CERUS CORP, 10-Q filed on 5/6/2016
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2016
Apr. 28, 2016
Document Information [Line Items]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Mar. 31, 2016 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q1 
 
Trading Symbol
CERS 
 
Entity Registrant Name
CERUS CORP 
 
Entity Central Index Key
0001020214 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
101,710,815 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 20,791 
$ 71,018 
Short-term investments
70,513 
25,698 
Investment in marketable equity securities
5,082 
11,163 
Accounts receivable
4,086 
5,794 
Inventories
11,255 
10,812 
Prepaid expenses
1,377 
1,166 
Other current assets
6,333 
4,755 
Total current assets
119,437 
130,406 
Non-current assets:
 
 
Property and equipment, net
3,380 
3,549 
Goodwill
1,316 
1,316 
Intangible assets, net
890 
940 
Restricted cash
574 
612 
Other assets
2,341 
2,579 
Total assets
127,938 
139,402 
Current liabilities:
 
 
Accounts payable
6,238 
5,217 
Accrued liabilities
9,221 
9,853 
Manufacturing and development obligations-current
2,219 
3,282 
Debt-current
4,527 
2,956 
Deferred revenue-current
613 
554 
Total current liabilities
22,818 
21,862 
Non-current liabilities:
 
 
Debt-non-current
15,301 
16,848 
Deferred income taxes
131 
122 
Manufacturing and development obligations-non-current
4,840 
4,542 
Other non-current liabilities
1,314 
1,263 
Total liabilities
44,404 
44,637 
Commitments and contingencies
   
   
Stockholders' equity:
 
 
Common stock
101 
99 
Additional paid-in capital
694,741 
685,189 
Accumulated other comprehensive income
3,367 
7,289 
Accumulated deficit
(614,675)
(597,812)
Total stockholders' equity
83,534 
94,765 
Total liabilities and stockholders' equity
$ 127,938 
$ 139,402 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Revenue
$ 7,632 
$ 7,692 
Cost of revenue
4,263 
4,714 
Gross profit
3,369 
2,978 
Operating expenses:
 
 
Research and development
6,917 
5,581 
Selling, general and administrative
11,747 
11,718 
Amortization of intangible assets
50 
50 
Total operating expenses
18,714 
17,349 
Loss from operations
(15,345)
(14,371)
Non-operating (expense) income, net:
 
 
Gain from revaluation of warrant liability
 
6,296 
Foreign exchange loss
(117)
(1,113)
Interest expense
(655)
(255)
Other income, net
66 
Total non-operating (expense) income, net
(706)
4,930 
Loss before income taxes
(16,051)
(9,441)
Provision for income taxes
812 
19 
Net loss
$ (16,863)
$ (9,460)
Net loss per share:
 
 
Basic
$ (0.17)
$ (0.10)
Diluted
$ (0.17)
$ (0.17)
Weighted average shares outstanding used for calculating net loss per share:
 
 
Basic
99,471 
93,411 
Diluted
99,471 
94,662 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Net loss
$ (16,863)
$ (9,460)
Other comprehensive (loss) income:
 
 
Unrealized (losses) gains on available-for-sale investments, net of taxes of ($2,058) and zero for the three months ended March 31, 2016 and 2015, respectively
(3,922)
19 
Comprehensive loss
$ (20,785)
$ (9,441)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Unrealized (losses) gains on available-for-sale investments, taxes
$ (2,058)
$ 0 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Operating activities
 
 
Net loss
$ (16,863)
$ (9,460)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Depreciation and amortization
476 
443 
Stock-based compensation
1,776 
1,474 
Changes in valuation of warrant liability
 
(6,296)
Non-cash interest expense
300 
64 
Deferred income taxes
Non-cash tax expense from other unrealized loss on available-for-sale securities
768 
 
Changes in operating assets and liabilities:
 
 
Accounts receivable
1,708 
340 
Inventories
(488)
(1,220)
Other assets
(213)
(116)
Accounts payable
995 
484 
Accrued liabilities
(639)
(1,488)
Manufacturing and development obligations
(924)
 
Deferred revenue
52 
23 
Net cash used in operating activities
(13,043)
(15,751)
Investing activities
 
 
Capital expenditures
(43)
(59)
Purchases of investments
(50,544)
(69,982)
Proceeds from maturities of investments
5,500 
4,400 
Restricted cash
38 
47 
Net cash used in investing activities
(45,049)
(65,594)
Financing activities
 
 
Net proceeds from the issuance of common stock in connection with equity incentive plans
698 
999 
Net proceeds from public offering
7,199 
75,527 
Repayment of debt
(32)
(28)
Net cash provided by financing activities
7,865 
76,498 
Net decrease in cash and cash equivalents
(50,227)
(4,847)
Cash and cash equivalents, beginning of year
71,018 
22,781 
Cash and cash equivalents, end of year
$ 20,791 
$ 17,934 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

Note 1. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include those of Cerus Corporation and its subsidiary, Cerus Europe B.V. (together with Cerus Corporation, hereinafter “Cerus” or the “Company”) after elimination of all intercompany accounts and transactions. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring entries, considered necessary for a fair presentation have been made. Operating results for the three months ended March 31, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016, or for any future periods.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2015, which were included in the Company’s 2015 Annual Report on Form 10-K, filed with the SEC on March 9, 2016. The accompanying condensed consolidated balance sheet as of December 31, 2015, has been derived from the Company’s audited consolidated financial statements as of that date, except as described in the New Accounting Pronouncement section below related to the adoption of Accounting Standards Update (“ASU”) No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.

Use of Estimates

The preparation of financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions.

Revenue

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 605-25, “Revenue Recognition – Arrangements with Multiple Deliverables,” as applicable. Revenue is recognized when (i) persuasive evidence of the arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) pricing is fixed or determinable; and (iv) collectability is reasonably assured. The Company’s main sources of revenues for the three months ended March 31, 2016 and 2015 were product revenue from sales of the INTERCEPT Blood System for platelets and plasma (“platelet and plasma systems” or “disposable kits”) and UVA illumination devices (“illuminators”).

Revenue related to product sales is generally recognized when the Company fulfills its obligations for each element of an agreement. For all sales of the Company’s INTERCEPT Blood System products, the Company uses a binding purchase order or signed sales contract as evidence of an arrangement. The Company sells its platelet and plasma systems directly to blood banks, hospitals, universities, government agencies, as well as to distributors in certain regions. Generally, the Company’s contracts with its customers do not provide for open return rights, except within a reasonable time after receipt of goods in the case of defective or non-conforming product. Deliverables and the units of accounting vary according to the provisions of each purchase order or sales contract. For revenue arrangements with multiple elements, the Company determines whether the delivered elements meet the criteria as separate units of accounting. Such criteria require that the deliverable have stand-alone value to the customer and that if a general right of return exists relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Once the Company determines if the deliverable meets the criteria for a separate unit of accounting, the Company must determine how the consideration should be allocated between the deliverables and how the separate units of accounting should be recognized as revenue. Consideration received is allocated to elements that are identified as discrete units of accounting. Because the Company has no vendor specific objective evidence or third party evidence for its systems due to the Company’s variability in its pricing across the regions into which it sells its products, the allocation of revenue is based on best estimated selling price for the products sold. The objective of best estimated selling price is to determine the price at which the Company would transact a sale, had the product been sold on a stand-alone basis. The Company determines best estimated selling price for its systems by considering multiple factors. The Company regularly reviews best estimated selling price.

Freight costs charged to customers are recorded as a component of revenue. Taxes that the Company invoices to its customers and remits to governments are recorded on a net basis, which excludes such tax from product revenue.

 

Research and Development Expenses

In accordance with ASC Topic 730, “Accounting for Research and Development Expenses,” research and development (“R&D”) expenses are charged to expense when incurred, including cost incurred under each grant that has been awarded to the Company by the U.S. government or development contracts. Research and development expenses include salaries and related expenses for scientific and regulatory personnel, payments to consultants, supplies and chemicals used in in-house laboratories, costs of R&D facilities, depreciation of equipment and external contract research expenses, including clinical trials, preclinical safety studies, other laboratory studies, process development and product manufacturing for research use.

The Company’s use of estimates in recording accrued liabilities for R&D activities (see “Use of Estimates” above) affects the amounts of R&D expenses recorded. Actual results may differ from those estimates under different assumptions or conditions.

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be classified as cash equivalents. These investments primarily consist of money market instruments, and are classified as available-for-sale.

Investments

Investments with original maturities of greater than three months primarily include corporate debt, U.S. government agency securities and marketable equity securities of Aduro Biotech, Inc. (“Aduro”), and are designated as available-for-sale and classified as short-term investments or investment in marketable equity securities, in accordance with ASC Topic 320, “Accounting for Certain Investments in Debt and Equity Securities”. Available-for-sale securities are carried at estimated fair value. The Company views its available-for-sale portfolio as available for use in its current operations. Unrealized gains and losses derived by changes in the estimated fair value of available-for-sale securities were recorded in “Net unrealized (losses) gains on available-for-sale investments, net of taxes” on the Company’s unaudited condensed consolidated statements of comprehensive loss. Realized gains (losses) from the sale of available-for-sale investments were recorded in “Other income, net” on the Company’s unaudited condensed consolidated statements of operations. The costs of securities sold are based on the specific identification method, if applicable. The Company reported the amortization of any premium and accretion of any discount resulting from the purchase of debt securities as a component of interest income.

The Company also reviews its available-for-sale securities on a regular basis to evaluate whether any security has experienced an other-than-temporary decline in fair value. Other-than-temporary declines in market value, if any, are recorded in “Other income, net” on the Company’s unaudited condensed consolidated statements of operations.

Restricted Cash

The Company holds a certificate of deposit with a domestic bank for any potential decommissioning resulting from the Company’s possession of radioactive material. The certificate of deposit is held to satisfy the financial surety requirements of the California Department of Health Services and is recorded in “Other assets” on the Company’s unaudited condensed consolidated balance sheets. The Company also has certain non-U.S. dollar denominated deposits recorded as “Restricted cash” in compliance with certain foreign contractual requirements.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, available-for-sale securities and accounts receivable.

Pursuant to the Company’s investment policy, substantially all of the Company’s cash, cash equivalents and available-for-sale securities are maintained at major financial institutions of high credit standing. The Company monitors the financial credit worthiness of the issuers of its investments and limits the concentration in individual securities and types of investments that exist within its investment portfolio. Generally, all of the Company’s investments carry high credit quality ratings, which is in accordance with its investment policy. At March 31, 2016, the fair value of the Company’s marketable equity securities of Aduro is subject to the underlying volatility of Aduro’s stock price. At March 31, 2016, the Company does not believe there is significant financial risk from non-performance by the issuers of the Company’s cash equivalents and short-term investments.

 

Concentrations of credit risk with respect to trade receivables exist. On a regular basis, including at the time of sale, the Company performs credit evaluations of its significant customers that it expects to sell to on credit terms. Generally, the Company does not require collateral from its customers to secure accounts receivable. To the extent that the Company determines specific invoices or customer accounts may be uncollectible, the Company establishes an allowance for doubtful accounts against the accounts receivable on its unaudited condensed consolidated balance sheets and records a charge on its unaudited condensed consolidated statements of operations as a component of selling, general and administrative expenses.

The Company had two customers and three customers that accounted for more than 10% of the Company’s outstanding trade receivables at March 31, 2016 and December 31, 2015, respectively. These customers cumulatively represented approximately 48% and 49% of the Company’s outstanding trade receivables at March 31, 2016 and December 31, 2015, respectively. To date, the Company has not experienced collection difficulties from these customers.

Inventories

At March 31, 2016 and December 31, 2015, inventory consisted of work-in-process and finished goods only. Finished goods include INTERCEPT disposable kits, illuminators, and certain replacement parts for the illuminators. Platelet and plasma systems’ disposable kits generally have a two-year life from the date of manufacture. Illuminators and replacement parts do not have regulated expiration dates. Work-in-process includes certain components that are manufactured over a protracted length of time before being sold to, and ultimately incorporated and assembled by Fresenius Kabi Deutschland GmbH or Fresenius, Inc. (with their affiliates, “Fresenius”) into the finished INTERCEPT disposable kits. The Company maintains an inventory balance based on its current sales projections, and at each reporting period, the Company evaluates whether its work-in-process inventory would be sold to Fresenius for production of finished units in order to sell to existing and prospective customers within the next twelve-month period. It is not customary for the Company’s production cycle for inventory to exceed twelve months. Instead, the Company uses its best judgment to factor in lead times for the production of its work-in-process and finished units to meet the Company’s forecasted demands. If actual results differ from those estimates, work-in-process inventory could potentially accumulate for periods exceeding one year. At March 31, 2016 and December 31, 2015, the Company classified its work-in-process inventory as a current asset on its consolidated balance sheets based on its evaluation that the work-in-process inventory would be sold to Fresenius for finished disposable kit production within each respective subsequent twelve-month period.

Inventory is recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value. The Company uses significant judgment to analyze and determine if the composition of its inventory is obsolete, slow-moving or unsalable and frequently reviews such determinations. The Company writes down specifically identified unusable, obsolete, slow-moving, or known unsalable inventory that has no alternative use in the period that it is first recognized by using a number of factors including product expiration dates, open and unfulfilled orders, and sales forecasts. Any write-down of its inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest that the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded in “Cost of revenue” on the Company’s consolidated statements of operations. At March 31, 2016 and December 31, 2015, the Company had $1.6 million and $1.8 million, respectively, recorded for potential obsolete, expiring or unsalable product.

Property and Equipment, net

Property and equipment is comprised of furniture, equipment, leasehold improvements, information technology hardware and software and is recorded at cost. At the time the property and equipment is ready for its intended use, it is depreciated on a straight-line basis over the estimated useful lives of the assets (generally three to five years). Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful lives of the improvements.

Capitalization of Software Costs

The Company capitalizes certain significant costs incurred in the acquisition and development of software for internal use, including the costs of the software, materials, and consultants during the application development stage. Costs incurred prior to the application development stage, costs incurred once the application is substantially complete and ready for its intended use, and other costs not qualifying for capitalization, including training and maintenance costs, are charged to expense as incurred. The capitalized costs associated with the enterprise resource planning system are being amortized over the estimated useful life of five years.

 

Goodwill and Intangible Assets, net

Intangible assets, net, which include a license for the right to commercialize the INTERCEPT Blood System in Asia, are subject to ratable amortization over the original estimated useful life of ten years. The amortization of the Company’s intangible assets, net, is recorded in “Amortization of intangible assets” on the Company’s consolidated statements of operations. Goodwill is not amortized but instead is subject to an impairment test performed on an annual basis, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Such impairment analysis is performed on August 31 of each fiscal year, or more frequently if indicators of impairment exist. The test for goodwill impairment may be assessed using qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the Company must then proceed with performing the quantitative two-step process to test goodwill for impairment; otherwise, goodwill is not considered impaired and no further testing is warranted. The Company may choose not to perform the qualitative assessment to test goodwill for impairment and proceed directly to the quantitative two-step process; however, the Company may revert to the qualitative assessment to test goodwill for impairment in any subsequent period. The first step of the two-step process compares the fair value of each reporting unit with its respective carrying amount, including goodwill. The Company has determined that it operates in one reporting unit and estimates the fair value of its one reporting unit using the enterprise approach under which it considers the quoted market capitalization of the Company as reported on the Nasdaq Global Market. The Company considers quoted market prices that are available in active markets to be the best evidence of fair value. The Company also considers other factors, which include future forecasted results, the economic environment and overall market conditions. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired and, therefore, the second step of the impairment test is unnecessary. The second step of the two-step process, which is used to measure the amount of impairment loss, compares the implied fair value of each reporting unit’s goodwill, based on the present value of future cash flows, with the respective carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

The Company performs an impairment test on its intangible assets, in accordance ASC Topic 360-10, “Property, Plant and Equipment,” if certain events or changes in circumstances occur which indicate that the carrying amounts of its intangible assets may not be recoverable. If the intangible assets are not recoverable, an impairment loss would be recognized by the Company based on the excess amount of the carrying value of the intangible assets over its fair value. For further details regarding the impairment analysis, reference is made to the section below under “Long-lived Assets.” See Note 5 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s impairment analysis and the valuation of goodwill and intangible assets, net.

Long-lived Assets

The Company evaluates its long-lived assets for impairment by continually monitoring events and changes in circumstances that could indicate carrying amounts of its long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the expected undiscounted future cash flows are less than the carrying amount of these assets, the Company then measures the amount of the impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company did not recognize impairment charges related to its long-lived assets during the three months ended March 31, 2016 and 2015.

Foreign Currency Remeasurement

The functional currency of the Company’s foreign subsidiary is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured in U.S. dollars using the exchange rates at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are remeasured in U.S. dollars using historical exchange rates. Revenues and expenses are remeasured using average exchange rates prevailing during the period. Remeasurements are recorded in the Company’s consolidated statements of operations.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation. Stock-based compensation expense is measured at the grant-date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period, and is adjusted for estimated forfeitures. To the extent that stock options contain performance criteria for vesting, stock-based compensation is recognized once the performance criteria are probable of being achieved.

 

For stock-based awards issued to non-employees, the Company follows ASC Topic 505-50, Equity Based Payment to Non-Employees and considers the measurement date at which the fair value of the stock-based award is measured to be the earlier of (i) the date at which a commitment for performance by the grantee to earn the equity instrument is reached or (ii) the date at which the grantee’s performance is complete. The Company recognizes stock-based compensation expense for the fair value of the vested portion of the non-employee stock-based awards in its consolidated statements of operations.

See Note 11 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s stock-based compensation expenses.

Income Taxes

The Company accounts for income taxes using an asset and liability approach in accordance with ASC Topic 740, Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. ASC Topic 740 requires derecognition of tax positions that do not have a greater than 50% likelihood of being recognized upon review by a taxing authority having full knowledge of all relevant information. Use of a valuation allowance as described in ASC Topic 740 is not an appropriate substitute for derecognition of a tax position. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense. To date, the Company has not recognized any interest and penalties in its unaudited condensed consolidated statements of operations, nor has it accrued for or made payments for interest and penalties. Although the Company believes it more likely than not that a taxing authority would agree with its current tax positions, there can be no assurance that the tax positions the Company has taken will be substantiated by a taxing authority if reviewed. The Company’s U.S. federal and California tax years through 2015 remain subject to examination by the taxing jurisdictions due to unutilized net operating losses and research credits. The Company continues to carry a full valuation allowance on all of its net deferred tax assets, except for its indefinite lived intangibles.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share gives effect to all potentially dilutive common shares outstanding for the period. The potentially dilutive securities include stock options, employee stock purchase plan rights, warrants and restricted stock units, which are calculated using the treasury stock method, and convertible preferred stock, which is calculated using the if-converted method. Diluted net loss per share also gives effect to potential adjustments to the numerator for gains resulting from the revaluation of warrants to fair value for the period, even if the Company is in a net loss position if the effect would result in more dilution.

Certain potential dilutive securities were excluded from the dilution calculation for the three months ended March 31, 2016 and 2015, as their inclusion would have been anti-dilutive.

The following table sets forth the reconciliation of the numerator and denominator used in the computation of basic and diluted net loss per share for the three months ended March 31, 2016 and 2015 (in thousands, except per share amounts):

 

     Three Months Ended
March 31,
 
     2016      2015  

Numerator for Basic and Diluted:

     

Net loss used for basic calculation

   $ (16,863    $ (9,460

Effect of revaluation of warrant liability

     —           (6,296
  

 

 

    

 

 

 

Adjusted net loss used for diluted calculation

   $ (16,863    $ (15,756
  

 

 

    

 

 

 

Denominator:

     

Basic weighted average number of shares outstanding

     99,471         93,411   

Effect of dilutive potential shares

     —           1,251   
  

 

 

    

 

 

 

Diluted weighted average number of shares outstanding

     99,471         94,662   
  

 

 

    

 

 

 

Net loss per share:

     

Basic

   $ (0.17    $ (0.10

Diluted

   $ (0.17    $ (0.17

 

The table below presents shares underlying stock options, employee stock purchase plan rights, restricted stock units and/or convertible preferred stock that were excluded from the calculation of the weighted average number of shares outstanding used for the calculation of diluted net loss per share. These are excluded from the calculation due to their anti-dilutive effect for the three months ended March 31, 2016 and 2015 (shares in thousands):

 

     Three Months Ended
March 31,
 
     2016      2015  

Weighted average number of anti-dilutive potential shares—outstanding options

     14,986         13,439   

Guarantee and Indemnification Arrangements

The Company recognizes the fair value for guarantee and indemnification arrangements issued or modified by the Company. In addition, the Company monitors the conditions that are subject to the guarantees and indemnifications in order to identify if a loss has occurred. If the Company determines it is probable that a loss has occurred, then any such estimable loss would be recognized under those guarantees and indemnifications. Some of the agreements that the Company is a party to contain provisions that indemnify the counter party from damages and costs resulting from claims that the Company’s technology infringes the intellectual property rights of a third party or claims that the sale or use of the Company’s products have caused personal injury or other damage or loss. The Company has not received any such requests for indemnification under these provisions and has not been required to make material payments pursuant to these provisions.

The Company generally provides for a one-year warranty on certain of its INTERCEPT blood-safety products covering defects in materials and workmanship. The Company accrues costs associated with warranty obligations when claims become known and are estimable. The Company has not experienced significant or systemic warranty claims nor is it aware of any existing current warranty claims. Accordingly, the Company had not accrued for any future warranty costs for its products at March 31, 2016 and December 31, 2015.

Fair Value of Financial Instruments

The Company applies the provisions of fair value relating to its financial assets and liabilities. The carrying amounts of accounts receivables, accounts payable, and other accrued liabilities approximate their fair value due to the relative short-term maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, the Company believes the fair value of its debt approximates their carrying amounts. The Company measures and records certain financial assets and liabilities at fair value on a recurring basis, including its available-for-sale securities and warrant liability prior to the expiration and exercise of the warrants in November 2015. The Company classifies instruments within Level 1 if quoted prices are available in active markets for identical assets, which include the Company’s cash accounts and money market funds. The Company classifies instruments in Level 2 if the instruments are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. These instruments include the Company’s corporate debt and U.S. government agency securities holdings. The available-for-sale securities are held by a custodian who obtains investment prices from a third party pricing provider that uses standard inputs (observable in the market) to models which vary by asset class. The Company classifies instruments in Level 3 if one or more significant inputs or significant value drivers are unobservable. The Company assesses any transfers among fair value measurement levels at the end of each reporting period.

See Notes 2 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s valuation of financial instruments.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date, which defers by one year the effective date of ASU No. 2014-09 to annual reporting periods beginning after December 15, 2017 (including interim periods within those periods). Early adoption is permitted to the original effective date of December 15, 2016 (including interim periods within those periods). In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies how to identify the unit of accounting for the principal versus agent evaluation and how to apply the control principle to certain types of arrangements. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies the implementation guidance on identifying performance obligations and licensing. These ASUs will be effective for the Company in the first quarter of fiscal year 2018, using one of two retrospective application methods. The Company has not selected a transition method and is currently assessing the potential effects of this ASU on the Company’s condensed consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and provide related disclosures. This ASU will be effective for the Company in fiscal year 2017. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s condensed consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the corresponding debt liability rather than as an asset. The Company has adopted this ASU effective January 1, 2016 under the retrospective application method. To conform to the current period presentation, the Company reclassified $32,000 and $36,000, which were previously included in the Other current assets and Other assets, respectively, in the Company’s condensed consolidated balance sheet as of December 31, 2015, as a reduction of Debt-current and Debt-non-current, respectively. As a result of the reclassifications, Other current assets and Debt-current decreased by $32,000, and Other assets and Debt- non-current decreased by $36,000, in the Company’s condensed consolidated balance sheet as of December 31, 2015.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10), which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, this ASU eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. This ASU will be effective for the Company in fiscal year 2018. Early adoption is permitted. The Company is currently assessing the future impact of this ASU on the Company’s condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. This ASU will be effective for the Company in fiscal year 2019. Early adoption is permitted. The Company is currently assessing the future impact of this ASU on its consolidated financial statements and anticipates the new guidance will significantly impact the Company’s condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which requires entities to record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement when awards vest or are settled, and eliminates additional paid-in capital (APIC) pools. The ASU also changes the accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation, and the accounting for forfeitures, and provides two practical expedients for nonpublic entities. This ASU will be effective for the Company in fiscal year 2017. Early adoption is permitted. The Company is currently assessing the future impact of this ASU on the Company’s condensed consolidated financial statements.

Fair Value on Financial Instruments
Fair Value on Financial Instruments

Note 2. Fair Value on Financial Instruments

The Company uses certain assumptions that market participants would use to determine the fair value of an asset or liability in pricing the asset or liability in an orderly transaction between market participants at the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows:

 

    Level 1: Quoted prices in active markets for identical instruments

 

    Level 2: Other significant observable inputs (including quoted prices in active markets for similar instruments)

 

    Level 3: Significant unobservable inputs (including assumptions in determining the fair value of certain investments)

Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

To estimate the fair value of Level 2 debt securities as of March 31, 2016, the Company’s primary service relies on inputs from multiple industry-recognized pricing sources to determine the price for each investment. Corporate debt and U.S. government agency securities are systematically priced by this service as of the close of business each business day. If the primary pricing service does not price a specific asset a secondary pricing service is utilized.

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at March 31, 2016 (in thousands):

 

     Balance sheet
classification
   Total      Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
     Significant
Other
Observable
Inputs
(Level 2)
     Significant
Unobservable
Inputs
(Level 3)
 

Money market funds

   Cash and cash equivalents    $ 6,648       $ 6,648       $ —         $ —     

United States government agency securities

   Short-term investments      9,997         —           9,997         —     

Corporate debt securities

   Short-term investments      60,516         —           60,516         —     

Marketable equity securities

   Marketable equity securities      5,082         5,082         —           —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets

      $ 82,243       $ 11,730       $ 70,513       $ —     
     

 

 

    

 

 

    

 

 

    

 

 

 

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2015 (in thousands):

 

     Balance sheet
classification
   Total      Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
     Significant
Other
Observable
Inputs
(Level 2)
     Significant
Unobservable
Inputs

(Level 3)
 

Money market funds

   Cash and cash equivalents    $ 59,302       $ 59,302       $ —         $ —     

Corporate debt securities

   Short-term investments      25,698         —           25,698         —     

Marketable equity securities

   Marketable equity securities      11,163         11,163         —           —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets

      $ 96,163       $ 70,465       $ 25,698       $ —     
     

 

 

    

 

 

    

 

 

    

 

 

 

The Company did not have any transfers among fair value measurement levels during the three months ended March 31, 2016 or the year ended December 31, 2015. The Company did not have any financial assets or liabilities classified as level 3 financial instruments at March 31, 2016 and December 31, 2015.

Available-for-sale Securities
Available-for-sale Securities

Note 3. Available-for-sale Securities

The following is a summary of available-for-sale securities at March 31, 2016 (in thousands):

 

     March 31, 2016  
     Amortized Cost      Gross
Unrealized Gain
     Gross
Unrealized Loss
     Fair Value  

Money market funds

   $ 6,648       $ —         $ —         $ 6,648   

United States government agency securities

     9,996         1         —           9,997   

Corporate debt securities

     60,465         72         (21      60,516   

Marketable equity securities

     —           5,082         —           5,082   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 77,109       $ 5,155       $ (21    $ 82,243   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following is a summary of available-for-sale securities at December 31, 2015 (in thousands):

 

     December 31, 2015  
     Amortized Cost      Gross
Unrealized Gain
     Gross
Unrealized Loss
     Fair Value  

Money market funds

   $ 59,302       $ —         $ —         $ 59,302   

Corporate debt securities

     25,747         —           (49      25,698   

Marketable equity securities

     —           11,163         —           11,163   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 85,049       $ 11,163       $ (49    $ 96,163   
  

 

 

    

 

 

    

 

 

    

 

 

 

Available-for-sale securities at March 31, 2016 and December 31, 2015, consisted of the following by contractual maturity (in thousands):

 

     March 31, 2016      December 31, 2015  
     Amortized Cost      Fair Value      Amortized Cost      Fair Value  

One year or less

   $ 56,934       $ 56,934       $ 85,049       $ 85,000   

Marketable equity securities

     —           5,082         —           11,163   

Greater than one year and less than five years

     20,175         20,227         —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 77,109       $ 82,243       $ 85,049       $ 96,163   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following tables show all available-for-sale marketable securities in an unrealized loss position for which an other-than-temporary impairment has not been recognized and the related gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

 

     March 31, 2016  
     Less than 12 Months     12 Months or Greater     Total  
     Fair Value      Unrealized Loss     Fair Value      Unrealized Loss     Fair Value      Unrealized Loss  

Corporate debt securities

   $ 18,137       $ (21   $ —         $ —        $ 18,137       $ (21
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total available-for-sale securities

   $ 18,137       $ (21   $ —         $ —        $ 18,137       $ (21
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
     December 31, 2015  
     Less than 12 Months     12 Months or Greater     Total  
     Fair Value      Unrealized Loss     Fair Value      Unrealized Loss     Fair Value      Unrealized Loss  

Corporate debt securities

   $ 20,170       $ (46   $ 5,528       $ (3   $ 25,698       $ (49
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total available-for-sale securities

   $ 20,170       $ (46   $ 5,528       $ (3   $ 25,698       $ (49
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

As of March 31, 2016, the Company considered the declines in market value of its marketable securities investment portfolio to be temporary in nature and did not consider any of its investments other-than-temporarily impaired. The Company typically invests in highly-rated securities, and its investment policy limits the amount of credit exposure to any one issuer. The policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. During the three months ended March 31, 2016 and 2015, the Company did not recognize any other-than-temporary impairment loss. The Company has no current requirement or intent to sell the securities in an unrealized loss position. The Company expects to recover up to (or beyond) the initial cost of investment for securities held.

The Company did not record any gross realized gains from the sale or maturity of available-for-sale investments during the three months ended March 31, 2016 and 2015. The Company did not record any gross realized losses from the sale or maturity of available-for-sale investments during the three months ended March 31, 2016 and 2015.

Inventories
Inventories

Note 4. Inventories

Inventories at March 31, 2016 and December 31, 2015, consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Work-in-process

   $ 2,966       $ 3,187   

Finished goods

     8,289         7,625   
  

 

 

    

 

 

 

Total inventories

   $ 11,255       $ 10,812   
  

 

 

    

 

 

 
Goodwill and Intangible Assets, net
Goodwill and Intangible Assets, net

Note 5. Goodwill and Intangible Assets, net

Goodwill

During the three months ended March 31, 2016, the Company did not dispose of or recognize additional goodwill. The Company expects to perform its annual review of goodwill on August 31, 2016, unless indicators of impairment are identified prior to that date. As of March 31, 2016, the Company has not identified any indicators of goodwill impairment.

Intangible Assets, net

The following is a summary of intangible assets, net at March 31, 2016 (in thousands):

 

     March 31, 2016  
     Gross
Carrying
Amount
     Accumulated
Amortization
     Net
Carrying
Amount
 

Acquisition-related intangible assets:

        

Reacquired license—INTERCEPT Asia

   $ 2,017       $ (1,127    $ 890   
  

 

 

    

 

 

    

 

 

 

Total intangible assets

   $ 2,017       $ (1,127    $ 890   
  

 

 

    

 

 

    

 

 

 

 

The following is a summary of intangible assets, net at December 31, 2015 (in thousands):

 

     December 31, 2015  
     Gross
Carrying
Amount
     Accumulated
Amortization
     Net
Carrying
Amount
 

Acquisition-related intangible assets:

        

Reacquired license—INTERCEPT Asia

   $ 2,017       $ (1,077    $ 940   
  

 

 

    

 

 

    

 

 

 

Total intangible assets

   $ 2,017       $ (1,077    $ 940   
  

 

 

    

 

 

    

 

 

 

The Company recognized $0.05 million in amortization expense related to intangible assets for each of the three months ended March 31, 2016 and 2015. During the three months ended March 31, 2016 and 2015, there were no impairment charges recognized related to the acquired intangible assets.

At March 31, 2016, the expected annual amortization expense of the intangible assets, net is $0.15 million for the remaining nine months of 2016, $0.2 million annually beginning with the year ending December 31, 2017 through the year ending December 31, 2019, and $0.1 million for the year ending December 31, 2020.

Marketable Equity Investments
Marketable Equity Investments

Note 6. Marketable Equity Investments

The Company held an investment in preferred shares of Aduro which it had historically accounted for under the cost method of accounting with a net carrying value of zero. In April 2015, Aduro’s common stock began trading on the NASDAQ Global Select Market, under the symbol “ADRO”. At the time of Aduro’s initial public offering (“IPO”), the Company’s preferred shares in Aduro converted to 396,700 shares of common stock, and the fair value of the Company’s investment became readily determinable and, as a result became a marketable equity security. Therefore, the Company no longer accounts for the investment in Aduro under the cost basis of accounting. The Company now reflects the investment in Aduro as an available-for-sale security included in investment in marketable equity securities on the Company’s unaudited condensed consolidated balance sheet (Note 2) and will adjust the carrying value of this investment to fair value each quarterly reporting period, with changes in fair value recorded within other comprehensive income (loss), net of tax.

Accrued Liabilities
Accrued Liabilities

Note 7. Accrued Liabilities

Accrued liabilities at March 31, 2016 and December 31, 2015, consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Accrued compensation and related costs

   $ 4,664       $ 5,198   

Accrued professional services

     2,808         2,337   

Accrued customer costs

     923         987   

Accrued insurance premiums

     220         438   

Other accrued expenses

     606         893   
  

 

 

    

 

 

 

Total accrued liabilities

   $ 9,221       $ 9,853   
  

 

 

    

 

 

 
Debt
Debt

Note 8. Debt

Debt consisted of the following (in thousands):

 

     March 31, 2016  
     Principal      Unamortized
Discount
     Total  

Loan and Security Agreement

   $ 20,000       $ (172    $ 19,828   

Less: debt—current

     (4,615      88         (4,527
  

 

 

    

 

 

    

 

 

 

Debt—non-current

   $ 15,385       $ (84    $ 15,301   
  

 

 

    

 

 

    

 

 

 
     December 31, 2015  
     Principal      Unamortized
Discount
     Net Carrying
Value
 

Loan and Security Agreement

   $ 20,000       $ (196    $ 19,804   

Less: debt—current

     (3,050      94         (2,956
  

 

 

    

 

 

    

 

 

 

Debt—non-current

   $ 16,950       $ (102    $ 16,848   
  

 

 

    

 

 

    

 

 

 

Principal and interest payments on debt at March 31, 2016, are expected to be as follows * (in thousands):

 

Year ended December 31,

   Principal      Interest      Total  

2016

   $ 3,050       $ 1,003       $ 4,053   

2017

     6,428         980         7,408   

2018

     6,892         517         7,409   

2019

     3,630         1,474         5,104   
  

 

 

    

 

 

    

 

 

 

Total

   $ 20,000       $ 3,974       $ 23,974   
  

 

 

    

 

 

    

 

 

 

 

* Unless interest only period extends to December 31, 2016, as described below.

 

Loan and Security Agreement

On June 30, 2014, the Company entered into a five year loan and security agreement with Oxford Finance LLC (the “Term Loan Agreement”) to borrow up to $30.0 million in term loans in three equal tranches (the “Term Loans”). On June 30, 2014, the Company received $10.0 million from the first tranche (“Term Loan A”). The second tranche of $10.0 million (“Term Loan B”) was drawn on June 15, 2015. On September 29, 2015, the Term Loan Agreement was amended to extend (i) the period in which the third tranche of $10.0 million (“Term Loan C”) can be drawn and (ii) the interest-only period for all advances under the Term Loan Agreement. The Company determined that the amendment to the Term Loan Agreement resulted in a modification. As a result, the Term Loan will continue to be accounted for by using the effective interest method, with a new effective interest rate based on revised cash flows calculated on a prospective basis upon the execution of the amendment to the Term Loan Agreement. As amended, Term Loan C will be available, subject to the Company achieving consolidated trailing six months’ revenue at a specified threshold (the “Revenue Event”), from the date of the achievement of the Revenue Event, to the earlier of (i) June 30, 2016, and (ii) 60 days after the Revenue Event is achieved. Term Loan A bears an interest rate of 6.95%. Term Loan B bears an interest rate of 7.01%. Term Loan C would bear an interest rate calculated at the greater of 6.95%, or 6.72% plus the three month U.S. LIBOR rate in effect three business days prior to the Term Loan C funding date. All of the Term Loans mature on June 1, 2019. The Company is required to make interest only payments through June 2016, followed by thirty-six months of equal principal and interest payments thereafter; however, if the Revenue Event is achieved no later than May 31, 2016, then the interest-only period may be extended through December 31, 2016, and the amortization period will be reduced to thirty months. The Company is also required to make a final payment equal to 7% of the principal amounts of the Term Loans drawn payable on the earlier to occur of maturity or prepayment. The costs associated with the final payment are recognized as interest expense over the life of the Term Loans. The Company may prepay at any time the Term Loans subject to declining prepayment fees over the term of the Term Loan Agreement. The Company pledged all current and future assets, excluding its intellectual property and 35% of the Company’s investment in its subsidiary, Cerus Europe B.V., as security for borrowings under the Term Loan Agreement. The Term Loan Agreement contains certain nonfinancial covenants, with which the Company was in compliance at March 31, 2016.

Commitments and Contingencies
Commitments and Contingencies

Note 9. Commitments and Contingencies

Operating Leases

The Company leases its office facilities, located in Concord, California and Amersfoort, the Netherlands, and certain equipment under non-cancelable operating leases with initial terms in excess of one year that require the Company to pay operating costs, property taxes, insurance and maintenance. The operating leases expire at various dates through 2020, with certain of the leases providing for renewal options, provisions for adjusting future lease payments based on the consumer price index, and the right to terminate the lease early. The Company’s leased facilities qualify as operating leases under ASC Topic 840, “Leases” and as such, are not included on its consolidated balance sheets.

Financed Leasehold Improvements

In 2010, the Company financed $1.1 million of leasehold improvements. The Company pays for the financed leasehold improvements as a component of rent and is required to reimburse its landlord over the remaining life of the respective leases. At March 31, 2016, the Company had an outstanding liability of $0.5 million related to these leasehold improvements, of which $0.1 million was reflected in “Accrued liabilities” and $0.4 million was reflected in “Other non-current liabilities” on the Company’s consolidated balance sheets.

Purchase Commitments

The Company is party to agreements with certain suppliers for certain components of the INTERCEPT Blood System. Certain of these agreements require minimum purchase commitments from the Company.

Stockholders' Equity
Stockholders' Equity

Note 10. Stockholders’ Equity

Sales Agreement

On March 21, 2014, the Company entered into Amendment No. 1 to the Controlled Equity OfferingSM Sales Agreement, dated August 31, 2012 (as amended, the “Cantor Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) that provided for the issuance and sale of shares of its common stock over the term of the Cantor Agreement having an aggregate offering price of up to $70 million through Cantor. Under the Cantor Agreement, Cantor also acts as the Company’s sales agent and receives compensation based on an aggregate of 2% of the gross proceeds on the sale price per share of its common stock. The issuance and sale of these shares by the Company pursuant to the Cantor Agreement are deemed an “at-the-market” offering and are registered under the Securities Act of 1933, as amended. During the three months ended March 31, 2016, 1.2 million shares of the Company’s common stock were sold under the Cantor Agreement for net proceeds of $7.1 million. At March 31, 2016, the Company had approximately $15.3 million of common stock available to be sold under the Cantor Agreement. See Note 15 regarding the amendment of the Cantor Agreement to increase the amount of common stock available to be sold thereunder.

Stock-Based Compensation
Stock-Based Compensation

Note 11. Stock-Based Compensation

Employee Stock Purchase Plan

The Company maintains an Employee Stock Purchase Plan (the “Purchase Plan”), which is intended to qualify as an employee stock purchase plan within the meaning of Section 423(b) of the Internal Revenue Code. Under the Purchase Plan, the Company’s Board of Directors may authorize participation by eligible employees, including officers, in periodic offerings. Under the Purchase Plan eligible employee participants may purchase shares of common stock of the Company at a purchase price equal to 85% of the lower of the fair market value per share on the start date of the offering period or the fair market value per share on the purchase date. The Purchase Plan consists of a fixed offering period of 12 months with two purchase periods within each offering period. The Purchase Plan was authorized to issue an aggregate of 1,320,500 shares. On June 10, 2015, the Company’s stockholders approved an amendment and restatement of the Purchase Plan that increased the aggregate number of shares of common stock authorized for issuance under the Purchase Plan by 1,500,000 shares. At March 31, 2016, the Company had 1,551,390 shares available for future issuance.

2008 Equity Incentive Plan

The Company also maintains an equity compensation plan to provide long-term incentives for employees, contractors, and members of its Board of Directors. The Company currently grants equity awards from one plan, the 2008 Equity Incentive Plan (the “2008 Plan”). The 2008 Plan allows for the issuance of non-statutory and incentive stock options, restricted stock, restricted stock units, stock appreciation rights, other stock-related awards, and performance awards which may be settled in cash, stock, or other property. On June 6, 2012 and June 12, 2013, the stockholders approved amendments to the Amended 2008 Plan (collectively the “Amended 2008 Plan”) such that the Amended 2008 Plan had reserved for issuance an amount not to exceed 19,540,940 shares. On June 10, 2015, the Company’s stockholders approved an amendment and restatement of the 2008 Plan that increased the aggregate number of shares of common stock authorized for issuance under the 2008 Plan by 5,000,000 shares. Awards under the Amended 2008 Plan generally have a maximum term of 10 years from the date of the award. The Amended 2008 Plan generally requires options to be granted at 100% of the fair market value of the Company’s common stock subject to the option on the date of grant. Options granted by the Company to employees generally vest over four years. Restricted stock units (RSUs) are measured based on the fair market value of the underlying stock on the date of grant and will generally vest over three years. Performance-based stock or cash awards granted under the Amended 2008 Plan are limited to either 500,000 shares of common stock or $1.0 million per recipient per calendar year. The attainment of any performance-based awards granted shall be conclusively determined by a committee designated by the Company’s Board of Directors. At March 31, 2016, no performance-based stock options were outstanding.

At March 31, 2016, the Company had an aggregate of approximately 21.0 million shares of its common stock subject to outstanding options or RSUs, or remaining available for future issuance under the Amended 2008 Plan, of which approximately 16.0 million shares and 0.6 million shares were subject to outstanding options and outstanding RSUs, respectively, and approximately 4.4 million shares were available for future issuance under the Amended 2008 Plan. The Company’s policy is to issue new shares of common stock upon the exercise of options or vesting of RSUs.

 

Activity under the Company’s equity incentive plans related to stock options is set forth below (in thousands except per share amounts):

 

     Number of
Options
Outstanding
     Weighted
Average
Exercise
Price per
Share
 

Balances at December 31, 2015

     14,119       $ 4.21   

Granted

     2,075         5.08   

Forfeited

     (37      5.16   

Expired

     (89      9.97   

Exercised

     (127      2.33   
  

 

 

    

Balances at March 31, 2016

     15,941         4.31   
  

 

 

    

Activity under the Company’s equity incentive plans related to RSUs is set forth below (in thousands except per share amounts):

 

     Number of
Shares
Outstanding
     Weighted
Average
Grant Date
Fair Value
per Share
 

Balances at December 31, 2015

     —         $ —     

Granted

     634         5.06   

Forfeited

     (1      5.06   

Vested

     —           —     
  

 

 

    

Balances at March 31, 2016

     633         5.06   
  

 

 

    

The Company uses the Black-Scholes option pricing model to determine the grant-date fair value of stock options and employee stock purchase plan rights. The Black-Scholes option pricing model is affected by the Company’s stock price, as well as assumptions regarding a number of complex and subjective variables, which include the expected term of the grants, actual and projected employee stock option exercise behaviors, including forfeitures, the Company’s expected stock price volatility, the risk-free interest rate and expected dividends. The Company recognizes the grant-date fair value of the stock award as stock-based compensation expense on a straight-line basis over the requisite service period, which is the vesting period, and is adjusted for estimated forfeitures.

Income Taxes
Income Taxes

Note 12. Income Taxes

Intraperiod tax allocation rules require the Company to allocate the provision for income taxes between continuing operations and other categories of earnings, such as other comprehensive income. In periods in which the Company has a year-to-date pre-tax loss from continuing operations and pre-tax items in other categories of earnings, such as other comprehensive income, the Company must allocate the tax provision to the other categories of earnings. The Company then records a related tax effect in continuing operations. During the three months ended March 31, 2016, the Company recorded unrealized losses of $3.9 million, net of taxes, on its investments in available-for-sale securities in other comprehensive income. As a result, the Company recorded tax expense of $0.8 million for the three months ended March 31, 2016.

Development and License Agreements
Development and License Agreements

Note 13. Development and License Agreements

Agreements with Fresenius

Through December 31, 2013, Fresenius manufactured and supplied the platelet and plasma systems to the Company under a supply agreement (the “Original Supply Agreement”) entered into by the parties. The Company also had an agreement with Fresenius that required the Company to pay royalties on INTERCEPT Blood System product sales at royalty rates that varied by product. In November 2013, the Company amended the Original Supply Agreement with Fresenius, with the new terms effective January 1, 2014 (the “2013 Amendment”). Under the 2013 Amendment, Fresenius was obligated to sell, and the Company was obligated to purchase, up to a certain specified annual volume of finished disposable kits for the platelet and plasma systems from Fresenius for both clinical and commercial use. The 2013 Amendment also provided for fixed pricing for finished kits with successive decreasing pricing tiers at various annual production volumes. Fresenius was also obligated to purchase and maintain specified inventory levels of the Company’s proprietary inactivation compounds and adsorption media from the Company at fixed prices.

In October 2015, the Company entered into an Amended and Restated Manufacturing and Supply Agreement (the “2015 Agreement”) with Fresenius, which amended and restated the 2013 Amendment and Original Supply Agreement. Under the 2015 Agreement, Fresenius continues to be obligated to sell and the Company is obligated to purchase finished disposable kits for the Company’s platelet and plasma systems and the Company’s red blood cell system product candidate (the “RBC Sets”). The 2015 Agreement permits the Company to purchase platelet and plasma systems and RBC Sets from third parties to the extent necessary to maintain supply qualifications with such third parties or where local or regional manufacturing is needed to obtain product registrations or sales. Pricing terms are initially fixed and decline at specified annual production levels, and are subject to certain adjustments after the initial pricing term. Under the 2015 Agreement, the Company is no longer required to make royalty payments to Fresenius for the sale of products after June 30, 2015. Under the 2015 Agreement, the Company maintains the amounts due from the components sold to Fresenius as a current asset on its accompanying consolidated balance sheets until such time as the Company purchases finished disposable kits using those components.

The 2015 Agreement also requires the Company to make certain payments totaling €8.6 million (“Manufacturing and Development Payments”) to Fresenius in 2016 and on December 31st of the earlier of (a) the year of achievement of certain production volumes or (b) 2022. Because these payments represent unconditional payment obligations, the Company recognized its liability for these payments at their net present value at discount rate of 9.72% based on the Company’s effective borrowing rate. The Manufacturing and Development Payments liability is accreted through interest expense based on the estimated timing of its ultimate settlement. As of March 31, 2016, the Company had paid $1.2 million (€1.1 million) and accrued $7.0 million (€6.2 million) related to the Manufacturing and Development Payments, of which $2.2 million (€1.9 million) was included in “Manufacturing and development obligations—current”, and $4.8 million (€4.3 million) was included in “Manufacturing and development obligations—non-current” on the Company’s Consolidated Balance Sheets.

As of December 31, 2015, the Company had accrued $7.8 million (€7.2 million) related to the Manufacturing and Development Payments, of which $3.3 million (€3.0 million) was included in “Manufacturing and development obligations—current”, and $4.5 million (€4.2 million) was included in “Manufacturing and development obligations—non-current” on the Company’s Consolidated Balance Sheets.

The Manufacturing and Development Payments will be made to support certain projects Fresenius will perform on behalf of the Company related to R&D activities and manufacturing efficiency activities. The Company allocated $4.8 million to R&D activities and $2.4 million to manufacturing efficiency activities based on their market value in October 2015. The prepaid asset related to amounts paid up front for the R&D activities to be conducted by Fresenius on behalf of the Company is expensed over the period which such activities occur. The manufacturing efficiency asset is expensed on a straight line basis over the life of the 2015 Agreement. As of March 31, 2016 and December 31, 2015, the prepaid asset related to amounts paid up front for the R&D activities to be conducted by Fresenius on behalf of the Company was included in “Other current assets” on the Company’s Consolidated Balance Sheets at $3.7 million and $4.1 million, respectively. As of March 31, 2016 and December 31, 2015, the manufacturing efficiency asset was included in “Other assets” on the Company’s Consolidated Balance Sheets at $2.3 million and $2.4 million, respectively.

The initial term of the 2015 Agreement extends through July 1, 2025 (the “Initial Term”) and is automatically renewed thereafter for additional two year terms (each, a “Renewal Term”), subject to termination by either party upon (i) two years written notice prior to the expiration of the Initial Term or (ii) one year written notice prior to the expiration of any Renewal Term. Under the 2015 Agreement, the Company has the right, but not the obligation, to purchase certain assets and assume certain liabilities from Fresenius.

The Company made payments to Fresenius of $3.6 million and $4.7 million relating to the manufacturing of the Company products during the three months ended March 31, 2016 and 2015, respectively. At March 31, 2016 and December 31, 2015, the Company owed Fresenius $3.2 million and $2.5 million, respectively, for platelet and plasma system disposable kits manufactured. At March 31, 2016 and December 31, 2015, amounts due from Fresenius were $0.9 million and $0.2 million, respectively.

Segment, Customer and Geographic Information
Segment, Customer and Geographic Information

Note 14. Segment, Customer and Geographic Information

The Company continues to operate in only one segment, blood safety. The Company’s chief executive officer is the chief operating decision maker who evaluates performance based on the net revenues and operating loss of the blood safety segment. The Company considers the sale of all of its INTERCEPT Blood System products to be similar in nature and function, and any revenue earned from services is minimal.

The Company’s operations outside of the U.S. include a wholly-owned subsidiary headquartered in Europe. The Company’s operations in the U.S. are responsible for the R&D and global and domestic commercialization of the INTERCEPT Blood System, while operations in Europe are responsible for the commercialization efforts of the platelet and plasma systems in Europe, the Commonwealth of Independent States and the Middle East. Product revenues are attributed to each region based on the location of the customer, and in the case of non-product revenues, on the location of the collaboration partner.

The Company had the following significant customers that accounted for more than 10% of the Company’s total revenue, each of which operates in a country outside of the United States of America, during the three months ended March 31, 2016 and 2015 (in percentages):

 

     Three Months Ended  
     March 31  
     2016     2015  

Advanced Technology Comp. KSC

     18     *   

Etablissement Francais du Sang

     *        26

Medical Device ApS

     11     *   

Rode Kruis Vlaanderen

     12     *   

 

* Represents an amount less than 10% of product revenue.
Subsequent Event
Subsequent Event

Note 15. Subsequent Event

Sales Agreement

On May 5, 2016, the Company entered into Amendment No. 2 (“Amendment No. 2”) to the Controlled Equity OfferingSM Sales Agreement, dated August 31, 2012, as previously amended on March 21, 2014 (as amended, the “Amended Cantor Agreement”) with Cantor. As amended by Amendment No. 2, the Amended Cantor Agreement now provides for the issuance and sale of shares of the Company’s common stock over the term of the Amended Cantor Agreement having an aggregate offering price of up to $62.2 million through Cantor. As a result of Amendment No. 2, at May 5, 2016, the Company had $70 million of common stock available to be sold under the Amended Cantor Agreement.

Summary of Significant Accounting Policies (Policies)

Principles of Consolidation and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include those of Cerus Corporation and its subsidiary, Cerus Europe B.V. (together with Cerus Corporation, hereinafter “Cerus” or the “Company”) after elimination of all intercompany accounts and transactions. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring entries, considered necessary for a fair presentation have been made. Operating results for the three months ended March 31, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016, or for any future periods.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2015, which were included in the Company’s 2015 Annual Report on Form 10-K, filed with the SEC on March 9, 2016. The accompanying condensed consolidated balance sheet as of December 31, 2015, has been derived from the Company’s audited consolidated financial statements as of that date, except as described in the New Accounting Pronouncement section below related to the adoption of Accounting Standards Update (“ASU”) No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.

Use of Estimates

The preparation of financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions.

Revenue

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 605-25, “Revenue Recognition – Arrangements with Multiple Deliverables,” as applicable. Revenue is recognized when (i) persuasive evidence of the arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) pricing is fixed or determinable; and (iv) collectability is reasonably assured. The Company’s main sources of revenues for the three months ended March 31, 2016 and 2015 were product revenue from sales of the INTERCEPT Blood System for platelets and plasma (“platelet and plasma systems” or “disposable kits”) and UVA illumination devices (“illuminators”).

Revenue related to product sales is generally recognized when the Company fulfills its obligations for each element of an agreement. For all sales of the Company’s INTERCEPT Blood System products, the Company uses a binding purchase order or signed sales contract as evidence of an arrangement. The Company sells its platelet and plasma systems directly to blood banks, hospitals, universities, government agencies, as well as to distributors in certain regions. Generally, the Company’s contracts with its customers do not provide for open return rights, except within a reasonable time after receipt of goods in the case of defective or non-conforming product. Deliverables and the units of accounting vary according to the provisions of each purchase order or sales contract. For revenue arrangements with multiple elements, the Company determines whether the delivered elements meet the criteria as separate units of accounting. Such criteria require that the deliverable have stand-alone value to the customer and that if a general right of return exists relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Once the Company determines if the deliverable meets the criteria for a separate unit of accounting, the Company must determine how the consideration should be allocated between the deliverables and how the separate units of accounting should be recognized as revenue. Consideration received is allocated to elements that are identified as discrete units of accounting. Because the Company has no vendor specific objective evidence or third party evidence for its systems due to the Company’s variability in its pricing across the regions into which it sells its products, the allocation of revenue is based on best estimated selling price for the products sold. The objective of best estimated selling price is to determine the price at which the Company would transact a sale, had the product been sold on a stand-alone basis. The Company determines best estimated selling price for its systems by considering multiple factors. The Company regularly reviews best estimated selling price.

Freight costs charged to customers are recorded as a component of revenue. Taxes that the Company invoices to its customers and remits to governments are recorded on a net basis, which excludes such tax from product revenue.

Research and Development Expenses

In accordance with ASC Topic 730, “Accounting for Research and Development Expenses,” research and development (“R&D”) expenses are charged to expense when incurred, including cost incurred under each grant that has been awarded to the Company by the U.S. government or development contracts. Research and development expenses include salaries and related expenses for scientific and regulatory personnel, payments to consultants, supplies and chemicals used in in-house laboratories, costs of R&D facilities, depreciation of equipment and external contract research expenses, including clinical trials, preclinical safety studies, other laboratory studies, process development and product manufacturing for research use.

The Company’s use of estimates in recording accrued liabilities for R&D activities (see “Use of Estimates” above) affects the amounts of R&D expenses recorded. Actual results may differ from those estimates under different assumptions or conditions.

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be classified as cash equivalents. These investments primarily consist of money market instruments, and are classified as available-for-sale.

Investments

Investments with original maturities of greater than three months primarily include corporate debt, U.S. government agency securities and marketable equity securities of Aduro Biotech, Inc. (“Aduro”), and are designated as available-for-sale and classified as short-term investments or investment in marketable equity securities, in accordance with ASC Topic 320, “Accounting for Certain Investments in Debt and Equity Securities”. Available-for-sale securities are carried at estimated fair value. The Company views its available-for-sale portfolio as available for use in its current operations. Unrealized gains and losses derived by changes in the estimated fair value of available-for-sale securities were recorded in “Net unrealized (losses) gains on available-for-sale investments, net of taxes” on the Company’s unaudited condensed consolidated statements of comprehensive loss. Realized gains (losses) from the sale of available-for-sale investments were recorded in “Other income, net” on the Company’s unaudited condensed consolidated statements of operations. The costs of securities sold are based on the specific identification method, if applicable. The Company reported the amortization of any premium and accretion of any discount resulting from the purchase of debt securities as a component of interest income.

The Company also reviews its available-for-sale securities on a regular basis to evaluate whether any security has experienced an other-than-temporary decline in fair value. Other-than-temporary declines in market value, if any, are recorded in “Other income, net” on the Company’s unaudited condensed consolidated statements of operations.

Restricted Cash

The Company holds a certificate of deposit with a domestic bank for any potential decommissioning resulting from the Company’s possession of radioactive material. The certificate of deposit is held to satisfy the financial surety requirements of the California Department of Health Services and is recorded in “Other assets” on the Company’s unaudited condensed consolidated balance sheets. The Company also has certain non-U.S. dollar denominated deposits recorded as “Restricted cash” in compliance with certain foreign contractual requirements.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, available-for-sale securities and accounts receivable.

Pursuant to the Company’s investment policy, substantially all of the Company’s cash, cash equivalents and available-for-sale securities are maintained at major financial institutions of high credit standing. The Company monitors the financial credit worthiness of the issuers of its investments and limits the concentration in individual securities and types of investments that exist within its investment portfolio. Generally, all of the Company’s investments carry high credit quality ratings, which is in accordance with its investment policy. At March 31, 2016, the fair value of the Company’s marketable equity securities of Aduro is subject to the underlying volatility of Aduro’s stock price. At March 31, 2016, the Company does not believe there is significant financial risk from non-performance by the issuers of the Company’s cash equivalents and short-term investments.

 

Concentrations of credit risk with respect to trade receivables exist. On a regular basis, including at the time of sale, the Company performs credit evaluations of its significant customers that it expects to sell to on credit terms. Generally, the Company does not require collateral from its customers to secure accounts receivable. To the extent that the Company determines specific invoices or customer accounts may be uncollectible, the Company establishes an allowance for doubtful accounts against the accounts receivable on its unaudited condensed consolidated balance sheets and records a charge on its unaudited condensed consolidated statements of operations as a component of selling, general and administrative expenses.

The Company had two customers and three customers that accounted for more than 10% of the Company’s outstanding trade receivables at March 31, 2016 and December 31, 2015, respectively. These customers cumulatively represented approximately 48% and 49% of the Company’s outstanding trade receivables at March 31, 2016 and December 31, 2015, respectively. To date, the Company has not experienced collection difficulties from these customers.

Inventories

At March 31, 2016 and December 31, 2015, inventory consisted of work-in-process and finished goods only. Finished goods include INTERCEPT disposable kits, illuminators, and certain replacement parts for the illuminators. Platelet and plasma systems’ disposable kits generally have a two-year life from the date of manufacture. Illuminators and replacement parts do not have regulated expiration dates. Work-in-process includes certain components that are manufactured over a protracted length of time before being sold to, and ultimately incorporated and assembled by Fresenius Kabi Deutschland GmbH or Fresenius, Inc. (with their affiliates, “Fresenius”) into the finished INTERCEPT disposable kits. The Company maintains an inventory balance based on its current sales projections, and at each reporting period, the Company evaluates whether its work-in-process inventory would be sold to Fresenius for production of finished units in order to sell to existing and prospective customers within the next twelve-month period. It is not customary for the Company’s production cycle for inventory to exceed twelve months. Instead, the Company uses its best judgment to factor in lead times for the production of its work-in-process and finished units to meet the Company’s forecasted demands. If actual results differ from those estimates, work-in-process inventory could potentially accumulate for periods exceeding one year. At March 31, 2016 and December 31, 2015, the Company classified its work-in-process inventory as a current asset on its consolidated balance sheets based on its evaluation that the work-in-process inventory would be sold to Fresenius for finished disposable kit production within each respective subsequent twelve-month period.

Inventory is recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value. The Company uses significant judgment to analyze and determine if the composition of its inventory is obsolete, slow-moving or unsalable and frequently reviews such determinations. The Company writes down specifically identified unusable, obsolete, slow-moving, or known unsalable inventory that has no alternative use in the period that it is first recognized by using a number of factors including product expiration dates, open and unfulfilled orders, and sales forecasts. Any write-down of its inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest that the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded in “Cost of revenue” on the Company’s consolidated statements of operations. At March 31, 2016 and December 31, 2015, the Company had $1.6 million and $1.8 million, respectively, recorded for potential obsolete, expiring or unsalable product.

Property and Equipment, net

Property and equipment is comprised of furniture, equipment, leasehold improvements, information technology hardware and software and is recorded at cost. At the time the property and equipment is ready for its intended use, it is depreciated on a straight-line basis over the estimated useful lives of the assets (generally three to five years). Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful lives of the improvements.

Capitalization of Software Costs

The Company capitalizes certain significant costs incurred in the acquisition and development of software for internal use, including the costs of the software, materials, and consultants during the application development stage. Costs incurred prior to the application development stage, costs incurred once the application is substantially complete and ready for its intended use, and other costs not qualifying for capitalization, including training and maintenance costs, are charged to expense as incurred. The capitalized costs associated with the enterprise resource planning system are being amortized over the estimated useful life of five years.

Goodwill and Intangible Assets, net

Intangible assets, net, which include a license for the right to commercialize the INTERCEPT Blood System in Asia, are subject to ratable amortization over the original estimated useful life of ten years. The amortization of the Company’s intangible assets, net, is recorded in “Amortization of intangible assets” on the Company’s consolidated statements of operations. Goodwill is not amortized but instead is subject to an impairment test performed on an annual basis, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Such impairment analysis is performed on August 31 of each fiscal year, or more frequently if indicators of impairment exist. The test for goodwill impairment may be assessed using qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the Company must then proceed with performing the quantitative two-step process to test goodwill for impairment; otherwise, goodwill is not considered impaired and no further testing is warranted. The Company may choose not to perform the qualitative assessment to test goodwill for impairment and proceed directly to the quantitative two-step process; however, the Company may revert to the qualitative assessment to test goodwill for impairment in any subsequent period. The first step of the two-step process compares the fair value of each reporting unit with its respective carrying amount, including goodwill. The Company has determined that it operates in one reporting unit and estimates the fair value of its one reporting unit using the enterprise approach under which it considers the quoted market capitalization of the Company as reported on the Nasdaq Global Market. The Company considers quoted market prices that are available in active markets to be the best evidence of fair value. The Company also considers other factors, which include future forecasted results, the economic environment and overall market conditions. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired and, therefore, the second step of the impairment test is unnecessary. The second step of the two-step process, which is used to measure the amount of impairment loss, compares the implied fair value of each reporting unit’s goodwill, based on the present value of future cash flows, with the respective carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

The Company performs an impairment test on its intangible assets, in accordance ASC Topic 360-10, “Property, Plant and Equipment,” if certain events or changes in circumstances occur which indicate that the carrying amounts of its intangible assets may not be recoverable. If the intangible assets are not recoverable, an impairment loss would be recognized by the Company based on the excess amount of the carrying value of the intangible assets over its fair value. For further details regarding the impairment analysis, reference is made to the section below under “Long-lived Assets.” See Note 5 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s impairment analysis and the valuation of goodwill and intangible assets, net.

Long-lived Assets

The Company evaluates its long-lived assets for impairment by continually monitoring events and changes in circumstances that could indicate carrying amounts of its long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the expected undiscounted future cash flows are less than the carrying amount of these assets, the Company then measures the amount of the impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company did not recognize impairment charges related to its long-lived assets during the three months ended March 31, 2016 and 2015.

Foreign Currency Remeasurement

The functional currency of the Company’s foreign subsidiary is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured in U.S. dollars using the exchange rates at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are remeasured in U.S. dollars using historical exchange rates. Revenues and expenses are remeasured using average exchange rates prevailing during the period. Remeasurements are recorded in the Company’s consolidated statements of operations.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation. Stock-based compensation expense is measured at the grant-date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period, and is adjusted for estimated forfeitures. To the extent that stock options contain performance criteria for vesting, stock-based compensation is recognized once the performance criteria are probable of being achieved.

 

For stock-based awards issued to non-employees, the Company follows ASC Topic 505-50, Equity Based Payment to Non-Employees and considers the measurement date at which the fair value of the stock-based award is measured to be the earlier of (i) the date at which a commitment for performance by the grantee to earn the equity instrument is reached or (ii) the date at which the grantee’s performance is complete. The Company recognizes stock-based compensation expense for the fair value of the vested portion of the non-employee stock-based awards in its consolidated statements of operations.

See Note 11 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s stock-based compensation expenses.

Income Taxes

The Company accounts for income taxes using an asset and liability approach in accordance with ASC Topic 740, Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. ASC Topic 740 requires derecognition of tax positions that do not have a greater than 50% likelihood of being recognized upon review by a taxing authority having full knowledge of all relevant information. Use of a valuation allowance as described in ASC Topic 740 is not an appropriate substitute for derecognition of a tax position. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense. To date, the Company has not recognized any interest and penalties in its unaudited condensed consolidated statements of operations, nor has it accrued for or made payments for interest and penalties. Although the Company believes it more likely than not that a taxing authority would agree with its current tax positions, there can be no assurance that the tax positions the Company has taken will be substantiated by a taxing authority if reviewed. The Company’s U.S. federal and California tax years through 2015 remain subject to examination by the taxing jurisdictions due to unutilized net operating losses and research credits. The Company continues to carry a full valuation allowance on all of its net deferred tax assets, except for its indefinite lived intangibles.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share gives effect to all potentially dilutive common shares outstanding for the period. The potentially dilutive securities include stock options, employee stock purchase plan rights, warrants and restricted stock units, which are calculated using the treasury stock method, and convertible preferred stock, which is calculated using the if-converted method. Diluted net loss per share also gives effect to potential adjustments to the numerator for gains resulting from the revaluation of warrants to fair value for the period, even if the Company is in a net loss position if the effect would result in more dilution.

Certain potential dilutive securities were excluded from the dilution calculation for the three months ended March 31, 2016 and 2015, as their inclusion would have been anti-dilutive.

The following table sets forth the reconciliation of the numerator and denominator used in the computation of basic and diluted net loss per share for the three months ended March 31, 2016 and 2015 (in thousands, except per share amounts):

 

     Three Months Ended
March 31,
 
     2016      2015  

Numerator for Basic and Diluted:

     

Net loss used for basic calculation

   $ (16,863    $ (9,460

Effect of revaluation of warrant liability

     —           (6,296
  

 

 

    

 

 

 

Adjusted net loss used for diluted calculation

   $ (16,863    $ (15,756
  

 

 

    

 

 

 

Denominator:

     

Basic weighted average number of shares outstanding

     99,471         93,411   

Effect of dilutive potential shares

     —           1,251   
  

 

 

    

 

 

 

Diluted weighted average number of shares outstanding

     99,471         94,662   
  

 

 

    

 

 

 

Net loss per share:

     

Basic

   $ (0.17    $ (0.10

Diluted

   $ (0.17    $ (0.17

 

The table below presents shares underlying stock options, employee stock purchase plan rights, restricted stock units and/or convertible preferred stock that were excluded from the calculation of the weighted average number of shares outstanding used for the calculation of diluted net loss per share. These are excluded from the calculation due to their anti-dilutive effect for the three months ended March 31, 2016 and 2015 (shares in thousands):

 

     Three Months Ended
March 31,
 
     2016      2015  

Weighted average number of anti-dilutive potential shares—outstanding options

     14,986         13,439   

Guarantee and Indemnification Arrangements

The Company recognizes the fair value for guarantee and indemnification arrangements issued or modified by the Company. In addition, the Company monitors the conditions that are subject to the guarantees and indemnifications in order to identify if a loss has occurred. If the Company determines it is probable that a loss has occurred, then any such estimable loss would be recognized under those guarantees and indemnifications. Some of the agreements that the Company is a party to contain provisions that indemnify the counter party from damages and costs resulting from claims that the Company’s technology infringes the intellectual property rights of a third party or claims that the sale or use of the Company’s products have caused personal injury or other damage or loss. The Company has not received any such requests for indemnification under these provisions and has not been required to make material payments pursuant to these provisions.

The Company generally provides for a one-year warranty on certain of its INTERCEPT blood-safety products covering defects in materials and workmanship. The Company accrues costs associated with warranty obligations when claims become known and are estimable. The Company has not experienced significant or systemic warranty claims nor is it aware of any existing current warranty claims. Accordingly, the Company had not accrued for any future warranty costs for its products at March 31, 2016 and December 31, 2015.

Fair Value of Financial Instruments

The Company applies the provisions of fair value relating to its financial assets and liabilities. The carrying amounts of accounts receivables, accounts payable, and other accrued liabilities approximate their fair value due to the relative short-term maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, the Company believes the fair value of its debt approximates their carrying amounts. The Company measures and records certain financial assets and liabilities at fair value on a recurring basis, including its available-for-sale securities and warrant liability prior to the expiration and exercise of the warrants in November 2015. The Company classifies instruments within Level 1 if quoted prices are available in active markets for identical assets, which include the Company’s cash accounts and money market funds. The Company classifies instruments in Level 2 if the instruments are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. These instruments include the Company’s corporate debt and U.S. government agency securities holdings. The available-for-sale securities are held by a custodian who obtains investment prices from a third party pricing provider that uses standard inputs (observable in the market) to models which vary by asset class. The Company classifies instruments in Level 3 if one or more significant inputs or significant value drivers are unobservable. The Company assesses any transfers among fair value measurement levels at the end of each reporting period.

See Notes 2 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s valuation of financial instruments.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date, which defers by one year the effective date of ASU No. 2014-09 to annual reporting periods beginning after December 15, 2017 (including interim periods within those periods). Early adoption is permitted to the original effective date of December 15, 2016 (including interim periods within those periods). In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies how to identify the unit of accounting for the principal versus agent evaluation and how to apply the control principle to certain types of arrangements. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies the implementation guidance on identifying performance obligations and licensing. These ASUs will be effective for the Company in the first quarter of fiscal year 2018, using one of two retrospective application methods. The Company has not selected a transition method and is currently assessing the potential effects of this ASU on the Company’s condensed consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and provide related disclosures. This ASU will be effective for the Company in fiscal year 2017. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s condensed consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the corresponding debt liability rather than as an asset. The Company has adopted this ASU effective January 1, 2016 under the retrospective application method. To conform to the current period presentation, the Company reclassified $32,000 and $36,000, which were previously included in the Other current assets and Other assets, respectively, in the Company’s condensed consolidated balance sheet as of December 31, 2015, as a reduction of Debt-current and Debt-non-current, respectively. As a result of the reclassifications, Other current assets and Debt-current decreased by $32,000, and Other assets and Debt- non-current decreased by $36,000, in the Company’s condensed consolidated balance sheet as of December 31, 2015.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10), which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, this ASU eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. This ASU will be effective for the Company in fiscal year 2018. Early adoption is permitted. The Company is currently assessing the future impact of this ASU on the Company’s condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. This ASU will be effective for the Company in fiscal year 2019. Early adoption is permitted. The Company is currently assessing the future impact of this ASU on its consolidated financial statements and anticipates the new guidance will significantly impact the Company’s condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which requires entities to record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement when awards vest or are settled, and eliminates additional paid-in capital (APIC) pools. The ASU also changes the accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation, and the accounting for forfeitures, and provides two practical expedients for nonpublic entities. This ASU will be effective for the Company in fiscal year 2017. Early adoption is permitted. The Company is currently assessing the future impact of this ASU on the Company’s condensed consolidated financial statements.

Summary of Significant Accounting Policies (Tables)

The following table sets forth the reconciliation of the numerator and denominator used in the computation of basic and diluted net loss per share for the three months ended March 31, 2016 and 2015 (in thousands, except per share amounts):

 

     Three Months Ended
March 31,
 
     2016      2015  

Numerator for Basic and Diluted:

     

Net loss used for basic calculation

   $ (16,863    $ (9,460

Effect of revaluation of warrant liability

     —           (6,296
  

 

 

    

 

 

 

Adjusted net loss used for diluted calculation

   $ (16,863    $ (15,756
  

 

 

    

 

 

 

Denominator:

     

Basic weighted average number of shares outstanding

     99,471         93,411   

Effect of dilutive potential shares

     —           1,251   
  

 

 

    

 

 

 

Diluted weighted average number of shares outstanding

     99,471         94,662   
  

 

 

    

 

 

 

Net loss per share:

     

Basic

   $ (0.17    $ (0.10

Diluted

   $ (0.17    $ (0.17

The table below presents shares underlying stock options, employee stock purchase plan rights, restricted stock units and/or convertible preferred stock that were excluded from the calculation of the weighted average number of shares outstanding used for the calculation of diluted net loss per share. These are excluded from the calculation due to their anti-dilutive effect for the three months ended March 31, 2016 and 2015 (shares in thousands):

 

     Three Months Ended
March 31,
 
     2016      2015  

Weighted average number of anti-dilutive potential shares—outstanding options

     14,986         13,439   
Fair Value on Financial Instruments (Tables)
Fair Values of Financial Assets and Liabilities

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at March 31, 2016 (in thousands):

 

     Balance sheet
classification
   Total      Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
     Significant
Other
Observable
Inputs
(Level 2)
     Significant
Unobservable
Inputs
(Level 3)
 

Money market funds

   Cash and cash equivalents    $ 6,648       $ 6,648       $ —         $ —     

United States government agency securities

   Short-term investments      9,997         —           9,997         —     

Corporate debt securities

   Short-term investments      60,516         —           60,516         —     

Marketable equity securities

   Marketable equity securities      5,082         5,082         —           —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets

      $ 82,243       $ 11,730       $ 70,513       $ —     
     

 

 

    

 

 

    

 

 

    

 

 

 

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2015 (in thousands):

 

     Balance sheet
classification
   Total      Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
     Significant
Other
Observable
Inputs
(Level 2)
     Significant
Unobservable
Inputs

(Level 3)
 

Money market funds

   Cash and cash equivalents    $ 59,302       $ 59,302       $ —         $ —     

Corporate debt securities

   Short-term investments      25,698         —           25,698         —     

Marketable equity securities

   Marketable equity securities      11,163         11,163         —           —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets

      $ 96,163       $ 70,465       $ 25,698       $ —     
     

 

 

    

 

 

    

 

 

    

 

 

 
Available-for-sale Securities (Tables)

The following is a summary of available-for-sale securities at March 31, 2016 (in thousands):

 

     March 31, 2016  
     Amortized Cost      Gross
Unrealized Gain
     Gross
Unrealized Loss
     Fair Value  

Money market funds

   $ 6,648       $ —         $ —         $ 6,648   

United States government agency securities

     9,996         1         —           9,997   

Corporate debt securities

     60,465         72         (21      60,516   

Marketable equity securities

     —           5,082         —           5,082   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 77,109       $ 5,155       $ (21    $ 82,243   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following is a summary of available-for-sale securities at December 31, 2015 (in thousands):

 

     December 31, 2015  
     Amortized Cost      Gross
Unrealized Gain
     Gross
Unrealized Loss
     Fair Value  

Money market funds

   $ 59,302       $ —         $ —         $ 59,302   

Corporate debt securities

     25,747         —           (49      25,698   

Marketable equity securities

     —           11,163         —           11,163   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 85,049       $ 11,163       $ (49    $ 96,163   
  

 

 

    

 

 

    

 

 

    

 

 

 

Available-for-sale securities at March 31, 2016 and December 31, 2015, consisted of the following by contractual maturity (in thousands):

 

     March 31, 2016      December 31, 2015  
     Amortized Cost      Fair Value      Amortized Cost      Fair Value  

One year or less

   $ 56,934       $ 56,934       $ 85,049       $ 85,000   

Marketable equity securities

     —           5,082         —           11,163   

Greater than one year and less than five years

     20,175         20,227         —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 77,109       $ 82,243       $ 85,049       $ 96,163   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following tables show all available-for-sale marketable securities in an unrealized loss position for which an other-than-temporary impairment has not been recognized and the related gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

 

     March 31, 2016  
     Less than 12 Months     12 Months or Greater     Total  
     Fair Value      Unrealized Loss     Fair Value      Unrealized Loss     Fair Value      Unrealized Loss  

Corporate debt securities

   $ 18,137       $ (21   $ —         $ —        $ 18,137       $ (21
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total available-for-sale securities

   $ 18,137       $ (21   $ —         $ —        $ 18,137       $ (21
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
     December 31, 2015  
     Less than 12 Months     12 Months or Greater     Total  
     Fair Value      Unrealized Loss     Fair Value      Unrealized Loss     Fair Value      Unrealized Loss  

Corporate debt securities

   $ 20,170       $ (46   $ 5,528       $ (3   $ 25,698       $ (49
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total available-for-sale securities

   $ 20,170       $ (46   $ 5,528       $ (3   $ 25,698       $ (49
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
Inventories (Tables)
Inventories

Inventories at March 31, 2016 and December 31, 2015, consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Work-in-process

   $ 2,966       $ 3,187   

Finished goods

     8,289         7,625   
  

 

 

    

 

 

 

Total inventories

   $ 11,255       $ 10,812   
  

 

 

    

 

 

 
Goodwill and Intangible Assets, net (Tables)
Summary of Intangible Assets

The following is a summary of intangible assets, net at March 31, 2016 (in thousands):

 

     March 31, 2016  
     Gross
Carrying
Amount
     Accumulated
Amortization
     Net
Carrying
Amount
 

Acquisition-related intangible assets:

        

Reacquired license—INTERCEPT Asia

   $ 2,017       $ (1,127    $ 890   
  

 

 

    

 

 

    

 

 

 

Total intangible assets

   $ 2,017       $ (1,127    $ 890   
  

 

 

    

 

 

    

 

 

 

 

The following is a summary of intangible assets, net at December 31, 2015 (in thousands):

 

     December 31, 2015  
     Gross
Carrying
Amount
     Accumulated
Amortization
     Net
Carrying
Amount
 

Acquisition-related intangible assets:

        

Reacquired license—INTERCEPT Asia

   $ 2,017       $ (1,077    $ 940   
  

 

 

    

 

 

    

 

 

 

Total intangible assets

   $ 2,017       $ (1,077    $ 940   
  

 

 

    

 

 

    

 

 

 
Accrued Liabilities (Tables)
Accrued Liabilities

Accrued liabilities at March 31, 2016 and December 31, 2015, consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Accrued compensation and related costs

   $ 4,664       $ 5,198   

Accrued professional services

     2,808         2,337   

Accrued customer costs

     923         987   

Accrued insurance premiums

     220         438   

Other accrued expenses

     606         893   
  

 

 

    

 

 

 

Total accrued liabilities

   $ 9,221       $ 9,853   
  

 

 

    

 

 

 
Debt (Tables)

Debt consisted of the following (in thousands):

 

     March 31, 2016  
     Principal      Unamortized
Discount
     Total  

Loan and Security Agreement

   $ 20,000       $ (172    $ 19,828   

Less: debt—current

     (4,615      88         (4,527
  

 

 

    

 

 

    

 

 

 

Debt—non-current

   $ 15,385       $ (84    $ 15,301   
  

 

 

    

 

 

    

 

 

 
     December 31, 2015  
     Principal      Unamortized
Discount
     Net Carrying
Value
 

Loan and Security Agreement

   $ 20,000       $ (196    $ 19,804   

Less: debt—current

     (3,050      94         (2,956
  

 

 

    

 

 

    

 

 

 

Debt—non-current

   $ 16,950       $ (102    $ 16,848   
  

 

 

    

 

 

    

 

 

 

Principal and interest payments on debt at March 31, 2016, are expected to be as follows * (in thousands):

 

Year ended December 31,

   Principal      Interest      Total  

2016

   $ 3,050       $ 1,003       $ 4,053   

2017

     6,428         980         7,408   

2018

     6,892         517         7,409   

2019

     3,630         1,474         5,104   
  

 

 

    

 

 

    

 

 

 

Total

   $ 20,000       $ 3,974       $ 23,974   
  

 

 

    

 

 

    

 

 

 

 

* Unless interest only period extends to December 31, 2016, as described below.
Stock-Based Compensation (Tables) (2008 Equity Incentive Plan)

Activity under the Company’s equity incentive plans related to stock options is set forth below (in thousands except per share amounts):

 

     Number of
Options
Outstanding
     Weighted
Average
Exercise
Price per
Share
 

Balances at December 31, 2015

     14,119       $ 4.21   

Granted

     2,075         5.08   

Forfeited

     (37      5.16   

Expired

     (89      9.97   

Exercised

     (127      2.33   
  

 

 

    

Balances at March 31, 2016

     15,941         4.31   
  

 

 

    

Activity under the Company’s equity incentive plans related to RSUs is set forth below (in thousands except per share amounts):

 

     Number of
Shares
Outstanding
     Weighted
Average
Grant Date
Fair Value
per Share
 

Balances at December 31, 2015

     —         $ —     

Granted

     634         5.06   

Forfeited

     (1      5.06   

Vested

     —           —     
  

 

 

    

Balances at March 31, 2016

     633         5.06   
  

 

 

    
Segment, Customer and Geographic Information (Tables)
Customer that Accounted for More Than Ten Percent of Total Revenue

The Company had the following significant customers that accounted for more than 10% of the Company’s total revenue, each of which operates in a country outside of the United States of America, during the three months ended March 31, 2016 and 2015 (in percentages):

 

     Three Months Ended  
     March 31  
     2016     2015  

Advanced Technology Comp. KSC

     18     *   

Etablissement Francais du Sang

     *        26

Medical Device ApS

     11     *   

Rode Kruis Vlaanderen

     12     *   

 

* Represents an amount less than 10% of product revenue.
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
3 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended
Mar. 31, 2016
Segment
Customer
Mar. 31, 2015
Dec. 31, 2015
Customer
Mar. 31, 2016
Computer Software, Intangible Asset
Dec. 31, 2015
Accounting Standards Update 2015-03
Scenario, Previously Reported
Dec. 31, 2015
Accounting Standards Update 2015-03
Scenario, Adjustment
Mar. 31, 2016
Trade Accounts Receivable
Customer Concentration Risk
Dec. 31, 2015
Trade Accounts Receivable
Customer Concentration Risk
Mar. 31, 2016
Minimum
Mar. 31, 2016
Maximum
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
Number of major customers representing outstanding trade receivables
 
 
 
 
 
 
 
 
Concentration risk, percentage
 
 
 
 
 
 
48.00% 
49.00% 
 
 
Life of inventory
2 years 
 
 
 
 
 
 
 
 
 
Protracted length of inventory
1 year 
 
 
 
 
 
 
 
 
 
Inventory valuation reserves
$ 1,600,000 
 
$ 1,800,000 
 
 
 
 
 
 
 
Estimated useful life of property and equipment
 
 
 
 
 
 
 
 
3 years 
5 years 
Enterprise resource planning system, estimated useful life
 
 
 
5 years 
 
 
 
 
 
 
Estimated useful life of intangible assets
10 years 
 
 
 
 
 
 
 
 
 
Number of reportable segments
 
 
 
 
 
 
 
 
 
Impairment charges on long-lived assets
 
 
 
 
 
 
 
 
Period of warranty
1 year 
 
 
 
 
 
 
 
 
 
Warranty claim liability
 
 
 
 
 
 
 
 
Other current assets
6,333,000 
 
4,755,000 
 
32,000 
(32,000)
 
 
 
 
Other assets
2,341,000 
 
2,579,000 
 
36,000 
(36,000)
 
 
 
 
Debt - current
4,527,000 
 
2,956,000 
 
 
(32,000)
 
 
 
 
Debt - non-current
$ 15,301,000 
 
$ 16,848,000 
 
 
$ (36,000)
 
 
 
 
Reconciliation of Numerator and Denominator Used in Computation of Basic and Diluted Net Income Loss per Share (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Numerator for Basic and Diluted:
 
 
Net loss used for basic calculation
$ (16,863)
$ (9,460)
Effect of revaluation of warrant liability
 
(6,296)
Adjusted net loss used for diluted calculation
$ (16,863)
$ (15,756)
Denominator:
 
 
Basic weighted average number of shares outstanding
99,471 
93,411 
Effect of dilutive potential shares
 
1,251 
Diluted weighted average number of shares outstanding
99,471 
94,662 
Net loss per share:
 
 
Basic
$ (0.17)
$ (0.10)
Diluted
$ (0.17)
$ (0.17)
Shares Underlying Stock Options, Excluded from Calculation of Weighted Average Number of Shares Outstanding used for Calculation of Diluted Net Loss Per Share (Detail) (Stock Options)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Stock Options
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Weighted average number of anti-dilutive potential shares-outstanding options
14,986 
13,439 
Fair Values on Financial Assets and Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Fair value of financial assets and liabilities
 
 
Total financial assets
$ 82,243 
$ 96,163 
Money market funds
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
6,648 
59,302 
Corporate debt securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
60,516 
25,698 
Marketable equity securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
5,082 
11,163 
United States government agency securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
9,997 
 
Level 1
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
11,730 
70,465 
Level 1 |
Money market funds
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
6,648 
59,302 
Level 1 |
Marketable equity securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
5,082 
11,163 
Level 2
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
70,513 
25,698 
Level 2 |
Corporate debt securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
60,516 
25,698 
Level 2 |
United States government agency securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
$ 9,997 
 
Summary of Available for Sale Securities (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
$ 77,109 
$ 85,049 
Gross Unrealized Gain
5,155 
11,163 
Gross Unrealized (Loss)
(21)
(49)
Fair Value
82,243 
96,163 
Money market funds
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
6,648 
59,302 
Fair Value
6,648 
59,302 
Corporate debt securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
60,465 
25,747 
Gross Unrealized Gain
72 
 
Gross Unrealized (Loss)
(21)
(49)
Fair Value
60,516 
25,698 
Marketable equity securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Gross Unrealized Gain
5,082 
11,163 
Fair Value
5,082 
11,163 
United States government agency securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
9,996 
 
Gross Unrealized Gain
 
Fair Value
$ 9,997 
 
Available for Sale Debt Securities by Original Contractual Maturity (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
 
 
One year or less, amortized cost
$ 56,934 
$ 85,049 
Marketable equity securities
Greater than one year and less than five years, amortized cost
20,175 
 
Amortized Cost
77,109 
85,049 
One year or less, fair value
56,934 
85,000 
Marketable equity securities
5,082 
11,163 
Greater than one year and less than five years, fair value
20,227 
 
Total available-for-sale securities fair value
$ 82,243 
$ 96,163 
Available for Sale Marketable Securities in Unrealized Position (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
 
 
Less than 12 Months, Fair Value
$ 18,137 
$ 20,170 
Less than 12 Months, Unrealized Loss
(21)
(46)
12 Months or Longer, Fair Value
 
5,528 
12 Months or Longer, Unrealized Loss
 
(3)
Total, Fair Value
18,137 
25,698 
Total, Unrealized Loss
(21)
(49)
Corporate debt securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Less than 12 Months, Fair Value
18,137 
20,170 
Less than 12 Months, Unrealized Loss
(21)
(46)
12 Months or Longer, Fair Value
 
5,528 
12 Months or Longer, Unrealized Loss
 
(3)
Total, Fair Value
18,137 
25,698 
Total, Unrealized Loss
$ (21)
$ (49)
Available-for-Sale Securities - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
 
 
Other-than-temporary impairment losses
$ 0 
$ 0 
Gross realized gains from the sale or maturity of available-for-sale investments
Gross realized losses from the sale or maturity of available-for-sale investments
$ 0 
$ 0 
Inventories (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Inventory [Line Items]
 
 
Work-in-process
$ 2,966 
$ 3,187 
Finished goods
8,289 
7,625 
Total inventories
$ 11,255 
$ 10,812 
Goodwill and Intangible Assets Net - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Dispose, impair or recognition of additional goodwill
$ 0 
 
Impairment charges on goodwill
 
Amortization of intangible assets
50,000 
50,000 
Impairment losses recognized related to the acquired intangible assets
Annual amortization expense of the intangible assets, 2016 (remaining nine months)
150,000 
 
Annual amortization expense of the intangible assets, 2017
200,000 
 
Annual amortization expense of the intangible assets, 2018
200,000 
 
Annual amortization expense of the intangible assets, 2019
200,000 
 
Annual amortization expense of the intangible assets, 2020
$ 100,000 
 
Summary of Intangible Assets Net (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
$ 2,017 
$ 2,017 
Accumulated Amortization
(1,127)
(1,077)
Net Carrying Amount
890 
940 
Reacquired license - INTERCEPT Asia
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
2,017 
2,017 
Accumulated Amortization
(1,127)
(1,077)
Net Carrying Amount
$ 890 
$ 940 
Marketable Equity investment - Additional Information (Detail) (USD $)
1 Months Ended
Mar. 31, 2016
Apr. 30, 2015
Aduro
Investment [Line Items]
 
 
Carrying value of investment
$ 0 
 
Preferred shares converted to common stock
 
396,700 
Accrued Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Schedule of Accrued Liabilities [Line Items]
 
 
Accrued compensation and related costs
$ 4,664 
$ 5,198 
Accrued professional services
2,808 
2,337 
Accrued customer costs
923 
987 
Accrued insurance premiums
220 
438 
Other accrued expenses
606 
893 
Total accrued liabilities
$ 9,221 
$ 9,853 
Debt (Detail) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Less: debt - current, Principal
$ (4,615,000)
$ (3,050,000)
Less: debt - current, Unamortized Discount
88,000 
94,000 
Less: debt-current
(4,527,000)
(2,956,000)
Debt - non-current, Principal
15,385,000 
16,950,000 
Debt - non-current, Unamortized Discount
(84,000)
(102,000)
Debt-non-current
15,301,000 
16,848,000 
Cerus Term Loans
 
 
Debt Instrument [Line Items]
 
 
Total debt, Principal
20,000,000 
20,000,000 
Total debt, Unamortized amount
(172,000)
(196,000)
Total debt
$ 19,828,000 
$ 19,804,000 
Debt - Principal and Interest Payments on Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Debt Instrument [Line Items]
 
2016, Principal
$ 3,050 1
2017, Principal
6,428 1
2018, Principal
6,892 1
2019, Principal
3,630 1
Total, Principal
20,000 1
2016, Interest
1,003 1
2017, Interest
980 1
2018, Interest
517 1
2019, Interest
1,474 1
Total, Interest
3,974 1
2016, Total
4,053 1
2017, Total
7,408 1
2018, Total
7,409 1
2019, Total
5,104 1
Total
$ 23,974 1
Debt - Additional Information (Detail) (Cerus Term Loans, USD $)
0 Months Ended 3 Months Ended
Jun. 30, 2014
Tranche
Mar. 31, 2016
Jun. 30, 2014
Line of Credit Facility [Line Items]
 
 
 
Maximum borrowing limit
 
 
$ 30,000,000 
Term of agreement
5 years 
 
 
Number of loan tranches
 
 
Interest rate, description
 
Term Loan A bears an interest rate of 6.95%. Term Loan B bears an interest rate of 7.01%. Term Loan C would bear an interest rate calculated at the greater of 6.95%, or 6.72% plus the three month U.S. LIBOR rate in effect three business days prior to the Term Loan C funding date. 
 
Maturity period
 
Jun. 01, 2019 
 
Principal and interest payments
36 months 
 
 
Final payment term percent
7.00% 
 
 
Terms of required periodic payments of interest and principal
 
The Company is required to make interest only payments through June 2016, followed by thirty-six months of equal principal and interest payments thereafter; however, if the Revenue Event is achieved no later than May 31, 2016, then the interest-only period may be extended through December 31, 2016, and the amortization period will be reduced to thirty months. The Company is also required to make a final payment equal to 7% of the principal amounts of the Term Loans drawn payable on the earlier to occur of maturity or prepayment. 
 
Securities Pledged as Collateral
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Percentage of investments made in subsidiary
35.00% 
 
35.00% 
First Tranche (Term Loan A)
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Loan and security agreement
10,000,000 
 
10,000,000 
Interest rate
6.95% 
 
6.95% 
Second Tranche (Term Loan B)
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Loan and security agreement
10,000,000 
 
10,000,000 
Borrowing conditions
 
The second tranche of $10.0 million ("Term Loan B") was drawn on June 15, 2015. 
 
Interest rate
 
7.01% 
 
Third Tranche (Term Loan C)
 
 
 
Line of Credit Facility [Line Items]
 
 
 
Loan and security agreement
$ 10,000,000 
 
$ 10,000,000 
Borrowing conditions
 
As amended, Term Loan C will be available, subject to the Company achieving consolidated trailing six months' revenue at a specified threshold (the "Revenue Event") 
 
Interest rate, minimum
 
6.95% 
 
Interest rate plus the three month U.S. LIBOR
 
6.72% 
 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2010
Commitments and Contingencies Disclosure [Line Items]
 
 
Minimum term of non-cancellable operating leases
1 year 
 
Expiration of non-cancellable operating leases maximum year
2020 
 
Financing for leasehold improvement
 
$ 1.1 
Outstanding liability related to leasehold improvements
0.5 
 
Accrued liabilities
 
 
Commitments and Contingencies Disclosure [Line Items]
 
 
Leasehold Improvements reflected in Accrued liabilities
0.1 
 
Other non-current liabilities
 
 
Commitments and Contingencies Disclosure [Line Items]
 
 
Leasehold Improvements reflected in Other non-current liabilities
$ 0.4 
 
Stockholders Equity - Additional Information (Detail) (USD $)
Share data in Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Stockholders Equity Note [Line Items]
 
 
Proceeds from common stock sold
$ 7,199,000 
$ 75,527,000 
Cantor |
Sales Agreement
 
 
Stockholders Equity Note [Line Items]
 
 
Maximum common stock offering price
70,000,000 
 
Percentage of proceeds payable as compensation to underwriter
2.00% 
 
Common stock, number of shares issued
1.2 
 
Proceeds from common stock sold
7,100,000 
 
Common stock registered for sale
$ 15,300,000 
 
Stock-Based Compensation - Additional Information (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended 3 Months Ended
Jun. 10, 2015
Mar. 31, 2016
Dec. 31, 2015
Jun. 12, 2013
Employee Stock Purchase Plan
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Increase in shares of common stock authorized for issuance
1,500,000 
1,320,500 
 
 
Aggregate number of shares of common stock reserved for future issuance
 
1,551,390 
 
 
Employee Stock Purchase Plan, offering period
 
12 months 
 
 
Number of purchase periods within each offering period
 
 
 
Stock-based compensation, option to be granted at percentage of fair value of common stock
 
85.00% 
 
 
2008 Equity Incentive Plan
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Increase in shares of common stock authorized for issuance
5,000,000 
 
 
 
Aggregate number of shares of common stock reserved for future issuance
 
21,000,000 
 
 
Stock-based compensation, option to be granted at percentage of fair value of common stock
 
100.00% 
 
 
Employee Stock Purchase Plan, authorized shares for issuance
 
 
 
19,540,940 
Stock-based compensation, award term
 
10 years 
 
 
Performance-based stock options, outstanding
 
 
 
Outstanding options and other stock based awards
 
15,941,000 
14,119,000 
 
Number of shares available for future issuance
 
4,400,000 
 
 
2008 Equity Incentive Plan |
Stock Options
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation, vesting period
 
4 years 
 
 
2008 Equity Incentive Plan |
Performance-based Stock or Cash Awards
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Employee Stock Purchase Plan, authorized shares for issuance
 
500,000 
 
 
Stock option plan granted on cash award
 
$ 1.0 
 
 
2008 Equity Incentive Plan |
Restricted Stock Units (RSUs)
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation, vesting period
 
3 years 
 
 
Number of Restricted Stock Units Outstanding
 
633,000 
 
Income Taxes - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Income Tax Disclosure [Line Items]
 
 
Unrealized (losses) gains on available-for-sale investments, taxes
$ (3,922)
$ 19 
Provision (benefit) for income taxes
$ 812 
$ 19 
Development and License Agreements - Additional Information (Detail)
3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Mar. 31, 2016
USD ($)
Mar. 31, 2015
USD ($)
Dec. 31, 2015
USD ($)
Mar. 31, 2016
Other current assets
USD ($)
Dec. 31, 2015
Other current assets
USD ($)
Mar. 31, 2016
Other assets
USD ($)
Dec. 31, 2015
Other assets
USD ($)
Mar. 31, 2016
Fresenius
USD ($)
Mar. 31, 2016
Manufacturing and Supply Agreement
USD ($)
Dec. 31, 2015
Manufacturing and Supply Agreement
USD ($)
Mar. 31, 2016
Manufacturing and Supply Agreement
Fresenius
USD ($)
Mar. 31, 2016
Manufacturing and Supply Agreement
Fresenius
EUR (€)
Mar. 31, 2016
Manufacturing and Supply Agreement
Fresenius
USD ($)
Mar. 31, 2016
Manufacturing and Supply Agreement
Fresenius
EUR (€)
Dec. 31, 2015
Manufacturing and Supply Agreement
Fresenius
USD ($)
Dec. 31, 2015
Manufacturing and Supply Agreement
Fresenius
EUR (€)
Dec. 31, 2016
Scenario Forecast
Manufacturing and Supply Agreement
Fresenius
EUR (€)
Licenses Agreements [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments made based on the successful achievement of production volumes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
€ 8,600,000 
Accrual for manufacturing and development of entity products
 
 
 
 
 
 
 
 
 
 
7,000,000 
6,200,000 
7,000,000 
6,200,000 
7,800,000 
7,200,000 
 
Manufacturing and development obligations, discount rate
 
 
 
 
 
 
 
 
 
 
 
 
9.72% 
9.72% 
 
 
 
Manufacturing and development obligations-current
2,219,000 
 
3,282,000 
 
 
 
 
 
 
 
2,200,000 
1,900,000 
2,200,000 
1,900,000 
3,300,000 
3,000,000 
 
Manufacturing and development obligations-non-current
4,840,000 
 
4,542,000 
 
 
 
 
 
 
 
4,800,000 
4,300,000 
4,800,000 
4,300,000 
4,500,000 
4,200,000 
 
Manufacturing and development payments
 
 
 
 
 
 
 
 
 
 
1,200,000 
1,100,000 
 
 
 
 
 
Allocated amount for research and development activities
 
 
 
 
 
 
 
4,800,000 
 
 
 
 
 
 
 
 
 
Manufacturing efficiency activity cost
 
 
 
 
 
 
 
2,400,000 
 
 
 
 
 
 
 
 
 
Research and development assets
 
 
 
3,700,000 
4,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
Manufacturing efficiency assets
 
 
 
 
 
2,300,000 
2,400,000 
 
 
 
 
 
 
 
 
 
 
Payments made relating to the manufacturing of the products
3,600,000 
4,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrual for manufacturing of entity products
 
 
 
 
 
 
 
 
3,200,000 
2,500,000 
 
 
 
 
 
 
 
Amounts due from Fresenius
$ 900,000 
 
$ 200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment, Customer and Geographic Information - Additional Information (Detail)
3 Months Ended
Mar. 31, 2016
Segment
Segment Reporting Information [Line Items]
 
Number of operating segments
Significant Customer that Accounted for More than Ten Percentage of Total Revenue (Detail) (Customer Concentration Risk, Sales Revenue, Goods, Net)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Advanced Technology Company KSC
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration risk, percentage
18.00% 
   1
Etablissement Francais du Sang
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration risk, percentage
   1
26.00% 
Medical Device APS
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration risk, percentage
11.00% 
   1
Rode Kruis Vlaanderen
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration risk, percentage
12.00% 
   1
Subsequent Event - Additional Information (Detail) (Cantor, Sales Agreement, USD $)
3 Months Ended 0 Months Ended
Mar. 31, 2016
May 5, 2016
Subsequent Event
Subsequent Event [Line Items]
 
 
Maximum common stock offering price
$ 70,000,000 
$ 62,200,000