Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38829 | |
Entity Registrant Name | Shockwave Medical, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-0494101 | |
Entity Address, Address Line One | 5403 Betsy Ross Drive | |
Entity Address, City or Town | Santa Clara | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95054 | |
City Area Code | 510 | |
Local Phone Number | 279-4262 | |
Title of 12(b) Security | Shockwave Medical, Inc., common stock, par value $0.001 per share | |
Trading Symbol | SWAV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 36,896,750 | |
Entity Central Index Key | 0001642545 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | [1] |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 498,108 | $ 156,586 | |
Short-term investments | 419,225 | 147,907 | |
Accounts receivable, net | 98,819 | 71,366 | |
Inventory | 97,180 | 75,112 | |
Prepaid expenses and other current assets | 15,210 | 8,292 | |
Total current assets | 1,128,542 | 459,263 | |
Operating lease right-of-use assets | 30,360 | 32,365 | |
Property and equipment, net | 62,017 | 48,152 | |
Equity method investment | 1,810 | 3,512 | |
Intangible assets, net | 93,775 | 0 | |
Goodwill | 39,789 | 0 | |
Deferred tax assets | 109,432 | 97,568 | |
Other assets | 8,234 | 5,229 | |
TOTAL ASSETS | 1,473,959 | 646,089 | |
CURRENT LIABILITIES: | |||
Accounts payable | 6,870 | 6,721 | |
Accrued liabilities | 69,764 | 55,375 | |
Lease liability, current portion | 1,569 | 1,278 | |
Total current liabilities | 78,203 | 63,374 | |
Lease liability, noncurrent portion | 32,358 | 34,928 | |
Convertible Debt, Noncurrent | 730,926 | 0 | |
Debt, noncurrent portion | 0 | 24,198 | |
Related party contract liability, noncurrent portion | 12,273 | 12,273 | |
Deferred tax liabilities | 9,647 | 0 | |
Other liabilities | 9,307 | 0 | |
TOTAL LIABILITIES | 872,714 | 134,773 | |
STOCKHOLDERS’ EQUITY: | |||
Preferred stock | 0 | 0 | |
Common stock | 37 | 36 | |
Additional paid-in capital | 535,197 | 548,960 | |
Accumulated other comprehensive loss | (149) | (867) | |
Retained earnings (accumulated deficit) | 66,160 | (36,813) | |
TOTAL STOCKHOLDERS’ EQUITY | 601,245 | 511,316 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,473,959 | $ 646,089 | |
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Product revenue | $ 186,020 | $ 131,330 | $ 527,251 | $ 345,707 |
Cost of revenue: | ||||
Cost of product revenue | 24,513 | 17,874 | 70,072 | 47,494 |
Gross profit | 161,507 | 113,456 | 457,179 | 298,213 |
Operating expenses: | ||||
Research and development | 39,526 | 20,177 | 103,326 | 57,956 |
Sales and marketing | 56,907 | 42,082 | 167,656 | 118,558 |
General and administrative | 21,451 | 14,434 | 70,386 | 39,988 |
Total operating expenses | 117,884 | 76,693 | 341,368 | 216,502 |
Income from operations | 43,623 | 36,763 | 115,811 | 81,711 |
(Loss) income from equity method investment | (733) | 97 | (1,702) | (1,414) |
Interest expense | (2,509) | (316) | (3,955) | (917) |
Other income (expense), net | 4,699 | (1,423) | 8,667 | (3,206) |
Net income before taxes | 45,080 | 35,121 | 118,821 | 76,174 |
Income tax expense | 10,094 | 118 | 15,848 | 1,089 |
Net income | 34,986 | 35,003 | 102,973 | 75,085 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale securities | 242 | (275) | 723 | (1,410) |
Adjustment for net gain realized and included in other income | 0 | 0 | 5 | 0 |
Total comprehensive income | $ 35,228 | $ 34,728 | $ 103,691 | $ 73,675 |
Net income per share | ||||
Basic (USD per share) | $ 0.95 | $ 0.97 | $ 2.81 | $ 2.10 |
Diluted (USD per share) | $ 0.92 | $ 0.92 | $ 2.70 | $ 1.99 |
Denominator: | ||||
Basic (in shares) | 36,797,072 | 36,003,931 | 36,630,575 | 35,807,264 |
Diluted (in shares) | 38,196,780 | 37,948,049 | 38,184,299 | 37,813,107 |
Type of Revenue [Extensible List] | Product [Member] | Product [Member] | Product [Member] | Product [Member] |
Type of Cost, Good Or Service [Extensible List] | Product [Member] | Product [Member] | Product [Member] | Product [Member] |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Convertible Senior Notes Due 2028 | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | |
Beginning balance, shares (in shares) at Dec. 31, 2021 | 35,444,472,000 | ||||||
Beginning balance at Dec. 31, 2021 | $ 241,830 | $ 35 | $ 494,806 | $ (202) | $ (252,809) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 54,913,000 | ||||||
Exercise of stock options | 391 | $ 1 | 390 | ||||
Unrealized gain on available-for-sale securities, net of tax | (815) | (815) | |||||
Issuance of common stock under employee stock purchase plan (in shares) | 14,172,000 | ||||||
Issuance of common stock under employee stock purchase plan | 2,135 | 2,135 | |||||
Issuance of common stock in connection with vesting of restricted stock (in shares) | 210,835,000 | ||||||
Taxes withheld on net settled vesting of restricted stock units (in shares) | (31,000) | ||||||
Taxes withheld on net settled vesting of restricted stock units | (6) | (6) | |||||
Stock-based compensation | 9,767 | 9,767 | |||||
Net income (loss) | 14,521 | 14,521 | |||||
Ending balance, shares (in shares) at Mar. 31, 2022 | 35,724,361,000 | ||||||
Ending balance at Mar. 31, 2022 | 267,823 | $ 36 | 507,092 | (1,017) | (238,288) | ||
Beginning balance, shares (in shares) at Dec. 31, 2021 | 35,444,472,000 | ||||||
Beginning balance at Dec. 31, 2021 | 241,830 | $ 35 | 494,806 | (202) | (252,809) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adjustment for net gain realized and included in other income | 0 | ||||||
Net income (loss) | 75,085 | ||||||
Ending balance, shares (in shares) at Sep. 30, 2022 | 36,133,599,000 | ||||||
Ending balance at Sep. 30, 2022 | 355,930 | $ 36 | 535,230 | (1,612) | (177,724) | ||
Beginning balance, shares (in shares) at Mar. 31, 2022 | 35,724,361,000 | ||||||
Beginning balance at Mar. 31, 2022 | 267,823 | $ 36 | 507,092 | (1,017) | (238,288) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 111,601,000 | ||||||
Exercise of stock options | 500 | 500 | |||||
Unrealized gain on available-for-sale securities, net of tax | (320) | (320) | |||||
Issuance of common stock in connection with vesting of restricted stock (in shares) | 71,491,000 | ||||||
Stock-based compensation | 11,504 | 11,504 | |||||
Net income (loss) | 25,561 | 25,561 | |||||
Ending balance, shares (in shares) at Jun. 30, 2022 | 35,907,453,000 | ||||||
Ending balance at Jun. 30, 2022 | 305,068 | $ 36 | 519,096 | (1,337) | (212,727) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 170,620,000 | ||||||
Exercise of stock options | 1,303 | 1,303 | |||||
Unrealized gain on available-for-sale securities, net of tax | (275) | (275) | |||||
Adjustment for net gain realized and included in other income | 0 | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 15,473,000 | ||||||
Issuance of common stock under employee stock purchase plan | 2,352 | 2,352 | |||||
Issuance of common stock in connection with vesting of restricted stock (in shares) | 40,053,000 | ||||||
Stock-based compensation | 12,479 | 12,479 | |||||
Net income (loss) | 35,003 | 35,003 | |||||
Ending balance, shares (in shares) at Sep. 30, 2022 | 36,133,599,000 | ||||||
Ending balance at Sep. 30, 2022 | 355,930 | $ 36 | 535,230 | (1,612) | (177,724) | ||
Beginning balance, shares (in shares) at Dec. 31, 2022 | 36,235,546,000 | ||||||
Beginning balance at Dec. 31, 2022 | 511,316 | [1] | $ 36 | 548,960 | (867) | (36,813) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 77,230,000 | ||||||
Exercise of stock options | 320 | $ 1 | 319 | ||||
Unrealized gain on available-for-sale securities, net of tax | 505 | 505 | |||||
Adjustment for net gain realized and included in other income | (5) | (5) | |||||
Issuance of common stock under employee stock purchase plan (in shares) | 19,124,000 | ||||||
Issuance of common stock under employee stock purchase plan | 3,092 | 3,092 | |||||
Issuance of common stock in connection with vesting of restricted stock (in shares) | 257,624,000 | ||||||
Taxes withheld on net settled vesting of restricted stock units (in shares) | (19,000) | ||||||
Taxes withheld on net settled vesting of restricted stock units | (3) | (3) | |||||
Stock-based compensation | 16,337 | 16,337 | |||||
Net income (loss) | 39,125 | 39,125 | |||||
Ending balance, shares (in shares) at Mar. 31, 2023 | 36,589,505,000 | ||||||
Ending balance at Mar. 31, 2023 | 570,687 | $ 37 | 568,705 | (367) | 2,312 | ||
Beginning balance, shares (in shares) at Dec. 31, 2022 | 36,235,546,000 | ||||||
Beginning balance at Dec. 31, 2022 | $ 511,316 | [1] | $ 36 | 548,960 | (867) | (36,813) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 191,956,000 | ||||||
Adjustment for net gain realized and included in other income | $ (5) | ||||||
Net income (loss) | 102,973 | ||||||
Ending balance, shares (in shares) at Sep. 30, 2023 | 36,882,240,000 | ||||||
Ending balance at Sep. 30, 2023 | 601,245 | $ 37 | 535,197 | (149) | 66,160 | ||
Beginning balance, shares (in shares) at Mar. 31, 2023 | 36,589,505,000 | ||||||
Beginning balance at Mar. 31, 2023 | 570,687 | $ 37 | 568,705 | (367) | 2,312 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 48,282,000 | ||||||
Exercise of stock options | 403 | 403 | |||||
Unrealized gain on available-for-sale securities, net of tax | (24) | (24) | |||||
Issuance of common stock in connection with vesting of restricted stock (in shares) | 90,837,000 | ||||||
Taxes withheld on net settled vesting of restricted stock units (in shares) | (7,000) | ||||||
Taxes withheld on net settled vesting of restricted stock units | (4) | (4) | |||||
Stock-based compensation | 16,988 | 16,988 | |||||
Net income (loss) | 28,862 | 28,862 | |||||
Ending balance, shares (in shares) at Jun. 30, 2023 | 36,728,617,000 | ||||||
Ending balance at Jun. 30, 2023 | 616,912 | $ 37 | 586,092 | (391) | 31,174 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 66,444,000 | ||||||
Exercise of stock options | 459 | 459 | |||||
Unrealized gain on available-for-sale securities, net of tax | 242 | $ 242 | |||||
Adjustment for net gain realized and included in other income | 0 | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 19,506,000 | ||||||
Issuance of common stock under employee stock purchase plan | 3,138 | 3,138 | |||||
Issuance of common stock in connection with vesting of restricted stock (in shares) | 67,812,000 | ||||||
Taxes withheld on net settled vesting of restricted stock units (in shares) | (139,000) | ||||||
Taxes withheld on net settled vesting of restricted stock units | (34) | (34) | |||||
Stock-based compensation | 18,516 | 18,516 | |||||
Purchase of capped calls related to convertible debt, net of tax | (72,974) | $ (72,974) | |||||
Net income (loss) | 34,986 | 34,986 | |||||
Ending balance, shares (in shares) at Sep. 30, 2023 | 36,882,240,000 | ||||||
Ending balance at Sep. 30, 2023 | $ 601,245 | $ 37 | $ 535,197 | $ (149) | $ 66,160 | ||
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 102,973 | $ 75,085 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 7,283 | 3,318 |
Loss from equity method investment | 1,702 | 1,414 |
Stock-based compensation | 51,423 | 32,247 |
Non-cash lease expense | 2,393 | 2,300 |
Amortization of premium and discount on available-for-sale securities | (3,777) | 303 |
Loss on write down of fixed assets | 140 | 0 |
Gain (Loss) on Extinguishment of Debt | 710 | 0 |
Deferred Income Taxes and Tax Credits | 9,756 | 0 |
Amortization of debt issuance costs | 562 | 473 |
Foreign currency remeasurement | 262 | 2,887 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (26,064) | (27,113) |
Inventory | (20,618) | (24,372) |
Prepaid expenses and other current assets | (6,094) | (3,615) |
Other assets | (3,347) | (1,174) |
Accounts payable | (1,574) | 109 |
Accrued and other current liabilities | 11,295 | 4,377 |
Lease liabilities | (2,675) | (943) |
Net cash provided by operating activities | 124,350 | 65,296 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of available-for-sale securities | (398,330) | (85,252) |
Proceeds from maturities of available-for-sale securities | 131,750 | 72,423 |
Purchase of property and equipment | (22,474) | (14,045) |
Business combination, net of cash acquired | (94,411) | 0 |
Net cash used in investing activities | (383,465) | (26,874) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments of taxes withheld on net settled vesting of restricted stock units | (41) | (6) |
Proceeds from stock option exercises | 1,182 | 1,672 |
Proceeds from issuance of common stock under employee stock purchase plan | 6,230 | 4,487 |
Proceeds from Convertible Debt | 730,809 | 0 |
Purchases of capped calls related to convertible debt | (96,375) | 0 |
Principal payment of debt | (105,000) | (2,750) |
Proceeds from debt financing | 80,000 | 0 |
Payment of assumed warrant liability | (16,240) | 0 |
Net cash provided by financing activities | 600,565 | 3,403 |
Effect of exchange rate changes on cash and cash equivalents | (303) | (2,755) |
Net increase in cash, cash equivalents and restricted cash | 341,147 | 39,070 |
Cash, cash equivalents and restricted cash at beginning of period | 158,302 | 90,874 |
Cash, cash equivalents and restricted cash equivalents at end of period | 499,449 | 129,944 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Interest paid | 1,755 | 442 |
Income tax paid | 6,230 | 1,415 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Property and equipment purchases included in accounts payable and accrued liabilities | $ 2,661 | $ 6,221 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Shockwave Medical, Inc. (the “Company”) was incorporated on June 17, 2009. The Company is primarily engaged in the development and commercialization of novel technologies that transform the care of patients with cardiovascular disease. The Company is focused on the improvement of its Intravascular Lithotripsy (“IVL”) technology for the treatment of calcified plaque in patients with peripheral vascular, coronary vascular and heart valve disease. Built on a balloon catheter platform, the IVL technology uses lithotripsy to disrupt both superficial and deep vascular calcium, while minimizing soft tissue injury, and an integrated angioplasty balloon to dilate blockages at low pressures, restoring blood flow. Additionally, the Company continues to develop its coronary sinus reducer (“Reducer”) technology for the treatment of refractory angina. The Company, which is headquartered in Santa Clara, California and operates primarily in the United States, began commercial and manufacturing operations in 2016. The unaudited condensed financial statements include the accounts of Shockwave Medical, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. As of September 30, 2023, the Company had cash, cash equivalents and short-term investments of $917.3 million, w hich are available to fund future working capital requirements, investments, acquisitions, or repayments of outstanding indebtedness. The Company believes that its cash, cash equivalents, and short-term investments as of September 30, 2023, will be sufficient for the Company to continue as a going concern for at least 12 months from the date these unaudited condensed consolidated financial statements are filed with the Securities and Exchange Commission (“SEC”). The Company’s future capital requirements will depend on many factors, including its growth rate, the timing and extent of its spending to support research and development activities, and the timing and cost of establishing additional sales and marketing capabilities. Risk and Uncertainties The Company is subject to continuing risks and uncertainties in connection with the current global business, political and macroeconomic environments, including inflation, rising interest rates, uncertainty with respect to the federal budget, instability in the global banking system, volatile market conditions, supply chain disruptions, cybersecurity events, and global events, including regional conflicts around the world. The Company is closely monitoring the impact of these factors on all aspects of its business, including the impacts on its customers, patients, employees, suppliers, vendors, business partners and distribution channels. In particular, while the Company has not experienced material disruptions in its supply chain to date, the Company has been and continues to be impacted by disruptions in the operations of certain of its third-party suppliers, resulting in increased lead-times, higher component costs and lower allocations for the purchase of some components. In certain cases, the Company has incurred higher logistical expenses. The Company is continuing to work closely with its manufacturing partners and suppliers to source key components and maintain appropriate inventory levels to meet customer demand. The Company’s future results of operations and liquidity could be adversely impacted by a variety of factors, including those discussed in the section titled “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 , filed with the SEC on February 27, 2023 (the “2022 Annual Report”), together with any updates in the section titled “Risk Factors” of the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023 and in this Quarterly Report on Form 10-Q. As of the date of issuance of these condensed consolidated financial statements, the extent to which the current macroeconomic environment may materially impact the Company’s financial condition, liquidity, or results of operations remains uncertain. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the 2022 Annual Report. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows: September 30, September 30, (in thousands) Cash and cash equivalents $ 498,108 $ 127,779 Restricted cash 1,341 2,165 Total cash, cash equivalents, and restricted cash $ 499,449 $ 129,944 Restricted cash as of September 30, 2023 and December 31, 2022 relates to corporate credit card security, customer bank guarantee security, and letters of credit established for the real estate property leases relating to the Company’s office buildings, and is recorded as other assets on the condensed consolidated balance sheets. Equity Method Investments Entities for which the Company has significant influence over the activities of the entity, but does not control, are accounted for under the equity method of accounting in accordance with Topic 323, Investments - Equity Method and Joint Ventures . The Company’s carrying value in the equity method investment is reported as equity method investment on the Company’s consolidated balance sheets. The Company records its proportionate share of the underlying income or loss which is recognized in earnings or loss from the equity method investment. T he Company eliminates a portion of intra-entity profit to the extent the goods sold by the Company have not yet been sold through by the equity method investee to an end customer at the end of the reporting period. The profit earned by the Company from the equity method investee for items not yet sold through is eliminated through equity method earnings or loss which is recognized in income (loss) from equity method investment. The Company assesses its equity method investment for impairment when events or circumstances suggest that the carrying amount of the investment may be impaired. The Company considers all available evidence in assessing whether a decline in fair value is other than temporary. If the decline in fair value is determined to be other than temporary, the difference between the carrying amount of the investment and estimated fair value is recognized as an impairment charge. Revenue To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, Revenue from Contracts with Customers , the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Product Revenue The Company records product revenue primarily from the sale of its IVL catheters and Reducer. The Company sells its products to hospitals, primarily through direct sales representatives, as well as through distributors in selected international markets. Additionally, a portion of the Company’s revenue is generated through a consignment model under which inventory is maintained at hospitals. Product revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. For products sold through direct sales representatives, control is transferred upon delivery to customers. For products sold to distributors internationally and products sold to customers that utilize stocking orders, control is transferred upon shipment or delivery to the customer’s named location, based on the contractual shipping terms. For consignment inventory, control is transferred at the time the IVL catheters are consumed in a procedure. The Company has elected to account for shipping and handling activities that occur after the customer has obtained control as a fulfillment activity, and not a separate performance obligation. The Company may provide for the use of an IVL generator and connector cable under an agreement to customers at no charge to facilitate use of the IVL catheters. These agreements generally do not contain contractually enforceable minimum commitments and are generally cancellable by either party with 30 days ’ notice. License Revenue For arrangements that contain a license of the Company’s functional intellectual property with a customer, the Company considers whether the license grant is distinct from other performance obligations in the arrangement. A license grant of functional intellectual property is generally considered to be capable of being distinct if a customer can benefit from the license on its own or together with other readily available resources. License revenue for licenses of functional intellectual property is recognized at a point in time when the Company satisfies its performance obligation of transferring the license to the customer. Consideration received in advance of the satisfaction of a performance obligation is recognized as a contract liability. No license revenues were recognized for the three and nine months ended September 30, 2023. Stock-Based Compensation The Company accounts for share-based payments at fair value. The fair value of stock options is measured using the Black-Scholes option-pricing model. For share-based awards that vest subject to the satisfaction of a service requirement, the fair value measurement date for stock-based compensation awards is the date of grant and the expense is recognized on a straight-line basis, over the vesting period. For share-based awards that vest upon the satisfaction of a performance target, the related compensation cost is recognized over the requisite service period based on the expected achievement of the performance target. The Company accounts for forfeitures as they occur. Business combinations The Company applies the provisions of ASC 805, Business Combinations (“ASC 805”), in accounting of its acquisitions. ASC 805 requires recognition of assets acquired, liabilities assumed, and contingent consideration at their fair value on the acquisition date with subsequent changes recognized in earnings; requires acquisition-related expenses to be recognized separately from the business combination and expensed as incurred; requires in-process research and development to be capitalized at fair value as an indefinite-lived intangible asset until completion or abandonment; and requires that changes in accounting for deferred tax asset valuation allowances and acquired uncertain tax positions after the measurement period be recognized as a component of provision for taxes. When an integrated set of assets and activities does not meet the practical screen test and otherwise meets the definition of a “business” under ASC 805, the Company accounts for such acquisitions as business combinations. The purchase price of an acquisition is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The Company bases the estimated fair value of identifiable intangible assets acquired in an acquisition on independent third-party valuations that use information and assumptions provided by the Company ’ s management and considers inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair values of the assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the provisional amounts of assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded in earnings. In addition, uncertain tax positions and tax related valuation allowances assumed in a business combination are initially estimated as of the acquisition date and therefore are also provisional by nature. The Company reevaluates these items quarterly based upon facts and circumstances that existed as of the acquisition date with any adjustments to its preliminary estimates being recorded to goodwill if identified within the measurement period. Goodwill In accordance with ASC 350, Intangibles-Goodwill and Other , the acquired goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company performs annual impairment reviews of its goodwill balance during the fourth fiscal quarter or more frequently if business factors indicate. In testing for impairment, the Company compares the fair value of its reporting unit to its carrying value including the goodwill of that unit. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, the Company will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. The Company did not incur any goodwill impairment losses during the nine months ended September 30, 2023. In-process research and development Intangible assets related to in-process research and development costs are considered indefinite-lived intangible assets until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived intangible assets and would then be amortized based on their respective estimated useful lives at that point in time. Prior to the completion or abandonment of the associated research and development efforts, the assets are not amortized but are tested for impairment on an annual basis and between annual tests if the Company becomes aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the in-process research and development projects below their respective carrying amounts. During the fourth fiscal quarter and if business factors indicate more frequently, the Company performs an assessment of the qualitative factors affecting the fair value of its in-process research and development projects. If the fair value exceeds the carrying value, there is no impairment. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of an asset to its carrying value, without consideration of any recoverability test. Intangible assets Amortizable intangible assets include customer relationships and developed technology acquired as part of the business combination. Customer relationships and developed technology acquired through business combinations subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from five Property, Plant and Equipment . Contingent Consideration Liabilities Related to Business Combination At each reporting period, the Company evaluates the likelihood of any expected future payments and the associated discount rate to determine the fair value of the contingent consideration. The Company remeasures the fair value of contingent consideration liabilities each reporting period, based on new developments, and records any necessary adjustments as a component of total operating expenses within the condensed consolidated statements of operations until either the contingent consideration obligation is satisfied through payment upon the achievement of, or the obligation no longer exists due to the failure to achieve, the specified milestones. Contingent consideration liabilities are recorded within other liabilities in the condensed consolidated balance sheets. Convertible Debt The Company applies the provisions of Accounting Standards Update (“ASU”) 2020-06- Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity ’ s Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity ’ s Own Equity (“ASU 2020-06”) which simplify the accounting related to convertible debt instruments by removing major separation models required under current GAAP. Accordingly, the Company does not bifurcate the liability and equity components of the convertible debt on the condensed consolidated balance sheets. The Company’s convertible debt is are reflected as a liability on the Company’s condensed consolidated balance sheets, with the initial carrying amount equal to the principal amount of the debt, net of issuance costs. The issuance costs are treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the instruments utilizing the effective interest method. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurements The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy: September 30, 2023 Level 1 Level 2 Level 3 Total (in thousands) Assets: U.S. Treasury securities $ 362,160 $ — $ — $ 362,160 Money market funds 383,946 — — 383,946 Commercial paper — 25,316 — 25,316 Corporate bonds — 12,202 — 12,202 U.S. agency securities — 13,790 — 13,790 Asset-backed securities — 5,757 — 5,757 Total assets $ 746,106 $ 57,065 $ — $ 803,171 Liabilities: Contingent consideration liability $ — $ — $ 9,307 $ 9,307 Convertible debt — 720,000 — 720,000 Total liabilities $ — $ 720,000 $ 9,307 $ 729,307 December 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Assets: U.S. Treasury securities $ 111,631 $ — $ — $ 111,631 Money market funds 12,076 — — 12,076 Commercial paper — 8,039 — 8,039 Corporate bonds — 18,808 — 18,808 U.S. agency securities — 9,429 — 9,429 Total assets $ 123,707 $ 36,276 $ — $ 159,983 During the three and nine months ended September 30, 2023 and 2022, there were no transfers between Level 1, Level 2 and Level 3. Contingent Consideration Liabilities Related to Business Combination In connection with the Company’s acquisition of Neovasc Inc. (“Neovasc”), a preliminary fair value of $9.3 million was recorded for the Neovasc contingent consideration, which consisted of estimated amounts in relation to the CVR (as defined below), on April 11, 2023, the date on which the closing conditions for the acquisition were met and the transaction was consummated. There were no changes in the estimated fair value of the contingent consideration liability as of September 30, 2023. See Note 5 “Business Combination” for information regarding existing contingent consideration liabilities as of September 30, 2023. Convertible Debt As of September 30, 2023, the fair value of the Company’s convertible debt was $720.0 million. The Company measures the fair value of its convertible debt for disclosure purposes. The fair value was determined based on the quoted price of the convertible debt in an over-the-counter market on the last trading day of the reporting period and has been classified as Level 2 in the fair value hierarchy. See Note 10 “Convertible Debt” for information regarding the Company’s convertible debt as of September 30, 2023. |
Cash Equivalents and Short-Term
Cash Equivalents and Short-Term Investments | 9 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash Equivalents and Short-Term Investments | 4. Cash Equivalents and Short-Term Investments The following is a summary of the Company’s cash equivalents and short-term investments: September 30, 2023 Amortized Unrealized Unrealized Fair Value (in thousands) U.S. Treasury securities $ 362,243 $ 32 $ (115) $ 362,160 Money market funds 383,910 36 — 383,946 Commercial paper 25,391 — (75) 25,316 Corporate bonds 12,197 32 (27) 12,202 U.S. agency securities 13,866 — (76) 13,790 Asset-backed securities 5,761 6 (10) 5,757 Total $ 803,368 $ 106 $ (303) $ 803,171 Reported as: Cash equivalents $ 383,946 Short-term investments 419,225 Total $ 803,171 December 31, 2022 Amortized Unrealized Unrealized Fair Value (in thousands) U.S. Treasury securities $ 112,719 $ 3 $ (1,091) $ 111,631 Money market funds 12,076 — — 12,076 Commercial paper 8,039 — — 8,039 Corporate bonds 18,876 8 (76) 18,808 U.S. agency securities 9,432 4 (7) 9,429 Total $ 161,142 $ 15 $ (1,174) $ 159,983 Reported as: Cash equivalents $ 12,076 Short-term investments 147,907 Total $ 159,983 There were $63.8 million and $123.8 million of investments in unrealized loss positions of $0.3 million and $1.2 million as of September 30, 2023 and December 31, 2022, respectively. During the three and nine months ended September 30, 2023 and 2022, the Company did not record any other-than-temporary impairment charges on its available-for-sale securities. Based on the Company’s procedures under the expected credit loss model, including an assessment of unrealized losses on the portfolio, the Company concluded that the unrealized losses for its marketable securities were not attributable to credit and therefore an allowance for credit losses for these securities has not been recorded as of September 30, 2023 and December 31, 2022. Also, based on the scheduled maturities of the investments, the Company was more likely than not to hold these investments for a period of time sufficient for a recovery of the Company’s cost basis. The remaining contractual maturities of the Company’s cash equivalents and short-term investments were as follows: September 30, Fair Value (in thousands) Money market funds $ 383,946 One year or less 409,382 Greater than one year and less than two years 9,843 Total $ 803,171 |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Inventory Inventory consists of the following: September 30, December 31, (in thousands) Raw materials $ 24,289 $ 18,456 Work in progress 17,493 7,666 Finished goods 54,907 48,735 Consigned inventory 491 255 Total inventory $ 97,180 $ 75,112 Accrued Liabilities Accrued liabilities consist of the following: September 30, December 31, (in thousands) Employee compensation $ 35,264 $ 32,885 Research and development costs 7,943 4,007 Asset purchases 4,718 4,600 Professional services 6,970 4,044 Excise, sales, income and other taxes 6,033 4,036 Other 8,836 5,803 Total accrued liabilities $ 69,764 $ 55,375 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company’s operating leases consist of leased facilities for the Company’s headquarter offices, leased facilities for Neovasc, and leased facilities for laboratory and manufacturing space. Also included in operating leases are leases for vehicles, for use by certain employees of the Company, which were not material for the periods presented. Short-term leases are leases having a term of 12 months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases. As of September 30, 2023, the Company has no material finance leases. In September 2021, the Company entered into an office lease agreement (“3003 Bunker Hill Lease”) for the 3003 Bunker Hill facility which expires in December 2031. Concurrently, the Company entered into an Amendment to Office Lease (Net) (the “First Lease Amendment”) which extended the lease terms of the 5353 Betsy Ross and 5403 Betsy Ross facilities to December 2031. The 5403 Betsy Ross lease (“5403 Lease”) continued in its existing terms (and with no changes to its terms, including its base rent) until its expiration in August 2022, at which point the leased space under the 5403 Lease became subject to the terms of the First Lease Amendment. The 3003 Bunker Hill Lease and the First Lease Amendment contain options to extend the lease term at the respective facilities for up to two additional five-year terms at the then fair market rate. As of September 30, 2023, the Company is not reasonably certain it will exercise these extension options. Additionally, included in the First Lease Amendment was an expansion option that stipulated that the Company had an option to lease the space in the adjacent building located at 5303 Betsy Ross (“5303 Lease”). The Company exercised this expansion option by entering into a Second Amendment to Office Lease (Net) (the “Second Lease Amendment”) on May 26, 2023. The 5303 Lease will commence on February 1, 2024 and will expire on December 31, 2031. The Company recognizes rent expense for these operating leases on a straight-line basis over the lease period. The components of lease costs, which the Company includes in operating expenses in the condensed consolidated statements of operations and comprehensive income, were as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) Operating lease cost $ 1,223 $ 1,168 $ 3,651 $ 3,451 Variable lease cost 366 453 955 696 Total lease cost $ 1,589 $ 1,621 $ 4,606 $ 4,147 During the three months ended September 30, 2023 and 2022, the Company recorded operating lease cost of $1.2 million and $1.2 million, respectively, and paid $1.4 million and $1.0 million of operating lease payments, respectively, related to the lease liabilities. During the nine months ended September 30, 2023 and 2022, the Company recorded operating lease cost of $3.7 million and $3.5 million, respectively, and paid $4.1 million and $2.1 million of operating lease payments, respectively, related to the lease liabilities. The Company includes operating lease payments in net cash used in operating activities in the condensed consolidated statements of cash flows. The weighted average remaining lease term and discount rate used to measure the Company’s operating lease liabilities were 8.2 years and 5.2%, respectively. The Company estimated the discount rate using the incremental borrowing rate as the rate implicit in the lease was not readily determinable. As of September 30, 2023, the maturities of the payments due under the Company’s operating lease liabilities were as follows: Years ending December 31, (in thousands) 2023 (remainder) $ 1,383 2024 5,517 2025 5,526 2026 5,690 2027 5,832 Thereafter 24,959 Total minimum lease payments $ 48,907 Less: imputed interest (9,312) Less: Lease incentive (5,668) Total lease liability $ 33,927 Less: current portion (1,569) Lease liability, noncurrent portion $ 32,358 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt On October 19, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, Wells Fargo Bank, National Association, as swingline lender and an issuing lender, Wells Fargo Securities, LLC and Silicon Valley Bank, as joint lead arrangers and joint bookrunners, Silicon Valley Bank, as syndication agent, and the several lenders party thereto. The Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $175.0 million with the right to request increases to the revolving commitments (subject to certain conditions) of up to the greater of (x) $100 million or (y) the Company’s consolidated EBITDA for the four fiscal quarter period most recently ended prior to the date of such increase. Concurrent with entering into the Credit Agreement, the Company drew down $25.0 million thereunder. The Company repaid the $25.0 million drawn under the Credit Agreement on August 29, 2023. The Company recognized a loss on debt extinguishment of $0.7 million in connection with this repayment, which is included in interest expense in the condensed consolidated statement of operations for the three and nine months ended September 30, 2023. On March 16, 2023, the Company drew down an additional $80.0 million under the Credit Agreement. The Company repaid the $80.0 million drawn under the Credit Agreement on April 26, 2023. The revolving credit facility accrues for interest, at the election of the Company, at (A) the Base Rate (as defined below) plus a margin ranging from 0% to 1% depending on the Company ’ s Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) (which rate is currently 0%) or (B) the applicable secured overnight financing rate (“SOFR”) plus a margin from 1% to 2%, depending on the Company ’ s Consolidated Total Net Leverage Ratio (which rate is currently 2%). Base Rate means, at any time, the highest of (a) the Wells Fargo Bank, National Association ’ s announced prime rate, (b) the federal funds rate plus 0.5% and (c) Term SOFR for a one-month tenor in effect on such day plus 1%. The Credit Agreement matures on October 19, 2027. The interest rate was 7.3% as of August 29, 2023. The Company recorded interest expense of $0.4 million and $0.3 million for the three months ended September 30, 2023 and 2022, respectively. The Company recorded interest expense of $1.8 million and $0.9 million for the nine months ended September 30, 2023 and 2022, respectively. |
Convertible Debt
Convertible Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Convertible Debt | 10. Convertible Debt On August 15, 2023, the Company issued $750.0 million in aggregate principal amount of 1.0% convertible senior notes due 2028 (the “Notes”). The issuance included the full exercise of an option granted by the Company to the initial purchasers of the Notes to purchase an additional $100.0 million in aggregate principal amount of Notes. The Notes were issued pursuant to and subject to the terms of an indenture, dated August 15, 2023, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”). The Indenture includes customary covenants and sets forth certain events of default, including certain types of bankruptcy and insolvency events, after which the Notes may be declared immediately due and payable. The Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Notes are senior, unsecured obligations of the Company. The Notes will mature on August 15, 2028, unless earlier converted, redeemed, or repurchased in accordance with their terms. The Notes bear interest at a rate of 1.0% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024. The Notes are convertible, in multiples of $1,000.0 principal amount and at the option of the noteholder, on or after May 15, 2028. Prior to May 15, 2028, holders of the Notes may convert all or a portion of their Notes, in multiples of $1,000.0 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after December 31, 2023 (and only during such calendar quarter) if the closing price of the Company’s common stock for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the then applicable conversion price for the Notes on each applicable trading day; (2) during the five business days immediately after any five consecutive trading day period in which the trading price (as defined in the Indenture) per $1,000.0 principal amount of Notes for each day of that period was less than 98% of the product of the closing price of the Company’s common stock and the then applicable conversion rate; (3) if the Company calls such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the Notes called (or deemed called) for redemption; or (4) upon the occurrence of specific corporate events as specified in the Indenture. The Company will settle any conversions of Notes by paying or delivering, as applicable, cash up to the aggregate principal amount of the Notes to be converted and by paying or delivering, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the election of the Company, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Notes being converted. The conversion rate for the Notes was initially 3.4595 shares of common stock per $1,000.0 principal amount of Notes, which is equivalent to an initial conversion price of approximately $289.06 per share of common stock. The initial conversion price of the Notes represents a premium of approximately 30% over the $222.35 per share last reported sale price of common stock on August 10, 2023. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture, with a maximum conversion rate of 4.4974 shares of common stock per $1,000.0 principal amount of Notes. The Company may not redeem the Notes prior to August 20, 2026. The Company may redeem, for cash equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest, all or any portion of the Notes, at its option, on or after August 20, 2026, if the last reported sales price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of the redemption. No sinking fund is provided for the Notes and therefore the Company is not required to redeem or retire the Notes periodically. If the Company undergoes a fundamental change, as defined in the Indenture, then subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Notes at a price equal to 100% of the principal amount of the Notes to be repurchased plus any accrued and unpaid interest to, but excluding, the repurchase date. In addition, under certain circumstances, holders of the Notes are entitled to an increase in the conversion rate. The conditions allowing holders of the Notes to convert were not met this quarter. As of September 30, 2023, the Notes were classified as a long-term liability, net of issuance costs of $19.5 million, on the condensed consolidated balance sheets. As of September 30, 2023, the net carrying amount of the Notes approximates fair value as the Notes were issued on August 15, 2023. Interest expense recognized related to the Notes for each of the three and nine months ended September 30, 2023 was $1.4 million. The Notes were issued at par and costs associated with the issuance of the Notes are amortized to interest expense over the contractual term of the Notes. As of September 30, 2023, the effective interest rate of the Notes was 1.5%. Capped Call Transactions On August 10, 2023, in connection with the pricing of the Notes and the initial purchasers’ exercise of their option to purchase additional Notes, the Company entered into privately negotiated capped call transactions (“Capped Call Transactions”). The Capped Call Transactions initially covered, subject to customary anti-dilution adjustments, the number of shares of common stock that underlie the Notes. The cap price of the Capped Call Transactions was initially $444.70 per share, which represents a premium of 100% over the last reported sale price of the Company ’ s common stock of $222.35 per share on August 10, 2023, and is subject to certain adjustments under the terms of the Capped Call Transactions. The Company used approximately $96.4 million of the proceeds from the offering of Notes to pay the cost of the Capped Call Transactions. The Company evaluated the Capped Call Transactions and determined that they should be accounted for separately from the Notes. The cost of $96.4 million to purchase the Capped Call Transactions was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheet as of September 30, 2023 as the Capped Call Transactions are indexed to the Company's own stock and met the criteria to be classified in stockholders ’ equity. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Total stock-based compensation was as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) Cost of product revenue $ 1,321 $ 388 $ 3,649 $ 1,559 Research and development 4,559 2,695 12,230 7,409 Sales and marketing 7,117 4,901 20,176 13,241 General and administrative 5,413 3,748 15,368 10,038 Total stock-based compensation $ 18,410 $ 11,732 $ 51,423 $ 32,247 Stock-based compensation of $0.1 million and $0.7 million was capitalized into inventory for the three months ended September 30, 2023 and 2022, respectively. Stock-based compensation of $0.4 million and $1.5 million was capitalized into inventory for the nine months ended September 30, 2023 and 2022, respectively. Stock-based compensation capitalized into inventory is recognized as cost of product revenue when the related product is sold. 2009 Equity Incentive Plan and 2019 Equity Incentive Plan On June 17, 2009, the Company adopted the 2009 Equity Incentive Plan (the “2009 Plan”) under which the Company ’ s Board of Directors (the “Board”) had the authority to issue stock options to employees, directors and consultants. In February 2019, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”), which became effective in connection with the Company ’ s initial public offering (the “IPO”). As a result, effective as of March 6, 2019, the Company may not grant any additional awards under the 2009 Plan. The 2009 Plan will continue to govern outstanding equity awards granted thereunder. The Company initially reserved 2,000,430 shares of common stock for the issuance of a variety of awards under the 2019 Plan, including stock options, stock appreciation rights, awards of restricted stock and awards of restricted stock units (“RSUs”). In addition, the number of shares of common stock reserved for issuance under the 2019 Plan will automatically increase on the first day of January for a period of up to ten years, which commenced on January 1, 2020, in an amount equal to 3% of the total number of shares of the Company’s capital stock outstanding on the last day of the preceding year, or a lesser number of shares determined by the Board. As of September 30, 2023, there were 3,617,756 shares available for issuance under the 2019 Plan. Stock Options Option activity under the 2009 Plan and 2019 Plan is set forth below: Number Weighted- Weighted- Aggregate (in years) (in thousands) Balance, December 31, 2022 1,122,009 $ 5.87 4.60 $ 224,115 Options exercised (191,956) 6.15 Options cancelled (6,133) 2.41 Balance, September 30, 2023 923,920 $ 5.83 3.86 $ 213,029 Vested and exercisable, 923,920 $ 5.83 3.86 $ 213,029 Vested and expected to vest, 923,920 $ 5.83 3.86 $ 213,029 Restricted Stock Units RSUs are share awards that entitle the holder to receive freely tradable shares of the Company’s common stock upon vesting. RSUs cannot be transferred and the awards are subject to forfeiture if the holder’s employment terminates prior to the release of the vesting restrictions. RSUs generally vest over a four-year period with straight-line quarterly vesting with a one year cliff or straight-line annual vesting, provided the employee remains continuously employed with the Company. The fair value of RSUs is equal to the closing price of the Company’s common stock on the grant date. In February 2022 and 2023, the Company granted performance-based restricted stock units (“PRSUs”) to certain key executives. The vesting of these PRSUs is dependent on the achievement of certain performance targets related to the Company’s compound annual growth rate of revenue over a two three RSU and PRSU activity under the 2019 Plan is set forth below. Grant activity for all PRSUs is disclosed at target (100%): Restricted Stock Units Performance-Based Restricted Stock Units Number Weighted- Number Weighted- Balance, December 31, 2022 1,125,991 $ 127.39 38,797 $ 165.74 RSUs and PRSUs granted 489,260 217.33 29,473 191.36 RSUs and PRSUs forfeited (68,149) 161.93 (713) 265.17 RSUs and PRSUs vested (416,063) 110.39 (210) 266.73 Balance, September 30, 2023 1,131,039 170.46 67,347 175.58 Employee Stock Purchase Plan In February 2019, the Company adopted the 2019 Employee Stock Purchase Plan (“ESPP”), which became effective in connection with the IPO on March 6, 2019. The Company initially reserved 300,650 shares of common stock for purchase under the ESPP. Each offering under the ESPP to Company employees to purchase stock under the ESPP begins on each September 1 and March 1 and ends on the following February 28 or 29 and August 31, respectively. On each purchase date, which falls on the last date of each offering period, ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of (1) the fair market value per share of the common stock on the offering date or (2) the fair market value of the common stock on the purchase date. The occurrence and duration of offering periods under the ESPP are subject to the determinations of the Company’s Compensation Committee of the Board, in its sole discretion. The fair value of the ESPP shares is estimated using the Black-Scholes option pricing model. The Company recorded $0.6 million and $0.8 million of stock-based compensation expense related to the ESPP for the three months ended September 30, 2023 and 2022, respectively. The Company recorded $2.5 million and $1.6 million of stock-based compensation expense related to the ESPP for the nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023, a total of 1,521,021 shares were available for issuance under the ESPP. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income Per Share Basic net income per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding for the period, without consideration of potential dilutive shares of common stock. Diluted net income per share attributable to the Company’s stockholders is calculated based on the weighted-average number of shares of its common stock and other dilutive securities outstanding. Potentially dilutive common shares from employee equity incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options and the assumed vesting of outstanding RSUs. Prior to conversion of the Company’s convertible debt, the Company will include, in the diluted net income per common share calculation, the effect of the additional shares that may be issued when the Company’s common stock price exceeds the conversion price using the if‐converted method. The Company’s convertible debt has no impact on diluted net income per common share unless the average price of the Company’s common stock exceeds the conversion price because the Company is required to settle the principal amount of the convertible debt in cash upon conversion. The components of basic and diluted net income per share were as follows (in thousands, except share and per share amounts): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator: Net income $ 34,986 $ 35,003 $ 102,973 $ 75,085 Denominator: Basic: Weighted average number of common shares outstanding - basic 36,797,072 36,003,931 36,630,575 35,807,264 Diluted: Weighted average number of common shares outstanding - basic 36,797,072 36,003,931 36,630,575 35,807,264 Dilutive effect of outstanding common stock options 934,847 1,250,350 988,941 1,348,908 Dilutive effect of restricted stock units 460,615 690,128 560,371 655,016 Dilutive effect of common stock pursuant to employee stock purchase plan 4,246 3,640 4,412 1,919 Weighted average number of common shares outstanding - diluted 38,196,780 37,948,049 38,184,299 37,813,107 Net income per share: Basic $ 0.95 $ 0.97 $ 2.81 $ 2.10 Diluted $ 0.92 $ 0.92 $ 2.70 $ 1.99 All restricted shares, employee stock purchase plan options, and capped call options for the three and nine months ended September 30, 2023 and 2022 have been excluded from the calculation of the diluted net income per share, because all such securities are anti-dilutive for all periods presented. The total number of potential shares excluded from the calculation of diluted net income per share are as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 Restricted stock units 115,361 17,318 96,548 5,966 Employee stock purchase plan — 3,806 — 1,100 Capped call options 333,409 — 333,409 — Total 448,770 21,124 429,957 7,066 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Disaggregation of Revenue [Abstract] | |
Revenue | Revenue The following table represents the Company’s product revenue based on product line: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) Coronary $ 136,325 $ 93,043 $ 375,977 $ 251,208 Peripheral 47,835 37,045 146,227 91,783 Reducer 1,288 — 2,519 — Other 572 1,242 2,528 2,716 Product revenue $ 186,020 $ 131,330 $ 527,251 $ 345,707 Coronary product revenue encompasses sales of the Company’s C 2 catheter and C 2+ catheter. Peripheral product revenue encompasses sales of the Company’s M 5 catheter, M 5+ catheter, S 4 catheter, and L 6 catheter. Reducer revenue encompasses sales of the Company’s Reducer product, which was acquired through the Neovasc acquisition. Other product revenue encompasses sales of the Company’s generators and related accessories. The following table represents the Company’s product revenue based on the location to which the product is shipped: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) United States $ 146,899 $ 110,502 $ 423,463 $ 289,117 Europe 19,352 11,762 54,501 37,223 All other countries 19,769 9,066 49,287 19,367 Product revenue $ 186,020 $ 131,330 $ 527,251 $ 345,707 |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | 14. Equity Method Investments Genesis Shockwave Private Limited On March 19, 2021, the Company entered into the Joint Venture Deed (or “JV Agreement”) with Genesis MedTech International Private Limited (“Genesis”) to establish a long-term strategic partnership to develop, manufacture and commercialize certain of the Company’s interventional products in the People’s Republic of China, excluding Taiwan and the Special Administrative Regions of Hong Kong and Macau (the “PRC”). Under the JV Agreement, Genesis Shockwave Private Ltd. (the “JV”) was formed under the laws of Singapore to serve as a joint venture of Genesis and the Company for the purpose of establishing and managing the strategic partnership. On the same date, Genesis and the Company entered into a Share Subscription Agreement pursuant to which, among other things, the JV issued (i) 54,900 ordinary shares, which represents 55% of the total equity of the JV, to Genesis in exchange for a cash contribution of $15.0 million, of which 50% was due upon signing and the remaining 50% was due within one year of signing, and (ii) 45,000 ordinary shares, which represents 45% of the total equity of the JV, to the Company as consideration for the Shockwave License Agreement (the “License Agreement”). Under the License Agreement, the Company has agreed to contribute to the JV an exclusive license under certain of the Company’s intellectual property rights to develop, manufacture, distribute and commercialize certain products in the PRC and is entitled to receive royalties on the sales of the licensed products in the PRC. Further, the Company entered into a Distribution Agreement, pursuant to which the Company has agreed to sell certain Company-manufactured products to the JV or a PRC subsidiary of the JV for commercialization and distribution in the PRC. In May 2022, the JV obtained regulatory approval from the China National Medical Products Administration to sell the Company-manufactured Shockwave IVL System with the Company ’ s C 2 catheter, M 5 catheter, and S 4 catheter in the PRC. The Company has accounted for its investment in the JV under the equity method of accounting. As of September 30, 2023, the carrying value of the Company’s investment in the JV was $1.8 million and the Company owned a 45% interest in the entity. During the three and nine months ended September 30, 2023, the Company continued to recognize product revenue on sales to the JV and eliminate a portion of intra-entity profit to the extent the goods have not yet either been consumed by the JV for use in clinical trials, or sold by the JV to an end customer at the end of the reporting period. The profit earned by the Company from the JV for items not yet sold through to an end customer is eliminated through equity method earnings or loss which is recognized in income (loss) from equity method investment. The Company’s product revenue for products sold to the JV during the three and nine months ended September 30, 2023 and related accounts receivable from the JV as of September 30, 2023 were immaterial. Intra-entity profit, which was recorded as a reduction to equity method investment as of and for the three and nine months ended September 30, 2023 was also immaterial. For the three months ended September 30, 2023 and 2022, the Company recorded a loss from the equity method of $0.7 million and income of $0.1 million, respectively. For the nine months ended September 30, 2023 and 2022, the Company’s loss from the equity method was $1.7 million and $1.4 million, respectively. Upon execution of the License Agreement, on March 19, 2021, the Company received a 45% equity stake in the JV. The Company determined that the JV met the definition of a customer under Topic 606, and that the promised goods and services of the contribution of the license of intellectual property and associated manufacturing technology transfer to the JV were considered to be a single performance obligation. The transaction price of $12.3 million was estimated by reference to the cash value of the shares that were issued at the formation of the JV. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure | 15. Income Taxes On a quarterly basis, the Company provides for income taxes based upon an estimated annual effective income tax rate, adjusted for discrete items. The Company recognized income tax expense of $10.1 million and $0.1 million for the three months ended September 30, 2023 and 2022, respectively, representing an effective tax rate of 22.15% and 0.34%, respectively. The Company recognized income tax expense of $15.8 million and $1.1 million for the nine months ended September 30, 2023 and 2022, respectively, representing an effective tax rate of 13.31% and 1.43%, respectively. The year-over-year increase in tax expense for the three and nine month periods ended September 30, 2023 was primarily due to the valuation allowance on the U.S. federal and other-than-California state deferred tax assets as of September 30, 2023, which was released in the fourth quarter of fiscal year 2022. For the three months ended September 30, 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to stock-based compensation for tax purposes. For the three months ended September 30, 2022, the effective tax rate differed from the U.S. federal statutory rate primarily due to the valuation allowance on the U.S. deferred tax assets. For the nine months ended September 30, 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to stock-based compensation for tax purposes. For the nine months ended September 30, 2022, the effective tax rate differed from the U.S. federal statutory rate primarily due to the valuation allowance on the U.S. deferred tax assets. The Company’s effective tax rate may be subject to fluctuation due to several factors, including the Company’s ability to accurately predict the pre-tax earnings in the various jurisdictions, valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions and the effects of tax law changes. During the fourth quarter of 2022, the Company determined that the positive evidence overcame any negative evidence, primarily due to the Company’s transition from a cumulative loss in recent years to cumulative income in 2022 and concluded that it was more likely than not that the U.S. federal and other-than-California state deferred tax assets were realizable. As a result, the Company released the valuation allowance against all of the U.S. federal deferred tax assets and other-than-California state deferred tax assets during the fourth quarter of fiscal year 2022. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | 5. Business Combination Neovasc Inc. On January 16, 2023, the Company entered into a definitive agreement to acquire Neovasc, a company focused on the minimally invasive treatment of refractory angina. On April 11, 2023, the closing conditions were met and the transaction was consummated. Upon the closing of the transaction, the Company acquired all of Neovasc’s issued and outstanding common stock equity for a cash payment of $27.25 per share. During the three and nine months ended September 30, 2023, the Company incurred $0.7 million and $5.6 million of buyer related transaction costs related to the acquisition of Neovasc, which were recorded as general and administrative expenses. The purchase price consideration for the acquisition totaled $121.4 million, which was comprised of cash paid of $112.1 million to the selling shareholders, and the estimated fair value of the contingent consideration liability in the amount of $9.3 million. The contingent consideration liability consisted of estimated amounts in relation to a contingent value right (a “CVR”) entitling the holders of Neovasc common stock and eligible equity awards to receive an additional cash payment of up to $12.00 per share or per share underlying an eligible equity award (equivalent to a maximum cash payment of $47.0 million) contingent on the attainment of a milestone. The milestone is defined as the grant by the United States Food and Drug Administration ’ s final approval of the premarket approval application for Neovasc’s coronary sinus reducer (“Reducer”) product for the treatment of angina. The milestone achievement timeline and respective payment per share ranges from $12.00 per CVR if the milestone is achieved on or prior to June 30, 2026, $8.00 per CVR if the milestone is achieved between July 1, 2026 and December 31, 2026 and $4.00 per CVR if the milestone is achieved between January 1, 2027 and December 31, 2027. The Company estimated the fair value of the contingent consideration liability using the probability-weighted discounted cash flow method based on the probability of achieving the milestone on each specified milestone date and consequently calculated the fair value of the CVR in the amount of $9.3 million as of the acquisition date. The material factors that may impact the fair value of the contingent consideration are (i) the number of diluted shares outstanding as of the acquisition date that are eligible for the CVR, (ii) the probabilities and timing of achievement of the milestone, and (iii) discount rates, all of which are unobservable Level 3 inputs not supported by market activity. Significant changes in any of these inputs may result in a significant change in fair value, which is estimated at each reporting date with changes reflected as general and administrative expense. The following table summarizes the purchase price consideration for Neovasc: Purchase Price (in thousands) Cash transferred $ 112,129 Contingent consideration liability 9,307 Total $ 121,436 Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and Level 3 inputs and assumptions used by the Company. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the residual amount of goodwill. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed through the Company ’ s Neovasc acquisition at the acquisition date based on management’s best estimates and assumptions as of the reporting date: Purchase Price (in thousands) Cash and cash equivalents $ 17,273 Accounts receivable, net 1,345 Inventory 918 Prepaid expenses and other current assets 841 Operating lease right-of-use assets 310 Property and equipment 156 Intangible assets 95,500 Other assets 502 Total identifiable assets acquired 116,845 Accounts payable 3,334 Accrued liabilities 4,082 Lease liability, current portion 253 Lease liability, noncurrent portion 64 Deferred tax liabilities 11,185 Other liabilities 16,280 Total liabilities assumed 35,198 Net identifiable assets acquired 81,647 Goodwill 39,789 Total purchase price $ 121,436 The purchase price allocation for the acquisition is preliminary and subject to revision as additional information about fair value of assets acquired and liabilities assumed becomes available, primarily related to the Company’s deferred tax liability and the related impact to goodwill. Additional information that existed as of the acquisition date but at the time was unknown to the Company may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. As of September 30, 2023, there were no changes to the preliminary allocation of the purchase consideration. The Company measured the identifiable assets and liabilities assumed at their acquisition date fair values separately from goodwill. The intangible assets acquired are the developed technology related to Neovasc’s Reducer, in-process research and development for its Reducer technology, and Neovasc’s customer relationships in place at the time of acquisition. The fair value of the intangible assets acquired as of the acquisition date and, the method used to value these assets as well as the estimated economic lives for amortizable intangible assets were as follows (in thousands, except estimated useful life which is in years): Fair value Estimated useful life Valuation method Customer relationships $ 2,900 5 years Avoided cost / lost profit Developed technology 61,200 20 years Multi-period excess earnings In-process research and development 31,400 N/A Multi-period excess earnings Total $ 95,500 Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The acquisition of Neovasc resulted in the recognition of $39.8 million of goodwill which the Company believes relates primarily to the anticipated benefits of synergies created through the acquisition and assembled workforce. The intangible assets and goodwill created as a result of the acquisition of Neovasc are not deductible for tax purposes. As such, the Company recorded deferred tax liabilities of $11.2 million related to the intangible assets in connection with the Company’s acquisition of Neovasc. Supplemental Unaudited Pro Forma Information The following are the supplemental condensed consolidated financial results of the Company and Neovasc on an unaudited pro forma basis, as if the Neovasc acquisition had been consummated on January 1, 2022. Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) Net revenue $ 186,020 $ 132,253 $ 528,720 $ 348,059 Net income $ 30,072 $ 27,287 $ 69,010 $ 45,815 |
Goodwill and intangible assets
Goodwill and intangible assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | 6. Goodwill and intangible assets Goodwill The changes in the carrying amounts of goodwill were as follows: (in thousands) Balance as of December 31, 2022 $ — Goodwill acquired - Neovasc 39,789 Goodwill deductions or impairment — Balance as of September 30, 2023 $ 39,789 The Company performs annual impairment reviews of goodwill during the fourth fiscal quarter or more frequently if required. Intangible assets The following table presents details of the acquired intangible assets as of September 30, 2023 (in thousands, except useful life and estimated remaining useful life which are in years): Gross Carrying Amount Accumulated Impairment Intangible Assets, Net Customer relationships $ 2,900 $ 275 $ — $ 2,625 5 years 4.5 years Developed technology 61,200 1,450 — 59,750 20 years 19.5 years In-process research and development 31,400 — — 31,400 N/A N/A Total $ 95,500 $ 1,725 $ — $ 93,775 19.3 years 18.8 years Acquisition-related intangible assets included in the above table are finite-lived, other than in-process research and development which has an indefinite life , and are carried at cost less accumulated amortization. Customer relationships and developed technology are amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized. Amortization expense was $0.9 million and $1.7 million for the three and nine months ended September 30, 2023, respectively, and was recorded to sales and marketing for customer relationships and to cost of revenue for developed technology. The following table summarizes the estimated future amortization expense of intangible assets with finite lives as of September 30, 2023: Years ending December 31, (in thousands) 2023 (remainder) $ 918 2024 3,640 2025 3,640 2026 3,640 2027 3,640 Thereafter 46,897 Total estimated future amortization expense $ 62,375 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) | $ 34,986 | $ 35,003 | $ 102,973 | $ 75,085 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 shares | Sep. 30, 2023 shares | |
Isaac Zacharias [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On August 25, 2023, Isaac Zacharias, the Company’s President, Chief Commercial Officer, entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 (the “Zacharias 10b5-1 Plan”) under the Exchange Act, for the sale of shares of the Company’s common stock. The Zacharias 10b5-1 Plan was entered into during an open trading window in accordance with the Company’s policies regarding transactions in the Company’s securities and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Zacharias 10b5-1 Plan provides for the potential sale of up to 68,000 shares of the Company’s common stock, including upon the exercise of vested stock options for shares of the Company’s common stock, so long as the market price of the Company’s common stock is higher than certain minimum threshold prices specified in the Zacharias 10b5-1 Plan, between January 26, 2024 and May 30, 2025. | |
Name | Isaac Zacharias | |
Title | President, Chief Commercial Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | August 25, 2023 | |
Arrangement Duration | 490 days | |
Aggregate Available | 68,000 | 68,000 |
F.T Jay Watkins [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 5, 2023, F.T Jay Watkins, a member of the Company’s Board of Directors, entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 (the “Watkins 10b5-1 Plan”) under the Exchange Act, for the sale of shares of the Company’s common stock. The Watkins 10b5-1 Plan was entered into during an open trading window in accordance with the Company’s policies regarding transactions in the Company’s securities and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Watkins 10b5-1 Plan provides for the potential sale of up to 24,000 shares of the Company’s common stock, including upon the exercise of vested stock options for shares of the Company’s common stock, so long as the market price of the Company’s common stock is higher than certain minimum threshold prices specified in the Watkins 10b5-1 Plan, between January 8, 2024 and December 31, 2024. | |
Name | F.T Jay Watkins, | |
Title | Board of Directors | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | September 5, 2023 | |
Arrangement Duration | 358 days | |
Aggregate Available | 24,000 | 24,000 |
Trinh Phung [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 7, 2023, Trinh Phung, the Company ’ s Vice President of Finance, entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 (the “Phung 10b5-1 Plan”) under the Exchange Act, for the sale of shares of the Company’s common stock. The Phung 10b5-1 Plan was entered into during an open trading window in accordance with the Company’s policies regarding transactions in the Company’s securities and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Phung 10b5-1 Plan provides for the potential sale of up to 15,165 shares of the Company’s common stock, including upon the exercise of vested stock options for shares of the Company’s common stock, less the number of shares sold to satisfy tax withholding obligations pursuant to the Company’s “sell to cover” requirement, so long as the market price of the Company’s common stock is higher than certain minimum threshold prices specified in the Phung 10b5-1 Plan, between December 7, 2023 and August 10, 2024. The number of shares to be sold to satisfy the Company’s tax withholding obligations under the “sell-to-cover” arrangement is dependent on future events which cannot be known at this time, including the future trading price of the Company’s common stock. | |
Name | Trinh Phung | |
Title | Vice President of Finance | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | September 7, 2023 | |
Arrangement Duration | 247 days | |
Aggregate Available | 15,165 | 15,165 |
Daniel Puckett [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 8, 2023, Daniel Puckett, the Company ’ s Chief Financial Officer, entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 (the “Puckett 10b5-1 Plan”) under the Exchange Act, for the sale of shares of the Company’s common stock. The Puckett 10b5-1 Plan was entered into during an open trading window in accordance with the Company’s policies regarding transactions in the Company’s securities and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Puckett 10b5-1 Plan provides for the potential sale of up to 17,594 shares of the Company’s common stock, including upon the exercise of vested stock options for shares of the Company’s common stock, less the number of shares sold to satisfy tax withholding obligations pursuant to the Company’s “sell to cover” requirement, so long as the market price of the Company’s common stock is higher than certain minimum threshold prices specified in the Puckett 10b5-1 Plan, between December 8, 2023 and June 15, 2024. The number of shares to be sold to satisfy the Company’s tax withholding obligations under the “sell-to-cover” arrangement is dependent on future events which cannot be known at this time, including the future trading price of the Company’s common stock. | |
Name | Daniel Puckett | |
Title | Chief Financial Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | September 8, 2023 | |
Arrangement Duration | 190 days | |
Aggregate Available | 17,594 | 17,594 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts. |
Equity Method Investments | Equity Method Investments Entities for which the Company has significant influence over the activities of the entity, but does not control, are accounted for under the equity method of accounting in accordance with Topic 323, Investments - Equity Method and Joint Ventures . The Company’s carrying value in the equity method investment is reported as equity method investment on the Company’s consolidated balance sheets. The Company records its proportionate share of the underlying income or loss which is recognized in earnings or loss from the equity method investment. T he Company eliminates a portion of intra-entity profit to the extent the goods sold by the Company have not yet been sold through by the equity method investee to an end customer at the end of the reporting period. The profit earned by the Company from the equity method investee for items not yet sold through is eliminated through equity method earnings or loss which is recognized in income (loss) from equity method investment. The Company assesses its equity method investment for impairment when events or circumstances suggest that the carrying amount of the investment may be impaired. The Company considers all available evidence in assessing whether a decline in fair value is other than temporary. If the decline in fair value is determined to be other than temporary, the difference between the carrying amount of the investment and estimated fair value is recognized as an impairment charge. |
Revenue | Revenue To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, Revenue from Contracts with Customers , the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Product Revenue The Company records product revenue primarily from the sale of its IVL catheters and Reducer. The Company sells its products to hospitals, primarily through direct sales representatives, as well as through distributors in selected international markets. Additionally, a portion of the Company’s revenue is generated through a consignment model under which inventory is maintained at hospitals. Product revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. For products sold through direct sales representatives, control is transferred upon delivery to customers. For products sold to distributors internationally and products sold to customers that utilize stocking orders, control is transferred upon shipment or delivery to the customer’s named location, based on the contractual shipping terms. For consignment inventory, control is transferred at the time the IVL catheters are consumed in a procedure. The Company has elected to account for shipping and handling activities that occur after the customer has obtained control as a fulfillment activity, and not a separate performance obligation. The Company may provide for the use of an IVL generator and connector cable under an agreement to customers at no charge to facilitate use of the IVL catheters. These agreements generally do not contain contractually enforceable minimum commitments and are generally cancellable by either party with 30 days ’ notice. License Revenue For arrangements that contain a license of the Company’s functional intellectual property with a customer, the Company considers whether the license grant is distinct from other performance obligations in the arrangement. A license grant of functional intellectual property is generally considered to be capable of being distinct if a customer can benefit from the license on its own or together with other readily available resources. License revenue for licenses of functional intellectual property is recognized at a point in time when the Company satisfies its performance obligation of transferring the license to the customer. Consideration received in advance of the satisfaction of a performance obligation is recognized as a contract liability. No license revenues were recognized for the three and nine months ended September 30, 2023. |
Share-based Payment Arrangement | Stock-Based Compensation The Company accounts for share-based payments at fair value. The fair value of stock options is measured using the Black-Scholes option-pricing model. For share-based awards that vest subject to the satisfaction of a service requirement, the fair value measurement date for stock-based compensation awards is the date of grant and the expense is recognized on a straight-line basis, over the vesting period. For share-based awards that vest upon the satisfaction of a performance target, the related compensation cost is recognized over the requisite service period based on the expected achievement of the performance target. The Company accounts for forfeitures as they occur. |
Business Combinations Policy | Business combinations The Company applies the provisions of ASC 805, Business Combinations (“ASC 805”), in accounting of its acquisitions. ASC 805 requires recognition of assets acquired, liabilities assumed, and contingent consideration at their fair value on the acquisition date with subsequent changes recognized in earnings; requires acquisition-related expenses to be recognized separately from the business combination and expensed as incurred; requires in-process research and development to be capitalized at fair value as an indefinite-lived intangible asset until completion or abandonment; and requires that changes in accounting for deferred tax asset valuation allowances and acquired uncertain tax positions after the measurement period be recognized as a component of provision for taxes. When an integrated set of assets and activities does not meet the practical screen test and otherwise meets the definition of a “business” under ASC 805, the Company accounts for such acquisitions as business combinations. The purchase price of an acquisition is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The Company bases the estimated fair value of identifiable intangible assets acquired in an acquisition on independent third-party valuations that use information and assumptions provided by the Company ’ s management and considers inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair values of the assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the provisional amounts of assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments would be recorded in earnings. |
Goodwill and Intangible Assets, Goodwill, Policy | Goodwill In accordance with ASC 350, Intangibles-Goodwill and Other , the acquired goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company performs annual impairment reviews of its goodwill balance during the fourth fiscal quarter or more frequently if business factors indicate. In testing for impairment, the Company compares the fair value of its reporting unit to its carrying value including the goodwill of that unit. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, the Company will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. The Company did not incur any goodwill impairment losses during the nine months ended September 30, 2023. |
Intangible Assets, Finite-Lived, Policy | In-process research and development Intangible assets related to in-process research and development costs are considered indefinite-lived intangible assets until the completion or abandonment of the associated research and development efforts. If and when development is complete, the associated assets would be deemed finite-lived intangible assets and would then be amortized based on their respective estimated useful lives at that point in time. Prior to the completion or abandonment of the associated research and development efforts, the assets are not amortized but are tested for impairment on an annual basis and between annual tests if the Company becomes aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the in-process research and development projects below their respective carrying amounts. |
Goodwill and Intangible Assets, Intangible Assets, Policy | Intangible assets Amortizable intangible assets include customer relationships and developed technology acquired as part of the business combination. Customer relationships and developed technology acquired through business combinations subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from five Property, Plant and Equipment . |
Contingent Consideration Liabilities | Contingent Consideration Liabilities Related to Business Combination At each reporting period, the Company evaluates the likelihood of any expected future payments and the associated discount rate to determine the fair value of the contingent consideration. The Company remeasures the fair value of contingent consideration liabilities each reporting period, based on new developments, and records any necessary adjustments as a component of total operating expenses within the condensed consolidated statements of operations until either the contingent consideration obligation is satisfied through payment upon the achievement of, or the obligation no longer exists due to the failure to achieve, the specified milestones. Contingent consideration liabilities are recorded within other liabilities in the condensed consolidated balance sheets. |
Convertible Debt Policy | Convertible Debt The Company applies the provisions of Accounting Standards Update (“ASU”) 2020-06- Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity ’ s Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity ’ s Own Equity (“ASU 2020-06”) which simplify the accounting related to convertible debt instruments by removing major separation models required under current GAAP. Accordingly, the Company does not bifurcate the liability and equity components of the convertible debt on the condensed consolidated balance sheets. The Company’s convertible debt is are reflected as a liability on the Company’s condensed consolidated balance sheets, with the initial carrying amount equal to the principal amount of the debt, net of issuance costs. The issuance costs are treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the instruments utilizing the effective interest method. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows: September 30, September 30, (in thousands) Cash and cash equivalents $ 498,108 $ 127,779 Restricted cash 1,341 2,165 Total cash, cash equivalents, and restricted cash $ 499,449 $ 129,944 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows: September 30, September 30, (in thousands) Cash and cash equivalents $ 498,108 $ 127,779 Restricted cash 1,341 2,165 Total cash, cash equivalents, and restricted cash $ 499,449 $ 129,944 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value | The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy: September 30, 2023 Level 1 Level 2 Level 3 Total (in thousands) Assets: U.S. Treasury securities $ 362,160 $ — $ — $ 362,160 Money market funds 383,946 — — 383,946 Commercial paper — 25,316 — 25,316 Corporate bonds — 12,202 — 12,202 U.S. agency securities — 13,790 — 13,790 Asset-backed securities — 5,757 — 5,757 Total assets $ 746,106 $ 57,065 $ — $ 803,171 Liabilities: Contingent consideration liability $ — $ — $ 9,307 $ 9,307 Convertible debt — 720,000 — 720,000 Total liabilities $ — $ 720,000 $ 9,307 $ 729,307 December 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Assets: U.S. Treasury securities $ 111,631 $ — $ — $ 111,631 Money market funds 12,076 — — 12,076 Commercial paper — 8,039 — 8,039 Corporate bonds — 18,808 — 18,808 U.S. agency securities — 9,429 — 9,429 Total assets $ 123,707 $ 36,276 $ — $ 159,983 |
Cash Equivalents and Short-Te_2
Cash Equivalents and Short-Term Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Summary of Cash Equivalents and Short-Term Investments | The following is a summary of the Company’s cash equivalents and short-term investments: September 30, 2023 Amortized Unrealized Unrealized Fair Value (in thousands) U.S. Treasury securities $ 362,243 $ 32 $ (115) $ 362,160 Money market funds 383,910 36 — 383,946 Commercial paper 25,391 — (75) 25,316 Corporate bonds 12,197 32 (27) 12,202 U.S. agency securities 13,866 — (76) 13,790 Asset-backed securities 5,761 6 (10) 5,757 Total $ 803,368 $ 106 $ (303) $ 803,171 Reported as: Cash equivalents $ 383,946 Short-term investments 419,225 Total $ 803,171 December 31, 2022 Amortized Unrealized Unrealized Fair Value (in thousands) U.S. Treasury securities $ 112,719 $ 3 $ (1,091) $ 111,631 Money market funds 12,076 — — 12,076 Commercial paper 8,039 — — 8,039 Corporate bonds 18,876 8 (76) 18,808 U.S. agency securities 9,432 4 (7) 9,429 Total $ 161,142 $ 15 $ (1,174) $ 159,983 Reported as: Cash equivalents $ 12,076 Short-term investments 147,907 Total $ 159,983 |
Summary of Remaining Contractual Maturities for Available-for-sale Securities | The remaining contractual maturities of the Company’s cash equivalents and short-term investments were as follows: September 30, Fair Value (in thousands) Money market funds $ 383,946 One year or less 409,382 Greater than one year and less than two years 9,843 Total $ 803,171 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory | Inventory consists of the following: September 30, December 31, (in thousands) Raw materials $ 24,289 $ 18,456 Work in progress 17,493 7,666 Finished goods 54,907 48,735 Consigned inventory 491 255 Total inventory $ 97,180 $ 75,112 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: September 30, December 31, (in thousands) Employee compensation $ 35,264 $ 32,885 Research and development costs 7,943 4,007 Asset purchases 4,718 4,600 Professional services 6,970 4,044 Excise, sales, income and other taxes 6,033 4,036 Other 8,836 5,803 Total accrued liabilities $ 69,764 $ 55,375 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease, Cost | The Company recognizes rent expense for these operating leases on a straight-line basis over the lease period. The components of lease costs, which the Company includes in operating expenses in the condensed consolidated statements of operations and comprehensive income, were as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) Operating lease cost $ 1,223 $ 1,168 $ 3,651 $ 3,451 Variable lease cost 366 453 955 696 Total lease cost $ 1,589 $ 1,621 $ 4,606 $ 4,147 |
Schedule of Minimum Future Rental Payments | As of September 30, 2023, the maturities of the payments due under the Company’s operating lease liabilities were as follows: Years ending December 31, (in thousands) 2023 (remainder) $ 1,383 2024 5,517 2025 5,526 2026 5,690 2027 5,832 Thereafter 24,959 Total minimum lease payments $ 48,907 Less: imputed interest (9,312) Less: Lease incentive (5,668) Total lease liability $ 33,927 Less: current portion (1,569) Lease liability, noncurrent portion $ 32,358 |
Lessor, Operating Lease, Payment to be Received, Maturity | The table below summarizes the undiscounted future non-cancellable lease payments for the 5303 Lease facility under the Second Lease Amendment, which had not yet commenced as of September 30, 2023. Years ending December 31, (in thousands) 2023 (remainder) $ — 2024 476 2025 1,173 2026 1,207 2027 1,244 Thereafter 5,359 Total undiscounted lease payments $ 9,459 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Total Stock-Based Compensation | Total stock-based compensation was as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) Cost of product revenue $ 1,321 $ 388 $ 3,649 $ 1,559 Research and development 4,559 2,695 12,230 7,409 Sales and marketing 7,117 4,901 20,176 13,241 General and administrative 5,413 3,748 15,368 10,038 Total stock-based compensation $ 18,410 $ 11,732 $ 51,423 $ 32,247 |
Schedule of Option Activity under 2009 Plan and 2019 Plan | Stock Options Option activity under the 2009 Plan and 2019 Plan is set forth below: Number Weighted- Weighted- Aggregate (in years) (in thousands) Balance, December 31, 2022 1,122,009 $ 5.87 4.60 $ 224,115 Options exercised (191,956) 6.15 Options cancelled (6,133) 2.41 Balance, September 30, 2023 923,920 $ 5.83 3.86 $ 213,029 Vested and exercisable, 923,920 $ 5.83 3.86 $ 213,029 Vested and expected to vest, 923,920 $ 5.83 3.86 $ 213,029 |
Schedule of RSU Activity under 2019 Plan | RSU and PRSU activity under the 2019 Plan is set forth below. Grant activity for all PRSUs is disclosed at target (100%): Restricted Stock Units Performance-Based Restricted Stock Units Number Weighted- Number Weighted- Balance, December 31, 2022 1,125,991 $ 127.39 38,797 $ 165.74 RSUs and PRSUs granted 489,260 217.33 29,473 191.36 RSUs and PRSUs forfeited (68,149) 161.93 (713) 265.17 RSUs and PRSUs vested (416,063) 110.39 (210) 266.73 Balance, September 30, 2023 1,131,039 170.46 67,347 175.58 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Net Income (Loss) Per Share | The components of basic and diluted net income per share were as follows (in thousands, except share and per share amounts): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator: Net income $ 34,986 $ 35,003 $ 102,973 $ 75,085 Denominator: Basic: Weighted average number of common shares outstanding - basic 36,797,072 36,003,931 36,630,575 35,807,264 Diluted: Weighted average number of common shares outstanding - basic 36,797,072 36,003,931 36,630,575 35,807,264 Dilutive effect of outstanding common stock options 934,847 1,250,350 988,941 1,348,908 Dilutive effect of restricted stock units 460,615 690,128 560,371 655,016 Dilutive effect of common stock pursuant to employee stock purchase plan 4,246 3,640 4,412 1,919 Weighted average number of common shares outstanding - diluted 38,196,780 37,948,049 38,184,299 37,813,107 Net income per share: Basic $ 0.95 $ 0.97 $ 2.81 $ 2.10 Diluted $ 0.92 $ 0.92 $ 2.70 $ 1.99 |
Summary of Outstanding Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Net Loss Per Share | All restricted shares, employee stock purchase plan options, and capped call options for the three and nine months ended September 30, 2023 and 2022 have been excluded from the calculation of the diluted net income per share, because all such securities are anti-dilutive for all periods presented. The total number of potential shares excluded from the calculation of diluted net income per share are as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 Restricted stock units 115,361 17,318 96,548 5,966 Employee stock purchase plan — 3,806 — 1,100 Capped call options 333,409 — 333,409 — Total 448,770 21,124 429,957 7,066 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Disaggregation of Revenue [Abstract] | |
Schedule of Product Revenue Based on Product Line and Location | The following table represents the Company’s product revenue based on product line: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) Coronary $ 136,325 $ 93,043 $ 375,977 $ 251,208 Peripheral 47,835 37,045 146,227 91,783 Reducer 1,288 — 2,519 — Other 572 1,242 2,528 2,716 Product revenue $ 186,020 $ 131,330 $ 527,251 $ 345,707 The following table represents the Company’s product revenue based on the location to which the product is shipped: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) United States $ 146,899 $ 110,502 $ 423,463 $ 289,117 Europe 19,352 11,762 54,501 37,223 All other countries 19,769 9,066 49,287 19,367 Product revenue $ 186,020 $ 131,330 $ 527,251 $ 345,707 |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the purchase price consideration for Neovasc: Purchase Price (in thousands) Cash transferred $ 112,129 Contingent consideration liability 9,307 Total $ 121,436 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of assets acquired and liabilities assumed through the Company ’ s Neovasc acquisition at the acquisition date based on management’s best estimates and assumptions as of the reporting date: Purchase Price (in thousands) Cash and cash equivalents $ 17,273 Accounts receivable, net 1,345 Inventory 918 Prepaid expenses and other current assets 841 Operating lease right-of-use assets 310 Property and equipment 156 Intangible assets 95,500 Other assets 502 Total identifiable assets acquired 116,845 Accounts payable 3,334 Accrued liabilities 4,082 Lease liability, current portion 253 Lease liability, noncurrent portion 64 Deferred tax liabilities 11,185 Other liabilities 16,280 Total liabilities assumed 35,198 Net identifiable assets acquired 81,647 Goodwill 39,789 Total purchase price $ 121,436 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The fair value of the intangible assets acquired as of the acquisition date and, the method used to value these assets as well as the estimated economic lives for amortizable intangible assets were as follows (in thousands, except estimated useful life which is in years): Fair value Estimated useful life Valuation method Customer relationships $ 2,900 5 years Avoided cost / lost profit Developed technology 61,200 20 years Multi-period excess earnings In-process research and development 31,400 N/A Multi-period excess earnings Total $ 95,500 |
Business Acquisition, Pro Forma Information | Supplemental Unaudited Pro Forma Information The following are the supplemental condensed consolidated financial results of the Company and Neovasc on an unaudited pro forma basis, as if the Neovasc acquisition had been consummated on January 1, 2022. Three Months Ended Nine Months Ended 2023 2022 2023 2022 (in thousands) (in thousands) Net revenue $ 186,020 $ 132,253 $ 528,720 $ 348,059 Net income $ 30,072 $ 27,287 $ 69,010 $ 45,815 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amounts of goodwill were as follows: (in thousands) Balance as of December 31, 2022 $ — Goodwill acquired - Neovasc 39,789 Goodwill deductions or impairment — Balance as of September 30, 2023 $ 39,789 |
Schedule of Finite-Lived Intangible Assets | The following table presents details of the acquired intangible assets as of September 30, 2023 (in thousands, except useful life and estimated remaining useful life which are in years): Gross Carrying Amount Accumulated Impairment Intangible Assets, Net Customer relationships $ 2,900 $ 275 $ — $ 2,625 5 years 4.5 years Developed technology 61,200 1,450 — 59,750 20 years 19.5 years In-process research and development 31,400 — — 31,400 N/A N/A Total $ 95,500 $ 1,725 $ — $ 93,775 19.3 years 18.8 years |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table summarizes the estimated future amortization expense of intangible assets with finite lives as of September 30, 2023: Years ending December 31, (in thousands) 2023 (remainder) $ 918 2024 3,640 2025 3,640 2026 3,640 2027 3,640 Thereafter 46,897 Total estimated future amortization expense $ 62,375 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash, cash equivalents and short-term investments | $ 917.3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | [1] | Sep. 30, 2022 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 498,108 | $ 156,586 | $ 127,779 | |
Restricted cash | 1,341 | 2,165 | ||
Total cash, cash equivalents, and restricted cash | $ 499,449 | $ 129,944 | ||
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Accounting Policies [Abstract] | ||
Notice period for cancellation of agreement | 30 days | |
Revenue recognized | $ 0 | $ 0 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years | 5 years |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 20 years | 20 years |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Apr. 11, 2023 | Dec. 31, 2022 |
Convertible Senior Notes Due 2028 | |||
Assets: | |||
Convertible Debt | $ 720,000 | ||
Neovasc Inc. | |||
Assets: | |||
Contingent consideration liability | $ 9,307 | ||
Recurring | |||
Assets: | |||
Total assets | 803,171 | $ 159,983 | |
Total liabilities | 729,307 | ||
Recurring | Contingent Consideration | |||
Assets: | |||
Obligations | 9,307 | ||
Recurring | Borrowings | |||
Assets: | |||
Obligations | 720,000 | ||
Recurring | Level 1 | |||
Assets: | |||
Total assets | 746,106 | 123,707 | |
Total liabilities | 0 | ||
Recurring | Level 1 | Contingent Consideration | |||
Assets: | |||
Obligations | 0 | ||
Recurring | Level 1 | Borrowings | |||
Assets: | |||
Obligations | 0 | ||
Recurring | Level 2 | |||
Assets: | |||
Total assets | 57,065 | 36,276 | |
Total liabilities | 720,000 | ||
Recurring | Level 2 | Contingent Consideration | |||
Assets: | |||
Obligations | 0 | ||
Recurring | Level 2 | Borrowings | |||
Assets: | |||
Obligations | 720,000 | ||
Recurring | Level 3 | |||
Assets: | |||
Total assets | 0 | 0 | |
Total liabilities | 9,307 | ||
Recurring | Level 3 | Contingent Consideration | |||
Assets: | |||
Obligations | 9,307 | ||
Recurring | Level 3 | Borrowings | |||
Assets: | |||
Obligations | 0 | ||
Recurring | U.S. Treasury securities | |||
Assets: | |||
Total assets | 362,160 | 111,631 | |
Recurring | U.S. Treasury securities | Level 1 | |||
Assets: | |||
Total assets | 362,160 | 111,631 | |
Recurring | U.S. Treasury securities | Level 2 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | U.S. Treasury securities | Level 3 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | Money market funds | |||
Assets: | |||
Total assets | 383,946 | 12,076 | |
Recurring | Money market funds | Level 1 | |||
Assets: | |||
Total assets | 383,946 | 12,076 | |
Recurring | Money market funds | Level 2 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | Money market funds | Level 3 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | Commercial paper | |||
Assets: | |||
Total assets | 25,316 | 8,039 | |
Recurring | Commercial paper | Level 1 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | Commercial paper | Level 2 | |||
Assets: | |||
Total assets | 25,316 | 8,039 | |
Recurring | Commercial paper | Level 3 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | Corporate bonds | |||
Assets: | |||
Total assets | 12,202 | 18,808 | |
Recurring | Corporate bonds | Level 1 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | Corporate bonds | Level 2 | |||
Assets: | |||
Total assets | 12,202 | 18,808 | |
Recurring | Corporate bonds | Level 3 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | US Government Agencies Debt Securities | |||
Assets: | |||
Total assets | 13,790 | 9,429 | |
Recurring | US Government Agencies Debt Securities | Level 1 | |||
Assets: | |||
Total assets | 0 | 0 | |
Recurring | US Government Agencies Debt Securities | Level 2 | |||
Assets: | |||
Total assets | 13,790 | 9,429 | |
Recurring | US Government Agencies Debt Securities | Level 3 | |||
Assets: | |||
Total assets | 0 | $ 0 | |
Recurring | Asset-Backed Securities | |||
Assets: | |||
Total assets | 5,757 | ||
Recurring | Asset-Backed Securities | Level 1 | |||
Assets: | |||
Total assets | 0 | ||
Recurring | Asset-Backed Securities | Level 2 | |||
Assets: | |||
Total assets | 5,757 | ||
Recurring | Asset-Backed Securities | Level 3 | |||
Assets: | |||
Total assets | $ 0 |
Cash Equivalents and Short-Te_3
Cash Equivalents and Short-Term Investments - Summary of Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Cash And Cash Equivalents [Line Items] | |||
Cash equivalents and short-term investments, amortized cost basis | $ 803,368 | $ 161,142 | |
Unrealized Gains | 106 | 15 | |
Unrealized Losses | (303) | (1,174) | |
Cash equivalents and short-term investments, fair value | 803,171 | 159,983 | |
Cash equivalents | 383,946 | 12,076 | |
Short-term investments | 419,225 | 147,907 | [1] |
U.S. Treasury securities | |||
Cash And Cash Equivalents [Line Items] | |||
Short-term investments, amortized cost basis | 362,243 | 112,719 | |
Unrealized Gains | 32 | 3 | |
Unrealized Losses | (115) | (1,091) | |
Short-term investments, fair value | 362,160 | 111,631 | |
Money market funds | |||
Cash And Cash Equivalents [Line Items] | |||
Short-term investments, amortized cost basis | 383,910 | 12,076 | |
Unrealized Gains | 36 | 0 | |
Unrealized Losses | 0 | 0 | |
Short-term investments, fair value | 383,946 | 12,076 | |
Commercial paper | |||
Cash And Cash Equivalents [Line Items] | |||
Short-term investments, amortized cost basis | 25,391 | 8,039 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | (75) | 0 | |
Short-term investments, fair value | 25,316 | 8,039 | |
Corporate Bond Securities | |||
Cash And Cash Equivalents [Line Items] | |||
Short-term investments, amortized cost basis | 12,197 | 18,876 | |
Unrealized Gains | 32 | 8 | |
Unrealized Losses | (27) | (76) | |
Short-term investments, fair value | 12,202 | 18,808 | |
US Government Agencies Debt Securities | |||
Cash And Cash Equivalents [Line Items] | |||
Short-term investments, amortized cost basis | 13,866 | 9,432 | |
Unrealized Gains | 0 | 4 | |
Unrealized Losses | (76) | (7) | |
Short-term investments, fair value | 13,790 | $ 9,429 | |
Asset-Backed Securities | |||
Cash And Cash Equivalents [Line Items] | |||
Short-term investments, amortized cost basis | 5,761 | ||
Unrealized Gains | 6 | ||
Unrealized Losses | (10) | ||
Short-term investments, fair value | $ 5,757 | ||
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Cash Equivalents and Short-Te_4
Cash Equivalents and Short-Term Investments - Summary of Remaining Contractual Maturities for Available-for-sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Abstract] | ||
Money market funds | $ 383,946 | $ 12,076 |
One year or less | 409,382 | |
Greater than one year and less than two years | 9,843 | |
Total | $ 803,171 |
Cash Equivalents and Short-Te_5
Cash Equivalents and Short-Term Investments - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Abstract] | ||
Debt Securities, Available-for-Sale, Unrealized Loss Position | $ 63.8 | $ 123.8 |
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0.3 | $ 1.2 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 24,289 | $ 18,456 | |
Work in progress | 17,493 | 7,666 | |
Finished goods | 54,907 | 48,735 | |
Consigned inventory | 491 | 255 | |
Total inventory | $ 97,180 | $ 75,112 | [1] |
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |||
Employee compensation | $ 35,264 | $ 32,885 | |
Research and development costs | 7,943 | 4,007 | |
Asset purchases | 4,718 | 4,600 | |
Professional services | 6,970 | 4,044 | |
Excise, sales, income and other taxes | 6,033 | 4,036 | |
Other | 8,836 | 5,803 | |
Total accrued liabilities | $ 69,764 | $ 55,375 | [1] |
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 term | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Operating lease cost | $ | $ 1,223 | $ 1,168 | $ 3,651 | $ 3,451 | |
Operating Lease, Payments | $ | $ 1,400 | $ 1,000 | $ 4,100 | $ 2,100 | |
Operating lease, weighted average remaining lease term | 8 years 2 months 12 days | 8 years 2 months 12 days | |||
Operating lease, weighted average discount rate | 5.20% | 5.20% | |||
Three Zero Zero Three Bunker Hill Lane | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Number of Additional Five Year Term | term | 2 | ||||
Operating Lease Extended Duration | 5 years | ||||
Other Commitments [Line Items] | |||||
Number of Additional Five Year Term | term | 2 | ||||
Operating Lease Extended Duration | 5 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 1,223 | $ 1,168 | $ 3,651 | $ 3,451 |
Variable lease cost | 366 | 453 | 955 | 696 |
Total lease cost | $ 1,589 | $ 1,621 | $ 4,606 | $ 4,147 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Minimum Future Rental Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | [1] |
Operating Lease Liabilities Payments Due [Abstract] | |||
2023 (remainder of year) | $ 1,383 | ||
2024 | 5,517 | ||
2025 | 5,526 | ||
2026 | 5,690 | ||
2027 | 5,832 | ||
Thereafter | 24,959 | ||
Total minimum lease payments | 48,907 | ||
Less: imputed interest | (9,312) | ||
Lessee, Operating Lease, Lease Incentive | (5,668) | ||
Total lease liability | 33,927 | ||
Lease liability, current portion | (1,569) | $ (1,278) | |
Lease liability, noncurrent portion | $ 32,358 | $ 34,928 | |
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 (remainder of year) | $ 0 |
2024 | 476 |
2025 | 1,173 |
2026 | 1,207 |
2027 | 1,244 |
Thereafter | 5,359 |
Total undiscounted lease payments | $ 9,459 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Aug. 29, 2023 | Apr. 26, 2023 | Mar. 16, 2023 | Oct. 19, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||||||||
Interest Expense | $ 2,509,000 | $ 316,000 | $ 3,955,000 | $ 917,000 | ||||
Gain (Loss) on Extinguishment of Debt | $ 700,000 | $ (710,000) | 0 | |||||
Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 175,000,000 | |||||||
Incremental revolving commitments, maximum | 100,000,000 | |||||||
Proceeds of supplemental term loan | $ 80,000,000 | $ 25,000,000 | ||||||
Line of Credit Facility, Interest Rate at Period End | 7.30% | 7.30% | ||||||
Interest Expense | $ 400,000 | $ 300,000 | $ 1,800,000 | $ 900,000 | ||||
Secured Overnight Financing Rate (SOFR) | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate basis | 1% | |||||||
Fed Funds Effective Rate Overnight Index Swap Rate | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate basis | 0.50% | |||||||
Minimum | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate basis | 0% | |||||||
Minimum | Base Rate | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate basis | 0% | |||||||
Minimum | Secured Overnight Financing Rate (SOFR) | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate basis | 1% | |||||||
Maximum | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate basis | 2% | |||||||
Maximum | Base Rate | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate basis | 1% | |||||||
Maximum | Secured Overnight Financing Rate (SOFR) | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate basis | 2% | |||||||
Loan and Security Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt extinguished | $ 80,000,000 | |||||||
Repayments of Debt | $ 25,000,000 |
Convertible Debt (Details)
Convertible Debt (Details) | 3 Months Ended | 9 Months Ended | ||||
Aug. 15, 2023 USD ($) d $ / shares shares | Aug. 10, 2023 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||
Interest Expense | $ | $ 2,509,000 | $ 316,000 | $ 3,955,000 | $ 917,000 | ||
Convertible Senior Notes Due 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate Terms | The Notes bear interest at a rate of 1.0% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130% | |||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 3.4595 | |||||
Debt Conversion, Converted Instrument, Maximum Shares Issued | shares | 4.4974 | |||||
Debt Instrument, Redemption Price, Percentage | 100% | |||||
Interest Expense | $ | $ 1,400,000 | |||||
Convertible Senior Notes Due 2028 | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt amount | $ | $ 100,000,000 | |||||
Debt Instrument, Interest Rate During Period | 1% | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | d | 30 | |||||
Debt Instrument, Convertible, Threshold Trading Days | d | 20 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 289.06 | |||||
Debt Conversion, Converted Instrument, Rate | 30% | |||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 222.35 | |||||
Debt Issuance Costs, Gross | $ | $ 19,500,000 | |||||
Debt interest rate | 1.50% | |||||
Debt Instrument, Issued, Principal | $ | $ 750,000,000 | |||||
Convertible Senior Notes Due 2028 | Convertible Debt | Debt Instrument, Period One | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | d | 30 | |||||
Debt Instrument, Convertible, Threshold Trading Days | d | 20 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130% | |||||
Convertible Senior Notes Due 2028 | Convertible Debt | Debt Instrument, Period Two | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | d | 5 | |||||
Debt Instrument, Convertible, Threshold Trading Days | d | 5 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 98% | |||||
Call Option | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 222.35 | |||||
Share Price | $ / shares | $ 444.70 | |||||
Premium Recognized On Capped Call Transactions | $ / shares | 1 | |||||
Purchases Of Capped Calls Related To Convertible Senior Notes | $ | $ 96,400,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Total Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 18,410 | $ 11,732 | $ 51,423 | $ 32,247 |
Cost of product revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 1,321 | 388 | 3,649 | 1,559 |
Research and development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 4,559 | 2,695 | 12,230 | 7,409 |
Sales and marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 7,117 | 4,901 | 20,176 | 13,241 |
General and administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 5,413 | $ 3,748 | $ 15,368 | $ 10,038 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2019 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 06, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based compensation expenses capitalized amount | $ 100 | $ 700 | $ 400 | $ 1,500 | ||
Common stock reserved for issuance (in shares) | 2,000,430 | |||||
Maximum period of automatic annual increase in common stock reserved for issuance | 10 years | |||||
Automatic annual increase in common stock reserved for issuance | 3% | |||||
Shares available for issuance (in shares) | 3,617,756 | 3,617,756 | ||||
Stock-based compensation expense | $ 18,410 | 11,732 | $ 51,423 | 32,247 | ||
Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Employee Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock reserved for issuance (in shares) | 300,650 | |||||
Shares available for issuance (in shares) | 1,521,021 | 1,521,021 | ||||
Purchase shares of common stock, price per share, percentage of fair market value | 85% | |||||
Stock-based compensation expense | $ 600 | $ 800 | $ 2,500 | $ 1,600 | ||
Performance-Based Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting percentage | 100% | |||||
Performance-Based Restricted Stock Units | Minimum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 2 years | |||||
Vesting percentage | 0% | |||||
Performance-Based Restricted Stock Units | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Vesting percentage | 200% |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Shares | |||
Balance beginning of period (in shares) | 1,122,009,000 | 1,122,009,000 | |
Options exercised (in shares) | (191,956,000) | ||
Options cancelled (in shares) | (6,133,000) | ||
Balance end of period (in shares) | 923,920,000 | ||
Vested and exercisable shares (in shares) | 923,920,000 | ||
Vested and expected to vest shares (in shares) | 923,920,000 | ||
Weighted- Average Exercise Price Per Share | |||
Beginning balance of period (USD per share) | $ 5,870 | $ 5,870 | |
Options exercised (USD per share) | 6,150 | ||
Options cancelled (USD per share) | 2,410 | ||
Ending balance of period (USD per share) | 5,830 | ||
Vested and exercisable shares (USD per share) | 5,830 | ||
Vested and expected to vest shares (USD per share) | $ 5,830 | ||
Weighted- Average Remaining Term | |||
Balance (USD per share) | 4 years 7 months 6 days | 3 years 10 months 9 days | |
Vested and exercisable, September 30, 2023 | 3 years 10 months 9 days | ||
Vested and expected to vest, September 30, 2023 | 3 years 10 months 9 days | ||
Aggregate Intrinsic Value | |||
Balance | $ 213,029 | $ 224,115 | |
Vested and exercisable, September 30, 2023 | 213,029 | ||
Vested and expected to vest, September 30, 2023 | $ 213,029 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of RSU Activity (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Restricted Stock Units | |
Number of Shares | |
Beginning balance of period (in shares) | shares | 1,125,991,000 |
RSUs granted (in shares) | shares | 489,260,000 |
RSUs forfeited (in shares) | shares | (68,149,000) |
RSUs vested (in shares) | shares | (416,063,000) |
Ending balance of period (in shares) | shares | 1,131,039,000 |
Weighted-Average Grant Date Fair Value Per Share | |
Beginning balance of period (USD per share) | $ / shares | $ 127,390 |
RSUs granted (USD per share) | $ / shares | 217,330 |
RSUs forfeited (USD per share) | $ / shares | 161,930 |
RSUs vested (USD per share) | $ / shares | 110,390 |
Ending balance of period (USD per share) | $ / shares | $ 170,460 |
Performance-Based Restricted Stock Units | |
Number of Shares | |
Beginning balance of period (in shares) | shares | 38,797,000 |
RSUs granted (in shares) | shares | 29,473,000 |
RSUs forfeited (in shares) | shares | (713,000) |
RSUs vested (in shares) | shares | (210,000) |
Ending balance of period (in shares) | shares | 67,347,000 |
Weighted-Average Grant Date Fair Value Per Share | |
Beginning balance of period (USD per share) | $ / shares | $ 165,740 |
RSUs granted (USD per share) | $ / shares | 191,360 |
RSUs forfeited (USD per share) | $ / shares | 265,170 |
RSUs vested (USD per share) | $ / shares | 266,730 |
Ending balance of period (USD per share) | $ / shares | $ 175,580 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Components of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net income (loss) | $ 34,986 | $ 35,003 | $ 102,973 | $ 75,085 |
Denominator: | ||||
Basic (in shares) | 36,797,072 | 36,003,931 | 36,630,575 | 35,807,264 |
Diluted (in shares) | 38,196,780 | 37,948,049 | 38,184,299 | 37,813,107 |
Net income per share: | ||||
Basic (USD per share) | $ 0.95 | $ 0.97 | $ 2.81 | $ 2.10 |
Diluted (USD per share) | $ 0.92 | $ 0.92 | $ 2.70 | $ 1.99 |
Restricted Stock Units | ||||
Denominator: | ||||
Dilutive effect of share-based payment arrangements (in shares) | 460,615 | 690,128 | 560,371 | 655,016 |
Employee Stock | ||||
Denominator: | ||||
Dilutive effect of share-based payment arrangements (in shares) | 4,246 | 3,640 | 4,412 | 1,919 |
Stock Options | ||||
Denominator: | ||||
Dilutive effect of share-based payment arrangements (in shares) | 934,847 | 1,250,350 | 988,941 | 1,348,908 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Outstanding Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares) | 448,770 | 21,124 | 429,957 | 7,066 |
Restricted Stock Units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares) | 115,361 | 17,318 | 96,548 | 5,966 |
Employee Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares) | 0 | 3,806 | 0 | 1,100 |
Capped Call Securities | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from calculation of diluted net loss per share (in shares) | 333,409 | 0 | 333,409 | 0 |
Revenue - Schedule of Product R
Revenue - Schedule of Product Revenue Based on Product Line (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | $ 186,020 | $ 131,330 | $ 527,251 | $ 345,707 |
Coronary | ||||
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | 136,325 | 93,043 | 375,977 | 251,208 |
Peripheral | ||||
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | 47,835 | 37,045 | 146,227 | 91,783 |
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | 572 | 1,242 | 2,528 | 2,716 |
Reducer | ||||
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | $ 1,288 | $ 0 | $ 2,519 | $ 0 |
Revenue - Schedule of Product_2
Revenue - Schedule of Product Revenue Based on Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | $ 186,020 | $ 131,330 | $ 527,251 | $ 345,707 |
United States | ||||
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | 146,899 | 110,502 | 423,463 | 289,117 |
Europe | ||||
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | 19,352 | 11,762 | 54,501 | 37,223 |
All other countries | ||||
Disaggregation Of Revenue [Line Items] | ||||
Product revenue | $ 19,769 | $ 9,066 | $ 49,287 | $ 19,367 |
Equity Method Investments - Add
Equity Method Investments - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Mar. 19, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | [1] | |
Schedule Of Equity Method Investments [Line Items] | |||||||
Equity method investment | $ 1,810 | $ 1,810 | $ 3,512 | ||||
(Loss) income from equity method investment | (733) | $ 97 | (1,702) | $ (1,414) | |||
Related party contract liability, noncurrent portion | 12,273 | 12,273 | $ 12,273 | ||||
Joint Venture | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Percentage of equity stake received | 45% | ||||||
Related party transaction. transaction price | $ 12,300 | ||||||
Joint Venture | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Related party contract liability, noncurrent portion | 12,300 | 12,300 | |||||
JV Agreement with Genesis MedTech | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Equity method investment | $ 1,800 | $ 1,800 | |||||
JV Agreement with Genesis MedTech | Share Subscription Agreement | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Ordinary shares issued (in shares) | 54,900 | ||||||
Equity percentage | 55% | ||||||
Cash contribution from exchange of equity | $ 15,000 | ||||||
Percentage of cash contribution received from exchange of equity upon signing of agreement | 50% | ||||||
Percentage of cash contribution receivable from exchange of equity within one year | 50% | ||||||
JV Agreement with Genesis MedTech | License Agreement | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Ordinary shares issued (in shares) | 45,000 | ||||||
Equity percentage | 45% | ||||||
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 10,094 | $ 118 | $ 15,848 | $ 1,089 |
Federal statutory income tax rate | 22.15% | 0.34% | 13.31% | 1.43% |
Business Combination - Narrativ
Business Combination - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Apr. 11, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | [1] | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 39,789 | $ 39,789 | $ 0 | ||
Neovasc Inc. | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Share Price | $ 27.25 | ||||
Business Combination, Acquisition Related Costs | 700 | 5,600 | |||
Business Combination, Consideration Transferred | $ 121,436 | ||||
Cash transferred | 112,129 | ||||
Contingent consideration liability | 9,307 | ||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 47,000 | 47,000 | |||
Goodwill | 39,789 | 39,789 | 39,789 | ||
Deferred tax liabilities | $ 11,185 | $ 11,200 | $ 11,200 | ||
Neovasc Inc. | June 30, 2026 Milestone | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Contingent Consideration, Per Share | $ 12 | ||||
Neovasc Inc. | December 31, 2026 Milestone | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Contingent Consideration, Per Share | 8 | ||||
Neovasc Inc. | December 31, 2027 Milestone | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Contingent Consideration, Per Share | $ 4 | ||||
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Business Combination - Calculat
Business Combination - Calculation of Consideration Transferred (Details) - Neovasc Inc. $ in Thousands | Apr. 11, 2023 USD ($) |
Business Acquisition [Line Items] | |
Cash transferred | $ 112,129 |
Contingent consideration liability | 9,307 |
Business Combination, Consideration Transferred | $ 121,436 |
Business Combination - Assets A
Business Combination - Assets Acquired, Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Apr. 11, 2023 | Dec. 31, 2022 | [1] |
Business Acquisition [Line Items] | ||||
Goodwill | $ 39,789 | $ 0 | ||
Neovasc Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 17,273 | |||
Accounts receivable, net | 1,345 | |||
Inventory | 918 | |||
Prepaid expenses and other current assets | 841 | |||
Operating lease right-of-use assets | 310 | |||
Property and equipment | 156 | |||
Intangible assets | 95,500 | 95,500 | ||
Other assets | 502 | |||
Total identifiable assets acquired | 116,845 | |||
Accounts payable | 3,334 | |||
Accrued liabilities | 4,082 | |||
Lease liability, current portion | 253 | |||
Lease liability, noncurrent portion | 64 | |||
Deferred tax liabilities | 11,200 | 11,185 | ||
Other liabilities | 16,280 | |||
Total liabilities assumed | 35,198 | |||
Net identifiable assets acquired | 81,647 | |||
Goodwill | $ 39,789 | 39,789 | ||
Total purchase price | $ 121,436 | |||
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Business Combination - Finite-L
Business Combination - Finite-Lived Intangible Assets (Details) - Neovasc Inc. - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Apr. 11, 2023 | |
Business Acquisition [Line Items] | ||
Intangible assets | $ 95,500 | $ 95,500 |
Customer Relationships | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangibles | $ 2,900 | |
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 5 years | |
Developed technology | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangibles | $ 61,200 | |
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 20 years | |
In-process research and development | ||
Business Acquisition [Line Items] | ||
Indefinite-Lived Intangible Assets | $ 31,400 |
Business Combination - Pro Form
Business Combination - Pro Forma Information (Details) - Neovasc Inc. - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Net revenue | $ 186,020 | $ 132,253 | $ 528,720 | $ 348,059 |
Net income | $ 30,072 | $ 27,287 | $ 69,010 | $ 45,815 |
Goodwill and intangible asset_2
Goodwill and intangible assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) | ||
Goodwill [Roll Forward] | ||
Balance as of December 31, 2022 | $ 0 | [1] |
Goodwill acquired - Neovasc | 39,789 | |
Goodwill deductions or impairment | 0 | |
Balance as of September 30, 2023 | $ 39,789 | |
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Goodwill and intangible asset_3
Goodwill and intangible assets - Schedule of Finite and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | [1] | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net | $ 93,775 | $ 0 | ||
Neovasc Inc. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangibles, gross carrying amount | 95,500 | |||
Accumulated Amortization | 1,725 | |||
Impairment | $ 0 | |||
Intangible Assets, Net | 62,375 | |||
Intangible assets, net | $ 93,775 | |||
Useful Life | 19 years 3 months 18 days | |||
Estimated Remaining Useful Life | 18 years 9 months 18 days | |||
In-process research and development | Neovasc Inc. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets | $ 31,400 | |||
Customer relationships | Neovasc Inc. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 2,900 | |||
Accumulated Amortization | 275 | |||
Impairment | 0 | |||
Intangible Assets, Net | $ 2,625 | |||
Useful Life | 5 years | |||
Estimated Remaining Useful Life | 4 years 6 months | |||
Developed technology | Neovasc Inc. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 61,200 | |||
Accumulated Amortization | 1,450 | |||
Impairment | $ 0 | |||
Intangible Assets, Net | $ 59,750 | |||
Useful Life | 20 years | |||
Estimated Remaining Useful Life | 19 years 6 months | |||
[1]The condensed consolidated balance sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. |
Goodwill and intangible asset_4
Goodwill and intangible assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Neovasc Inc. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 0.9 | $ 1.7 |
Goodwill and intangible asset_5
Goodwill and intangible assets - Future Amortization Expense (Details) - Neovasc Inc. $ in Thousands | Sep. 30, 2023 USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2023 (remainder) | $ 918 |
2024 | 3,640 |
2025 | 3,640 |
2026 | 3,640 |
2027 | 3,640 |
Thereafter | 46,897 |
Intangible Assets, Net | $ 62,375 |