155,968 | |
Shares Subject to Outstanding Options, Outstanding, Beginning Balance | 14,893,253 | |
Shares Subject to Outstanding Options, Options granted (unaudited) | 3,890,331 | |
Shares Subject to Outstanding Options, Forfeited or cancelled (unaudited) | (218,303) | |
Shares Subject to Outstanding Options, Exercised (unaudited) | (883,845) | |
Shares Subject to Outstanding Options, Outstanding, Ending Balance (unaudited) | 17,681,436 | |
Weighted Average Exercise Price per Share, Outstanding, Beginning Balance | $ / shares | $ 4.59 | |
Weighted Average Exercise Price per Share, Options granted (unaudited) | $ / shares | 7.55 | |
Weighted Average Exercise Price per Share, Forfeited or cancelled (unaudited) | $ / shares | 6.19 | |
Weighted Average Exercise Price per Share, Exercised (unaudited) | $ / shares | 2.13 | |
Weighted Average Exercise Price per Share, Outstanding, Ending Balance (unaudited) | $ / shares | $ 5.35 | |
Aggregate Intrinsic Value, Outstanding | $ | $ 759,479 | $ 39,864 |
Sequenta, Inc. 2008 Stock Plan | Series E-1 Convertible Preferred Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares Subject to Outstanding Options, Outstanding, Beginning Balance | 264,677 | |
Shares Subject to Outstanding Options, Exercised (unaudited) | (249,643) | |
Shares Subject to Outstanding Options, Outstanding, Ending Balance (unaudited) | 15,034 | |
Weighted Average Exercise Price per Share, Outstanding, Beginning Balance | $ / shares | $ 0.44 | |
Weighted Average Exercise Price per Share, Exercised (unaudited) | $ / shares | 0.44 | |
Weighted Average Exercise Price per Share, Outstanding, Ending Balance (unaudited) | $ / shares | $ 0.49 | |
Aggregate Intrinsic Value, Outstanding | $ | $ 719 | $ 1,826 |
Equity Incentive Plans - Summ_2
Equity Incentive Plans - Summary of Estimated Fair Value of Options Granted (Details) - Adaptive 2009 Equity Incentive Plan - $ / shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grant date fair value | $ 8.55 | $ 6.55 |
Expected term (in years) | 6 years 21 days | 6 years 1 month 28 days |
Risk-free interest rate | 2.40% | 2.70% |
Expected volatility | 67.90% | 69.20% |
Equity incentive Plans - Summ_3
Equity incentive Plans - Summary of Compensation Costs Related to Stock Options Included in Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 3,332 | $ 2,448 | $ 6,378 | $ 5,550 |
Cost of Revenue | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 113 | 92 | 243 | 176 |
Research and Development | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 978 | 652 | 1,895 | 1,468 |
Sales and Marketing | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 943 | 592 | 1,849 | 1,549 |
General and Administration | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1,298 | $ 1,112 | $ 2,391 | $ 2,357 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Shareholders - Computation of the Basic and Diluted Net Loss Per Share Attributable to Common Shareholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net loss | $ (15,659) | $ (12,493) | $ (34,045) | $ (24,884) |
Fair value adjustments to redemption value for Series E-1 convertible preferred stock options | (710) | (2) | (964) | 2 |
Net loss attributable to common shareholders, basic and diluted | $ (16,369) | $ (12,495) | $ (35,009) | $ (24,882) |
Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted | 13,279,324 | 12,385,888 | 13,074,692 | 12,334,227 |
Net loss per share attributable to common shareholders, basic and diluted | $ (1.23) | $ (1.01) | $ (2.68) | $ (2.02) |
Series E-1 Convertible Preferred Stock | ||||
Fair value adjustments to redemption value for Series E-1 convertible preferred stock options | $ (710) | $ (2) | $ (964) | $ 2 |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Shareholders - Weighted-Average Common Stock Equivalents were Excluded From Calculation of Diluted Net Loss Per Share Attributable to Common Shareholders (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Convertible preferred stock (on as if converted basis) | 110,758,398 | 107,842,523 | 109,993,511 | 107,194,266 |
Convertible Preferred Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Convertible preferred stock (on as if converted basis) | 93,028,311 | 92,768,158 | 92,973,101 | 92,751,261 |
Options | 2009 Plan | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Convertible preferred stock (on as if converted basis) | 17,591,720 | 14,597,833 | 16,826,833 | 13,927,507 |
Options | 2008 Plan | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Convertible preferred stock (on as if converted basis) | 26,460 | 364,625 | 81,670 | 403,591 |
Common Stock Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Convertible preferred stock (on as if converted basis) | 55,032 | 55,032 | 55,032 | 55,032 |
Convertible Preferred Stock Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Convertible preferred stock (on as if converted basis) | 56,875 | 56,875 | 56,875 | 56,875 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Aug. 13, 2019USD ($)ft² | |
Subsequent Event [Line Items] | ||
Operating lease description | In August 2019, we entered into an operating lease to rent 100,000 square feet in a to-be-constructed building in Seattle, Washington. Shell construction is expected to be completed in 2020. The lease term commences on the date that the landlord delivers the premises to us for construction of certain tenant improvements. Rent obligations commence 10 months thereafter, and the lease term ends 142 months form the date rent commences, subject to our option to twice extend the lease for five years. The lease is cancellable under certain circumstances if the landlord fails to deliver the premises to us by May 1, 2021. We plan to occupy the new building in 2021, once interior construction is finished. The lease also requires us to pay additional amounts for operating and maintenance expenses. | |
Option to extend the lease term, description | our option to twice extend the lease for five years | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Operating lease to rent in a to-be constructed building | 100,000 | |
Letter of credit | $ | $ 2.1 | |
Expand the size of the existing premises by area | 8,400 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Future Minimum Lease Payments Under Operating Leases (Detail) - USD ($) $ in Thousands | Aug. 13, 2019 | Jun. 30, 2019 |
Lessee Lease Description [Line Items] | ||
2019 | $ 1,781 | |
2020 | 3,819 | |
2021 | 3,917 | |
2022 | 4,017 | |
2023 | 2,295 | |
Thereafter | 2,315 | |
Total future minimum lease payments | $ 18,144 | |
Subsequent Event | ||
Lessee Lease Description [Line Items] | ||
2019 | $ 1,431 | |
2020 | 3,053 | |
2021 | 5,802 | |
2022 | 9,706 | |
2023 | 9,975 | |
Thereafter | 105,270 | |
Total future minimum lease payments | $ 135,237 |