CERUS CORP, 10-Q filed on 8/8/2014
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2014
Jul. 25, 2014
Document Information [Line Items]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 30, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
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
 
74,048,000 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Current assets:
 
 
Cash and cash equivalents
$ 28,562 
$ 29,485 1
Short-term investments
21,134 
28,191 1
Accounts receivable
4,478 
6,125 1
Inventories
13,377 
13,063 1
Prepaid expenses
1,353 
848 1
Other current assets
1,416 
442 1
Total current assets
70,320 
78,154 1
Non-current assets:
 
 
Property and equipment, net
3,615 
2,189 1
Goodwill
1,316 
1,316 1
Intangible assets, net
1,243 
1,344 1
Restricted cash
307 
308 1
Other assets
51 
70 1
Total assets
76,852 
83,381 1
Current liabilities:
 
 
Accounts payable
3,169 
5,674 1
Accrued liabilities
10,619 
9,813 1
Deferred revenue
266 
181 1
Debt-current
3,366 1
Warrant liability
7,653 
20,390 1
Total current liabilities
21,707 
39,424 1
Non-current liabilities:
 
 
Debt-non-current
9,848 
1
Deferred income taxes
102 
89 1
Other non-current liabilities
987 
1,073 1
Total liabilities
32,644 
40,586 1
Commitments and contingencies
   
   1
Stockholders' equity:
 
 
Common stock
74 
72 1
Additional paid-in capital
555,131 
545,905 1
Accumulated other comprehensive income
1
Accumulated deficit
(511,003)
(503,189)1
Total stockholders' equity
44,208 
42,795 1
Total liabilities and stockholders' equity
$ 76,852 
$ 83,381 1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Revenue
$ 8,601 
$ 10,150 
$ 16,467 
$ 19,883 
Cost of revenue
4,752 
5,747 
8,909 
10,837 
Gross profit
3,849 
4,403 
7,558 
9,046 
Operating expenses:
 
 
 
 
Research and development
4,722 
3,506 
9,364 
6,206 
Selling, general and administrative
10,080 
7,954 
18,316 
14,807 
Amortization of intangible assets
51 
51 
101 
101 
Total operating expenses
14,853 
11,511 
27,781 
21,114 
Loss from operations
(11,004)
(7,108)
(20,223)
(12,068)
Non-operating gain (expense), net:
 
 
 
 
Gain (Loss) from revaluation of warrant liability
3,491 
686 
12,525 
(4,387)
Foreign exchange loss
(25)
(157)
(4)
(211)
Interest expense
(141)
(107)
(334)
(238)
Other income, net
134 
16 
304 
33 
Total non-operating gain (expense), net
3,459 
438 
12,491 
(4,803)
Loss before income taxes
(7,545)
(6,670)
(7,732)
(16,871)
Provision for income taxes
44 
54 
82 
105 
Net loss
$ (7,589)
$ (6,724)
$ (7,814)
$ (16,976)
Net loss per share:
 
 
 
 
Basic
$ (0.10)
$ (0.10)
$ (0.11)
$ (0.26)
Diluted
$ (0.16)
$ (0.10)
$ (0.28)
$ (0.26)
Weighted average shares outstanding used for calculating net loss per share:
 
 
 
 
Basic
72,899 
69,727 
72,495 
64,756 
Diluted
74,517 
71,928 
74,927 
64,756 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Net loss
$ (7,589)
$ (6,724)
$ (7,814)
$ (16,976)
Other comprehensive loss:
 
 
 
 
Net unrealized losses on available-for-sale securities, net of taxes
(1)
(1)
Comprehensive loss
$ (7,590)
$ (6,724)
$ (7,815)
$ (16,976)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Operating activities
 
 
Net loss
$ (7,814)
$ (16,976)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Depreciation and amortization
615 
283 
Stock-based compensation
2,286 
1,554 
Changes in revaluation of warrant liability
(12,525)
4,387 
Deferred income taxes
13 
13 
Loss on disposal of fixed assets
56 
Changes in operating assets and liabilities, net of effects of acquired business:
 
 
Accounts receivable
1,647 
(1,424)
Inventories
(1,411)
(1,341)
Other assets
(450)
492 
Accounts payable
(2,625)
(2,151)
Accrued liabilities
743 
990 
Deferred revenue
85 
76 
Net cash used in operating activities
(19,436)
(14,041)
Investing activities
 
 
Capital expenditures
(1,429)
(180)
Purchases of investments and certain other assets
(3,492)
(13)
Maturities of investments
10,299 
Net cash provided by (used in) investing activities
5,378 
(193)
Financing activities
 
 
Net proceeds from equity incentives and exercise of warrants
2,859 
191 
Net proceeds from public offering
3,847 
51,171 
Proceeds from term loan, net of discount and revolving line of credit
9,848 
526 
Payments on debt, revolving line of credit and landlord provided leasehold incentives
(3,419)
(6,149)
Net cash provided by financing activities
13,135 
45,739 
Net (decrease) increase in cash and cash equivalents
(923)
31,505 
Cash and cash equivalents, beginning of period
29,485 1
26,696 
Cash and cash equivalents, end of period
$ 28,562 
$ 58,201 
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. (collectively referred to hereinafter as “Cerus” or the “Company”) after elimination of all intercompany accounts and transactions. These 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 and six months ended June 30, 2014, are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any future periods.

These 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, 2013, which were included in the Company’s 2013 Annual Report on Form 10-K, filed with the SEC on March 7, 2014. The accompanying consolidated balance sheet as of December 31, 2013, has been derived from the Company’s audited consolidated financial statements as of that date.

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 an agreement with the funding party exists; (ii) services have been rendered or product has been delivered; (iii) pricing is fixed or determinable; and (iv) collection is reasonably assured. The Company’s main sources of revenues for the three and six months ended June 30, 2014 and 2013, were product revenue from sales of the INTERCEPT Blood System for platelets and plasma (“platelet and plasma systems”).

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 and signed sales contract as evidence of a written agreement. 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 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 systems 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, including, but not limited to, features and functionality of the system, geographies, type of customer, and market conditions. The Company regularly reviews best estimated selling price and maintains internal controls over the establishment and updates of these estimates.

 

Freight costs charged to customers are recorded as a component of revenue under ASC Topic 605, “Accounting for Shipping and Handling Fees and Costs.” Value-added-taxes (“VAT”) that the Company invoices to its customers and remits to governments are recorded on a net basis, which excludes such VAT from product revenue.

Research and Development Expenses

In accordance with ASC Topic 730, “Accounting for Research and Development Expenses,” research and development expenses are charged to expense when incurred. Research and development expenses include salaries and related expenses for scientific personnel, payments to consultants, supplies and chemicals used in in-house laboratories, costs of research and development 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 research and development activities (see “Use of Estimates” above) affects the amounts of research and development expenses recorded and revenue recorded from development funding and government grants and collaborative agreements. 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 which included corporate debt and United States government agency securities are designated as available-for-sale and classified as short-term investments. In accordance with ASC Topic 320, “Accounting for Certain Investments in Debt and Equity Securities,” the Company classified all debt securities as available-for-sale at the time of purchase and reevaluates such designation as of each balance sheet date. Available-for-sale securities are carried at estimated fair value. Unrealized gains and losses derived by changes in the estimated fair value of available-for-sale securities were recorded in “Net unrealized gains (losses) on available-for-sale securities, net of taxes” on the Company’s condensed consolidated statements of comprehensive loss. Realized gains and losses from the sale of available-for-sale investments were recorded in “Other income, net” on the Company’s condensed consolidated statements of operations. The cost of securities sold was based on the specific identification method. 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 marketable 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 are recorded in “Other income, net” on the Company’s 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 “Restricted cash” on the Company’s condensed consolidated balance sheets. The Company also has certain non-US 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, short-term investments and accounts receivable.

Pursuant to the Company’s investment policy, substantially all of the Company’s cash, cash equivalents and short-term investments are maintained at a major financial institution 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 June 30, 2014, the Company does not believe there is significant financial risk from non-performance by the issuers of the Company’s cash equivalents.

 

Concentrations of credit risk with respect to trade receivables exist. However, for certain customers, the Company purchases a credit insurance policy that mitigates some of its credit risk, as the policy will pay either the Company or its lender on eligible claims filed on its outstanding receivables. On a regular basis, including at the time of sale, the Company performs credit evaluations of its customers. 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 reserves against the accounts receivable on its condensed consolidated balance sheets and records a charge on its condensed consolidated statements of operations. At June 30, 2014 and December 31, 2013, the Company had not recorded any reserves for potentially uncollectible accounts.

The Company had three customers and two customers that accounted for more than 10% of the Company’s outstanding trade receivables at each of June 30, 2014 and December 31, 2013, respectively. These customers cumulatively represented approximately 65% and 55% of the Company’s outstanding trade receivables, at June 30, 2014 and December 31, 2013, respectively. To date, the Company has not experienced collection difficulties from these customers.

Inventories

At June 30, 2014 and December 31, 2013, inventory consisted of work-in-process and finished goods only. Finished goods include INTERCEPT disposable kits, UVA illumination devices (“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 Fresenius, Inc. (with its 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 June 30, 2014 and December 31, 2013, the Company classified its work-in-process inventory as a current asset on its condensed 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 market 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 condensed consolidated statements of operations. At June 30, 2014 and December 31, 2013, the Company had $0.1 million and $0.4 million, respectively, recorded for potential obsolete, expiring or unsalable product.

Property and Equipment, net

Property and equipment is comprised of furniture, equipment, 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, consultants, and payroll and payroll-related costs for employees 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. The Company capitalized costs for enhancement of the enterprise resource planning software system and other internal use software of zero and $1.2 million during the six months ended June 30, 2013 and 2014, respectively. Upon being placed in service, these costs are amortized over the estimated useful life.

 

Goodwill and Intangible Assets, net

Additions to goodwill and intangible assets, net are derived at the time of a business acquisition, in which the Company assigns the total consideration transferred to the acquired assets based on each asset’s fair value and any residual amount becomes goodwill, an indefinite life intangible asset. 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 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 condensed 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 segment and has 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 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.” Also, 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 net cash flows. If the expected undiscounted future net 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 and six months ended June 30, 2014 and 2013.

Foreign Currency Remeasurement

The functional currency of the Company’s foreign subsidiary is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured in United States dollars using the exchange rates at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are remeasured in United States 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 condensed consolidated statements of operations. The Company recorded foreign currency losses of less than $0.2 million during the three and six months ended June 30, 2014 and 2013.

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 generally 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 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 condensed 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 assumptions and expenses.

Warrant Liability

In August 2009 and November 2010, the Company issued warrants to purchase an aggregate of 2.4 million and 3.7 million shares of common stock, respectively. The material terms of the warrants were identical under each issuance except for the exercise price, date issued and expiration date. The Company classified the warrants as a liability on its condensed consolidated balance sheets as the warrants contain certain material terms which require the Company (or its successor) to purchase the warrants for cash in an amount equal to the value of the unexercised portion of the warrants (as determined in accordance with the Black-Scholes option pricing model) in connection with certain change of control transactions. In addition, the Company may also be required to pay cash to a warrant holder under certain circumstances if the Company is unable to timely deliver the shares acquired upon warrant exercise to such holder.

The fair value of these outstanding warrants is calculated using the binomial-lattice option-pricing model and is adjusted accordingly at each reporting period. The binomial-lattice option-pricing model requires that the Company uses significant assumptions and judgment to determine appropriate inputs to the model. Some of the assumptions that the Company relies on include the probability of a change of control occurring, the volatility of the Company’s stock over the life of the warrant and assumptions and inputs used to value the warrants under the Black-Scholes model should a change of control occur.

Changes resulting from the revaluation of warrants to fair value are recorded in “Gain (loss) revaluation of warrant liability” on the condensed consolidated statements of operations. Upon the exercise or modification to remove the provisions which require the warrants to be treated as a liability, the fair value of the warrants will be reclassified from a liability to stockholders’ equity on the Company’s condensed consolidated balance sheets and no further adjustment to the fair value would be made in subsequent periods.

See Note 10 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s valuation of warrant liability.

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 the 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 condensed consolidated statements of operations, nor has its accrued for or made payments for interest and penalties. The Company continues to carry a full valuation allowance on all of its deferred tax assets. 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 tax years 1998 through 2013 remain subject to examination by the taxing jurisdictions due to unutilized net operating losses and research credits.

Net Loss Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (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. Diluted net income (loss) per share also gives effect to potential adjustments to the numerator for changes 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 and six months ended June 30, 2014 and 2013, 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 and six months ended June 30, 2014 and 2013 (in thousands, except per share amounts):

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2014     2013     2014     2013  

Numerator for Basic and Diluted:

        

Net loss used for basic calculation

   $ (7,589   $ (6,724   $ (7,814   $ (16,976

Effect of revaluation of warrant liability

     (4,007     (686     (13,041     0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss used for diluted calculation

   $ (11,596   $ (7,410   $ (20,855   $ (16,976
  

 

 

   

 

 

   

 

 

   

 

 

 

Denominator:

        

Basic weighted average number of shares outstanding

     72,899        69,727        72,495        64,756   

Effect of dilutive potential shares

     1,618        2,201        2,432        0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted weighted average number of shares outstanding

     74,517        71,928        74,927        64,756   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share:

        

Basic

   $ (0.10   $ (0.10   $ (0.11   $ (0.26

Diluted

   $ (0.16   $ (0.10   $ (0.28   $ (0.26

The table below presents shares underlying stock options, employee stock purchase plan rights and restricted stock units that are excluded from the calculation of the weighted average number of shares outstanding used for the calculation of diluted net loss per share. Warrants are excluded from the table below in periods for which the warrants are included in the calculation of diluted net loss per share. These are excluded from the calculation due to their anti-dilutive effect for the three and six months ended June 30, 2014 and 2013 (shares in thousands):

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2014      2013      2014      2013  

Weighted average number of anti-dilutive potential shares

     12,160         10,633         11,587         16,123   

Guarantee and Indemnification Arrangements

The Company recognizes the fair value for guarantee and indemnification arrangements issued or modified by the Company after December 31, 2002. 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.

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 its 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. 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 available-for-sale securities related to corporate debt and United States government agency securities. 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, which include its warrant liability. The Company assesses any transfers among fair value measurement levels at the end of each reporting period.

See Notes 2 and 10 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 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. The ASU’s effective date for the Company will be the first quarter of fiscal year 2017, using one of two retrospective application methods. Early adoption is not permitted. The Company is assessing the potential effects of this ASU on its consolidated financial statements.

Fair Value on Financial Instruments
Fair Value on Financial Instruments

Note 2. Fair Value on Financial Instruments

The Company determines the fair value of an asset or liability based on the assumptions that market participants would use 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 June 30, 2014, the Company’s primary pricing service relies on inputs from multiple industry-recognized pricing sources to determine the price for each investment. Corporate debt and United States 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 Company’s financial assets and liabilities were recorded at fair value in the condensed consolidated balance sheets at June 30, 2014, as follows (in thousands):

 

     Total      Level 1      Level 2      Level 3  

Money market funds (1)

   $ 6,329       $ 6,329       $ 0       $ 0   

Corporate debt securities (2)

     17,700         0         17,700         0   

United States government agency securities (2)

     3,434         0         3,434         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets

   $ 27,463       $ 6,329       $ 21,134       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Warrant liability (3)

   $ 7,653       $ 0       $ 0       $ 7,653   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial liabilities

   $ 7,653       $ 0       $ 0       $ 7,653   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Included in cash and cash equivalents on the Company’s condensed consolidated balance sheets.
(2) Included in short-term investments on the Company’s condensed consolidated balance sheets.
(3) Included in current liabilities on the Company’s condensed consolidated balance sheets.

The Company’s financial assets and liabilities were recorded at fair value in the condensed consolidated balance sheets at December 31, 2013, as follows (in thousands):

 

     Total      Level 1      Level 2      Level 3  

Money market funds (1)

   $ 8,650       $ 8,650       $ 0       $ 0   

Corporate debt securities (2)

     23,173         0         23,173         0   

United States government agency securities (2)

     5,018         0         5,018         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets

   $ 36,841       $ 8,650       $ 28,191       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Warrant liability (3)

   $ 20,390       $ 0       $ 0       $ 20,390   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial liabilities

   $ 20,390       $ 0       $ 0       $ 20,390   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Included in cash and cash equivalents on the Company’s condensed consolidated balance sheets.
(2) Included in short-term investments on the Company’s condensed consolidated balance sheets.
(3) Included in current liabilities on the Company’s condensed consolidated balance sheets.

A reconciliation of the beginning and ending balances for warrant liability using significant unobservable inputs (Level 3) from December 31, 2013 to June 30, 2014, was as follows (in thousands):

 

Balance at December 31, 2013

   $ 20,390   

Decrease in fair value of warrants

     (12,525

Settlement of warrants exercised

     (212
  

 

 

 

Balance at June 30, 2014

   $ 7,653   
  

 

 

 

See Notes 1 and 10 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s valuation techniques and unobservable inputs for warrant liability using significant unobservable inputs (Level 3).

The Company did not have any transfers among fair value measurement levels during the three and six months ended June 30, 2014, or the year ended December 31, 2013.

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 June 30, 2014 (in thousands):

 

     June 30, 2014  
     Carrying Value      Net
Unrealized Gain
     Fair Value  

Money market funds

   $ 6,329       $ 0       $ 6,329   

Corporate debt securities

     17,694         6         17,700   

United States government agency securities

     3,434         0         3,434   
  

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 27,457       $ 6       $ 27,463   
  

 

 

    

 

 

    

 

 

 

The following is a summary of available-for-sale securities at December 31, 2013 (in thousands):

 

     December 31, 2013  
     Carrying Value      Net
Unrealized Gain
    Fair Value  

Money market funds

   $ 8,650       $ 0      $ 8,650   

Corporate debt securities

     23,165         8        23,173   

United States government agency securities

     5,019         (1     5,018   
  

 

 

    

 

 

   

 

 

 

Total available-for-sale securities

   $ 36,834       $ 7      $ 36,841   
  

 

 

    

 

 

   

 

 

 

Available-for-sale securities at June 30, 2014 and December 31, 2013, consisted of the following by original contractual maturity (in thousands):

 

     June 30, 2014      December 31, 2013  
     Carrying Value      Fair Value      Carrying Value      Fair Value  

Due in one year or less

   $ 27,457       $ 27,463       $ 30,700       $ 30,701   

Due greater than one year and less than three years

     0         0         6,134         6,140   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cash equivalents and short-term investments

   $ 27,457       $ 27,463       $ 36,834       $ 36,841   
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company did not record any gross realized gains from the sale or maturity of available-for-sale investments during the three and six months ended June 30, 2014 and 2013. The Company did not record losses on investments experiencing an other-than-temporary decline in fair value nor did it record any gross realized losses from the sale or maturity of available-for-sale investments during the three and six months ended June 30, 2014 and 2013, respectively.

Inventories
Inventories

Note 4. Inventories

Inventories at June 30, 2014 and December 31, 2013, consisted of the following (in thousands):

 

     June 30,      December 31,  
     2014      2013  

Work-in-process

   $ 2,691       $ 4,863   

Finished goods

     10,686         8,200   
  

 

 

    

 

 

 

Total inventories

   $ 13,377       $ 13,063   
  

 

 

    

 

 

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

Note 5. Goodwill and Intangible Assets, net

Goodwill

During the three and six months ended June 30, 2014, the Company did not dispose of or recognize additional goodwill. The Company expects to perform its annual review of goodwill on August 31, 2014, unless indicators of impairment are identified prior to that date. As of June 30, 2014, the Company has not identified any indicators of goodwill impairment.

 

Intangible Assets, net

The following is a summary of intangible assets, net at June 30, 2014 (in thousands):

 

     June 30, 2014  
     Gross
Carrying Amount
     Accumulated
Amortization
    Net
Carrying Amount
 

Acquisition-related intangible assets:

       

Reacquired license—INTERCEPT Asia

   $ 2,017       $ (774   $ 1,243   
  

 

 

    

 

 

   

 

 

 

Total intangible assets

   $ 2,017       $ (774   $ 1,243   
  

 

 

    

 

 

   

 

 

 

The following is a summary of intangible assets, net at December 31, 2013 (in thousands):

 

     December 31, 2013  
     Gross
Carrying Amount
     Accumulated
Amortization
    Net
Carrying Amount
 

Acquisition-related intangible assets:

       

Reacquired license—INTERCEPT Asia

   $ 2,017       $ (673   $ 1,344   
  

 

 

    

 

 

   

 

 

 

Total intangible assets

   $ 2,017       $ (673   $ 1,344   
  

 

 

    

 

 

   

 

 

 

During the three and six months ended June 30, 2014 and 2013, there were no impairment charges recognized related to the acquired intangible assets.

At June 30, 2014, the expected annual amortization expense of the intangible assets, net is $0.1 million for the remaining six months of 2014, $0.2 million annually beginning with the year ending December 31, 2015 through the year ending December 31, 2019 and $0.1 million for the year ending December 31, 2020.

Long-Term Investments
Long-Term Investments

Note 6. Long-Term Investments

In connection with the agreements to license the immunotherapy technologies to Aduro BioTech, Inc. (“Aduro”) in 2009, the Company received shares of preferred stock of Aduro. Pursuant to these license agreements, the Company is eligible to receive a 1% royalty fee on any future sales resulting from the licensed technology. As of June 2014, the Company’s ownership in Aduro was less than 1% on a fully diluted basis. Since receiving preferred stock in Aduro, the Company has carried its investment in Aduro at zero in its condensed consolidated balance sheets. As of June 30, 2014, the Company has not received any royalties under this agreement.

Accrued Liabilities
Accrued Liabilities

Note 7. Accrued Liabilities

Accrued liabilities at June 30, 2014 and December 31, 2013, consisted of the following (in thousands):

 

     June 30,      December 31,  
     2014      2013  

Accrued compensation and related costs

   $ 2,440       $ 2,527   

Accrued inventory costs

     4,082         3,553   

Accrued professional services

     2,773         2,722   

Other accrued expenses

     1,324         1,011   
  

 

 

    

 

 

 

Total accrued liabilities

   $ 10,619       $ 9,813   
  

 

 

    

 

 

 
Debt
Debt

Note 8. Debt

Debt at June 30, 2014, consisted of the following (in thousands):

 

     June 30, 2014  
     Principal      Unamortized
Discount
     Total  

Loan and Security Agreement

   $ 10,000       $ 152       $ 9,848   

Less: debt—current

     0         0         0   
  

 

 

    

 

 

    

 

 

 

Debt—non-current

   $ 10,000       $ 152       $ 9,848   
  

 

 

    

 

 

    

 

 

 

Debt at December 31, 2013, consisted of the following (in thousands):

 

     December 31, 2013  
     Principal     Unamortized
Discount
     Total  

Comerica—Revolving Line of Credit

   $ 3,366      $ 0       $ 3,366   

Less: debt—current

     (3,366     0         (3,366
  

 

 

   

 

 

    

 

 

 

Debt—non-current

   $ 0      $ 0       $ 0   
  

 

 

   

 

 

    

 

 

 

Principal and interest payments on debt at June 30, 2014, are expected to be as follows (in thousands):

 

Year ended December 31,

      

2014 (remaining six months)

   $ 290   

2015

     695   

2016

     3,227   

2017

     3,227   

2018

     3,227   

2019

     2,314   
  

 

 

 
   $ 12,980   
  

 

 

 

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”) is contingent upon the approval, if it occurs, by the U.S. Food and Drug Administration (“FDA”) of the Company’s premarket approval application for either the plasma or platelet system (the “PMA Approval”). The availability of Term Loan B expires at the earlier of (i) six months after receiving PMA Approval or (ii) June 30, 2015. The third tranche of $10.0 million (“Term Loan C”) will be available from July 1, 2015 through December 31, 2015, contingent upon both (i) obtaining PMA Approval and (ii) the Company achieving trailing six months’ revenue at a specified threshold (the “Revenue Event”). Term Loan A bears an interest rate of 6.95%. Term Loan B and Term Loan C will 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 applicable Term Loan funding date. All of the Term Loans mature on June 1, 2019. The Company is required to make interest only payments through December 2015 followed by forty-two months of equal principal and interest payments thereafter; however, if the Revenue Event is achieved no later than November 30, 2015, 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 will be recognized as interest expense over the principle life of the Term Loans. The Company may prepay the Term Loans subject to declining prepayment fees over the term of the Term Loan Agreement. The Company paid the lender a $0.2 million commitment fee related to the Term Loan Agreement which has been recorded as a discount on the Term Loans and will be amortized to interest expense using the effective interest method over the life of the Term Loans. In addition, the Company paid $0.1 million of the lender legal fees, which are capitalized in prepaid expenses on the Company’s condensed consolidated balance sheets and will be recognized using the effective interest method over the life of the Term Loans. 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 June 30, 2014.

 

Revolving Line of Credit

The Company entered into a loan and security agreement on September 30, 2011, as amended effective on December 13, 2011, and June 30, 2012, with Comerica Bank (collectively, the “Amended Credit Agreement”). The Amended Credit Agreement provided for a formula-based revolving line of credit (“RLOC”) of up to $7.0 million. At December 31, 2013, the Company had $3.4 million outstanding under the RLOC, which was repaid in May 2014. The Amended Credit Agreement expired in June 2014.

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 2019, with certain of the leases providing for renewal options, provisions for adjusting future lease payments, which is based on the consumer price index and the right to terminate the lease early, which may occur as early as January 2015. In June 2013, the Company entered into a new lease for additional space in Concord. The lease has a two year initial term with four (4) two year options for the Company to renew. The lease commenced on August 1, 2013, and obligates the Company to pay rent payments for the remaining six months of approximately $78,000 and $90,000 in 2014 and 2015, respectively. The Company’s leased facilities qualify as operating leases under ASC Topic 840, “Leases” and as such, are not included on its condensed consolidated balance sheets.

Financed Leasehold Improvements

In 2010, the Company financed $1.1 million of leasehold improvements at one of its facilities in Concord, California. 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 lease. If the Company exercises its right to early terminate the Concord California lease under which such improvements were made, which may occur as early as January 2015, the Company would be required to repay any remaining portion of the landlord financed leasehold improvements at such time. At June 30, 2014, the Company had an outstanding liability of $0.7 million related to these leasehold improvements, of which $0.1 million was reflected in “Accrued liabilities” and $0.6 million was reflected in “Other non-current liabilities” on the Company’s condensed consolidated balance sheets.

Purchase Commitments

The Company is party to agreements with certain providers for certain components of INTERCEPT Blood System which the Company purchases from third party manufacturers and supplies to Fresenius at no cost for use in manufacturing finished INTERCEPT disposable kits. Certain of these agreements require minimum purchase commitments from the Company.

In June 2014, the Company terminated its distribution agreement with one of its distributors in certain countries and entered into an agreement to provide for specific post-termination obligations (the “Transition Agreement”). The Transition Agreement expires September 30, 2014. At September 30, 2014, the Transition Agreement requires the Company to repurchase certain illuminators for an aggregate price of €134,000, spare parts at the price originally paid by the distributor and up to 2,000 INTERCEPT disposable kits purchased by the distributor during the third quarter of 2014. The Company is also required to pay this former distributor a fee of €10 per disposable kit for platelet systems sold by the Company to any customer in certain countries commencing with the termination of the agreement through April 1, 2018, subject to a maximum payment of €3 million. As this former distributor will remain as a customer in other countries, in accordance with “Vendor’s Income Statement Characterization of Consideration Given to a Customer” any fees paid to the former distributor related to INTERCEPT disposable kits will be offset against the revenue associated with the sale of INTERCEPT disposable kits in those territories.

Stockholders' Equity
Stockholders' Equity

Note 10. Stockholders’ Equity

Common Stock and Associated Warrant Liability

In August 2009, the Company issued warrants to purchase 2.4 million shares of common stock, exercisable at an exercise price of $2.90 per share (“2009 Warrants”). The 2009 Warrants are exercisable for a period of five years from the issue date.

In November 2010, the Company received net proceeds of approximately $19.7 million, after deducting underwriting discounts and commissions and stock issuance costs of approximately $1.3 million, from an underwritten public offering of 7.4 million units. Each unit sold consisted of one share of common stock and a warrant to purchase 1/2 of a share of common stock. Each unit was sold for $2.85, resulting in the issuance of 7.4 million shares of common stock and warrants to purchase 3.7 million shares of common stock, exercisable at an exercise price of $3.20 per share. The warrants issued in November 2010 (“2010 Warrants”) became exercisable on May 15, 2011, and are exercisable for a period of five years from the issue date.

 

The fair value of the 2009 Warrants and 2010 Warrants was recorded on the condensed consolidated balance sheets as a liability pursuant to “Accounting for Derivative Instruments and Hedging Activities” and “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity” Topics of ASC and are adjusted to fair value at each financial reporting date thereafter until the earlier of exercise or modification to remove the provisions which require the warrants to be treated as a liability, at which time, these warrants would be reclassified into stockholders’ equity. The Company classified the 2009 Warrants and 2010 Warrants as a liability as these warrants contain certain provisions that, under certain circumstances, which may be out of the Company’s control, could require the Company to pay cash to settle the exercise of the warrants or may require the Company to redeem the warrants.

The fair value of the warrants at June 30, 2014 and December 31, 2013, consisted of the following (in thousands):

 

     June 30,      December 31,  
     2014      2013  

2009 Warrants

   $ 3,018       $ 8,542   

2010 Warrants

     4,635         11,848   
  

 

 

    

 

 

 

Total warrant liability

   $ 7,653       $ 20,390   
  

 

 

    

 

 

 

The fair value of the Company’s warrants was based option valuation models and using the following assumptions at June 30, 2014 and December 31, 2013:

 

     June 30,      December 31,  
     2014      2013  

2009 Warrants:

     

Expected term (in years)

     0.15              0.65        

Estimated volatility

     49%          45%    

Risk-free interest rate

     0.04%          0.10%    

Expected dividend yield

     0%          0%    

2010 Warrants:

     

Expected term (in years)

     1.36              1.86        

Estimated volatility

     49%          41%    

Risk-free interest rate

     0.11%          0.38%    

Expected dividend yield

     0%          0%    

For the three months ended June 30, 2014 and 2013, the Company recorded non-cash gains of $3.5 million and of $0.7 million, respectively, on its condensed consolidated statements of operations within non-operating expense, net, due to the changes in fair value of the warrants. For the six months ended June 30, 2014 and 2013, the Company recorded non-cash gains of $12.5 million and losses of $4.4 million, respectively, on its condensed consolidated statements of operations within non-operating expense, net, due to the changes in fair value of the warrants. Significant changes to the Company’s market price for its common stock will impact the implied and/or historical volatility used to fair value the warrants. Any significant increases in the Company’s stock price will likely create an increase to the fair value of the warrant liability. Similarly, any significant decreases in the Company’s stock price will likely create a decrease to the fair value of the warrant liability. During the three and six months ended June 30, 2014, warrants to purchase 157,894 shares of common stock were exercised from the outstanding 2010 Warrants. In 2013, warrants to purchase 186,586 shares of common stock were issued upon exercise of outstanding 2010 Warrants. As of June 30, 2014, 2.4 million of the 2009 warrants were outstanding and 3.3 million of the 2010 warrants were outstanding.

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 “Amended Cantor Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) that provides for the issuance and sale of shares of its common stock over the term of the Amended Cantor Agreement having an aggregate offering price of up to $70.0 million through Cantor. Under the Amended 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 Amended Cantor Agreement are deemed an “at-the-market” offering and are registered under the Securities Act. During the year ended December 31, 2013, approximately 5.4 million shares of the Company’s common stock were sold under the Amended Cantor Agreement for aggregate net proceeds of $23.5 million. During the six months ended June 30, 2014, 0.9 million shares of the Company’s common stock were sold under the Amended Cantor Agreement for aggregate net proceeds of $3.9 million. At June 30, 2014, the Company had approximately $37.6 million of common stock available to be sold under the Amended Cantor Agreement.

 

Public Offering of Common Stock

The Company completed a public offering of common stock on March 19, 2013. As a result of this offering, the Company issued approximately 8.3 million shares of its common stock at $4.20 per share. The Company provided the underwriters an overallotment of an additional approximately 1.3 million shares of its common stock, which was fully subscribed. Combined gross proceeds for the offering were approximately $40.3 million. Net proceeds to the Company were approximately $38.0 million after the underwriters’ discount of approximately $1.8 million and offering costs of approximately $0.5 million.

Stockholder Rights Plan

In October 2009, the Company’s Board of Directors adopted an amendment to its 1999 stockholder rights plan, commonly referred to as a “poison pill,” to reduce the exercise price, extend the expiration date and revise certain definitions under the plan. The stockholder rights plan is intended to deter hostile or coercive attempts to acquire the Company. The stockholder rights plan enables stockholders to acquire shares of the Company’s common stock, or the common stock of an acquirer, at a substantial discount to the public market price should any person or group acquire more than 15% of the Company’s common stock without the approval of the Board of Directors under certain circumstances. The Company has designated 250,000 shares of Series C Junior Participating preferred stock for issuance in connection with the stockholder rights plan.

Stock-Based Compensation
Stock-Based Compensation

Note 11. Stock-Based Compensation

The Company 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. The Company continues to have equity awards outstanding under its previous stock plans: 1998 Non-Officer Stock Option Plan and 1999 Equity Incentive Plan (collectively, the “Prior Plans”) and 1996 Equity Incentive Plan (the “1996 Plan”). Equity awards issued under the Prior Plans and the 1996 Plan continue to adhere to the terms of those respective stock plans and no further options may be granted under those previous plans. However, at June 2, 2008, any shares that remained available for future grants under the Prior Plans became available for issuance under the 2008 Plan. On June 6, 2012 and June 12, 2013, the stockholders approved amendments to the 2008 Plan (“Amended 2008 Plan”) which increased the aggregate number of shares of common stock authorized for issuance by 3,000,000 and 6,000,000 shares, respectively, such that the Amended 2008 Plan has reserved for issuance an amount not to exceed 19,540,940 shares effective June 12, 2013. At June 30, 2014, the Company had an aggregate of approximately 17.7 million shares of its common stock reserved for issuance under the Amended 2008 Plan, the Prior Plans and the 1996 Plan, of which approximately 5.6 million shares were available for future issuance under the Amended 2008 Plan.

The Company also 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. On June 6, 2012, the stockholders approved an amendment to the Purchase Plan to increase the aggregate number of shares of common stock authorized for issuance by 500,000 shares, such that the Purchase Plan has reserved for issuance an amount not to exceed 1,320,500 shares. At June 30, 2014, the Company had approximately 0.5 million shares available for future issuance under the Purchase 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
 

Balance at December 31, 2013

     10,405      $ 3.46   

Granted

     2,641        6.00   

Forfeited

     (98     4.53   

Expired

     (30     9.78   

Exercised

     (900     2.49   
  

 

 

   

Balance at June 30, 2014

     12,018      $ 4.07   
  

 

 

   

The Company currently uses the Black-Scholes option pricing model to determine the grant-date fair value of stock options and employee stock purchase plan shares. 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.

Stock-based compensation recognized on the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013, was as follows (in thousands):

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2014      2013      2014      2013  

Stock-based compensation expense by caption:

           

Research and development

   $ 276       $ 122       $ 459       $ 209   

Selling, general and administrative

     1,065         719         1,827         1,345   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 1,341       $ 841       $ 2,286       $ 1,554   
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company did not record any stock-based compensation associated with performance-based stock options during the three and six months ended June 30, 2014 and 2013, as the performance criteria was not probable of being achieved during these periods. There are no performance-based stock options outstanding at June 30, 2014.

Development and License Agreements
Development and License Agreements

Note 12. Development and License Agreements

Agreements with Fresenius

The Company has certain agreements with Fresenius which require the Company to pay royalties on INTERCEPT Blood System product sales at royalty rates that vary by product: 10% of product sales for the platelet system and 3% of product sales for the plasma system. During the three months ended June 30, 2014 and 2013, the Company made royalty payments to Fresenius of $0.6 million and $0.7 million, respectively. During the six months ended June 30, 2014 and 2013, the Company made royalty payments to Fresenius of $1.3 million and $1.6 million, respectively. At June 30, 2014 and December 31, 2013, accrued royalties due to Fresenius were $0.6 million and $0.7 million, respectively.

The Company also paid Fresenius certain costs associated with the amended manufacturing and supply agreement the Company executed with Fresenius in December 2008 (the “Original Supply Agreement”), for the manufacture of INTERCEPT finished disposable kits for the Company’s platelet and plasma systems through December 31, 2013. Under the Original Supply Agreement, the Company paid Fresenius a set price per disposable kit, which was established annually, plus a fixed surcharge per disposable kit. In addition, volume driven manufacturing overhead was paid or refunded if actual manufacturing volumes were higher or lower than the annually estimated production volumes.

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 is obligated to sell, and the Company is 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. Once the specified annual volume of disposable kits is purchased from Fresenius, the Company is able to purchase additional quantities of disposable kits from other third-party manufacturers. The 2013 Amendment also provides for fixed pricing for finished kits with successive decreases in pricing at certain annual production volumes. In addition, the 2013 Amendment requires the Company to purchase additional specified annual volumes of sets per annum if and when an additional Fresenius manufacturing site is identified and qualified to make INTERCEPT disposable kits subject to mutual agreement on pricing for disposable kits manufactured at the additional site. Fresenius is 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. The Company sold such components to Fresenius in an aggregate amount of $1.1 million during the three months ended June 30, 2014, and $3.8 million during the six months ended June 30, 2014. The Company maintains the amounts due from the components sold to Fresenius as a current asset on its balance sheet until such time as the Company purchases finished disposable kits using those components. The term of the 2013 Amendment extends through December 31, 2018, subject to termination by either party upon thirty months prior written notice, in the case of Fresenius, or twenty-four months prior written notice, in the Company’s case. The Company and Fresenius each have normal and customary termination rights, including termination for material breach.

The Company made payments to Fresenius of $4.9 million and $3.6 million relating to the manufacturing of the Company products during the three months ended June 30, 2014 and 2013, respectively and $9.5 million and $7.6 million during the six months ended June 30, 2014 and 2013, respectively. At June 30, 2014 and December 31, 2013, accrued amounts due to Fresenius were $3.8 million and $4.3 million, respectively, for INTERCEPT disposable kits manufactured.

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

Note 13. 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 United States of America include a wholly-owned subsidiary headquartered in Europe. The Company’s operations in the United States of America are responsible for the research and development and global commercialization of the INTERCEPT Blood System, as discussed in further detail below, 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 product revenue, all of which operate in a country outside of the United States of America, during the three and six months ended June 30, 2014 and 2013 (in percentages):

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2014      2013      2014      2013  

Etablissement Francais du Sang

     24%           18%           24%           17%     

Advanced Technology Company KSC

     18%               *               *               *     

Medical Device APS

     10%               *               *               *     

Delrus Inc.

         *           17%               *           29%     

Bravo Pacific Limited

         *           14%               *               *     

AUM+ LTD

         *           10%               *               *     

 

* Represents an amount less than 10% of product revenue.
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. (collectively referred to hereinafter as “Cerus” or the “Company”) after elimination of all intercompany accounts and transactions. These 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 and six months ended June 30, 2014, are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any future periods.

These 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, 2013, which were included in the Company’s 2013 Annual Report on Form 10-K, filed with the SEC on March 7, 2014. The accompanying consolidated balance sheet as of December 31, 2013, has been derived from the Company’s audited consolidated financial statements as of that date.

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 an agreement with the funding party exists; (ii) services have been rendered or product has been delivered; (iii) pricing is fixed or determinable; and (iv) collection is reasonably assured. The Company’s main sources of revenues for the three and six months ended June 30, 2014 and 2013, were product revenue from sales of the INTERCEPT Blood System for platelets and plasma (“platelet and plasma systems”).

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 and signed sales contract as evidence of a written agreement. 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 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 systems 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, including, but not limited to, features and functionality of the system, geographies, type of customer, and market conditions. The Company regularly reviews best estimated selling price and maintains internal controls over the establishment and updates of these estimates.

 

Freight costs charged to customers are recorded as a component of revenue under ASC Topic 605, “Accounting for Shipping and Handling Fees and Costs.” Value-added-taxes (“VAT”) that the Company invoices to its customers and remits to governments are recorded on a net basis, which excludes such VAT from product revenue.

Research and Development Expenses

In accordance with ASC Topic 730, “Accounting for Research and Development Expenses,” research and development expenses are charged to expense when incurred. Research and development expenses include salaries and related expenses for scientific personnel, payments to consultants, supplies and chemicals used in in-house laboratories, costs of research and development 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 research and development activities (see “Use of Estimates” above) affects the amounts of research and development expenses recorded and revenue recorded from development funding and government grants and collaborative agreements. 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 which included corporate debt and United States government agency securities are designated as available-for-sale and classified as short-term investments. In accordance with ASC Topic 320, “Accounting for Certain Investments in Debt and Equity Securities,” the Company classified all debt securities as available-for-sale at the time of purchase and reevaluates such designation as of each balance sheet date. Available-for-sale securities are carried at estimated fair value. Unrealized gains and losses derived by changes in the estimated fair value of available-for-sale securities were recorded in “Net unrealized gains (losses) on available-for-sale securities, net of taxes” on the Company’s condensed consolidated statements of comprehensive loss. Realized gains and losses from the sale of available-for-sale investments were recorded in “Other income, net” on the Company’s condensed consolidated statements of operations. The cost of securities sold was based on the specific identification method. 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 marketable 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 are recorded in “Other income, net” on the Company’s 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 “Restricted cash” on the Company’s condensed consolidated balance sheets. The Company also has certain non-US 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, short-term investments and accounts receivable.

Pursuant to the Company’s investment policy, substantially all of the Company’s cash, cash equivalents and short-term investments are maintained at a major financial institution 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 June 30, 2014, the Company does not believe there is significant financial risk from non-performance by the issuers of the Company’s cash equivalents.

 

Concentrations of credit risk with respect to trade receivables exist. However, for certain customers, the Company purchases a credit insurance policy that mitigates some of its credit risk, as the policy will pay either the Company or its lender on eligible claims filed on its outstanding receivables. On a regular basis, including at the time of sale, the Company performs credit evaluations of its customers. 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 reserves against the accounts receivable on its condensed consolidated balance sheets and records a charge on its condensed consolidated statements of operations. At June 30, 2014 and December 31, 2013, the Company had not recorded any reserves for potentially uncollectible accounts.

The Company had three customers and two customers that accounted for more than 10% of the Company’s outstanding trade receivables at each of June 30, 2014 and December 31, 2013, respectively. These customers cumulatively represented approximately 65% and 55% of the Company’s outstanding trade receivables, at June 30, 2014 and December 31, 2013, respectively. To date, the Company has not experienced collection difficulties from these customers.

Inventories

At June 30, 2014 and December 31, 2013, inventory consisted of work-in-process and finished goods only. Finished goods include INTERCEPT disposable kits, UVA illumination devices (“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 Fresenius, Inc. (with its 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 June 30, 2014 and December 31, 2013, the Company classified its work-in-process inventory as a current asset on its condensed 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 market 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 condensed consolidated statements of operations. At June 30, 2014 and December 31, 2013, the Company had $0.1 million and $0.4 million, respectively, recorded for potential obsolete, expiring or unsalable product.

Property and Equipment, net

Property and equipment is comprised of furniture, equipment, 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, consultants, and payroll and payroll-related costs for employees 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. The Company capitalized costs for enhancement of the enterprise resource planning software system and other internal use software of zero and $1.2 million during the six months ended June 30, 2013 and 2014, respectively. Upon being placed in service, these costs are amortized over the estimated useful life.

Goodwill and Intangible Assets, net

Additions to goodwill and intangible assets, net are derived at the time of a business acquisition, in which the Company assigns the total consideration transferred to the acquired assets based on each asset’s fair value and any residual amount becomes goodwill, an indefinite life intangible asset. 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 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 condensed 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 segment and has 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 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.” Also, 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 net cash flows. If the expected undiscounted future net 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 and six months ended June 30, 2014 and 2013.

Foreign Currency Remeasurement

The functional currency of the Company’s foreign subsidiary is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured in United States dollars using the exchange rates at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are remeasured in United States 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 condensed consolidated statements of operations. The Company recorded foreign currency losses of less than $0.2 million during the three and six months ended June 30, 2014 and 2013.

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 generally 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 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 condensed 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 assumptions and expenses.

Warrant Liability

In August 2009 and November 2010, the Company issued warrants to purchase an aggregate of 2.4 million and 3.7 million shares of common stock, respectively. The material terms of the warrants were identical under each issuance except for the exercise price, date issued and expiration date. The Company classified the warrants as a liability on its condensed consolidated balance sheets as the warrants contain certain material terms which require the Company (or its successor) to purchase the warrants for cash in an amount equal to the value of the unexercised portion of the warrants (as determined in accordance with the Black-Scholes option pricing model) in connection with certain change of control transactions. In addition, the Company may also be required to pay cash to a warrant holder under certain circumstances if the Company is unable to timely deliver the shares acquired upon warrant exercise to such holder.

The fair value of these outstanding warrants is calculated using the binomial-lattice option-pricing model and is adjusted accordingly at each reporting period. The binomial-lattice option-pricing model requires that the Company uses significant assumptions and judgment to determine appropriate inputs to the model. Some of the assumptions that the Company relies on include the probability of a change of control occurring, the volatility of the Company’s stock over the life of the warrant and assumptions and inputs used to value the warrants under the Black-Scholes model should a change of control occur.

Changes resulting from the revaluation of warrants to fair value are recorded in “Gain (loss) revaluation of warrant liability” on the condensed consolidated statements of operations. Upon the exercise or modification to remove the provisions which require the warrants to be treated as a liability, the fair value of the warrants will be reclassified from a liability to stockholders’ equity on the Company’s condensed consolidated balance sheets and no further adjustment to the fair value would be made in subsequent periods.

See Note 10 in the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding the Company’s valuation of warrant liability.

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 the 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 condensed consolidated statements of operations, nor has its accrued for or made payments for interest and penalties. The Company continues to carry a full valuation allowance on all of its deferred tax assets. 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 tax years 1998 through 2013 remain subject to examination by the taxing jurisdictions due to unutilized net operating losses and research credits.

Net Loss Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (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. Diluted net income (loss) per share also gives effect to potential adjustments to the numerator for changes 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 and six months ended June 30, 2014 and 2013, 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 and six months ended June 30, 2014 and 2013 (in thousands, except per share amounts):

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2014     2013     2014     2013  

Numerator for Basic and Diluted:

        

Net loss used for basic calculation

   $ (7,589   $ (6,724   $ (7,814   $ (16,976

Effect of revaluation of warrant liability

     (4,007     (686     (13,041     0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss used for diluted calculation

   $ (11,596   $ (7,410   $ (20,855   $ (16,976
  

 

 

   

 

 

   

 

 

   

 

 

 

Denominator:

        

Basic weighted average number of shares outstanding

     72,899        69,727        72,495        64,756   

Effect of dilutive potential shares

     1,618        2,201        2,432        0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted weighted average number of shares outstanding

     74,517        71,928        74,927        64,756   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share:

        

Basic

   $ (0.10   $ (0.10   $ (0.11   $ (0.26

Diluted

   $ (0.16   $ (0.10   $ (0.28   $ (0.26

The table below presents shares underlying stock options, employee stock purchase plan rights and restricted stock units that are excluded from the calculation of the weighted average number of shares outstanding used for the calculation of diluted net loss per share. Warrants are excluded from the table below in periods for which the warrants are included in the calculation of diluted net loss per share. These are excluded from the calculation due to their anti-dilutive effect for the three and six months ended June 30, 2014 and 2013 (shares in thousands):

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2014      2013      2014      2013  

Weighted average number of anti-dilutive potential shares

     12,160         10,633         11,587         16,123   

Guarantee and Indemnification Arrangements

The Company recognizes the fair value for guarantee and indemnification arrangements issued or modified by the Company after December 31, 2002. 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.

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 its 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. 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 available-for-sale securities related to corporate debt and United States government agency securities. 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, which include its warrant liability. The Company assesses any transfers among fair value measurement levels at the end of each reporting period.

See Notes 2 and 10 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 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. The ASU’s effective date for the Company will be the first quarter of fiscal year 2017, using one of two retrospective application methods. Early adoption is not permitted. The Company is assessing the potential effects of this ASU on its 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 and six months ended June 30, 2014 and 2013 (in thousands, except per share amounts):

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2014     2013     2014     2013  

Numerator for Basic and Diluted:

        

Net loss used for basic calculation

   $ (7,589   $ (6,724   $ (7,814   $ (16,976

Effect of revaluation of warrant liability

     (4,007     (686     (13,041     0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss used for diluted calculation

   $ (11,596   $ (7,410   $ (20,855   $ (16,976
  

 

 

   

 

 

   

 

 

   

 

 

 

Denominator:

        

Basic weighted average number of shares outstanding

     72,899        69,727        72,495        64,756   

Effect of dilutive potential shares

     1,618        2,201        2,432        0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted weighted average number of shares outstanding

     74,517        71,928        74,927        64,756   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share:

        

Basic

   $ (0.10   $ (0.10   $ (0.11   $ (0.26

Diluted

   $ (0.16   $ (0.10   $ (0.28   $ (0.26

The table below presents shares underlying stock options, employee stock purchase plan rights and restricted stock units that are excluded from the calculation of the weighted average number of shares outstanding used for the calculation of diluted net loss per share. Warrants are excluded from the table below in periods for which the warrants are included in the calculation of diluted net loss per share. These are excluded from the calculation due to their anti-dilutive effect for the three and six months ended June 30, 2014 and 2013 (shares in thousands):

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2014      2013      2014      2013  

Weighted average number of anti-dilutive potential shares

     12,160         10,633         11,587         16,123   
Fair Value on Financial Instruments (Tables)

The Company’s financial assets and liabilities were recorded at fair value in the condensed consolidated balance sheets at June 30, 2014, as follows (in thousands):

 

     Total      Level 1      Level 2      Level 3  

Money market funds (1)

   $ 6,329       $ 6,329       $ 0       $ 0   

Corporate debt securities (2)

     17,700         0         17,700         0   

United States government agency securities (2)

     3,434         0         3,434         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets

   $ 27,463       $ 6,329       $ 21,134       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Warrant liability (3)

   $ 7,653       $ 0       $ 0       $ 7,653   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial liabilities

   $ 7,653       $ 0       $ 0       $ 7,653   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Included in cash and cash equivalents on the Company’s condensed consolidated balance sheets.
(2) Included in short-term investments on the Company’s condensed consolidated balance sheets.
(3) Included in current liabilities on the Company’s condensed consolidated balance sheets.

The Company’s financial assets and liabilities were recorded at fair value in the condensed consolidated balance sheets at December 31, 2013, as follows (in thousands):

 

     Total      Level 1      Level 2      Level 3  

Money market funds (1)

   $ 8,650       $ 8,650       $ 0       $ 0   

Corporate debt securities (2)

     23,173         0         23,173         0   

United States government agency securities (2)

     5,018         0         5,018         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets

   $ 36,841       $ 8,650       $ 28,191       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Warrant liability (3)

   $ 20,390       $ 0       $ 0       $ 20,390   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial liabilities

   $ 20,390       $ 0       $ 0       $ 20,390   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Included in cash and cash equivalents on the Company’s condensed consolidated balance sheets.
(2) Included in short-term investments on the Company’s condensed consolidated balance sheets.
(3) Included in current liabilities on the Company’s condensed consolidated balance sheets.

A reconciliation of the beginning and ending balances for warrant liability using significant unobservable inputs (Level 3) from December 31, 2013 to June 30, 2014, was as follows (in thousands):

 

Balance at December 31, 2013

   $ 20,390   

Decrease in fair value of warrants

     (12,525

Settlement of warrants exercised

     (212
  

 

 

 

Balance at June 30, 2014

   $ 7,653   
  

 

 

 
Available-for-sale Securities (Tables)

The following is a summary of available-for-sale securities at June 30, 2014 (in thousands):

 

     June 30, 2014  
     Carrying Value      Net
Unrealized Gain
     Fair Value  

Money market funds

   $ 6,329       $ 0       $ 6,329   

Corporate debt securities

     17,694         6         17,700   

United States government agency securities

     3,434         0         3,434   
  

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 27,457       $ 6       $ 27,463   
  

 

 

    

 

 

    

 

 

 

The following is a summary of available-for-sale securities at December 31, 2013 (in thousands):

 

     December 31, 2013  
     Carrying Value      Net
Unrealized Gain
    Fair Value  

Money market funds

   $ 8,650       $ 0      $ 8,650   

Corporate debt securities

     23,165         8        23,173   

United States government agency securities

     5,019         (1     5,018   
  

 

 

    

 

 

   

 

 

 

Total available-for-sale securities

   $ 36,834       $ 7      $ 36,841   
  

 

 

    

 

 

   

 

 

 

Available-for-sale securities at June 30, 2014 and December 31, 2013, consisted of the following by original contractual maturity (in thousands):

 

     June 30, 2014      December 31, 2013  
     Carrying Value      Fair Value      Carrying Value      Fair Value  

Due in one year or less

   $ 27,457       $ 27,463       $ 30,700       $ 30,701   

Due greater than one year and less than three years

     0         0         6,134         6,140   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cash equivalents and short-term investments

   $ 27,457       $ 27,463       $ 36,834       $ 36,841   
  

 

 

    

 

 

    

 

 

    

 

 

 
Inventories (Tables)
Inventories

Inventories at June 30, 2014 and December 31, 2013, consisted of the following (in thousands):

 

     June 30,      December 31,  
     2014      2013  

Work-in-process

   $ 2,691       $ 4,863   

Finished goods

     10,686         8,200   
  

 

 

    

 

 

 

Total inventories

   $ 13,377       $ 13,063   
  

 

 

    

 

 

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

The following is a summary of intangible assets, net at June 30, 2014 (in thousands):

 

     June 30, 2014  
     Gross
Carrying Amount
     Accumulated
Amortization
    Net
Carrying Amount
 

Acquisition-related intangible assets:

       

Reacquired license—INTERCEPT Asia

   $ 2,017       $ (774   $ 1,243   
  

 

 

    

 

 

   

 

 

 

Total intangible assets

   $ 2,017       $ (774   $ 1,243   
  

 

 

    

 

 

   

 

 

 

The following is a summary of intangible assets, net at December 31, 2013 (in thousands):

 

     December 31, 2013  
     Gross
Carrying Amount
     Accumulated
Amortization
    Net
Carrying Amount
 

Acquisition-related intangible assets:

       

Reacquired license—INTERCEPT Asia

   $ 2,017       $ (673   $ 1,344   
  

 

 

    

 

 

   

 

 

 

Total intangible assets

   $ 2,017       $ (673   $ 1,344   
  

 

 

    

 

 

   

 

 

 
Accrued Liabilities (Tables)
Accrued Liabilities

Accrued liabilities at June 30, 2014 and December 31, 2013, consisted of the following (in thousands):

 

     June 30,      December 31,  
     2014      2013  

Accrued compensation and related costs

   $ 2,440       $ 2,527   

Accrued inventory costs

     4,082         3,553   

Accrued professional services

     2,773         2,722   

Other accrued expenses

     1,324         1,011   
  

 

 

    

 

 

 

Total accrued liabilities

   $ 10,619       $ 9,813   
  

 

 

    

 

 

 
Debt (Tables)

Debt at June 30, 2014, consisted of the following (in thousands):

 

     June 30, 2014  
     Principal      Unamortized
Discount
     Total  

Loan and Security Agreement

   $ 10,000       $ 152       $ 9,848   

Less: debt—current

     0         0         0   
  

 

 

    

 

 

    

 

 

 

Debt—non-current

   $ 10,000       $ 152       $ 9,848   
  

 

 

    

 

 

    

 

 

 

Debt at December 31, 2013, consisted of the following (in thousands):

 

     December 31, 2013  
     Principal     Unamortized
Discount
     Total  

Comerica—Revolving Line of Credit

   $ 3,366      $ 0       $ 3,366   

Less: debt—current

     (3,366     0         (3,366
  

 

 

   

 

 

    

 

 

 

Debt—non-current

   $ 0      $ 0       $ 0   
  

 

 

   

 

 

    

 

 

 

Principal and interest payments on debt at June 30, 2014, are expected to be as follows (in thousands):

 

Year ended December 31,

      

2014 (remaining six months)

   $ 290   

2015

     695   

2016

     3,227   

2017

     3,227   

2018

     3,227   

2019

     2,314   
  

 

 

 
   $ 12,980   
  

 

 

 
Stockholders' Equity (Tables)

The fair value of the warrants at June 30, 2014 and December 31, 2013, consisted of the following (in thousands):

 

     June 30,      December 31,  
     2014      2013  

2009 Warrants

   $ 3,018       $ 8,542   

2010 Warrants

     4,635         11,848   
  

 

 

    

 

 

 

Total warrant liability

   $ 7,653       $ 20,390   
  

 

 

    

 

 

 

The fair value of the Company’s warrants was based option valuation models and using the following assumptions at June 30, 2014 and December 31, 2013:

 

     June 30,      December 31,  
     2014      2013  

2009 Warrants:

     

Expected term (in years)

     0.15              0.65        

Estimated volatility

     49%          45%    

Risk-free interest rate

     0.04%          0.10%    

Expected dividend yield

     0%          0%    

2010 Warrants:

     

Expected term (in years)

     1.36              1.86        

Estimated volatility

     49%          41%    

Risk-free interest rate

     0.11%          0.38%    

Expected dividend yield

     0%          0%    
Stock-Based Compensation (Tables)

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
 

Balance at December 31, 2013

     10,405      $ 3.46   

Granted

     2,641        6.00   

Forfeited

     (98     4.53   

Expired

     (30     9.78   

Exercised

     (900     2.49   
  

 

 

   

Balance at June 30, 2014

     12,018      $ 4.07   
  

 

 

   

Stock-based compensation recognized on the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013, was as follows (in thousands):

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2014      2013      2014      2013  

Stock-based compensation expense by caption:

           

Research and development

   $ 276       $ 122       $ 459       $ 209   

Selling, general and administrative

     1,065         719         1,827         1,345   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 1,341       $ 841       $ 2,286       $ 1,554   
  

 

 

    

 

 

    

 

 

    

 

 

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

The Company had the following significant customers that accounted for more than 10% of the Company’s total product revenue, all of which operate in a country outside of the United States of America, during the three and six months ended June 30, 2014 and 2013 (in percentages):

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2014      2013      2014      2013  

Etablissement Francais du Sang

     24%           18%           24%           17%     

Advanced Technology Company KSC

     18%               *               *               *     

Medical Device APS

     10%               *               *               *     

Delrus Inc.

         *           17%               *           29%     

Bravo Pacific Limited

         *           14%               *               *     

AUM+ LTD

         *           10%               *               *     

 

* Represents an amount less than 10% of product revenue.
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
Customer
Jun. 30, 2013
Jun. 30, 2014
Segment
Customer
Jun. 30, 2013
Dec. 31, 2013
Customer
Aug. 31, 2009
2009 Unit Offering
Nov. 30, 2010
2010 Unit Offering
Jun. 30, 2014
Trade Accounts Receivable
Dec. 31, 2013
Trade Accounts Receivable
Jun. 30, 2014
Minimum
Jun. 30, 2014
Maximum
Jun. 30, 2013
Maximum
Jun. 30, 2014
Maximum
Jun. 30, 2013
Maximum
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of major customers representing outstanding trade receivables
 
 
 
 
 
 
 
 
 
 
 
Cumulative outstanding trade receivables percentage by major customers
 
 
 
 
 
 
 
65.00% 
55.00% 
 
 
 
 
 
Life of inventory
 
 
2 years 
 
 
 
 
 
 
 
 
 
 
 
Protracted length of inventory
 
 
1 year 
 
 
 
 
 
 
 
 
 
 
 
Inventory valuation reserves
$ 0.1 
 
$ 0.1 
 
$ 0.4 
 
 
 
 
 
 
 
 
 
Estimated useful life of property and equipment
 
 
 
 
 
 
 
 
 
3 years 
 
 
5 years 
 
Capitalized costs for enhancement of enterprise resource planning software system and other internal use software
1.2 
1.2 
 
 
 
 
 
 
 
 
 
 
Estimated useful life of intangible assets
 
 
10 years 
 
 
 
 
 
 
 
 
 
 
 
Number of operating segments
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of reportable segments
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment charges on long-lived assets
 
 
 
 
 
 
 
 
 
 
Foreign exchange losses
 
 
 
 
 
 
 
 
 
 
$ (0.2)
$ (0.2)
$ (0.2)
$ (0.2)
Warrants to purchase an aggregate shares of common stock
 
 
 
 
 
2.4 
3.7 
 
 
 
 
 
 
 
Derecognition of tax positions, Maximum
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
Company's tax years subject to examination by the taxing jurisdictions
 
 
 
 
 
 
 
 
 
1998 
 
 
2013 
 
Period of warranty
 
 
1 year 
 
 
 
 
 
 
 
 
 
 
 
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 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Numerator for Basic and Diluted:
 
 
 
 
Net loss used for basic calculation
$ (7,589)
$ (6,724)
$ (7,814)
$ (16,976)
Effect of revaluation of warrant liability
(4,007)
(686)
(13,041)
Adjusted net loss used for diluted calculation
$ (11,596)
$ (7,410)
$ (20,855)
$ (16,976)
Denominator:
 
 
 
 
Basic weighted average number of shares outstanding
72,899 
69,727 
72,495 
64,756 
Effect of dilutive potential shares
1,618 
2,201 
2,432 
Diluted weighted average number of shares outstanding
74,517 
71,928 
74,927 
64,756 
Net loss per share:
 
 
 
 
Basic
$ (0.10)
$ (0.10)
$ (0.11)
$ (0.26)
Diluted
$ (0.16)
$ (0.10)
$ (0.28)
$ (0.26)
Shares Underlying Stock Options, Employee Stock Purchase Plan Rights, Warrants and Restricted Stock Units Excluded from Calculation of Weighted Average Number of Shares Outstanding used for Calculation of Diluted Net Income Loss Per Share (Detail)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Weighted average number of anti-dilutive potential shares
12,160 
10,633 
11,587 
16,123 
Fair Value on Financial Assets and Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Fair value of financial assets and liabilities
 
 
Total financial assets
$ 27,463 
$ 36,841 
Total financial liabilities
7,653 
20,390 
Money market funds
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
6,329 1
8,650 1
Corporate debt securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
17,700 2
23,173 2
United States government agency securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
3,434 2
5,018 2
Warrant Liability
 
 
Fair value of financial assets and liabilities
 
 
Total financial liabilities
7,653 3
20,390 3
Level 1
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
6,329 
8,650 
Total financial liabilities
Level 1 |
Money market funds
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
6,329 1
8,650 1
Level 1 |
Corporate debt securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
2
2
Level 1 |
United States government agency securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
2
2
Level 1 |
Warrant Liability
 
 
Fair value of financial assets and liabilities
 
 
Total financial liabilities
3
3
Level 2
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
21,134 
28,191 
Total financial liabilities
Level 2 |
Money market funds
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
1
1
Level 2 |
Corporate debt securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
17,700 2
23,173 2
Level 2 |
United States government agency securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
3,434 2
5,018 2
Level 2 |
Warrant Liability
 
 
Fair value of financial assets and liabilities
 
 
Total financial liabilities
3
3
Level 3
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
Total financial liabilities
7,653 
20,390 
Level 3 |
Money market funds
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
1
1
Level 3 |
Corporate debt securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
2
2
Level 3 |
United States government agency securities
 
 
Fair value of financial assets and liabilities
 
 
Total financial assets
2
2
Level 3 |
Warrant Liability
 
 
Fair value of financial assets and liabilities
 
 
Total financial liabilities
$ 7,653 3
$ 20,390 3
Reconciliation of Beginning and Ending Balances for Warrant Liability Using Significant Unobservable Inputs (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
Beginning balance
$ 20,390 
Decrease in fair value of warrants
(12,525)
Settlement of warrants exercised
(212)
Ending balance
$ 7,653 
Summary of Available for Sale Securities (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying Value
$ 27,457 
$ 36,834 
Net Unrealized Gain
Fair Value
27,463 
36,841 
Money market funds
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying Value
6,329 
8,650 
Net Unrealized Gain
Fair Value
6,329 
8,650 
Corporate debt securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying Value
17,694 
23,165 
Net Unrealized Gain
Fair Value
17,700 
23,173 
United States government agency securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Carrying Value
3,434 
5,019 
Net Unrealized Gain
(1)
Fair Value
$ 3,434 
$ 5,018 
Available for Sale Securities by Original Contractual Maturity (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
 
 
Due in one year or less, carrying value
$ 27,457 
$ 30,700 
Due greater than one year and less than three years, carrying value
6,134 
Total cash equivalents and short-term investments, carrying value
27,457 
36,834 
Due in one year or less, fair value
27,463 
30,701 
Due greater than one year and less than three years, fair value
6,140 
Total cash equivalents and short-term investments, fair value
$ 27,463 
$ 36,841 
Available-for-Sale Securities - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
 
 
Gross realized gains from the sale or maturity of available-for-sale investments
$ 0 
$ 0 
Gross realized losses from the sale or maturity of available-for-sale investments
Other-than-temporary impairments from the sale or maturity of available-for-sale investments
$ 0 
$ 0 
Inventories (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Inventory [Line Items]
 
 
Work-in-process
$ 2,691 
$ 4,863 
Finished goods
10,686 
8,200 
Total inventories
$ 13,377 
$ 13,063 
Goodwill and Intangible Assets Net - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2014
Jun. 30, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Disposal or recognition of additional goodwill
$ 0 
$ 0 
 
Impairment charges on goodwill
 
 
Impairment charges recognized related to the acquired intangible assets
 
Annual amortization expense of the intangible assets, 2014 (remaining six months)
0.1 
0.1 
 
Annual amortization expense of the intangible assets, 2015
0.2 
0.2 
 
Annual amortization expense of the intangible assets, 2016
0.2 
0.2 
 
Annual amortization expense of the intangible assets, 2017
0.2 
0.2 
 
Annual amortization expense of the intangible assets, 2018
0.2 
0.2 
 
Annual amortization expense of the intangible assets, 2019
0.2 
0.2 
 
Annual amortization expense of the intangible assets, 2020
$ 0.1 
$ 0.1 
 
Summary of Intangible Assets Net (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
$ 2,017 
$ 2,017 
Accumulated Amortization
(774)
(673)
Net Carrying Amount
1,243 
1,344 
Reacquired license - INTERCEPT Asia
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
2,017 
2,017 
Accumulated Amortization
(774)
(673)
Net Carrying Amount
$ 1,243 
$ 1,344 
Long-Term Investments - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Investment [Line Items]
 
Eligibility to receive a royalty fee
1.00% 
Royalty income, nonoperating
$ 0 
Carrying value of investment
$ 0 
Maximum
 
Investment [Line Items]
 
Ownership percentage under Cost Method for Investments
1.00% 
Accrued Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Schedule of Accrued Liabilities [Line Items]
 
 
Accrued compensation and related costs
$ 2,440 
$ 2,527 
Accrued inventory costs
4,082 
3,553 
Accrued professional services
2,773 
2,722 
Other accrued expenses
1,324 
1,011 
Total accrued liabilities
$ 10,619 
$ 9,813 1
Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
Less: debt - current, Principal
$ 0 
$ (3,366)
Less: debt - current, Unamortized Discount
Less: debt-current
(3,366)1
Debt - non-current, Principal
10,000 
Debt - non-current, Unamortized Discount
152 
Debt-non-current
9,848 
1
Loan and Security Agreement
 
 
Debt Instrument [Line Items]
 
 
Total debt, Principal
10,000 
 
Total debt, Unamortized amount
152 
 
Total debt
9,848 
 
Comerica - Revolving Line of Credit
 
 
Debt Instrument [Line Items]
 
 
Total debt, Principal
 
3,366 
Total debt, Unamortized amount
 
Total debt
 
$ 3,366 
Debt - Principal and Interest Payments on Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Debt Instrument [Line Items]
 
2014 (remaining six months)
$ 290 
2015
695 
2016
3,227 
2017
3,227 
2018
3,227 
2019
2,314 
Long-term Debt
$ 12,980 
Debt - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
0 Months Ended 6 Months Ended 6 Months Ended 6 Months Ended
Jun. 30, 2014
Loan and Security Agreement
Jun. 30, 2014
Loan and Security Agreement
Tranche
Jun. 30, 2014
Loan and Security Agreement
Securities Pledged as Collateral
Jun. 30, 2014
Revolving Credit Facility
May 31, 2014
Revolving Credit Facility
Jun. 30, 2014
First Tranche (Term Loan A)
Loan and Security Agreement
Jun. 30, 2014
Second Tranche (Term Loan B)
Loan and Security Agreement
Jun. 30, 2014
Third Tranche (Term Loan C)
Loan and Security Agreement
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
Maximum borrowing limit
 
$ 30.0 
 
$ 7.0 
 
 
 
 
Term of agreement
 
5 years 
 
 
 
 
 
 
Number of loan tranches
 
 
 
 
 
 
 
Loan and security agreement
 
 
 
 
 
10.0 
10.0 
10.0 
Borrowing conditions
 
 
 
 
 
 
The second tranche of $10.0 million (“Term Loan B”) is contingent upon the approval, if it occurs, by the U.S. Food and Drug Administration (“FDA”) of the Company’s premarket approval application for either the plasma or platelet system (the “PMA Approval”). The availability of Term Loan B expires at the earlier of (i) six months after receiving PMA Approval or (ii) June 30, 2015. 
The third tranche of $10.0 million (“Term Loan C”) will be available from July 1, 2015 through December 31, 2015, contingent upon both (i) obtaining PMA Approval and (ii) the Company achieving trailing six months’ revenue at a specified threshold (the “Revenue Event”). 
Interest rate
 
 
 
 
 
6.95% 
 
 
Interest rate, description
Term Loan A bears an interest rate of 6.95%. Term Loan B and Term Loan C will 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 applicable Term Loan funding date. 
 
 
 
 
 
 
 
Maturity period
Jun. 01, 2019 
 
 
Jun. 30, 2014 
 
 
 
 
Principal and interest payments
42 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 December 2015 followed by forty-two months of equal principal and interest payments thereafter; however, if the Revenue Event is achieved no later than November 30, 2015, 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. 
 
 
 
 
 
 
 
Commitment fee
 
0.2 
 
 
 
 
 
 
Lender legal fees
0.1 
 
 
 
 
 
 
 
Percentage of investments made in subsidiary
 
 
35.00% 
 
 
 
 
 
Outstanding amounts
 
 
 
 
$ 3.4 
 
 
 
Commitments and Contingencies - Additional Information (Detail)
6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
EUR (€)
Dec. 31, 2010
USD ($)
Jun. 30, 2014
USD ($)
Sep. 30, 2014
Scenario, Forecast
EUR (€)
Disposable_Kits
Jun. 30, 2014
Additional Concord Lease
USD ($)
Option
Commitments and Contingencies Disclosure [Line Items]
 
 
 
 
 
Minimum term of non-cancellable operating leases
1 year 
 
 
 
 
Expiration of non-cancellable operating leases maximum year
2019 
 
 
 
 
Early termination of non-cancellable operating leases minimum period
 
 
 
 
2015-01 
Initial term of operating lease
 
 
 
 
2 years 
Number of renewal options
 
 
 
 
Renewal period of operating lease
 
 
 
 
2 years 
Lease commencement date
 
 
 
 
Aug. 01, 2013 
Future rent payment, 2014
 
 
 
 
$ 78,000 
Future rent payment, 2015
 
 
 
 
90,000 
Financing for leasehold improvement
 
1,100,000 
 
 
 
Outstanding liability related to leasehold improvements
 
 
700,000 
 
 
Leasehold Improvements reflected in Accrued liabilities
 
 
100,000 
 
 
Leasehold Improvements reflected in Other non-current liabilities
 
 
600,000 
 
 
Transition agreement expiration date
Sep. 30, 2014 
 
 
 
 
Aggregate repurchase price
 
 
 
134,000 
 
Number of disposable kits to be repurchased
 
 
 
2,000 
 
Distribution fee per disposable kit
10 
 
 
 
 
Potential maximum payment of distribution fee
€ 3,000,000 
 
 
 
 
Stockholders Equity - Additional Information (Detail) (USD $)
3 Months Ended 6 Months Ended 6 Months Ended 6 Months Ended 1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Jun. 30, 2013
IPO
Mar. 19, 2013
IPO
Jun. 30, 2013
IPO
Overallotment Option
Jun. 30, 2014
2009 Unit Offering
Aug. 31, 2009
2009 Unit Offering
Jun. 30, 2014
2010 Unit Offering
Nov. 30, 2010
2010 Unit Offering
Aug. 31, 2009
Warrant
2009 Unit Offering
Nov. 30, 2010
Warrant
2010 Unit Offering
Jun. 30, 2014
Warrant
2010 Unit Offering
Jun. 30, 2014
Warrant
2010 Unit Offering
Dec. 31, 2013
Warrant
2010 Unit Offering
Jun. 30, 2014
Stockholder Rights Plan
Jun. 30, 2014
Sales Agreement
Cantor
Dec. 31, 2013
Sales Agreement
Cantor
Stockholders Equity Note [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants to purchase an aggregate shares of common stock
 
 
 
 
 
 
 
 
 
2,400,000 
 
3,700,000 
 
 
 
 
 
 
 
 
Warrant exercise price
 
 
 
 
 
 
 
 
 
2.90 
 
3.20 
 
 
 
 
 
 
 
 
Exercisable period
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
5 years 
 
 
 
 
 
 
Net proceeds from underwritten public offering
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 19,700,000 
 
 
 
 
 
 
Payment for underwriting discounts and commissions and stock issuance cost
 
 
 
 
 
500,000 
 
 
 
 
 
 
 
1,300,000 
 
 
 
 
 
 
Number of units sold in underwritten public offering
 
 
 
 
 
 
 
 
 
 
 
 
 
7,400,000 
 
 
 
 
 
 
Number of common stock in each unit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of common stock shares purchasable with each warrant
 
 
 
 
 
 
 
 
 
 
 
 
 
0.5 
 
 
 
 
 
 
Units issued, price per unit
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2.85 
 
 
 
 
 
 
Common stock, number of shares issued
 
 
 
 
 
8,300,000 
 
1,300,000 
 
 
 
 
 
7,400,000 
 
 
 
 
900,000 
5,400,000 
Warrants exercisable date
 
 
 
 
 
 
 
 
 
 
 
 
 
May 15, 2011 
 
 
 
 
 
 
Gain (Loss) from revaluation of warrant liability
3,491,000 
686,000 
12,525,000 
(4,387,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants exercised
 
 
 
 
 
 
 
 
 
 
 
 
 
 
157,894 
157,894 
186,586 
 
 
 
Warrant liability
7,653,000 
 
7,653,000 
 
20,390,000 1
 
 
 
2,400,000 
 
3,300,000 
 
 
 
 
 
 
 
 
 
Maximum common stock offering price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
70,000,000 
 
Percentage of proceeds payable as compensation to underwriter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
Proceeds from common stock sold
 
 
3,847,000 
51,171,000 
 
38,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
3,900,000 
23,500,000 
Common stock available for sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37,600,000 
 
Common stock, price per share
 
 
 
 
 
 
$ 4.20 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross proceeds from public offering
 
 
 
 
 
40,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Underwriter's discount
 
 
 
 
 
$ 1,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minimum percentage of common stock acquired by stockholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.00% 
 
 
Designated preferred stock for future issuance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
250,000 
 
 
Fair Value of Warrants (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Class of Warrant or Right [Line Items]
 
 
Warrant liability
$ 7,653 
$ 20,390 1
2009 Warrants
 
 
Class of Warrant or Right [Line Items]
 
 
Warrant liability
3,018 
8,542 
2010 Warrants
 
 
Class of Warrant or Right [Line Items]
 
 
Warrant liability
$ 4,635 
$ 11,848 
Fair Value of Warrants Using Valuation Model (Detail)
6 Months Ended 12 Months Ended
Jun. 30, 2014
Dec. 31, 2013
2009 Warrants
 
 
Class of Warrant or Right [Line Items]
 
 
Expected term (in years)
1 month 24 days 
7 months 24 days 
Estimated volatility
49.00% 
45.00% 
Risk-free interest rate
0.04% 
0.10% 
Expected dividend yield
0.00% 
0.00% 
2010 Warrants
 
 
Class of Warrant or Right [Line Items]
 
 
Expected term (in years)
1 year 4 months 10 days 
1 year 10 months 10 days 
Estimated volatility
49.00% 
41.00% 
Risk-free interest rate
0.11% 
0.38% 
Expected dividend yield
0.00% 
0.00% 
Stock-Based Compensation - Additional Information (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 0 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Jun. 30, 2014
Performance Shares
Jun. 30, 2013
Performance Shares
Jun. 30, 2014
Performance Shares
Jun. 30, 2013
Performance Shares
Jun. 6, 2012
Employee Stock Purchase Plan
Jun. 30, 2014
Employee Stock Purchase Plan
Jun. 12, 2013
2008 Equity Incentive Plan
Jun. 6, 2012
2008 Equity Incentive Plan
Jun. 30, 2014
2008 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase in shares of common stock authorized for issuance
 
 
 
 
 
 
 
 
 
500,000 
 
6,000,000 
3,000,000 
 
Maximum number of shares of common stock authorized for issuance
 
 
 
 
 
 
 
 
 
1,320,500 
 
19,540,940 
 
 
Number of shares available for future issuance
17,700,000 
 
17,700,000 
 
 
 
 
 
 
 
500,000 
 
 
5,600,000 
Performance-based stock options awards
$ 1,341 
$ 841 
$ 2,286 
$ 1,554 
 
$ 0 
$ 0 
$ 0 
$ 0 
 
 
 
 
 
Performance-based stock options, outstanding
12,018,000 
 
12,018,000 
 
10,405,000 
 
 
 
 
 
 
 
Stock-Based Compensation Recognized on Condensed Consolidated Statements of Operations (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation expense
$ 1,341 
$ 841 
$ 2,286 
$ 1,554 
Research and Development Expense
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation expense
276 
122 
459 
209 
Selling, General and Administrative Expenses
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation expense
$ 1,065 
$ 719 
$ 1,827 
$ 1,345 
Development and License Agreements - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 3 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Fresenius
Jun. 30, 2014
Royalty
Dec. 31, 2013
Royalty
Jun. 30, 2014
Royalty
Platelet system
Jun. 30, 2014
Royalty
Plasma system
Jun. 30, 2014
Manufacturing Costs
Dec. 31, 2013
Manufacturing Costs
Licenses Agreements [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Royalty rate applied towards sale of products
 
 
 
 
 
 
 
10.00% 
3.00% 
 
 
Royalty payments on products
$ 0.6 
$ 0.7 
$ 1.3 
$ 1.6 
 
 
 
 
 
 
 
Royalties owed
 
 
 
 
 
0.6 
0.7 
 
 
3.8 
4.3 
Prior written notice for termination of agreement
 
 
24 months 
 
30 months 
 
 
 
 
 
 
Revenue from sale of components
1.1 
 
3.8 
 
 
 
 
 
 
 
 
Payments made relating to the manufacturing of the products
$ 4.9 
$ 3.6 
$ 9.5 
$ 7.6 
 
 
 
 
 
 
 
Segment, Customer and Geographic Information - Additional Information (Detail)
6 Months Ended
Jun. 30, 2014
Segment
Segment Reporting Information [Line Items]
 
Number of operating segments
Significant Customers that Accounted for More than Ten Percentage of Total Product Revenue (Detail)
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Etablissement Francais du Sang
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Percentage of revenue derived from significant customer from Company's total product revenue
24.00% 
18.00% 
24.00% 
17.00% 
Advanced Technology Company KSC
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Percentage of revenue derived from significant customer from Company's total product revenue
18.00% 
 
 
 
Medical Device APS
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Percentage of revenue derived from significant customer from Company's total product revenue
10.00% 
 
 
 
Delrus Inc.
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Percentage of revenue derived from significant customer from Company's total product revenue
 
17.00% 
 
29.00% 
Bravo Pacific Limited
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Percentage of revenue derived from significant customer from Company's total product revenue
 
14.00% 
 
 
AUM+ LTD
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Percentage of revenue derived from significant customer from Company's total product revenue
 
10.00%