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(1) ORGANIZATION AND BASIS OF PRESENTATION
Organization
Exact Sciences Corporation (together with its subsidiary, “Exact”, “we”, “us” or the “Company”) was incorporated in February 1995. Exact is a molecular diagnostics company currently focused on the early detection and prevention of colorectal cancer. The Company’s non-invasive stool-based DNA (sDNA) screening technology includes proprietary and patented methods that isolate and analyze human DNA present in stool to screen for the presence of colorectal pre-cancer and cancer.
Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of Exact Sciences Corporation and those of its wholly-owned subsidiary, Exact Sciences Laboratories, LLC, are unaudited and have been prepared on a basis substantially consistent with the Company’s audited financial statements and notes as of and for the year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K (the “2013 Form 10-K”). These condensed financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation of the results of operations have been included. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. The statements should be read in conjunction with the audited financial statements and related notes included in the 2013 Form 10-K. Management has evaluated subsequent events for disclosure or recognition in the accompanying financial statements up to the filing of this report.
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(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company’s wholly-owned subsidiary, Exact Sciences Laboratories, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers cash on hand, demand deposits in bank, money market funds, and all highly liquid investments with an original maturity of 90 days or less to be cash and cash equivalents. The Company had no restricted cash at March 31, 2014 and December 31, 2013.
Marketable Securities
Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Debt securities carried at amortized cost are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Marketable equity securities and debt securities not classified as held-to-maturity are classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive loss. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method, which approximates the effective interest method. Such amortization is included in investment income. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in investment income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in investment income.
At March 31, 2014 and December 31, 2013, the Company’s investments were comprised of fixed income investments and all were deemed available-for-sale. The objectives of the Company’s investment strategy are to provide liquidity and safety of principal while striving to achieve the highest rate of return consistent with these two objectives. The Company’s investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations (including those with a contractual term greater than one year from the date of purchase) are classified as current. All of the Company’s investments are considered current. There were no realized losses for the three months ended March 31, 2014 and 2013. Realized gains were $6.3 thousand and $2.2 thousand for the three months ended March 31, 2014 and 2013, respectively. Unrealized gains or losses on investments are recorded in other comprehensive loss.
Available-for-sale securities at March 31, 2014 consisted of the following:
|
|
March 31, 2014 |
| ||||||||||
(In thousands) |
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
U.S. government agency securities |
|
$ |
29,662 |
|
$ |
48 |
|
$ |
— |
|
$ |
29,710 |
|
Corporate bonds |
|
61,857 |
|
83 |
|
— |
|
61,940 |
| ||||
Certificates of deposit |
|
5,052 |
|
2 |
|
— |
|
5,054 |
| ||||
Commercial paper |
|
1,500 |
|
— |
|
— |
|
1,500 |
| ||||
Total available-for-sale securities |
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$ |
98,071 |
|
$ |
133 |
|
$ |
— |
|
$ |
98,204 |
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Available-for-sale securities at December 31, 2013 consisted of the following:
|
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December 31, 2013 |
| ||||||||||
(In thousands) |
|
Amortized |
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Gains in |
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Losses in |
|
Estimated |
| ||||
Corporate bonds |
|
$ |
77,935 |
|
$ |
75 |
|
— |
|
$ |
78,010 |
| |
U.S. government agency securities |
|
34,291 |
|
47 |
|
— |
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34,338 |
| ||||
Certificates of deposit |
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6,558 |
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3 |
|
— |
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6,561 |
| ||||
Commercial paper |
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1,499 |
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— |
|
— |
|
1,499 |
| ||||
Total available-for-sale securities |
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$ |
120,283 |
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$ |
125 |
|
$ |
— |
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$ |
120,408 |
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Changes in Accumulated Other Comprehensive Income
The amounts recognized in accumulated other comprehensive income (AOCI) for the three months ended March 31, 2014, were as follows (in thousands):
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Change in value of |
| |
Beginning balance |
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$ |
125 |
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Other comprehensive income before reclassifications |
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14 |
| |
Amounts reclassified from accumulated other comprehensive income |
|
(6 |
) | |
Net current period change in accumulated other comprehensive income |
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8 |
| |
Ending balance |
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$ |
133 |
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Amounts reclassified from accumulated other comprehensive income were as follows (in thousands):
Details about AOCI Components |
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Affected Line Item in the |
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The three |
| |
Change in value of available-for-sale investments |
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|
|
|
| |
Sales and maturities of available-for-sale investments |
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Investment income |
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$ |
(6 |
) |
Total reclassifications |
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|
|
$ |
(6 |
) |
Property and Equipment
Property and equipment are stated at cost and depreciated using the straight-line method over the assets’ estimated useful lives. Maintenance and repairs are expensed when incurred; additions and improvements are capitalized. The estimated useful lives of fixed assets are as follows:
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Estimated |
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Asset Classification |
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Useful Life |
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Laboratory equipment |
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3 - 5 years |
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Office and computer equipment |
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3 years |
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Leasehold improvements |
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Lesser of the remaining |
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|
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lease term or useful life |
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Furniture and fixtures |
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3 years |
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At March 31, 2014, the Company had $4.9 million of assets under construction which consisted of $3.1 million of capitalized costs related to software projects and $1.8 million of costs related to an equipment project. Depreciation will begin on these assets once they are placed into service. We expect that it will cost $0.5 million to complete the equipment project and $1.0 million to complete the software projects, and these projects are expected to be completed in 2014.
Software Capitalization Policy
Software development costs related to internal use software are incurred in three stages of development: the preliminary project stage, the application development stage, and the post-implementation stage. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred. Costs in the application development stage that meet the criteria for capitalization are capitalized and amortized using the straight-line basis over the estimated economic useful life of the software.
Net Loss Per Share
Basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share are the same because all outstanding common stock equivalents have been excluded, as they are anti-dilutive due to the Company’s losses.
The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect due to net losses for each period:
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March 31, |
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(In thousands) |
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2014 |
|
2013 |
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Shares issuable upon exercise of stock options |
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6,261 |
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6,379 |
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Shares issuable upon exercise of outstanding warrants (1) |
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155 |
|
240 |
|
Shares issuable upon the release of restricted stock awards |
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1,519 |
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1,003 |
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Shares issuable upon the vesting of restricted stock awards related to a licensing agreement |
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49 |
|
73 |
|
|
|
7,984 |
|
7,695 |
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(1) At March 31, 2014, represents warrants to purchase 80,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. At March 31, 2013, represents warrants to purchase 165,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement.
Revenue Recognition
License fees. License fees for the licensing of product rights are recorded as deferred revenue upon receipt of cash and recognized as revenue on a straight-line basis over the license period. As more fully described in the 2013 Form 10-K, in connection with the Company’s January 2009 strategic transaction with Genzyme Corporation, Genzyme agreed to pay the Company a total of $18.5 million, of which $16.65 million was paid on January 27, 2009 and $1.85 million was subject to a holdback by Genzyme to satisfy certain potential indemnification obligations in exchange for the assignment and licensing of certain intellectual property to Genzyme. The Company’s on-going performance obligations to Genzyme under the Collaboration, License and Purchase Agreement (the “CLP Agreement”), as described below, including its obligation to deliver through licenses certain intellectual property improvements to Genzyme, if improvements are made during the initial five-year collaboration period, were deemed to be undelivered elements of the CLP Agreement on the date of closing. Accordingly, the Company deferred the initial $16.65 million in cash received at closing and is amortizing that up-front payment on a straight-line basis into revenue over the initial five-year collaboration period which ended in January 2014. The Company received the first holdback amount of $1.0 million, which included accrued interest due, from Genzyme during the first quarter of 2010. The Company received the second holdback amount of $0.9 million, which included accrued interest due, from Genzyme during the third quarter of 2010. The amounts were deferred and are being amortized on a straight-line basis into revenue over the remaining term of the collaboration at the time of receipt.
In addition, Genzyme purchased 3,000,000 shares of common stock on January 27, 2009 for $2.00 per share, representing a premium of $0.51 per share above the closing price of the Company’s common stock on that date of $1.49 per share. The aggregate premium paid by Genzyme over the closing price of the Company’s common stock on the date of the transaction of $1.53 million is deemed to be a part of the total consideration for the CLP Agreement. Accordingly, the Company deferred the aggregate $1.53 million premium and amortized that amount on a straight-line basis into revenue over the initial five-year collaboration period which ended in January 2014.
The Company recognized approximately $0.3 million and $1.0 million in license fee revenue in connection with the amortization of the up-front payments from Genzyme, during the three month periods ended March 31, 2014 and 2013, respectively.
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(3) MAYO LICENSE AGREEMENT
Overview
On June 11, 2009, the Company entered into a license agreement (the “License Agreement”) with MAYO Foundation for Medical Education and Research (“MAYO”). Under the License Agreement, MAYO granted the Company an exclusive, worldwide license within the field (the “Field”) of stool or blood based cancer diagnostics and screening (excluding a specified proteomic target) with regard to certain MAYO patents, and a non-exclusive worldwide license within the Field with regard to certain MAYO know-how. The licensed patents cover advances in sample processing, analytical testing and data analysis associated with non-invasive, stool-based DNA screening for colorectal cancer. Under the License Agreement, the Company assumes the obligation and expense of prosecuting and maintaining the licensed patents and is obligated to make commercially reasonable efforts to bring products covered by the license to market. Pursuant to the License Agreement, the Company granted MAYO two common stock purchase warrants with an exercise price of $1.90 per share covering 1,000,000 and 250,000 shares of common stock, respectively. The Company is also required to make payments to MAYO for up-front fees, fees once certain milestones are reached by the Company, and other payments as outlined in the License Agreement. In addition to the license to intellectual property owned by MAYO, the Company receives product development and research and development efforts from MAYO personnel. The Company is also obligated to make royalty payments to MAYO on potential future net sales of any products developed from the licensed technology. The Company sought rights to the MAYO intellectual property for the specific purpose of developing a non-invasive, stool-based DNA screening test for colorectal cancer. At the time the license agreement was executed, the sole focus of the Company was the development of such a test. Accordingly, the Company recognized the initial payments and expenses related to the warrants at the time of the transaction and the amounts were expensed to research and development as there were no anticipated alternative future uses associated with the intellectual property.
Warrants
The warrants granted to MAYO were valued based on a Black-Scholes pricing model at the date of the grant. The warrants were granted with an exercise price of $1.90 per share of common stock. The grant to purchase 1,000,000 shares was immediately exercisable and the grant to purchase 250,000 shares vests and becomes exercisable over a four year period.
MAYO exercised the warrant to purchase 1,000,000 shares through several partial exercises. As of September 2011, the warrant covering 1,000,000 shares was fully exercised.
In January of 2013, MAYO partially exercised its warrant covering 250,000 shares by utilizing the cashless exercise provision contained in the warrant. As a result of this exercise for a gross amount of 85,000 shares, in lieu of paying a cash exercise price, MAYO forfeited its right with respect to 14,008 shares leaving it with a net amount of 70,992 shares.
In June of 2013, MAYO partially exercised this warrant by utilizing the cashless exercise provision contained in the warrant. As a result of this exercise for a gross amount of 85,000 shares, in lieu of paying a cash exercise price, MAYO forfeited its right with respect to 12,765 shares leaving it with a net amount of 72,235 shares. Following this exercise, the warrant originally covering 250,000 shares covered a total of 80,000 shares at March 31, 2014.
Royalty Payments
The Company will make royalty payments to MAYO based on a percentage of net sales of products developed from the licensed technology starting in the third year of the agreement. In 2012, minimum royalty payments were $10,000. For each year from 2013 through 2029 (the year the last patent expires), the minimum royalty payments are $25,000 per year.
Other Payments
Other payments under the License Agreement include an upfront payment of $80,000, a milestone payment of $250,000 on the commencement of patient enrollment in a human cancer screening clinical trial, and a $500,000 payment upon FDA approval of the Company’s Cologuard test. The upfront payment of $80,000 was made in the third quarter of 2009 and expensed to research and development in the second quarter of 2009. The Company began enrollment in a human cancer screening clinical trial in June 2011 and the milestone payment of $250,000 was made and expensed to research and development in June 2011. It is uncertain as to when or if the FDA will approve the Company’s Cologuard test; therefore the $500,000 milestone payment has not been recorded as a liability. The Company evaluates the status of the FDA trial at each reporting date to determine if a liability should be recorded for the milestone payment.
In addition, the Company is paying MAYO for research and development efforts. As part of the Company’s research collaborations with MAYO, the Company has incurred charges of $0.5 million and has made payments of $0.2 million for the three months ended March 31, 2014. The Company has recorded an estimated liability in the amount of $1.0 million for research and development efforts as of March 31, 2014. The Company incurred charges of $0.4 million and made payments of $0.1 million for the three months ended March 31, 2013. The Company recorded an estimated liability in the amount of $0.4 million for research and development efforts at March 31, 2013.
May 2012 Amendment
In May 2012 the Company expanded the relationship with MAYO through an amendment to the License Agreement. As part of the amendment, MAYO expanded the Company’s license to include all gastrointestinal cancers and diseases, and new cancer screening applications of stool- and blood-based testing. As consideration for the expanded license, the Company granted MAYO 97,466 shares of restricted stock, one quarter of which vested immediately, with the remainder to vest in three equal annual installments. The Company recognized $1.0 million in research and development licensing expense during the twelve months ended December 31, 2012 in connection with the restricted stock grant. The Company sought rights to the MAYO intellectual property for the specific purpose of developing future non-invasive, stool-based DNA screening tests for gastrointestinal diseases other than colorectal cancer. The Company does not believe there are alternative future uses for the intellectual property. In addition, at the time the restricted stock grant expense was recorded for the intellectual property license, the Company believed it was unlikely they would proceed with the tests for other gastrointestinal diseases until following receipt of FDA approval for the Company’s Cologuard test. Because of the significant uncertainty of receiving this FDA approval, coupled with the uncertainty associated with funding future development of tests for other gastrointestinal diseases, the Company could not conclude that commencement of any future projects related to the acquired intellectual property was reasonably expected at the time of this license agreement amendment.
As part of the amendment, the Company will also be responsible for making additional restricted stock grants to MAYO as certain milestones are met with respect to commercial launch of the Company’s second and third licensed products. Additionally, the Company will make milestone payments once certain sales levels are reached on licensed products. It is uncertain as to when or if these milestones will be met; therefore, the milestone payments have not been recorded as a liability. The Company evaluates the status of the milestone payments at each reporting date to determine if a liability should be recorded for the milestone payment.
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(4) STOCK-BASED COMPENSATION
Stock-Based Compensation Plans
The Company maintains the 2010 Omnibus Long-Term Incentive Plan, the 2010 Employee Stock Purchase Plan and the 2000 Stock Option and Incentive Plan (collectively, the “Stock Plans”).
Stock-Based Compensation Expense
The Company recorded $2.0 million in stock-based compensation expense during the three months ended March 31, 2014 in connection with the amortization of restricted stock and restricted stock unit awards, stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees, non-employee consultants and non-employee directors. The Company recorded $1.0 million in stock-based compensation expense during the three months ended March 31, 2013 in connection with the amortization of restricted stock and restricted stock unit awards, stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees, non-employee consultants and non-employee directors.
Determining Fair Value
Valuation and Recognition - The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below. The estimated fair value of employee stock options is recognized to expense using the straight-line method over the vesting period.
Expected Term - The Company uses the simplified calculation of expected life, described in the SEC’s Staff Accounting Bulletins 107 and 110, as the Company does not currently have sufficient historical exercise data on which to base an estimate of expected life. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted.
Expected Volatility - Expected volatility is based on the Company’s historical stock volatility data over the expected term of the awards.
Risk-Free Interest Rate - The Company bases the risk-free interest rate used in the Black-Scholes valuation method on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent expected term.
Forfeitures - The Company records stock-based compensation expense only for those awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. The Company’s forfeiture rate used in the three months ended March 31, 2014 was 4.99%. The Company’s forfeiture rate used in the three months ended March 31, 2013 was 2.76%.
The fair value of each restricted stock and restricted stock unit award is determined on the date of grant using the closing stock price on that day.
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Three Months Ended |
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|
March 31, |
| ||||
|
|
2014 |
|
2013 |
| ||
|
|
|
|
|
| ||
Option Plan Shares |
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|
|
|
| ||
Risk-free interest rates |
|
1.96 |
% |
1.15 |
% | ||
Expected term (in years) |
|
6 |
|
6 |
| ||
Expected volatility |
|
80.8 |
% |
84.0 |
% | ||
Dividend yield |
|
0 |
% |
0 |
% | ||
Weighted average fair value per share of options granted during the period |
|
$ |
9.86 |
|
$ |
7.73 |
|
|
|
|
|
|
| ||
ESPP Shares |
|
|
|
|
| ||
Risk-free interest rates |
|
|
(1) |
|
(1) | ||
Expected term (in years) |
|
|
(1) |
|
(1) | ||
Expected volatility |
|
|
(1) |
|
(1) | ||
Dividend yield |
|
|
(1) |
|
(1) | ||
Weighted average fair value per share of stock purchase rights granted during the period |
|
|
(1) |
|
(1) | ||
(1) The Company did not issue stock purchase rights under its 2010 Purchase Plan during the respective period.
Stock Option and Restricted Stock Activity
A summary of stock option activity under the Stock Plans during the three months ended March 31, 2014 is as follows:
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|
|
|
|
Weighted |
|
|
| ||
|
|
|
|
Weighted |
|
Average |
|
|
| ||
|
|
|
|
Average |
|
Remaining |
|
Aggregate |
| ||
|
|
|
|
Exercise |
|
Contractual |
|
Intrinsic |
| ||
Options |
|
Shares |
|
Price |
|
Term (Years) |
|
Value (1) |
| ||
(Aggregate intrinsic value in thousands) |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Outstanding, January 1, 2014 |
|
6,062,587 |
|
$ |
2.78 |
|
6.6 |
|
|
| |
Granted |
|
233,000 |
|
$ |
13.96 |
|
|
|
|
| |
Exercised |
|
(30,439 |
) |
$ |
2.90 |
|
|
|
|
| |
Forfeited |
|
(4,375 |
) |
$ |
7.59 |
|
|
|
|
| |
Outstanding, March 31, 2014 |
|
6,260,773 |
|
$ |
3.19 |
|
6.5 |
|
$ |
68,765 |
|
|
|
|
|
|
|
|
|
|
| ||
Exercisable, March 31, 2014 |
|
5,390,794 |
|
$ |
2.05 |
|
5.4 |
|
$ |
65,358 |
|
|
|
|
|
|
|
|
|
|
| ||
Vested and expected to vest, March 31, 2014 |
|
6,217,361 |
|
$ |
3.21 |
|
6.5 |
|
$ |
68,582 |
|
(1)The aggregate intrinsic value of options outstanding, exercisable and vested and expected to vest is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for options that had exercise prices that were lower than the $14.17 market price of the Company’s common stock at March 31, 2014. The total intrinsic value of options exercised during the three months ended March 31, 2014 and 2013 was $0.3 million and $0.1 million, respectively.
As of March 31, 2014, there was $20.6 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all Stock Plans. Total unrecognized compensation cost will be adjusted for future changes in forfeitures. The Company expects to recognize that cost over a weighted average period of 3.06 years.
A summary of restricted stock activity under the Stock Plans during the three months ended March 31, 2014 is as follows:
|
|
|
|
Weighted |
| |
|
|
Restricted |
|
Average Grant |
| |
|
|
Shares |
|
Date Fair Value |
| |
Outstanding, January 1, 2014 |
|
1,150,694 |
|
$ |
11.24 |
|
Granted |
|
527,245 |
|
$ |
13.96 |
|
Released |
|
(146,522 |
) |
$ |
9.16 |
|
Forfeited |
|
(12,187 |
) |
$ |
12.10 |
|
Outstanding, March 31, 2014 |
|
1,519,230 |
|
$ |
12.48 |
|
|
(5) FAIR VALUE MEASUREMENTS
The FASB has issued authoritative guidance which requires that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy. The fair value hierarchy establishes and prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The three levels of the fair value hierarchy established are as follows:
Level 1 |
|
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. |
|
|
|
Level 2 |
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
|
|
|
Level 3 |
|
Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available. |
Fixed-income securities and mutual funds are valued using a third party pricing agency. The valuation is based on observable inputs including pricing for similar assets and other observable market factors. There has been no material change from period to period. The estimated fair value of the Company’s long-term debt based on a market approach was approximately $1.0 million as of March 31, 2014 and December 31, 2013 and represent Level 2 measurements. When determining the estimated fair value of the Company’s long-term debt, the Company used market-based risk measurements, such as credit risk.
The following table presents the Company’s fair value measurements as of March 31, 2014 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands.
|
|
|
|
Fair Value Measurement at March 31, 2014 Using: |
| ||||||||
|
|
|
|
Quoted Prices in Active |
|
Significant Other |
|
Significant Unobservable |
| ||||
|
|
Fair Value at |
|
Markets for Identical Assets |
|
Observable Inputs |
|
Inputs |
| ||||
Description |
|
March 31, 2014 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
| ||||
Cash and money market |
|
$ |
17,806 |
|
$ |
17,806 |
|
$ |
— |
|
$ |
— |
|
Available-for-Sale |
|
|
|
|
|
|
|
|
| ||||
Marketable securities |
|
|
|
|
|
|
|
|
| ||||
U.S. government agency securities |
|
29,710 |
|
— |
|
29,710 |
|
— |
| ||||
Corporate bonds |
|
61,940 |
|
— |
|
61,940 |
|
— |
| ||||
Certificates of deposit |
|
5,054 |
|
— |
|
5,054 |
|
— |
| ||||
Commercial paper |
|
1,500 |
|
— |
|
1,500 |
|
— |
| ||||
Total |
|
$ |
116,010 |
|
$ |
17,806 |
|
$ |
98,204 |
|
$ |
— |
|
The following table presents the Company’s fair value measurements as of December 31, 2013 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands.
|
|
|
|
Fair Value Measurement at December 31, 2013 Using: |
| ||||||||
|
|
|
|
Quoted Prices in Active |
|
Significant Other |
|
Significant Unobservable |
| ||||
|
|
Fair Value at |
|
Markets for Identical Assets |
|
Observable Inputs |
|
Inputs |
| ||||
Description |
|
December 31, 2013 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
| ||||
Cash and money market |
|
$ |
12,851 |
|
$ |
12,851 |
|
$ |
— |
|
$ |
— |
|
Available-for-Sale |
|
|
|
|
|
|
|
|
| ||||
Marketable securities |
|
|
|
|
|
|
|
|
| ||||
Corporate bonds |
|
78,010 |
|
— |
|
78,010 |
|
— |
| ||||
U.S. government agency securities |
|
34,338 |
|
— |
|
34,338 |
|
— |
| ||||
Certificates of deposit |
|
6,561 |
|
— |
|
6,561 |
|
— |
| ||||
Commercial paper |
|
1,499 |
|
— |
|
1,499 |
|
— |
| ||||
Total |
|
$ |
133,259 |
|
$ |
12,851 |
|
$ |
120,408 |
|
$ |
— |
|
As of March 31, 2014 and December 31, 2013 the Company held available-for-sale securities which had been in a continuous unrealized loss position for less than twelve months, the total unrealized losses of which were $1.8 thousand, as of March 31, 2014, and $7.2 thousand, as of December 31, 2013. At March 31, 2014 and December 31, 2013 there were no available-for-sale securities in a continuous loss position for greater than twelve months.
The following summarizes contractual underlying maturities of the Company’s available-for-sale investments in debt securities at March 31, 2014 (in thousands):
|
|
Cost |
|
Fair Value |
| ||
Due in one year or less |
|
$ |
67,853 |
|
$ |
67,918 |
|
Due after one year through two years |
|
30,218 |
|
30,286 |
| ||
|
|
$ |
98,071 |
|
$ |
98,204 |
|
|
(6) RELATED PARTY TRANSACTIONS
During the three months ended September 30, 2013, the Company entered into a one year consulting agreement with a non-employee director under which the director provides advisory services in support of the Company’s commercialization activities. The Company recorded $15.0 thousand of expense and $18.6 thousand of non-cash stock-based compensation expense related to this agreement in the three months ended March 31, 2014.
|
(7) RECENT ACCOUNTING PRONOUNCEMENTS
In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which requires enhanced disclosures of amounts reclassified out of Accumulated Other Comprehensive Income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of Accumulated Other Comprehensive Income by the respective line items of net income, but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. The guidance was effective for us beginning in the first quarter of fiscal year 2014 and did not have a material effect on the condensed consolidated financial statements, as amounts reclassified out of other comprehensive income are immaterial for all periods presented.
|
(8) SUBSEQUENT EVENTS
On April 9, 2014 the Company completed an underwritten public offering of 11.5 million shares of common stock at a price of $12.75 per share to the public. The Company received approximately $137.7 million of net proceeds from the offering, after deducting $8.9 million for the underwriting discount and estimated expenses of the offering payable by the Company. The Company expects to use the net proceeds from the offering to fund the Company’s efforts to obtain FDA approval of its Cologuard test, to fund the Company’s Cologuard commercialization activities, to fund the Company’s product development efforts, and for general corporate and working capital purposes.
|
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company’s wholly-owned subsidiary, Exact Sciences Laboratories, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers cash on hand, demand deposits in bank, money market funds, and all highly liquid investments with an original maturity of 90 days or less to be cash and cash equivalents. The Company had no restricted cash at March 31, 2014 and December 31, 2013.
Marketable Securities
Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Debt securities carried at amortized cost are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Marketable equity securities and debt securities not classified as held-to-maturity are classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive loss. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method, which approximates the effective interest method. Such amortization is included in investment income. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in investment income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in investment income.
At March 31, 2014 and December 31, 2013, the Company’s investments were comprised of fixed income investments and all were deemed available-for-sale. The objectives of the Company’s investment strategy are to provide liquidity and safety of principal while striving to achieve the highest rate of return consistent with these two objectives. The Company’s investment policy limits investments to certain types of instruments issued by institutions with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations (including those with a contractual term greater than one year from the date of purchase) are classified as current. All of the Company’s investments are considered current. There were no realized losses for the three months ended March 31, 2014 and 2013. Realized gains were $6.3 thousand and $2.2 thousand for the three months ended March 31, 2014 and 2013, respectively. Unrealized gains or losses on investments are recorded in other comprehensive loss.
Available-for-sale securities at March 31, 2014 consisted of the following:
|
|
March 31, 2014 |
| ||||||||||
(In thousands) |
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
U.S. government agency securities |
|
$ |
29,662 |
|
$ |
48 |
|
$ |
— |
|
$ |
29,710 |
|
Corporate bonds |
|
61,857 |
|
83 |
|
— |
|
61,940 |
| ||||
Certificates of deposit |
|
5,052 |
|
2 |
|
— |
|
5,054 |
| ||||
Commercial paper |
|
1,500 |
|
— |
|
— |
|
1,500 |
| ||||
Total available-for-sale securities |
|
$ |
98,071 |
|
$ |
133 |
|
$ |
— |
|
$ |
98,204 |
|
Available-for-sale securities at December 31, 2013 consisted of the following:
|
|
December 31, 2013 |
| ||||||||||
(In thousands) |
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
Corporate bonds |
|
$ |
77,935 |
|
$ |
75 |
|
— |
|
$ |
78,010 |
| |
U.S. government agency securities |
|
34,291 |
|
47 |
|
— |
|
34,338 |
| ||||
Certificates of deposit |
|
6,558 |
|
3 |
|
— |
|
6,561 |
| ||||
Commercial paper |
|
1,499 |
|
— |
|
— |
|
1,499 |
| ||||
Total available-for-sale securities |
|
$ |
120,283 |
|
$ |
125 |
|
$ |
— |
|
$ |
120,408 |
|
Changes in Accumulated Other Comprehensive Income
The amounts recognized in accumulated other comprehensive income (AOCI) for the three months ended March 31, 2014, were as follows (in thousands):
|
|
Change in value of |
| |
Beginning balance |
|
$ |
125 |
|
Other comprehensive income before reclassifications |
|
14 |
| |
Amounts reclassified from accumulated other comprehensive income |
|
(6 |
) | |
Net current period change in accumulated other comprehensive income |
|
8 |
| |
Ending balance |
|
$ |
133 |
|
Amounts reclassified from accumulated other comprehensive income were as follows (in thousands):
Details about AOCI Components |
|
Affected Line Item in the |
|
The three |
| |
Change in value of available-for-sale investments |
|
|
|
|
| |
Sales and maturities of available-for-sale investments |
|
Investment income |
|
$ |
(6 |
) |
Total reclassifications |
|
|
|
$ |
(6 |
) |
Property and Equipment
Property and equipment are stated at cost and depreciated using the straight-line method over the assets’ estimated useful lives. Maintenance and repairs are expensed when incurred; additions and improvements are capitalized. The estimated useful lives of fixed assets are as follows:
|
|
Estimated |
|
Asset Classification |
|
Useful Life |
|
Laboratory equipment |
|
3 - 5 years |
|
Office and computer equipment |
|
3 years |
|
Leasehold improvements |
|
Lesser of the remaining |
|
|
|
lease term or useful life |
|
Furniture and fixtures |
|
3 years |
|
At March 31, 2014, the Company had $4.9 million of assets under construction which consisted of $3.1 million of capitalized costs related to software projects and $1.8 million of costs related to an equipment project. Depreciation will begin on these assets once they are placed into service. We expect that it will cost $0.5 million to complete the equipment project and $1.0 million to complete the software projects, and these projects are expected to be completed in 2014.
Software Capitalization Policy
Software development costs related to internal use software are incurred in three stages of development: the preliminary project stage, the application development stage, and the post-implementation stage. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred. Costs in the application development stage that meet the criteria for capitalization are capitalized and amortized using the straight-line basis over the estimated economic useful life of the software.
Net Loss Per Share
Basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share are the same because all outstanding common stock equivalents have been excluded, as they are anti-dilutive due to the Company’s losses.
The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect due to net losses for each period:
|
|
March 31, |
| ||
(In thousands) |
|
2014 |
|
2013 |
|
Shares issuable upon exercise of stock options |
|
6,261 |
|
6,379 |
|
Shares issuable upon exercise of outstanding warrants (1) |
|
155 |
|
240 |
|
Shares issuable upon the release of restricted stock awards |
|
1,519 |
|
1,003 |
|
Shares issuable upon the vesting of restricted stock awards related to a licensing agreement |
|
49 |
|
73 |
|
|
|
7,984 |
|
7,695 |
|
(1) At March 31, 2014, represents warrants to purchase 80,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. At March 31, 2013, represents warrants to purchase 165,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement.
Revenue Recognition
License fees. License fees for the licensing of product rights are recorded as deferred revenue upon receipt of cash and recognized as revenue on a straight-line basis over the license period. As more fully described in the 2013 Form 10-K, in connection with the Company’s January 2009 strategic transaction with Genzyme Corporation, Genzyme agreed to pay the Company a total of $18.5 million, of which $16.65 million was paid on January 27, 2009 and $1.85 million was subject to a holdback by Genzyme to satisfy certain potential indemnification obligations in exchange for the assignment and licensing of certain intellectual property to Genzyme. The Company’s on-going performance obligations to Genzyme under the Collaboration, License and Purchase Agreement (the “CLP Agreement”), as described below, including its obligation to deliver through licenses certain intellectual property improvements to Genzyme, if improvements are made during the initial five-year collaboration period, were deemed to be undelivered elements of the CLP Agreement on the date of closing. Accordingly, the Company deferred the initial $16.65 million in cash received at closing and is amortizing that up-front payment on a straight-line basis into revenue over the initial five-year collaboration period which ended in January 2014. The Company received the first holdback amount of $1.0 million, which included accrued interest due, from Genzyme during the first quarter of 2010. The Company received the second holdback amount of $0.9 million, which included accrued interest due, from Genzyme during the third quarter of 2010. The amounts were deferred and are being amortized on a straight-line basis into revenue over the remaining term of the collaboration at the time of receipt.
In addition, Genzyme purchased 3,000,000 shares of common stock on January 27, 2009 for $2.00 per share, representing a premium of $0.51 per share above the closing price of the Company’s common stock on that date of $1.49 per share. The aggregate premium paid by Genzyme over the closing price of the Company’s common stock on the date of the transaction of $1.53 million is deemed to be a part of the total consideration for the CLP Agreement. Accordingly, the Company deferred the aggregate $1.53 million premium and amortized that amount on a straight-line basis into revenue over the initial five-year collaboration period which ended in January 2014.
The Company recognized approximately $0.3 million and $1.0 million in license fee revenue in connection with the amortization of the up-front payments from Genzyme, during the three month periods ended March 31, 2014 and 2013, respectively.
|
|
|
March 31, 2014 |
| ||||||||||
(In thousands) |
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
U.S. government agency securities |
|
$ |
29,662 |
|
$ |
48 |
|
$ |
— |
|
$ |
29,710 |
|
Corporate bonds |
|
61,857 |
|
83 |
|
— |
|
61,940 |
| ||||
Certificates of deposit |
|
5,052 |
|
2 |
|
— |
|
5,054 |
| ||||
Commercial paper |
|
1,500 |
|
— |
|
— |
|
1,500 |
| ||||
Total available-for-sale securities |
|
$ |
98,071 |
|
$ |
133 |
|
$ |
— |
|
$ |
98,204 |
|
|
|
December 31, 2013 |
| ||||||||||
(In thousands) |
|
Amortized |
|
Gains in |
|
Losses in |
|
Estimated |
| ||||
Corporate bonds |
|
$ |
77,935 |
|
$ |
75 |
|
— |
|
$ |
78,010 |
| |
U.S. government agency securities |
|
34,291 |
|
47 |
|
— |
|
34,338 |
| ||||
Certificates of deposit |
|
6,558 |
|
3 |
|
— |
|
6,561 |
| ||||
Commercial paper |
|
1,499 |
|
— |
|
— |
|
1,499 |
| ||||
Total available-for-sale securities |
|
$ |
120,283 |
|
$ |
125 |
|
$ |
— |
|
$ |
120,408 |
|
The amounts recognized in accumulated other comprehensive income (AOCI) for the three months ended March 31, 2014, were as follows (in thousands):
|
|
Change in value of |
| |
Beginning balance |
|
$ |
125 |
|
Other comprehensive income before reclassifications |
|
14 |
| |
Amounts reclassified from accumulated other comprehensive income |
|
(6 |
) | |
Net current period change in accumulated other comprehensive income |
|
8 |
| |
Ending balance |
|
$ |
133 |
|
Amounts reclassified from accumulated other comprehensive income were as follows (in thousands):
Details about AOCI Components |
|
Affected Line Item in the |
|
The three |
| |
Change in value of available-for-sale investments |
|
|
|
|
| |
Sales and maturities of available-for-sale investments |
|
Investment income |
|
$ |
(6 |
) |
Total reclassifications |
|
|
|
$ |
(6 |
) |
|
|
Estimated |
|
Asset Classification |
|
Useful Life |
|
Laboratory equipment |
|
3 - 5 years |
|
Office and computer equipment |
|
3 years |
|
Leasehold improvements |
|
Lesser of the remaining |
|
|
|
lease term or useful life |
|
Furniture and fixtures |
|
3 years |
|
|
|
March 31, |
| ||
(In thousands) |
|
2014 |
|
2013 |
|
Shares issuable upon exercise of stock options |
|
6,261 |
|
6,379 |
|
Shares issuable upon exercise of outstanding warrants (1) |
|
155 |
|
240 |
|
Shares issuable upon the release of restricted stock awards |
|
1,519 |
|
1,003 |
|
Shares issuable upon the vesting of restricted stock awards related to a licensing agreement |
|
49 |
|
73 |
|
|
|
7,984 |
|
7,695 |
|
(1) At March 31, 2014, represents warrants to purchase 80,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement. At March 31, 2013, represents warrants to purchase 165,000 shares of common stock issued under a license agreement and warrants to purchase 75,000 shares of common stock issued under a consulting agreement.
|
|
|
Three Months Ended |
| ||||
|
|
March 31, |
| ||||
|
|
2014 |
|
2013 |
| ||
|
|
|
|
|
| ||
Option Plan Shares |
|
|
|
|
| ||
Risk-free interest rates |
|
1.96 |
% |
1.15 |
% | ||
Expected term (in years) |
|
6 |
|
6 |
| ||
Expected volatility |
|
80.8 |
% |
84.0 |
% | ||
Dividend yield |
|
0 |
% |
0 |
% | ||
Weighted average fair value per share of options granted during the period |
|
$ |
9.86 |
|
$ |
7.73 |
|
|
|
|
|
|
| ||
ESPP Shares |
|
|
|
|
| ||
Risk-free interest rates |
|
|
(1) |
|
(1) | ||
Expected term (in years) |
|
|
(1) |
|
(1) | ||
Expected volatility |
|
|
(1) |
|
(1) | ||
Dividend yield |
|
|
(1) |
|
(1) | ||
Weighted average fair value per share of stock purchase rights granted during the period |
|
|
(1) |
|
(1) | ||
(1) The Company did not issue stock purchase rights under its 2010 Purchase Plan during the respective period.
|
|
|
|
|
|
Weighted |
|
|
| ||
|
|
|
|
Weighted |
|
Average |
|
|
| ||
|
|
|
|
Average |
|
Remaining |
|
Aggregate |
| ||
|
|
|
|
Exercise |
|
Contractual |
|
Intrinsic |
| ||
Options |
|
Shares |
|
Price |
|
Term (Years) |
|
Value (1) |
| ||
(Aggregate intrinsic value in thousands) |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Outstanding, January 1, 2014 |
|
6,062,587 |
|
$ |
2.78 |
|
6.6 |
|
|
| |
Granted |
|
233,000 |
|
$ |
13.96 |
|
|
|
|
| |
Exercised |
|
(30,439 |
) |
$ |
2.90 |
|
|
|
|
| |
Forfeited |
|
(4,375 |
) |
$ |
7.59 |
|
|
|
|
| |
Outstanding, March 31, 2014 |
|
6,260,773 |
|
$ |
3.19 |
|
6.5 |
|
$ |
68,765 |
|
|
|
|
|
|
|
|
|
|
| ||
Exercisable, March 31, 2014 |
|
5,390,794 |
|
$ |
2.05 |
|
5.4 |
|
$ |
65,358 |
|
|
|
|
|
|
|
|
|
|
| ||
Vested and expected to vest, March 31, 2014 |
|
6,217,361 |
|
$ |
3.21 |
|
6.5 |
|
$ |
68,582 |
|
(1)The aggregate intrinsic value of options outstanding, exercisable and vested and expected to vest is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for options that had exercise prices that were lower than the $14.17 market price of the Company’s common stock at March 31, 2014. The total intrinsic value of options exercised during the three months ended March 31, 2014 and 2013 was $0.3 million and $0.1 million, respectively.
|
|
|
|
Weighted |
| |
|
|
Restricted |
|
Average Grant |
| |
|
|
Shares |
|
Date Fair Value |
| |
Outstanding, January 1, 2014 |
|
1,150,694 |
|
$ |
11.24 |
|
Granted |
|
527,245 |
|
$ |
13.96 |
|
Released |
|
(146,522 |
) |
$ |
9.16 |
|
Forfeited |
|
(12,187 |
) |
$ |
12.10 |
|
Outstanding, March 31, 2014 |
|
1,519,230 |
|
$ |
12.48 |
|
|
The following table presents the Company’s fair value measurements as of March 31, 2014 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands.
|
|
|
|
Fair Value Measurement at March 31, 2014 Using: |
| ||||||||
|
|
|
|
Quoted Prices in Active |
|
Significant Other |
|
Significant Unobservable |
| ||||
|
|
Fair Value at |
|
Markets for Identical Assets |
|
Observable Inputs |
|
Inputs |
| ||||
Description |
|
March 31, 2014 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
| ||||
Cash and money market |
|
$ |
17,806 |
|
$ |
17,806 |
|
$ |
— |
|
$ |
— |
|
Available-for-Sale |
|
|
|
|
|
|
|
|
| ||||
Marketable securities |
|
|
|
|
|
|
|
|
| ||||
U.S. government agency securities |
|
29,710 |
|
— |
|
29,710 |
|
— |
| ||||
Corporate bonds |
|
61,940 |
|
— |
|
61,940 |
|
— |
| ||||
Certificates of deposit |
|
5,054 |
|
— |
|
5,054 |
|
— |
| ||||
Commercial paper |
|
1,500 |
|
— |
|
1,500 |
|
— |
| ||||
Total |
|
$ |
116,010 |
|
$ |
17,806 |
|
$ |
98,204 |
|
$ |
— |
|
The following table presents the Company’s fair value measurements as of December 31, 2013 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Amounts in the table are in thousands.
|
|
|
|
Fair Value Measurement at December 31, 2013 Using: |
| ||||||||
|
|
|
|
Quoted Prices in Active |
|
Significant Other |
|
Significant Unobservable |
| ||||
|
|
Fair Value at |
|
Markets for Identical Assets |
|
Observable Inputs |
|
Inputs |
| ||||
Description |
|
December 31, 2013 |
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
| ||||
Cash and money market |
|
$ |
12,851 |
|
$ |
12,851 |
|
$ |
— |
|
$ |
— |
|
Available-for-Sale |
|
|
|
|
|
|
|
|
| ||||
Marketable securities |
|
|
|
|
|
|
|
|
| ||||
Corporate bonds |
|
78,010 |
|
— |
|
78,010 |
|
— |
| ||||
U.S. government agency securities |
|
34,338 |
|
— |
|
34,338 |
|
— |
| ||||
Certificates of deposit |
|
6,561 |
|
— |
|
6,561 |
|
— |
| ||||
Commercial paper |
|
1,499 |
|
— |
|
1,499 |
|
— |
| ||||
Total |
|
$ |
133,259 |
|
$ |
12,851 |
|
$ |
120,408 |
|
$ |
— |
|
The following summarizes contractual underlying maturities of the Company’s available-for-sale investments in debt securities at March 31, 2014 (in thousands):
|
|
Cost |
|
Fair Value |
| ||
Due in one year or less |
|
$ |
67,853 |
|
$ |
67,918 |
|
Due after one year through two years |
|
30,218 |
|
30,286 |
| ||
|
|
$ |
98,071 |
|
$ |
98,204 |
|
|
|
|
|
|
|
|
|
|
|
|