ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 04-3462475 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ¨ | Accelerated filer | x | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
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March 31, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 13,273 | $ | 19,459 | |||
Accounts receivable, net of allowance for doubtful accounts | 8,449 | 6,621 | |||||
Other current assets | 1,823 | 2,118 | |||||
Total current assets | 23,545 | 28,198 | |||||
FIXED ASSETS, net of accumulated depreciation | 5,870 | 6,069 | |||||
OTHER ASSETS | |||||||
Restricted cash | 300 | 300 | |||||
Patents and other intangible assets, net of accumulated amortization | 1,679 | 1,727 | |||||
Investment in joint venture | 329 | 341 | |||||
Goodwill | 12,029 | 12,029 | |||||
Other | 217 | 220 | |||||
Total other assets | 14,554 | 14,617 | |||||
Total Assets | $ | 43,969 | $ | 48,884 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 7,775 | $ | 7,579 | |||
Obligations under capital leases, current portion | 106 | 122 | |||||
Deferred revenue | 630 | 831 | |||||
Bank term note, current portion | 1,833 | 1,333 | |||||
Total current liabilities | 10,344 | 9,865 | |||||
Obligations under capital leases | 251 | 276 | |||||
Deferred rent payable and other | 309 | 315 | |||||
Warrant liability | — | 17 | |||||
Deferred revenue, long-term | 622 | 752 | |||||
Bank term note | 4,146 | 4,642 | |||||
Total liabilities | 15,672 | 15,867 | |||||
STOCKHOLDERS’ EQUITY | |||||||
Preferred stock, authorized 9,764 shares, $0.0001 par value, none issued | — | — | |||||
Common stock, authorized 100,000 shares, $0.0001 par value, 13,652 and 13,652 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 1 | 1 | |||||
Additional paid-in capital | 131,701 | 131,167 | |||||
Accumulated (deficit) | (103,405 | ) | (98,151 | ) | |||
Total Stockholders’ Equity | 28,297 | 33,017 | |||||
Total Liabilities and Stockholders’ Equity | $ | 43,969 | $ | 48,884 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Revenue | $ | 6,068 | $ | 4,370 | |||
Cost of revenues | 4,103 | 3,141 | |||||
Gross profit | 1,965 | 1,229 | |||||
Operating expenses: | |||||||
Research and development | 1,532 | 1,278 | |||||
General and administrative | 4,318 | 2,987 | |||||
Sales and marketing | 1,298 | 1,116 | |||||
Total operating expenses | 7,148 | 5,381 | |||||
Loss from operations | (5,183 | ) | (4,152 | ) | |||
Other income (expense): | |||||||
Interest expense | (126 | ) | (34 | ) | |||
Interest income | 4 | 13 | |||||
Change in fair value of acquisition note payable | 34 | (90 | ) | ||||
Change in fair value of warrant liability | 17 | (15 | ) | ||||
Total other (expense) | (71 | ) | (126 | ) | |||
Net (loss) | $ | (5,254 | ) | $ | (4,278 | ) | |
Basic net (loss) per share | $ | (0.39 | ) | $ | (0.44 | ) | |
Diluted net (loss) per share | $ | (0.39 | ) | $ | (0.44 | ) | |
Basic Weighted-Average Shares Outstanding | 13,547 | 9,704 | |||||
Diluted Weighted-Average Shares Outstanding | 13,547 | 9,704 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net (loss) | $ | (5,254 | ) | $ | (4,278 | ) | |
Adjustments to reconcile net (loss) to net cash (used in) operating activities: | |||||||
Depreciation | 518 | 348 | |||||
Amortization | 87 | 9 | |||||
Provision for bad debts | — | 221 | |||||
Stock-based compensation | 534 | 696 | |||||
Change in fair value of acquisition note payable | (34 | ) | 90 | ||||
Change in fair value of Gentris contingent consideration | — | (162 | ) | ||||
Change in fair value of warrant liability | (17 | ) | 15 | ||||
Amortization of debt issuance costs | 4 | — | |||||
Loss in equity method investment | 12 | 207 | |||||
Changes in: | |||||||
Accounts receivable | (1,828 | ) | (17 | ) | |||
Other current assets | 295 | 23 | |||||
Other non-current assets | 3 | — | |||||
Accounts payable, accrued expenses and deferred revenue | (101 | ) | (239 | ) | |||
Deferred rent and other | (6 | ) | (18 | ) | |||
Net cash (used in) operating activities | (5,787 | ) | (3,105 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchase of fixed assets | (319 | ) | (83 | ) | |||
Patent costs | (39 | ) | (40 | ) | |||
Net cash (used in) investing activities | (358 | ) | (123 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Principal payments on capital lease obligations | (41 | ) | (14 | ) | |||
Net cash (used in) financing activities | (41 | ) | (14 | ) | |||
Net (decrease) in cash and cash equivalents | (6,186 | ) | (3,242 | ) | |||
CASH AND CASH EQUIVALENTS | |||||||
Beginning | 19,459 | 25,554 | |||||
Ending | $ | 13,273 | $ | 22,312 | |||
SUPPLEMENTAL CASH FLOW DISCLOSURE | |||||||
Cash paid for interest | $ | 97 | $ | 34 |
Three Months Ended March 31, | |||
2015 | |||
Revenue | $ | 8,161 | |
Net loss | (7,919 | ) | |
Basic net loss per share | $ | (0.75 | ) |
Diluted net loss per share | (0.75 | ) |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Biopharma Services | $ | 3,350 | $ | 3,331 | |||
Clinical Services | 2,456 | 873 | |||||
Discovery Services | 262 | 166 | |||||
$ | 6,068 | $ | 4,370 |
March 31, 2016 | December 31, 2015 | ||||||
Biopharma Services | $ | 3,334 | $ | 3,238 | |||
Clinical Services | 5,432 | 3,733 | |||||
Discovery Services | 347 | 314 | |||||
Allowance for doubtful accounts | (664 | ) | (664 | ) | |||
$ | 8,449 | $ | 6,621 |
Allowance for Doubtful Accounts (in thousands) | |||
Balance, December 31, 2015 | $ | 664 | |
Additions to allowance for doubtful accounts | — | ||
Balance, March 31, 2016 | $ | 664 |
Three Months Ended March 31, | |||
2016 | 2015 | ||
Medicare | 15% | 6% | |
Other insurers | 21% | 7% | |
Other healthcare facilities | 4% | 7% | |
40% | 20% |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Numerator: | |||||||
Net (loss) for basic earnings per share | $ | (5,254 | ) | $ | (4,278 | ) | |
Change in fair value of warrant liability | 17 | — | |||||
Net (loss) for diluted earnings per share | $ | (5,271 | ) | $ | (4,278 | ) | |
Denominator: | |||||||
Weighted-average basic common shares outstanding | 13,547 | 9,704 | |||||
Assumed conversion of dilutive securities: | |||||||
Common stock purchase warrants | — | — | |||||
Potentially dilutive common shares | — | — | |||||
Denominator for diluted earnings per share – adjusted weighted-average shares | 13,547 | 9,704 | |||||
Basic net (loss) per share | $ | (0.39 | ) | $ | (0.44 | ) | |
Diluted net (loss) per share | $ | (0.39 | ) | $ | (0.44 | ) |
Three Months Ended March 31, | |||||
2016 | 2015 | ||||
Common stock purchase warrants | 4,362 | 1,136 | |||
Stock options | 1,928 | 1,888 | |||
Restricted shares of common stock | 98 | 122 | |||
6,388 | 3,146 |
March 31, 2016 | December 31, 2015 | ||||||
Term Note, principal balance | $ | 6,000 | $ | 6,000 | |||
Less unamortized debt issuance costs | 21 | 25 | |||||
Term Note, net | 5,979 | 5,975 | |||||
Less current maturities | 1,833 | 1,333 | |||||
Long-term portion | $ | 4,146 | $ | 4,642 | |||
Options Outstanding | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||
Number of Shares | Weighted- Average Exercise Price | |||||||||||
Outstanding January 1, 2016 | 1,961 | $ | 10.55 | 7.68 | $ | — | ||||||
Canceled or expired | (33 | ) | 9.91 | |||||||||
Outstanding March 31, 2016 | 1,928 | $ | 10.56 | 7.38 | $ | — | ||||||
Exercisable March 31, 2016 | 1,081 | $ | 10.34 | 6.52 | $ | — |
Three Months Ended | |
March 31, 2015 | |
Volatility | 68.98% |
Risk free interest rate | 1.70% |
Dividend yield | 0.00% |
Term (years) | 6.31 |
Weighted-average fair value of options granted during the period | 5.83 |
Three Months Ended March 31, | ||||
2016 | 2015 | |||
Volatility | 75.92 | % | 70.50% | |
Risk free interest rate | 1.56 | % | 1.88% | |
Dividend yield | 0.00 | % | 0.00% | |
Term (years) | 8.14 | 9.09 |
Non-vested Restricted Stock Awards | ||||||
Number of Shares (in thousands) | Weighted-Average Grant Date Fair Value | |||||
Non-vested at January 1, 2016 | 121 | $ | 8.25 | |||
Vested | (23 | ) | 10.18 | |||
Non-vested at March 31, 2016 | 98 | $ | 7.80 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cost of revenues | $ | 69 | $ | 49 | |||
Research and development | 50 | 95 | |||||
General and administrative | 387 | 521 | |||||
Sales and marketing | 28 | 31 | |||||
Total stock-based compensation | $ | 534 | $ | 696 |
Issued With / For | Exercise Price | Warrants Outstanding January 1, 2016 | 2016 Warrants Expired | Warrants Outstanding March 31, 2016 | ||||||||
Non-Derivative Warrants: | ||||||||||||
Financing | $ | 10.00 | 243 | — | 243 | |||||||
Financing | 15.00 | 436 | — | 436 | ||||||||
Debt guarantee | 15.00 | 233 | — | 233 | ||||||||
Consulting | 10.00 | 10 | (10 | ) | — | |||||||
2015 Offering | 5.00 | 3,450 | — | 3,450 | ||||||||
Total non-derivative warrants | $ | 6.81 | B | 4,372 | (10 | ) | 4,362 | |||||
Derivative Warrants: | ||||||||||||
Financing | 4.00 | A | 60 | (60 | ) | — | ||||||
Total derivative warrants | — | B | 60 | (60 | ) | — | ||||||
Total | $ | 6.81 | B | 4,432 | (70 | ) | 4,362 |
A | These warrants were subject to fair value accounting and contained an exercise price adjustment feature. |
B | Weighted-average exercise prices are as of March 31, 2016. |
March 31, 2016 | |||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Notes payable | $ | 232 | $ | — | $ | — | $ | 232 | |||||||
December 31, 2015 | |||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Warrant liability | $ | 17 | $ | — | $ | — | $ | 17 | |||||||
Notes payable | 266 | — | — | 266 | |||||||||||
$ | 283 | $ | — | $ | — | $ | 283 | ||||||||
Note Payable | Warrant | ||||||
to VenturEast | Liability | ||||||
Fair value at December 31, 2015 | $ | 266 | $ | 17 | |||
Change in fair value | (34 | ) | (17 | ) | |||
Fair value at March 31, 2016 | $ | 232 | $ | — |
Three Months Ended March 31, | Change | |||||||||||||
(dollars in thousands) | 2016 | 2015 | $ | % | ||||||||||
Revenue | $ | 6,068 | $ | 4,370 | $ | 1,698 | 39 | % | ||||||
Cost of revenues | 4,103 | 3,141 | 962 | 31 | % | |||||||||
Research and development expenses | 1,532 | 1,278 | 254 | 20 | % | |||||||||
General and administrative expenses | 4,318 | 2,987 | 1,331 | 45 | % | |||||||||
Sales and marketing expenses | 1,298 | 1,116 | 182 | 16 | % | |||||||||
Loss from operations | (5,183 | ) | (4,152 | ) | (1,031 | ) | 25 | % | ||||||
Interest income (expense) | (122 | ) | (21 | ) | (101 | ) | 481 | % | ||||||
Change in fair value of acquisition note payable | 34 | (90 | ) | 124 | (138 | )% | ||||||||
Change in fair value of warrant liability | 17 | (15 | ) | 32 | (213 | )% | ||||||||
Net (loss) | $ | (5,254 | ) | $ | (4,278 | ) | $ | (976 | ) | 23 | % |
Three Months Ended March 31, | Change | |||||||||||||||||||
2016 | 2015 | |||||||||||||||||||
(dollars in thousands) | $ | % | $ | % | $ | % | ||||||||||||||
Biopharma Services | $ | 3,350 | 55 | % | $ | 3,331 | 76 | % | $ | 19 | 1 | % | ||||||||
Clinical Services | 2,456 | 40 | % | 873 | 20 | % | 1,583 | 181 | % | |||||||||||
Discovery Services | 262 | 4 | % | 166 | 4 | % | 96 | 58 | % | |||||||||||
Total Revenue | $ | 6,068 | 100 | % | $ | 4,370 | 100 | % | $ | 1,698 | 39 | % |
Three Months Ended March 31, | |||||||
(in thousands) | 2016 | 2015 | |||||
Cash provided by (used in): | |||||||
Operating activities | $ | (5,787 | ) | $ | (3,105 | ) | |
Investing activities | (358 | ) | (123 | ) | |||
Financing activities | (41 | ) | (14 | ) | |||
Net (decrease) in cash and cash equivalents | $ | (6,186 | ) | $ | (3,242 | ) |
• | our ability to achieve revenue growth and profitability; |
• | the costs for funding the operations we recently acquired and our ability to successfully integrate those operations with and into our own; |
• | our ability to obtain approvals for our new diagnostic tests; |
• | our ability to execute on our marketing and sales strategy for our genomic tests and gain acceptance of our tests in the market; |
• | our ability to obtain adequate reimbursement from governmental and other third-party payors for our tests and services; |
• | the costs, scope, progress, results, timing and outcomes of the clinical trials of our diagnostic tests; |
• | the costs of operating and enhancing our laboratory facilities; |
• | our ability to succeed with our cost control initiative; |
• | the timing of and the costs involved in regulatory compliance, particularly if the regulations change; |
• | the costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities; |
• | our ability to manage the costs of manufacturing our tests; |
• | our rate of progress in, and cost of research and development activities associated with, tests in research and early development; |
• | the effect of competing technological and market developments; |
• | costs related to expansion; |
• | our ability to secure financing and the amount thereof; and |
• | other risks and uncertainties discussed in our annual report on Form 10-K for the year ended December 31, 2015 and other reports, as applicable, we file with the Securities and Exchange Commission. |
• | Revenue recognition; |
• | Accounts receivable and bad debts; and |
• | Stock-based compensation. |
• | our ability to achieve profitability by increasing sales of our laboratory tests and services and to continually develop and commercialize novel and innovative diagnostic tests and services for cancer patients; |
• | ability to raise additional capital to meet our liquidity needs; |
• | our ability clinically validate our pipeline of genomic microarray tests currently in development; |
• | our ability to execute on our marketing and sales strategy for our genomic tests and gain acceptance of our tests in the market; |
• | our ability to keep pace with rapidly advancing market and scientific developments; |
• | our ability to satisfy U.S. (including FDA) and international regulatory requirements with respect to our tests and services, many of which are new and still evolving; |
• | our ability to obtain reimbursement from governmental and other third-party payors for our tests and services; |
• | competition from clinical laboratory services companies, diagnostic tests currently available or new tests that may emerge; |
• | our ability to maintain our clinical collaborations and enter into new collaboration agreements with highly regarded organizations in the cancer field so that, among other things, we have access to thought leaders in the field and to a robust number of samples to validate our genomic tests; |
• | our ability to maintain our present customer base and obtain new customers; |
• | potential product liability or intellectual property infringement claims; |
• | our dependency on third-party manufacturers to supply or manufacture our products; |
• | our ability to attract and retain a sufficient number of scientists, clinicians, sales personnel and other key personnel with extensive experience in oncology, who are in short supply; |
• | our ability to obtain or maintain patents or other appropriate protection for the intellectual property in our proprietary tests and services; |
• | our dependency on the intellectual property licensed to us or possessed by third parties; |
• | our ability to expand internationally and launch our tests in emerging markets, such as India and Brazil; |
• | our ability to adequately support future growth; and |
• | the risk factors discussed in our annual report on Form 10-K for the year ended December 31, 2015, as updated in other reports, as applicable, that we file with the Securities and Exchange Commission. |
Cancer Genetics, Inc. | ||||||
(Registrant) | ||||||
Date: May 10, 2016 | /s/ Panna L. Sharma | |||||
Panna L. Sharma | ||||||
President and Chief Executive Officer (Principal Executive Officer) | ||||||
Date: May 10, 2016 | /s/ Edward J. Sitar | |||||
Edward J. Sitar | ||||||
Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit No. | Description | |
10.1 | Consent and First Amendment to Loan and Security Agreement, dated January 28, 2016, by and among Silicon Valley Bank and Cancer Genetics, Inc. and its subsidiary Gentris, LLC (incorporated by reference to Exhibit 10.73 to the Company’s annual report on Form 10-K for the year ended December 31, 2015, filed on March 10, 2016). | |
31.1 | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under The Securities Exchange Act of 1934, as amended * | |
31.2 | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under The Securities Exchange Act of 1934, as amended * | |
32.1 | Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 ** | |
32.2 | Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 ** | |
101 | The following materials from the Registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheet at March 31, 2016 (unaudited) and December 31, 2015, (ii) Consolidated Statements of Operations for the three month periods ended March 31, 2016 and 2015, (iii) Consolidated Statements of Cash Flows for the three month periods ended March 31, 2016 and 2015 (unaudited) and (iv) Notes to Consolidated Financial Statements (unaudited) | |
* | Filed herewith. | |
** | Furnished herewith. |
Date: May 10, 2016 | /s/ Panna L. Sharma | |||
Panna L. Sharma | ||||
President and Chief Executive Officer | ||||
(Principal Executive Officer) |
Date: May 10, 2016 | /s/ Edward J. Sitar | |||
Edward J. Sitar | ||||
Chief Financial Officer | ||||
(Principal Financial Officer) |
/s/ Panna L. Sharma |
Panna L. Sharma |
President and Chief Executive Officer |
/s/ Edward J. Sitar |
Edward J. Sitar |
Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
May. 01, 2016 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | CANCER GENETICS, INC | |
Trading Symbol | CGIX | |
Entity Central Index Key | 0001349929 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 13,652,274 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized (in shares) | 9,764,000 | 9,764,000 |
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued (in shares) | 13,652,000 | 13,652,000 |
Common stock, shares outstanding (in shares) | 13,652,000 | 13,652,000 |
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Income Statement [Abstract] | ||
Revenue | $ 6,068 | $ 4,370 |
Cost of revenues | 4,103 | 3,141 |
Gross profit | 1,965 | 1,229 |
Operating expenses: | ||
Research and development | 1,532 | 1,278 |
General and administrative | 4,318 | 2,987 |
Sales and marketing | 1,298 | 1,116 |
Total operating expenses | 7,148 | 5,381 |
Loss from operations | (5,183) | (4,152) |
Other income (expense): | ||
Interest expense | (126) | (34) |
Interest income | 4 | 13 |
Change in fair value of acquisition note payable | 34 | (90) |
Change in fair value of warrant liability | 17 | (15) |
Total other (expense) | (71) | (126) |
Net (loss) | $ (5,254) | $ (4,278) |
Basic net (loss) per share (usd per share) | $ (0.39) | $ (0.44) |
Diluted net (loss) per share (usd per share) | $ (0.39) | $ (0.44) |
Basic Weighted-Average Shares Outstanding (in shares) | 13,547 | 9,704 |
Diluted Weighted-Average Shares Outstanding (in shares) | 13,547 | 9,704 |
Organization, Description of Business, Basis of Presentation, Acquisitions and Recent Accounting Pronouncements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||
Organization, Description of Business, Basis of Presentation, Acquisitions and Recent Accounting Pronouncements | Organization, Description of Business, Basis of Presentation, Acquisitions and Recent Accounting Pronouncements We are an emerging leader in the field of personalized medicine, enabling precision medicine in the field of oncology through our diagnostic products and services and molecular markers. We develop, commercialize and provide molecular- and biomarker-based tests and services that enable physicians to personalize the clinical management of each individual patient by providing genomic information to better diagnose, monitor and inform cancer treatment and that enable biopharmaceutical companies engaged in oncology trials to better select candidate populations and reduce adverse drug reactions by providing information regarding genomic factors influencing subject responses to therapeutics. We have a comprehensive, disease-focused oncology testing portfolio. Our tests and techniques target a wide range of cancers, covering eight of the top ten cancers in prevalence in the United States, with additional unique capabilities offered by our Tissue of Origin® test for identifying difficult to diagnose tumor types or poorly differentiated metastatic disease. We were incorporated in the State of Delaware on April 8, 1999 and have offices and state-of-the-art laboratories located in California, New Jersey, North Carolina, Shanghai (China), and Hyderabad (India). Our laboratories comply with the highest regulatory standards as appropriate for the services they deliver including CLIA, CAP, NY State, California State and NABL (India). Our services are built on a foundation of world-class scientific knowledge and intellectual property in solid and blood-borne cancers, as well as strong academic relationships with major cancer centers such as Memorial Sloan-Kettering, Mayo Clinic, and the National Cancer Institute. Basis of Presentation The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for interim reporting as prescribed by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2015, filed with the Securities and Exchange Commission on March 10, 2016. The consolidated balance sheet as of December 31, 2015, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. Interim financial results are not necessarily indicative of the results that may be expected for any future interim period or for the year ending December 31, 2016. Acquisition of Response Genetics, Inc. On October 9, 2015, we acquired substantially all the assets and assumed certain liabilities of Response Genetics, Inc. (“Response Genetics”), with its principal place of business in California, in a transaction valued at approximately $12.9 million, comprised of $7.5 million in cash and 788,584 shares of the Company’s common stock, with the common stock being valued at $5.4 million. The following table provides certain pro forma financial information for the Company as if the acquisition of Response Genetics discussed above occurred on January 1, 2015 (in thousands except per share amounts):
The pro forma numbers above are derived from historical numbers of the Company and Response Genetics. Over time the operations of Response Genetics will be integrated into the operations of the Company. This integration may change how certain tests are coded and submitted to payers (including Medicare) and, consequently, may result in differences in the future in which revenues and bad debt expenses are recorded when compared with the historical methods of Response Genetics. At the current time, we do not have enough information to prepare a reliable estimate of any possible changes. The results of operations for the three months ended March 31, 2016 include the operations of Response Genetics, which accounted for approximately $2,163,000 of the Company’s consolidated revenue. The net loss of Response Genetics cannot be determined, as its operations are integrated with Cancer Genetics. Recent Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09 “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This standard requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective in 2017 with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and the timing of adoption. |
Revenue and Accounts Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Accounts Receivable | Revenue and Accounts Receivable Revenue by service type for the three months ended March 31, 2016 and 2015 is comprised of the following (in thousands):
The table above includes approximately $459,000 of biopharma revenue and approximately $1,704,000 of clinical services revenue from our acquisition of Response Genetics for the three months ended March 31, 2016. Accounts receivable by service type at March 31, 2016 and December 31, 2015 consists of the following (in thousands):
Revenue for Biopharma Services are customized solutions for patient stratification and treatment selection through an extensive suite of DNA-based testing services. Clinical Services are tests performed to provide information on diagnosis, prognosis and theranosis of cancers to guide patient management. These tests can be billed to Medicare, another third party insurer or the referring community hospital or other healthcare facility. Discovery Services are services that provide the tools and testing methods for companies and researchers seeking to identify new DNA-based biomarkers for disease. The breakdown of our Clinical Services revenue (as a percent of total revenue) is as follows:
We have historically derived a significant portion of our revenue from a limited number of test ordering sites. Test ordering sites account for all of our Clinical Services and Biopharma Services revenue. Our test ordering sites are largely hospitals, cancer centers, reference laboratories, physician offices and biopharmaceutical companies. Oncologists and pathologists at these sites order the tests on behalf of the needs of their oncology patients or as part of a clinical trial sponsored by a biopharmaceutical company in which the patient is being enrolled. We generally do not have formal, long-term written agreements with such test ordering sites, and, as a result, we may lose a significant test ordering site at any time. The top five test ordering sites during the three months ended March 31, 2016 and 2015 accounted for 35% and 72%, respectively, of our testing volumes, with 8% and 24%, respectively, of the volume coming from community hospitals. During the three months ended March 31, 2016, there were two biopharmaceutical companies which accounted for approximately 11% and 10% of our total revenue, respectively. During the three months ended March 31, 2015, there were two biopharmaceutical companies which accounted for approximately 29% and 22% of our total revenue, respectively. |
Earnings Per Share |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share For purposes of this calculation, stock warrants, outstanding stock options and unvested restricted shares are considered common stock equivalents using the treasury stock method, and are the only such equivalents outstanding. Basic net loss and diluted net loss per share data were computed as follows (in thousands except per share data):
The following table summarizes equivalent units outstanding that were excluded from the earnings per share calculation because their effects were anti-dilutive (in thousands):
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Bank Term Note and Line of Credit |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank Term Note and Line of Credit | Bank Term Note and Line of Credit On May 7, 2015, we entered into a debt financing facility with Silicon Valley Bank (“SVB”). The SVB credit facility provides for a $6.0 million term note (“Term Note”) and a revolving line of credit (“Line of Credit”) for an amount not to exceed the lesser of (i) $4.0 million or (ii) an amount equal to 80% of eligible accounts receivable. The Term Note requires interest-only payments through April 30, 2016 and beginning May 1, 2016, monthly principal payments of approximately $167,000 will be required plus interest through maturity on April 1, 2019. The interest rate of the Term Note is the Wall Street Journal prime rate plus 2%, with a floor of 5.25% (5.50% at March 31, 2016) and an additional deferred interest payment of $180,000 will be due upon maturity. The Line of Credit requires monthly interest-only payments of the Wall Street Journal prime rate plus 1.5% (5.00% at March 31, 2016) and matures on May 7, 2017. The loan agreement requires maintenance of certain financial ratios and grants SVB a first security interest in substantially all Company assets (other than our intellectual property). At March 31, 2016 the principal balance of the Term Note was $6,000,000 and the principal balance of the Line of Credit was $0. On January 28, 2016, the Line of Credit was amended with SVB and we are no longer able to draw on the Line of Credit until we raise approximately $13 million of additional equity. The following is a summary of long-term debt (in thousands):
Principal maturities of the Term Note as of March 31, 2016 are as follows: 2016 (remaining nine months) - $1,333,333; 2017 - $2,000,000; 2018 - $2,000,000; 2019 - $666,667. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation We have two equity incentive plans: the 2008 Stock Option Plan (the “2008 Plan”) and the 2011 Equity Incentive Plan (the “2011 Plan”, and together with the 2008 Plan, the “Stock Option Plans”). The Stock Option Plans are meant to provide additional incentive to officers, employees and consultants to remain in our employment. Options granted are generally exercisable for up to 10 years. At March 31, 2016, 886,151 shares remain available for future awards under the 2011 Plan and 111,455 shares remain available for future awards under the 2008 Plan. As of March 31, 2016, no stock appreciation rights and 275,500 shares of restricted stock have been awarded under the Stock Option Plans. A summary of employee and non-employee stock option activity for the three months ended March 31, 2016 is as follows:
Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options. As of March 31, 2016, total unrecognized compensation cost related to non-vested stock options granted to employees was $4,165,630 which we expect to recognize over the next 2.85 years. As of March 31, 2016, total unrecognized compensation cost related to non-vested stock options granted to non-employees was $112,875 which we expect to recognize over the next 1.76 years. The estimate of unrecognized non-employee compensation is based on the fair value of the non-vested options as of March 31, 2016. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term (the period of time that the options granted are expected to be outstanding), the volatility of our common stock, a risk-free interest rate, and expected dividends. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for options that do not vest. We use the simplified calculation of expected life described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, and volatility is based on an average of the historical volatilities of the common stock of three entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. We use an expected dividend yield of zero, as we do not anticipate paying any dividends in the foreseeable future. Expected forfeitures are assumed to be zero due to the small number of plan participants and the plan design which has monthly vesting after an initial cliff vesting period. The following table presents the weighted-average assumptions used to estimate the fair value of options granted to employees during the periods presented:
In May 2014, we issued 200,000 options to our Director, Raju Chaganti, with an exercise price of $15.89. See Note 9 for additional information. The following table presents the weighted-average assumptions used to estimate the fair value of options reaching their measurement date for non-employees during the periods presented:
Restricted stock awards have been granted to employees, directors and consultants as compensation for services. At March 31, 2016, there was $629,524 of unrecognized compensation cost related to non-vested restricted stock granted to employees; we expect to recognize the cost over 2.29 years. The following table summarizes the activities for our non-vested restricted stock awards for the three months ended March 31, 2016:
The following table presents the effects of stock-based compensation related to stock option and restricted stock awards to employees and non-employees on our Statement of Operations during the periods presented (in thousands):
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Warrants |
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Warrants | Warrants We have issued certain warrants which contain an exercise price adjustment feature in the event we issue additional equity instruments at a price lower than the exercise price of the warrant. The warrants are described herein as derivative warrants. As of March 31, 2016 all derivative warrants have either expired or have been exercised. The following table summarizes the warrant activity for the three months ended March 31, 2016 (in thousands, except exercise price):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards Codification requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, the Topic establishes a fair value hierarchy for valuation inputs that give the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that we have the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect our own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following table summarizes the financial liabilities measured at fair value on a recurring basis segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):
The ultimate payment to VenturEast will be the value of 84,278 shares of common stock at the time of payment. The value of the note payable to VenturEast was determined using the fair value of our common stock less a discount for credit risk. During the three months ended March 31, 2016, we recognized a gain of approximately $34,000 due to the change in value of the note. During the three months ended March 31, 2016, we recognized a gain of approximately $17,000 due to the expiration of all remaining warrants underlying the warrant liability. Realized and unrealized gains and losses related to the change in fair value of the VenturEast note and warrant liability are included in other income (expense) on the Consolidated Statement of Operations. The following table summarizes the activity of the notes payable to VenturEast and the warrant liability, which were measured at fair value using Level 3 inputs (in thousands):
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Joint Venture Agreement |
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Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Joint Venture Agreement | Joint Venture Agreement In November 2011, we entered into an affiliation agreement with the Mayo Foundation for Medical Education and Research (“Mayo”), subsequently amended. Under the agreement, we formed a joint venture with Mayo in May 2013 to focus on developing oncology diagnostic services and tests utilizing next generation sequencing. The joint venture is a limited liability company, with each party initially holding fifty percent of the issued and outstanding membership interests of the new entity (the “JV”). In exchange for our membership interest in the JV, we made an initial capital contribution of $1.0 million in October 2013. In addition, we issued 10,000 shares of our common stock to Mayo pursuant to our affiliation agreement and recorded an expense of approximately $175,000. We also recorded additional expense of approximately $231,000 during the fourth quarter of 2013 related to shares issued to Mayo in November 2011 as the JV achieved certain performance milestones. In the third quarter of 2014, we made an additional $1.0 million capital contribution. The agreement also requires aggregate total capital contributions by us of up to an additional $4.0 million. We currently anticipate that we will make capital contributions of $1.0 million later in 2016. The timing of the remaining installments is subject to the JV's achievement of certain operational milestones agreed upon by the board of governors of the JV. In exchange for its membership interest, Mayo’s capital contribution takes the form of cash, staff, services, hardware and software resources, laboratory space and instrumentation, the fair market value of which will be approximately equal to $6.0 million. Mayo’s continued contribution will also be conditioned upon the JV’s achievement of certain milestones. Our share of the JV’s net loss was approximately $12,000 and $207,000 for the three months ended March 31, 2016 and 2015, respectively, and is included in research and development expense on the Consolidated Statement of Operations. We have a net receivable due from the JV of approximately $10,000 at March 31, 2016, which is included in other current assets in the Consolidated Balance Sheets. The joint venture is considered a variable interest entity under ASC 810-10, but we are not the primary beneficiary as we do not have the power to direct the activities of the JV that most significantly impact its performance. Our evaluation of ability to impact performance is based on our equal board membership and voting rights and day-to-day management functions which are performed by the Mayo personnel. |
Related Party Transactions |
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Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions John Pappajohn, our Chairman of the Board of Directors and stockholder, has 232,312 warrants outstanding at $15.00 per share at March 31, 2016, granted in consideration for personally guaranteeing our revolving line of credit through March 31, 2014. Mr. Pappajohn also loaned money to us prior to our IPO and was granted warrants in consideration. At March 31, 2016, Mr. Pappajohn retained 436,079 of these warrants at $15.00 per share. In January 2014, the Board of Directors appointed Mr. Pappajohn to serve as the Chairman of the Board. As compensation for serving as Chairman of the Board, the Company pays Mr. Pappajohn $100,000 per year and granted to Mr. Pappajohn 25,000 restricted shares of the Company’s common stock and options to purchase an aggregate of 100,000 shares of the Company's common stock. In April 2014, we entered into a consulting agreement with Equity Dynamics, Inc. (“EDI”), an entity controlled by Mr. Pappajohn, pursuant to which EDI received a monthly fee of $10,000. Total expenses for the three months ended March 31, 2016 and 2015 were $30,000. As of March 31, 2016, we owed EDI $0. In 2010, we entered into a three-year consulting agreement with Dr. Chaganti, which was subsequently renewed through December 31, 2016 pursuant to which Dr. Chaganti receives $5,000 per month for providing consulting and technical support services. Pursuant to the terms of the renewed consulting agreement, Dr. Chaganti received an option to purchase 200,000 shares of our common stock at a purchase price of $15.89 per share vesting over a period of four years. Total non-cash stock-based compensation recognized under the consulting agreement for each of the three months ended March 31, 2016 and 2015 was $16,125 and $62,500, respectively. Also pursuant to the consulting agreement, Dr. Chaganti assigned to us all rights to any inventions which he may invent during the course of rendering consulting services to us. In exchange for this assignment, if the USPTO issues a patent for an invention on which Dr. Chaganti is listed as an inventor, we are required to pay Dr. Chaganti (i) a one-time payment of $50,000 and (ii) 1% of any net revenues we receive from any licensed sales of the invention. In the first quarter of 2016, we paid Dr. Chaganti $50,000 which was recognized as an expense in fiscal 2015 when one patent was issued. |
Contingencies |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies In the normal course of business, the Company may become involved in various claims and legal proceedings. In the opinion of management, the ultimate liability or disposition thereof is not expected to have a material adverse effect on our financial condition, results of operations, or liquidity. |
Organization, Description of Business, Basis of Presentation, Acquisitions and Recent Accounting Pronouncements (Policies) |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for interim reporting as prescribed by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2015, filed with the Securities and Exchange Commission on March 10, 2016. The consolidated balance sheet as of December 31, 2015, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. Interim financial results are not necessarily indicative of the results that may be expected for any future interim period or for the year ending December 31, 2016. |
Recent Accounting Pronouncements | In March 2016, the FASB issued ASU 2016-09 “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This standard requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective in 2017 with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and the timing of adoption. |
Organization, Description of Business, Basis of Presentation, Acquisitions and Recent Accounting Pronouncements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Response Genetics, Inc. | |||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||
Schedule of Pro Forma Information | The following table provides certain pro forma financial information for the Company as if the acquisition of Response Genetics discussed above occurred on January 1, 2015 (in thousands except per share amounts):
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Revenue and Accounts Receivable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Service Type | Revenue by service type for the three months ended March 31, 2016 and 2015 is comprised of the following (in thousands):
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Schedule of Accounts Receivable by Service Type | Accounts receivable by service type at March 31, 2016 and December 31, 2015 consists of the following (in thousands):
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Schedule of Clinical Services Revenue (As a Percent of Total Revenue) | The breakdown of our Clinical Services revenue (as a percent of total revenue) is as follows:
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic Net Loss and Diluted Net Loss Per Share | Basic net loss and diluted net loss per share data were computed as follows (in thousands except per share data):
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Summary of Anti-Dilutive Equivalent Units Outstanding Excluded From Earnings Per Share Calculation | The following table summarizes equivalent units outstanding that were excluded from the earnings per share calculation because their effects were anti-dilutive (in thousands):
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Bank Term Note and Line of Credit (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | The following is a summary of long-term debt (in thousands):
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Stock-Based Compensation (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Employee and Nonemployee Stock Option Activity | A summary of employee and non-employee stock option activity for the three months ended March 31, 2016 is as follows:
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Weighted-Average Assumptions Used to Estimate Fair Value of Options Granted | The following table presents the weighted-average assumptions used to estimate the fair value of options reaching their measurement date for non-employees during the periods presented:
The following table presents the weighted-average assumptions used to estimate the fair value of options granted to employees during the periods presented:
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Nonvested Restricted Stock Shares Activity | The following table summarizes the activities for our non-vested restricted stock awards for the three months ended March 31, 2016:
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Effects of Stock-Based Compensation Related to Awards | The following table presents the effects of stock-based compensation related to stock option and restricted stock awards to employees and non-employees on our Statement of Operations during the periods presented (in thousands):
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Warrants (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Warrant Activity | The following table summarizes the warrant activity for the three months ended March 31, 2016 (in thousands, except exercise price):
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the financial liabilities measured at fair value on a recurring basis segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):
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Schedule of Fair Value Notes Payable of Business Acquisition and Warrant Liability | The following table summarizes the activity of the notes payable to VenturEast and the warrant liability, which were measured at fair value using Level 3 inputs (in thousands):
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Organization, Description of Business, Basis of Presentation, Acquisitions and Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Oct. 09, 2015 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Business Acquisition [Line Items] | |||
Revenue | $ 6,068 | $ 4,370 | |
Response Genetics, Inc. | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 12,900 | ||
Consideration transferred, amount paid in cash | $ 7,500 | ||
Consideration transferred, common stock paid (in shares) | 788,584 | ||
Consideration transferred, common stock value | $ 5,400 | ||
Response Genetics, Inc. | |||
Business Acquisition [Line Items] | |||
Revenue | $ 2,163 |
Organization, Description of Business, Basis of Presentation, Acquisitions and Recent Accounting Pronouncements - Pro Forma (Details) - Response Genetics, Inc. $ / shares in Units, $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2015
USD ($)
$ / shares
| |
Pro Forma Financial Information | |
Revenue | $ | $ 8,161 |
Net loss | $ | $ (7,919) |
Basic net loss per share (usd per share) | $ / shares | $ (0.75) |
Dilutive net loss per share (usd per share) | $ / shares | $ (0.75) |
Revenue and Accounts Receivable - Schedule of Revenue by Service Type (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Revenue | $ 6,068 | $ 4,370 |
Biopharma Services | ||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Revenue | 3,350 | 3,331 |
Clinical Services | ||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Revenue | 2,456 | 873 |
Discovery Services | ||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Revenue | $ 262 | $ 166 |
Revenue and Accounts Receivable - Schedule of Accounts Receivable by Service Type (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ (664) | $ (664) |
Accounts receivable, net | 8,449 | 6,621 |
Biopharma Services | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | 3,334 | 3,238 |
Clinical Services | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | 5,432 | 3,733 |
Discovery Services | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | $ 347 | $ 314 |
Revenue and Accounts Receivable - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance, December 31, 2015 | $ 664 | |
Additions to allowance for doubtful accounts | 0 | $ 221 |
Balance, March 31, 2016 | $ 664 |
Revenue and Accounts Receivable - Schedule of Clinical Services Revenue (Details) - Payor - Sales Revenue, Net [Member] |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Product Information [Line Items] | ||
Percentage of revenue | 40.00% | 20.00% |
Medicare | ||
Product Information [Line Items] | ||
Percentage of revenue | 15.00% | 6.00% |
Other insurers | ||
Product Information [Line Items] | ||
Percentage of revenue | 21.00% | 7.00% |
Other healthcare facilities | ||
Product Information [Line Items] | ||
Percentage of revenue | 4.00% | 7.00% |
Earnings Per Share - Summary of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Earnings Per Share [Abstract] | ||
Net (loss) for basic earnings per share | $ (5,254) | $ (4,278) |
Change in fair value of warrant liability | 17 | 0 |
Net (loss) for diluted earnings per share | $ (5,271) | $ (4,278) |
Weighted-average basic common shares outstanding (in shares) | 13,547 | 9,704 |
Common stock purchase warrants (in shares) | 0 | 0 |
Potentially dilutive common shares (in shares) | 0 | 0 |
Denominator for diluted earnings per share – adjusted weighted-average shares (in shares) | 13,547 | 9,704 |
Basic net (loss) per share (usd per share) | $ (0.39) | $ (0.44) |
Diluted net (loss) per share (usd per share) | $ (0.39) | $ (0.44) |
Earnings Per Share - Summary of Anti-Dilutive Equivalent Units Outstanding Excluded From Calculation of Earnings Per Share (Detail) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation (in shares) | 6,388 | 3,146 |
Common stock purchase warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation (in shares) | 4,362 | 1,136 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation (in shares) | 1,928 | 1,888 |
Restricted shares of common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation (in shares) | 98 | 122 |
Bank Term Note and Line of Credit - Schedule of Long-Term Debt (Details) - Secured Debt - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
May. 07, 2015 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Term Note, principal balance | $ 6,000 | $ 6,000 | $ 6,000 |
Less unamortized debt issuance costs | 21 | 25 | |
Term Note, net | 5,979 | 5,975 | |
Less current maturities | 1,833 | 1,333 | |
Long-term portion | $ 4,146 | $ 4,642 |
Stock-Based Compensation - Summary of Employee and Nonemployee Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Options Outstanding, Number of Shares Outstanding | ||
Outstanding, beginning balance (in shares) | 1,961,000 | |
Canceled or expired (in shares) | (33,000) | |
Outstanding, ending balance (in shares) | 1,928,000 | 1,961,000 |
Exercisable | 1,081,000 | |
Options Outstanding, Weighted-Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ 10.55 | |
Cancelled or expired (in dollars per share) | 9.91 | |
Outstanding, ending balance (in dollars per share) | 10.56 | $ 10.55 |
Exercisable (in dollars per share) | $ 10.34 | |
Weighted-Average Remaining Contractual Term (in years) | ||
Outstanding | 7 years 4 months 17 days | 7 years 8 months 5 days |
Exercisable | 6 years 6 months 7 days | |
Aggregate Intrinsic Value | ||
Outstanding, beginning balance | $ 0 | |
Outstanding, ending balance | 0 | $ 0 |
Exercisable | $ 0 |
Stock-Based Compensation - Weighted-Average Assumptions Used to Estimate Fair Value of Options Granted (Detail) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 68.98% | |
Risk free interest rate | 1.70% | |
Dividend yield | 0.00% | |
Term (years) | 6 years 3 months 22 days | |
Weighted-average fair value of options granted during the period | $ 5.83 | |
Non-Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 75.92% | 70.50% |
Risk free interest rate | 1.56% | 1.88% |
Dividend yield | 0.00% | 0.00% |
Term (years) | 8 years 1 month 21 days | 9 years 1 month 2 days |
Stock-Based Compensation - Restricted Stock Award Activity (Details) - Restricted shares of common stock |
3 Months Ended |
---|---|
Mar. 31, 2016
$ / shares
shares
| |
Number of Shares (in shares): | |
Non-vested, beginning balance (in shares) | shares | 121,000 |
Vested (in shares) | shares | (23,000) |
Non-vested, ending balance (in shares) | shares | 98,000 |
Weighted-Average Grant Date Fair Value (in dollars per share): | |
Non-vested, beginning balance (in dollars per share) | $ / shares | $ 8.25 |
Vested (in dollars per share) | $ / shares | 10.18 |
Non-vested, ending balance (in dollars per share) | $ / shares | $ 7.80 |
Stock-Based Compensation - Effects of Stock-Based Compensation Related to Stock Option Awards (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Total stock-based compensation | $ 534 | $ 696 |
Cost of Revenues | ||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Total stock-based compensation | 69 | 49 |
Research and Development | ||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Total stock-based compensation | 50 | 95 |
General and Administrative | ||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Total stock-based compensation | 387 | 521 |
Sales and Marketing | ||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Total stock-based compensation | $ 28 | $ 31 |
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gain due to change in value of note payable | $ (34) | $ 90 |
Gain due to expiration of warrant liability | 17 | (15) |
BioServe | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gain due to change in value of note payable | $ (34) | $ 90 |
VenturEast [Member] | BioServe | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of shares associated with notes payable | 84,278 | |
Gain due to change in value of note payable | $ 34 |
Fair Value Measurements - Summary of Fair Value of Notes Payable (Details) - Significant Unobservable Inputs (Level 3) - Fair value measurements, recurring $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
BioServe | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 266 |
Change in fair value | (34) |
Ending balance | 232 |
Warrant liability | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | 17 |
Change in fair value | (17) |
Ending balance | $ 0 |
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